RECOrd DO I HAVE TO BE PRESENT FOR A HOME INSPECTION? RECO s new education program gets top marks. There s no off the record real estate advice

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1 F O R T H E RECOrd PUBLISHED BY THE REAL ESTATE COUNCIL OF ONTARIO FOR REAL ESTATE PROFESSIONALS FALL 2013 DO I HAVE TO BE PRESENT FOR A HOME INSPECTION? RECO s new education program gets top marks There s no off the record real estate advice

2 MESSAGE FROM THE CHAIR RECO BOARD OF DIRECTORS By Glenda Brindle We think of summer as a time to relax and recharge, but for RECO it s been a summer of hard work and important new initiatives. In fact, in terms of phone inquiries it was our busiest summer ever. In July and August, RECO staff answered more than 31,000 calls regarding insurance, education and general inquiries. With the launch of RECO s new mandatory continuing education program and our insurance renewal season falling in the same period, it was a real test of RECO s resources. I m proud to report that we were up to the task. New continuing education program Speaking of the education program launch, we have received a great deal of positive feedback from registrants, as well as suggestions for improvements. We have taken these suggestions seriously and implemented changes where appropriate. The launch was the culmination of a great deal of work by RECO staff to design an easy-to-use program that features content that is practical to registrants day-to-day work. I would also like to recognize the important role registrants played, by providing valuable feedback that informed the design of the program. A select group of registrants also engaged in critical pre-launch testing. I d like to extend my thanks to both staff and registrants for their efforts. We want to hear from you We ll be turning to registrants again soon to gather feedback on how we can improve. This fall RECO will be conducting a registrant survey to determine your satisfaction with RECO s services, publications and more. Watch your inbox for a message from InfoFeedback, which will conduct the survey on our behalf. Filling out the survey is your opportunity to tell us how we re doing. It only takes a few minutes and it provides us with essential feedback on how we can make RECO better for you. Changes to RECO s by-laws You should also keep an eye out for details on upcoming changes to RECO s by-laws. The changes are mandatory under the Federal government s new Canada Not-for-profit Corporations Act. While the revisions will be technical in nature, their approval at the 2014 Annual General Meeting is essential so that we can meet the compliance deadline of October RECO is committed to keeping you informed about these changes, so stay tuned for more info. I am thankful to be able to serve as RECO s Chair during a period when we are moving the real estate industry forward professionally and technologically. I encourage you to read this edition of For the RECOrd thoroughly to learn more about our initiatives and inform yourselves about emerging issues. 2 FALL 2013

3 HOME INSPECTIONS: Obtain written confirmation before third-party entry Once an offer is made on a property, various professionals will probably require access before the transaction is finalized. Regardless of whether it s a home inspector, appraiser, engineer or a contractor, it s in your best interest to clarify with your client (whether it be a buyer or seller) if you will or will not be present for those visits. Over the years, RECO has received complaints about property damage, theft and even personal injury sustained when, contrary to a seller s expectations, non-registrants were given access to the property without a real estate professional in attendance. While there is no section in the Real Estate and Business Brokers Act, 2002 (REBBA 2002) that specifically requires a registrant to be in attendance, RECO s Discipline Committee has made it clear that it is unacceptable for a home inspection to take place without a registrant present unless there is written consent from the seller. In addition, many local real estate boards have a rule to address these situations. For example, the Toronto Real Estate Board has a rule that requires the buyer s representative to be, in continuous attendance during any showing of the property, buyer visits or inspections necessary to fulfill conditions. Registrants have an obligation to protect a client s best interests under the Code of Ethics. As such, any time a non-registrant requires access to the property in the course of completing a trade RECO recommends that you obtain clear written confirmation from your client about whether you are to be present. This applies whether you re representing the buyer or the seller. Given your obligation under the Code of Ethics to promote and protect your client s best interests, it s a good idea to discuss and document whether you will be present during home inspections and the like, says RECO s Registrar, Joseph Richer. If something does go wrong, a written record confirming the arrangement demonstrates your diligence in seeking direction from your client. An acknowledged would suffice. Consider clarifying the arrangement with your client while fulfilling the obligation to identify the services that will be provided, as required under REBBA Doing so will help avoid misunderstandings and help manage expectations. 3 FALL 2013

