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ontario regulation 235/23
made under the
Real Estate and Business Brokers Act, 2002
Made: July 27, 2023
Filed: July 28, 2023
Published on e-Laws: July 28, 2023
Published in The Ontario Gazette: August 12, 2023
Amending O. Reg. 567/05
(GENERAL)
1. (1) The definition of “client” in subsection 1 (1) of Ontario Regulation 567/05 is revoked and the following substituted:
“client” means,
(a) with respect to a brokerage and a trade in real estate, a person who, in the trade,
(i) receives services, including representation, from the brokerage under a brokerage representation agreement, or
(ii) receives services, but not representation, from the brokerage under a designated representation agreement, and
(b) with respect to a broker or salesperson and a trade in real estate, a person who, in the trade,
(i) receives services, including representation, from the brokerage that employs the broker or salesperson under a brokerage representation agreement with the brokerage, if the broker or salesperson provides services to the person under that agreement, or
(ii) receives services, including representation, from the broker or salesperson under a designated representation agreement with the brokerage that employs the broker or salesperson, if the broker or salesperson is a designated representative under that agreement; (“client”)
(2) The definition of “representation agreement” in subsection 1 (1) of the Regulation is revoked and the following substituted:
“representation agreement” means a written, oral or implied agreement between a brokerage and a person under which the brokerage and the person agree that the person will receive services from the brokerage and will receive representation from either the brokerage or a designated representative, in respect of a trade in real estate; (“convention de représentation”)
(3) Subsection 1 (6) of the Regulation is revoked and the following substituted:
(6) For the purposes of the definition of “representation agreement” in subsection (1), the following circumstances do not give rise to an implied agreement between a brokerage and a person:
1. As a service provided to a client, or incidental to a service provided to a client, a broker or salesperson employed by the brokerage provides assistance to another person without encouraging the other person to rely on the broker’s or salesperson’s skill or judgment in respect of a trade in real estate.
2. A brokerage provides general information to a person relating to the business of trading in real estate.
2. Subsection 2 (1) of the Regulation is amended by adding the following definitions:
“brokerage representation agreement” means a representation agreement between a brokerage and a client under which the brokerage and all of the brokers and salespersons employed by the brokerage provide services, including representation, to the client; (“convention de représentation de courtage”)
“designated representation agreement” means a representation agreement between a brokerage and a client under which the brokerage provides services to the client and designates one or more brokers or salespersons employed by the brokerage to represent the client to the exclusion of the brokerage and all of the other brokers and salespersons employed by the brokerage; (“convention de représentation désignée”)
“designated representative” means a broker or salesperson who is designated under a designated representation agreement to represent a client; (“agent désigné”)
3. Subsection 13 (2) of the Regulation is revoked and the following substituted:
(2) The information guide shall include the following information:
1. An indication that a person may interact with a registrant,
i. as a client under a representation agreement, or
ii. as a self-represented party.
2. A summary of the rights and duties set out in the Act and the regulations in respect of registrants, clients and self-represented parties.
3. An explanation of the risks of being a self-represented party if a person chooses not to receive services, including representation, from a registrant.
4. A statement advising a person contemplating being a self-represented party to seek independent professional advice.
5. Guidance in respect of the duties that a brokerage would owe to a client and the services that the brokerage would provide to a client, if the brokerage entered into a brokerage representation agreement with the client.
6. With respect to situations where a brokerage enters into a designated representation agreement with a client, guidance in respect of the duties that the brokerage and the designated representative employed by the brokerage would owe to the client and the services that the brokerage and the designated representative would provide to the client.
7. An indication that agreements with brokerages may include terms related to termination of the agreement.
8. Guidance in respect of remuneration arrangements in relation to a trade in real estate, including a description of remuneration arrangements that are permitted and prohibited for,
i. a broker or salesperson, and
ii. a brokerage.
9. A caution that a brokerage is not permitted to represent more than one client in respect of the same trade in real estate unless the requirements set out in subsection 22 (1) are satisfied.
10. A caution that a designated representative is not permitted to represent more than one client in respect of the same trade in real estate unless the requirements set out in subsection 22.0.1 (1) are satisfied.
11. A caution that a brokerage and a designated representative employed by the brokerage are not permitted to represent their respective clients in respect of the same trade in real estate unless the requirements set out in subsection 22.0.2 (2) are satisfied.
12. With respect to situations where a brokerage represents more than one client in respect of the same trade in real estate, guidance in respect of the duties that a brokerage would owe to each client and the services that the brokerage would provide to each client.
13. With respect to situations where a designated representative represents more than one client in respect of the same trade in real estate, guidance in respect of the duties that the brokerage and the designated representative employed by the brokerage would owe to each client and the services that they would provide to each client.
14. With respect to situations where a brokerage represents a client and a designated representative employed by the brokerage represents a client in respect of the same trade in real estate, guidance in respect of the duties that the brokerage and the designated representative would owe to their respective clients and the services that they would provide to their respective clients.
