PCs allow Ontario realtors to keep representing both buyers and sellers

Premier Doug Ford and Public and Business Service Delivery Minister Todd McCarthy professed their “love” for real estate agents at the Ontario Real Estate Association’s (OREA) Power House conference in Toronto yesterday and assured attendees that new regulations coming into force on Friday will prevent “a very few bad apples [from painting] a broad brush against the whole real estate market.”

“We love your profession because you’re so often associated with good news: the purchase of a first home, or resale, or the leasing or purchase of an office space,” said McCarthy.

Extensive new regulations under the Trust in Real Estate Services Act, which passed in 2020, represent the second phase of regulatory changes under the legislation, including an updated code of ethics and increased disciplinary powers for the Real Estate Council of Ontario (RECO).

However, the act was crafted to maintain realtors’ ability to represent both the buyer and seller in a single real estate deal — something OREA and other industry stakeholders have advocated for, despite concerns about the practice and bans on it elsewhere in Canada.

OREA CEO and former PC leader Tim Hudak thanked Ford and McCarthy for preserving that practice, instead of stripping “the right of somebody to use a realtor that they know and trust and like.”

“It’s the personal touch,” agreed McCarthy. “It’s like what I said earlier, right? We love our individual real estate agents and brokers.”

In a 2022 report, Ontario’s auditor general expressed concern about the practice, which has been banned in B.C. “due to the risks it poses to consumers.”

Ontario did mull banning dual representation in 2017 and 2019 but decided against both times, the AG noted, due to OREA, which “strongly opposed a regulatory change that would prohibit this practice.”

While the new regulations do not ban the practice, they do impose new requirements on agents to disclose their status to each client and get their consent to the situation in writing.

To address cases where clients do not consent, the government is moving ahead with a suggestion from OREA’s 2019 proposal to create “designated representation agreements,” which would assign separate agents at the same brokerage to represent each party in a deal.

The agreements would make one agent at a brokerage solely responsible for the interests of one client while allowing other agents at the same company to represent another party in the sale.

Ministry of Government and Consumer Services policy director Michelle Sanborn told the public accounts committee last week the agreements are a necessary compromise, especially in small communities with few agents or brokerages.

“Multiple representations [by one agent] will continue to exist for consumer choice and for smaller communities with a limited number of agents, for example,” said Sandborn.

PC MPP Donna Skelly told the committee she was troubled that multiple representations will still be allowed under the new regulations.

“I couldn’t imagine as an agent, having two clients and trying to represent both of them, getting the most amount of money for one and paying the least amount of money for the other. How can you possibly square that?” she wondered. “Should that perhaps not be permitted?”

Public and Business Service Delivery deputy minister Renu Kulendran noted the government did consult on an outright ban of the practice but was told by industry representatives that it would not work in some Ontario markets.

“What we tried to do — and what we think we’ve achieved — is to have the two coexist in the legislation: designated representation and multiple representation,” said Kulendran.

“We are responding to what we have heard from the sector, and we believe the cumulative impact of these changes has put us on a much better foot in terms of protecting the consumer.”

Skelly remained skeptical, wondering how well the new disclosure requirements for dual representation will be enforced.

“This is probably the biggest purchase of anyone’s life or sale of anyone’s life,” she said. “If you’re being represented by one person, you can’t possibly be getting the best representation when they’re representing both parties.”