4 WHEN YOU PROVIDE REAL ESTATE HELP IT S ALWAYS ON THE RECORD Whether you re providing real estate guidance in your brokerage office or at a backyard barbecue, it s important to remember that as a real estate professional you re still held to the same standards. When it comes to helping with a real estate trade, nothing you do is off the record says RECO Registrar Joseph Richer. No matter what the circumstances are, the rules still apply. All advice and guidance provided by registrants must abide by the requirements of the Real Estate and Business Brokers Act, 2002 (REBBA 2002). This is true even if you re not being paid for your services. For example, what if your friend has decided to sell his home on his own but would like your help in putting together a listing, including measuring the rooms and providing a description of the property? You are still obligated to abide by REBBA 2002 in this situation, despite not being the seller s representative. As a registered real estate professional, the general public sees you as an expert in your field and may act upon any advice, guidance or tips you provide about buying or selling a home. If a doctor performs a medical procedure outside of the hospital or clinic where they work, or a lawyer offers pro bono legal advice outside of their firm, they are still subject to regulatory requirements. The same is true in the case of the real estate sector. Any guidance you provide, even in an informal setting or relationship, must meet the same level of diligence as that you would provide to a customer or client. Your obligations as a professional never sleep. For more information about your obligations under REBBA 2002, view RECO s library of Registrar s Bulletins available at > Industry Professional > Registration > Registrar s Bulletins. 4 FALL 2013

5 RECO S CONTINUING EDUCATION PROGRAM GETS TOP MARKS FROM REGISTRANTS Since RECO s new mandatory continuing education program launched on August 1, over 5,600 registrants have registered for the program, and many of them have provided valuable feedback. The comments we ve received have been extremely helpful, says RECO Registrar Joseph Richer. Registrants suggestions have helped us find ways to enhance navigation and select topics to develop into new courses. After they complete a course, registrants can answer a survey. The results to date have been very encouraging: 93% agreed or strongly agreed that the course content was interesting and easy to follow 96% agreed or strongly agreed that the course content was relevant to their real estate practice 95% agreed or strongly agreed that they enjoyed the flexibility and convenience of online learning In comments provided with the survey, registrants have recognized the advantages of online learning and praised the quality of the course content. Here s what they told us. The explanations and practical examples given are very helpful to understand the whole text. Easy pace. Able to exit and rejoin course at will. No need to travel to a course venue and commit a whole day to the course. This is the first on-line course I have ever completed. The scenarios were helpful so that I could relate them to my own real estate experiences. Very relevant, practical and current. For example, the inclusion of advertising using Internet technology (LinkedIn, Facebook, Visually it etc.) was very interesting was strong, it was very and reassuring. interactive and well laid out. For more information on the new mandatory continuing education program, visit RECO s website ( To register for the program, logon to MyWeb ( 5 FALL 2013

6 Selling your own property: KNOW THE RISKS When the time comes to sell your own property it may be tempting to handle the transaction yourself. After all, as a real estate professional you have the knowledge and skills to make it happen. The Real Estate and Business Brokers Act, 2002 (REBBA 2002) permits this arrangement as long as you promptly and properly disclose in writing any interest you, or any person related to you, has in the property. The interest in question may be direct (for example, if you or a relative are the buyer or seller) or indirect (for example, you hold a mortgage on the property or the buyer or seller is a corporation for which you or a relative are a shareholder). However, completing the transaction yourself carries additional risks because the errors and omissions coverage under RECO s insurance program may not cover you for all activities during the trade. As the name suggests, errors and omissions coverage protects you in the event that a client makes a claim against you due to a mistake or negligent action committed in the course of your professional services. While each claim is evaluated on its own merits, the insurance is not intended to cover liability arising from the role of a seller. Therefore, acting as both the salesperson and seller can affect the degree to which the policy can respond, if at all. One of the most common causes of loss under errors and omissions coverage is a failure to disclose facts considered material to the purchase and sale. REBBA 2002 (section 32) requires full disclosure of all facts within the registrant s knowledge that affect or will affect the value of the real estate. If you re selling your own property, you may be held to a higher disclosure standard than a registrant selling someone else s property. The bottom line is that while REBBA 2002 allows you to act as your own real estate professional, you may be held to a higher standard by the courts in the event of a claim. There are definite advantages to keeping the roles of registrant and buyer or seller separate, says RECO Registrar, Joseph Richer. Insurance is there for peace of mind. Ask yourself if it s worth potentially compromising that coverage. 6 FALL 2013

