RECOrdF O R T H E

PUBLISHED BY THE REAL ESTATE COUNCIL OF ONTARIO • SPRING 2015

ARE YOU PREPARED FOR CHANGES IN OFFER HANDLING?

RECO TAKES ACTION AGAINST CHEATING IN

ONLINE EDUCATION

KITEC PLUMBING AND MATERIAL FACTS

2 S P R I N G 2 0 1 5

The spring buying season is in full

swing, and it’s been a busy season

at RECO as well. The way we

communicate is changing, the

regulatory environment is changing,

and we are welcoming a new

Director to the Board.

NEW WEBSITE MAKES IT EASY TO FIND INFORECO recently launched a redesigned

website that features a fresh, bold

design. But even more importantly, it

focuses on straightforward navigation,

making it easier for you to find the

latest news and bulletins, and learn

about your education, registration and

insurance requirements.

It’s a big upgrade for consumers too—

whether it’s home inspections, deposits,

or competing offers, we’ve made it

easier for buyers and sellers to find the

information they need. And, it makes

it easier for you to share these helpful

resources with your clients.

If you haven’t taken a look yet, I

encourage you to take a few minutes

to check it out.

NEW RULES FOR HANDLING OFFERSThe coming weeks will mark an

important changes in how we

conduct real estate in Ontario. Starting

July 1, new rules for handling offers

will come into effect, as a result of

Bill 55, the Stronger Protection for

Ontario Consumers Act, 2013. If you

haven’t reviewed the fact sheet on

RECO’s website, I urge you to do so

as soon as possible.

REGISTRANTS NOMINATE THREE DIRECTORSEarlier this spring, registrants voted to

nominate three Directors to the Board.

I would like to extend a special

congratulation to Timothy Barber, who

will be joining the Board for the first

time. I would also like to congratulate

Michael Appleton and Mike Cusano on

their return to the Board. Serving on

RECO’s Board is a great honour and a

rewarding experience.

All three nominated Directors will be

formally elected at the AGM.

FAREWELLThe AGM will mark the end of my time

as a Director, and the end of my term

as Chair. I would like to extend my

deepest gratitude to my fellow

Directors for their support as we

worked together to advance the

profession. I also want to express

my thanks to the staff of RECO for

their hard work and commitment to

making RECO the best it can be.

Serving as Chair has been incredibly

rewarding, and I’m very proud of what

we have been able to accomplish. I’ve

greatly enjoyed meeting real estate

professionals across Ontario, and

learning about their unique viewpoints

and concerns. I have every confidence

that my successor will continue to

advance our profession.

By Glenda Brindle

MESSAGE FROM THE CHAIR RECO BOARD OF DIRECTORS

MESSAGE FROM THE CHAIR RECO BOARD OF DIRECTORS

3 S P R I N G 2 0 1 5

CHANGES IN OFFER HANDLING

COMING JULY 1, 2015New rules for handling offers come into

effect on July 1, 2015.

Your brokerage must create processes

and policies that comply with these

legislative changes.

RECO has prepared a detailed fact

sheet about the changes. All registrants

should review it so that they can ensure

compliance as of July 1, 2015.

Here is an outline of the changes:

• Offers must be made in writing.

Please keep in mind that a written

offer must be signed to be valid.

• A registrant cannot indicate that they

have an offer, unless they have a

written offer.

• The seller’s brokerage must keep a

record of all written offers that it

receives.

• RECO is developing a process to

confirm the number of offers that

were received for a property.

The changes stem from Bill 55, the

Stronger Protection for Ontario

Consumers Act, 2013. To review the

relevant changes, see section 35.1

of REBBA 2002 and section 19.1 of

Ontario Regulation 579/05 made

under REBBA 2002.

4 S P R I N G 2 0 1 5

Recently, RECO has received inquiries about registrants’ obligations when selling a property with Kitec plumbing, a type of pipe that is vulnerable to premature failure. This can damage the home and result in costly repairs for the homeowner. RECO encourages registrants to find out how to identify Kitec and seek expert assistance from a home inspector or plumber when necessary. Such a flaw can be considered a material fact. Here’s what you need to know about material facts.

KITEC PLUMBING AND MATERIAL FACTS By Joseph Richer, Registrar

Section 21 of the Code of Ethics says

registrants must, on behalf of clients,

take reasonable steps to determine the

material facts relating to the purchase

or sale of a property and, at the earliest

practicable opportunity, disclose the

material facts to the client.

A material fact is something that:

• could affect a “reasonable person’s

decision” to purchase or sell a

property;

• may influence what price to offer or

to list at; or

• may influence what conditions are

attached to any agreements of

purchase and sale.

RECO is often asked for a list of facts

that would be considered material. But

what is a material fact to one buyer

or seller may not factor into another

client’s decision-making process for

many different reasons, not the least

of which is the intended use of the

property.

Issues that are often considered to be

material facts include:

• The type of insulation and wiring

(knob and tube wiring, for example)

• The type of plumbing (Kitec pipes,

for example)

• A history of flooding, structural

damage or fire

• Renovations made to a property and

whether they were conducted with a

permit

• Property taxes

• Whether a property had been used

as a grow-op or for other illicit

purposes

• Any rights-of-way, allowances

or restrictions regarding use of

the property established by the

municipality, region or other

governmental agency

• Existence of nearby businesses or

facilities that may impact quality of

life (e.g., prisons, quarries, industrial

facilities, airports, rail lines, etc.)