15. An explanation of how to file a complaint about the conduct of a broker or salesperson to,
i. the brokerage that employs the broker or salesperson, and
ii. the administrative authority.
16. Any other information the registrar considers relevant in respect of the rights and duties set out in the Act or the regulations in respect of registrants, clients and self-represented parties.
4. Subsection 13.1 (1) of the Regulation is revoked and the following substituted:
Information to self-represented parties
(1) If a brokerage provides services to a client in respect of a trade in real estate and provides assistance to a self-represented party in respect of the trade, the brokerage shall provide the following information to the self-represented party before providing the assistance:
1. A disclosure that the brokerage provides services to a client in respect of the trade.
2. A disclosure that the brokerage or a designated representative employed by the brokerage represents a client in respect of the trade.
3. An explanation of the risks to the party that may arise from receiving assistance from the brokerage.
4. A description of the type of assistance that the brokerage is permitted to provide to the party.
5. A recommendation that the party seek independent professional advice.
5. The Regulation is amended by adding the following section immediately after the heading “Agreements: Trade in Real Estate”:
Representation required
13.3.1 A brokerage shall not enter into an agreement with a buyer or seller for the purposes of trading in real estate if the agreement does not include the provision of representation.
6. Subparagraphs 1 v and vi of subsection 13.4 (1) of the Regulation are revoked and the following substituted:
v. The services that the brokerage will provide under the agreement and, in the case of a designated representation agreement, the fact that the brokerage will not provide representation.
vi. In the case of a designated representation agreement,
A. the name of each designated representative under the agreement,
B. the services that the designated representative will provide under the agreement,
C. the duties of the brokerage under section 22.0.4, and
D. the duty of the designated representative under section 22.0.5.
vii. The terms related to termination of the agreement, if any.
7. (1) Subsection 21 (2) of the Regulation is amended by striking out “If the purchase of a business is negotiated by a brokerage on behalf of the person disposing of the business, the brokerage shall” in the portion before paragraph 1 and substituting “If the purchase of a business is negotiated by a registrant on behalf of the person disposing of the business, the registrant shall”.
(2) Subsections 21 (3) and (4) of the Regulation are amended by striking out “the brokerage” wherever it appears and substituting in each case “the registrant”.
8. (1) Clause 22 (1) (b) of the Regulation is amended by striking out “the registrant” and substituting “the brokerage”.
(2) Paragraph 2 of subsection 22 (2) of the Regulation is revoked and the following substituted:
2. The differences between the duties the brokerage would have if it represented only one client in respect of the trade and the duties the brokerage would have if it represented more than one client in respect of the trade, including any differences relating to,
i. the duties the brokerage would owe,
ii. the services the brokerage would provide, and
iii. the remuneration arrangements the brokerage would have.
(3) Subsection 22 (3) of the Regulation is revoked.
(4) Subsection 22 (4) of the Regulation is revoked and the following substituted:
(4) The brokerage shall make best efforts to obtain a written acknowledgement from each person receiving a disclosure under subsection (1) indicating that the disclosure has been received and, if a person makes the acknowledgement, provide them with a copy of it.
(5) Section 22 of the Regulation is amended by adding the following subsection:
(5) If a brokerage represents more than one client in respect of the same trade in real estate, the brokerage and, for clarity, every broker and salesperson employed by the brokerage shall treat the interests of those clients in an objective and impartial manner.
9. The Regulation is amended by adding the following sections:
Multiple representation — designated representative
22.0.1 (1) A designated representative shall not represent more than one client in respect of the same trade in real estate, unless,
(a) the brokerage discloses the information set out in subsection (2) to each client and prospective client in respect of the trade; and
(b) each client and prospective client, after receiving the disclosure under clause (a), consents in writing to being represented by the same designated representative in respect of the trade.
(2) The following is the information referred to in subsection (1):
1. The fact that the brokerage proposes to have the designated representative represent more than one client in respect of the same trade in real estate.
2. The differences between the duties the brokerage and the designated representative would have if the designated representative represented only one client in respect of the trade and the duties the brokerage and the designated representative would have if the designated representative represented more than one client in respect of the trade, including any differences relating to,
i. the duties the brokerage and the designated representative would owe,
ii. the services the brokerage and the designated representative would provide, and
iii. the remuneration arrangements the brokerage would have.
(3) The brokerage shall make best efforts to obtain a written acknowledgement from each person receiving a disclosure under subsection (1) indicating that the disclosure has been received and, if a person makes the acknowledgement, provide them with a copy of it.
(4) If a designated representative represents more than one client in respect of the same trade in real estate, the designated representative shall treat the interests of those clients in an objective and impartial manner.
Multiple representation — brokerage and designated representative
22.0.2 (1) This section applies if a brokerage represents one or more clients in respect of a trade in real estate under a brokerage representation agreement and a broker or salesperson employed by the brokerage represents one or more other clients, as a designated representative under a designated representation agreement, in respect of the same trade.