7 INSURANCE RENEWAL UPDATE RECO s insurance department was buzzing with activity throughout the summer, collecting renewal payments from over 61,000 registrants. That s about 3,000 more transactions than last year due to the increase in the number of registrants. As is usually the case, activity peaked during the week leading up to the payment deadline when more than 23,000 payments were received and processed. That s nearly 38 per cent of all renewals processed over the course of five business days. More registrants (78 per cent, compared to 72 per cent last year) opted for the convenience of completing their insurance renewals online through MyWeb ( RECO s exclusive web portal for registrants. Although the majority of insurance renewals were completed online, RECO still experienced a high volume of calls during the insurance renewal period. We thank everyone for their patience during this busy time. RECO s insurance program continues to benefit both registrants and consumers in Ontario, by offering broad protection at a competitive price. For the policy period, the program premium and costs are $1.09 per day. The program is unique in offering consumer deposit and commission protection. These insurance features are not offered in any other Canadian jurisdiction. 7 FALL 2013

8 Professionalism When the right way is the hard way True professionalism requires the consistent application of sound judgment. Knowledge and skill might get you a long way in your business, but if you aren t able to routinely exercise good judgment, you won t be recognized as a true professional. Your knowledge and skill are a reflection of your education and training. Your judgment is a reflection of your character and experience. Professional judgment is about doing things the right way, even when that means doing them the hard way. The true professional recognizes that the right way exists for a reason typically to reduce risk and better protect the client or themselves. While the perceived risk of a shortcut may appear small, a professional recognizes that they can t control everything, and even a small lapse in judgment can create major problems. Doing things right may take longer and require more effort, but by exercising good judgment you ll reap great rewards. Are You A Professional? Professionalism is a hot topic in Ontario s real estate industry. We all know that a high level of professionalism among registrants is critical for maintaining consumer confidence in our industry. But what does it mean to be a professional? There s more to it than just knowing the rules in REBBA 2002 and following them. To shed light on the issue, RECO has produced two videos featuring Chair Glenda Brindle and Director Keith Tarswell that discuss elements of professionalism in an interesting way, along with some cool animation. The videos, which cover professional courtesy and record keeping, are available now. To watch them, visit the Registration section of RECO s website or RECO s YouTube channel at youtube.com/recohelps. 8 FALL 2013

9 RECO investigator wins prestigious award RECO is proud to announce that Dave Tredrea has received the prestigious Investigative Excellence Award from the Council on Licensure, Enforcement and Regulation (CLEAR) for his investigative work. Dave s exceptional efforts have done a great deal to protect the integrity of real estate transactions in Ontario. Dave also has an impressive level of expertise, with more than 30 years of experience working on criminal investigations for the Toronto Police Service, including the major crime unit and drug enforcement squad. Dave and our other investigators are at the front line of RECO s efforts to protect the public interest and enhance consumer confidence in the real estate profession, says Joseph Richer, RECO s Registrar. The vast majority of real estate professionals take pride in providing quality services to home buyers and sellers, but when issues arise they can count on investigators like Dave to get to the bottom of the matter. Do you have any comments or inquires about For the RECOrd newsletter? Please send them to: communications@reco.on.ca Real Estate Council of Ontario 3300 Bloor Street West Suite 1200, West Tower Toronto, Ontario M8X 2X2 Tel: Toll-Free: Fax: PM # Disclaimer: While RECO makes every effort to ensure that the information in this publication is current and accurate, RECO does not warrant or guarantee that it will be free of errors. The information contained in this publication is not intended to cover all situations. It is general information only and users/readers are encouraged to seek their own independent advice for particular fact situations.