From RECO’s perspective, a registrant’s

obligation is twofold:

1. Take reasonable steps to determine

the material facts; and

2. Promptly disclose those facts to

the client.

WORKING WITH A SELLERWhen acting as a listing representative

it is possible that the material facts may

already be known by the seller, but the

obligation to determine and disclose to

your client still exists.

For virtually all material facts, the

“reasonable steps” required for

determining those facts will go beyond

simply accepting the seller’s verbal

representations. Some research and

supporting documentation will be

necessary.

WORKING WITH A BUYERWhen working with a buyer, registrants

often have checklists or ask questions

of the buyer to determine their needs

and what type of property will best suit

them. This is the ideal time to discover

the interests and sensitivities of the

buyer and help determine what the

buyer would consider a material fact

about a specific property.

When in doubt about whether

something may constitute a material

fact to your client, err on the side of

disclosing it to them.

If you are aware of something that

could be considered a material fact to

your buyer client, you should disclose

it to them. Failing to do so can have

significant consequences – both in

terms of civil liability and under

REBBA 2002.

6 S P R I N G 2 0 1 5

As professionals, registrants are

expected to act with honesty and

integrity, and this situation is

no different.

A recent case has demonstrated

that there are consequences for

trying to evade continuing

education requirements, as the

registrant in question was fined

$2,500 after pleading guilty to a

provincial offence. Submitting a false

document to RECO’s Registrar is a

violation of the Real Estate and Business

Brokers Act, 2002 (REBBA 2002), and

RECO takes cheating very seriously.

It’s also important to note the purpose

of mandatory continuing education—

to provide valuable information that no

registrant in Ontario should be without.

RECO will continue to investigate

allegations of this nature and take

appropriate action, which could

include a provincial prosecution,

a discipline hearing or a refusal to

renew registration.

RECO’s online mandatory continuing education program has been a big success since it launched in 2013. As part of the process, registrants have to declare their identity at the end of each course. And when registrants renew, they have to sign a declaration that they have met their continuing education requirements.

CHEATING IN ONLINE EDUCATION LEADS TO REGULATORY ACTION

7 S P R I N G 2 0 1 5

Consumer Protection Ontario is an

awareness program from Ontario’s

Ministry of Government and Consumer

Services, which promotes consumer

rights and public safety in conjunction

with other public organizations such

as RECO.

HOW CAN CONSUMER PROTECTION ONTARIO HELP YOU AND YOUR CLIENTS?When you’re guiding your clients as

they buy or sell a home, consider letting

them know about Consumer Protection

Ontario to help them navigate some

of the other aspects involved in

moving and owning a home. It’s all

about knowing the right questions

to ask!

MOVING COMPANIES:Did you know that when working

with a moving company, they can’t

charge you more than 10% above the

written estimated cost unless you agree

to a new service, price, or sign a new

contract?

DOOR-TO-DOOR SALES:The Consumer Protection Act (CPA)

gives you special rights when you buy

something in your home that costs

more than $50. You have the right to

cancel a contract for any reason within

a 10 calendar-day cooling-off period,

with the exception of water heater

contracts for which you have a

cooling-off period of 20 days.

HOME RENOVATIONS:Under Ontario law, any home

renovation contract worth more than

$50 must be in writing. Be sure that

that all the details (such as the type of

materials being used) are in writing.

Be prepared to pay for any extra

materials or any work that are not

in the contract. If something isn’t

written in your contract, you may

not get it.

To learn more about your rights and the

right questions to ask when it comes

to movers, door-to-door sales, home

renovations and much more, visit

www.ontario.ca/ConsumerProtection.

GET INFORMED: MOVERS, DOOR-TO-DOOR CONTRACTS, HOME RENOVATIONS AND MORE!

Real Estate Council of Ontario

3300 Bloor Street West

Suite 1200, West Tower

Toronto, Ontario M8X 2X2

Tel: 416-207-4800

Toll-Free: 1-800-245-6910

Fax: 416-207-4820

Do you have any comments or inquires about For the RECOrd

newsletter? Please send them to: communications@reco.on.ca

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.

Using an aerial drone to take photos

or videos can provide a unique

perspective on a property that’s on the

market. However, registrants should be

aware that there are stringent rules and

regulations regarding the use of drones.

Drones, or unmanned aerial vehicles

(UAV), fall under Transport Canada

jurisdiction. If you want to operate

a drone you are required to obtain

insurance coverage and approval from

Transport Canada – a process that can

be quite lengthy.

You’ll also need to obtain a special

operations flight certificate (SOFC) from

Transport Canada before each flight.

Failure to obtain an SOFC can result in

penalties in the amount of $5,000

for an individual and $25,000 for a

corporation.

RECO does not regulate the use of

drones. Information on how to apply

to conduct a drone flight can be found

on Transport Canada’s website

(www.tc.gc.ca).

DRONESDID YOU KNOW?