(2) The brokerage and the designated representative shall not represent their respective clients in respect of the same trade unless,
(a) the brokerage discloses the information set out in subsection (3) to each client in respect of the trade; and
(b) each client, after receiving the disclosure under clause (a), consents in writing to being represented by the registrant in respect of the trade.
(3) The following is the information referred to in subsection (2):
1. The fact that the brokerage represents one or more clients and a broker or salesperson employed by the brokerage represents, as a designated representative, one or more clients in respect of the same trade in real estate.
2. With respect to the brokerage’s client or clients, the differences between the duties the brokerage would have if only the brokerage represented its client or clients in respect of the trade and the duties the brokerage would have if both the brokerage and the designated representative represented their respective clients in respect of the trade, including any differences relating to,
i. the duties the brokerage would owe,
ii. the services the brokerage would provide, and
iii. the remuneration arrangements the brokerage would have.
3. With respect to the designated representative’s client or clients, the differences between the duties the brokerage and the designated representative would have if the brokerage did not represent any clients in respect of the trade and only the designated representative represented the designated representative’s client or clients in respect of the trade and the duties the brokerage and the designated representative would have if both of them represented their respective clients in respect of the trade, including any differences relating to,
i. the duties the brokerage and the designated representative would owe,
ii. the services the brokerage and the designated representative would provide, and
iii. the remuneration arrangements the brokerage would have.
(4) The brokerage shall make best efforts to obtain a written acknowledgement from each person receiving a disclosure under subsection (2) indicating that the disclosure has been received and, if a person makes the acknowledgement, provide them with a copy of it.
(5) The brokerage and the designated representative and, for clarity, every other broker and salesperson employed by the brokerage shall treat the interests of the brokerage’s client or clients and the designated representative’s client or clients in respect of the same trade in an objective and impartial manner.
(6) Nothing in this section affects the application of section 22 or 22.0.1 in circumstances where the brokerage or the designated representative represents more than one client in respect of the same trade.
Disclosure of multiple clients to buyers
22.0.3 (1) If a brokerage provides services to a seller and a buyer in respect of the same trade in real estate, the brokerage shall, as soon as possible after receiving a written offer from the buyer and before an offer is accepted, disclose this fact to every other buyer who makes a written offer.
(2) A brokerage shall make best efforts to obtain a written acknowledgement from each person receiving a disclosure under subsection (1) indicating that the disclosure has been received and, if a person makes the acknowledgment, provide them with a copy of it.
Duties of brokerage — designated representation agreement
22.0.4 If a brokerage enters into one or more designated representation agreements, the brokerage shall,
(a) protect each client’s confidential information, including ensuring that a designated representative does not disclose any confidential information of the designated representative’s client to any other broker or salesperson employed by the brokerage or other person, unless the disclosure is authorized by the client or required by law;
(b) treat the interests of all the brokerage’s clients that have entered into designated representation agreements in an objective and impartial manner;
(c) supervise every designated representative to ensure they fulfil their duties under the designated representation agreement; and
(d) in the event that a designated representative is not able to represent a client, designate a different broker or salesperson employed by the brokerage to be the designated representative for the client, if the client so agrees.
Duty of designated representative
22.0.5 Every designated representative shall protect the confidential information of every client represented by the designated representative, including by not disclosing a client’s confidential information to any other broker or salesperson employed by the same brokerage or any other person, unless the disclosure is authorized by the client or required by law.
10. (1) Subsection 22.1 (1) of the Regulation is amended by striking out “who has a client” in the portion before clause (a) and substituting “who represents a client”.
(2) Subsection 22.1 (2) of the Regulation is amended by striking out “The registrant” at the beginning and substituting “The broker or salesperson”.
11. Subsection 22.2 (2) of the Regulation is amended by striking out “The registrant” at the beginning and substituting “The broker or salesperson”.
12. Section 22.3 of the Regulation is amended by striking out “has a seller as a client and” in the portion before clause (a) and substituting “who represents a seller”.
13. Section 22.4 of the Regulation is amended by striking out “who acts on behalf of the buyer” and substituting “who represents the buyer”.
14. Section 22.6 of the Regulation is amended by striking out “in the course of representing the client” at the end and substituting “in the course of providing services to the client”.
15. Subsection 22.7 (1) of the Regulation is amended by striking out “If a brokerage that has a seller as a client” in the portion before clause (a) and substituting “If a brokerage that has entered into a representation agreement with a seller”.
16. Subsection 22.9 (1) of the Regulation is amended by adding the following paragraph:
5. If the registrant is a designated representative, any property interest that the brokerage that employs the designated representative has in the real estate.
17. Subsection 23 (4) of the Regulation is amended by striking out “If a brokerage has a seller as a client” at the beginning and substituting “If a brokerage has entered into a representation agreement with a seller”.
Commencement
18. This Regulation comes into force on the later of the day subsection 31 (1) of the Trust in Real Estate Services Act, 2020 comes into force and the day this Regulation is filed.