RECO Information Guide

Every real estate agent in Ontario must be registered with RECO, which requires the necessary education and carrying both consumer deposit insurance and professional liability insurance.

When you are a client of a brokerage, the brokerage and agent owe you these duties:

• Undivided loyalty— your interests come first, ahead of the brokerage, its agents, and any other party.
• Disclosure— they must tell you everything they know about the transaction or your relationship that could affect your decisions.
• Confidentiality— your confidential information (your motivation, the price you would pay or accept, and similar) is not shared outside the brokerage without your written consent, even after the relationship ends.
• Avoiding conflicts of interest— they must steer clear of situations that compromise acting in your best interest, and disclose any conflict that does arise.

A seller’s agent can advise on pricing and strategy, market the property, arrange showings, inspections and appraisals, vet buyers and offers, handle competing offers, negotiate, and guide you through closing. A buyer’s agent can help with financing pre-approval, research neighbourhoods and homes, make inquiries about zoning and permitted use, advise in competing-offer situations, negotiate, refer other professionals, and guide you through closing.

As a client, you are expected to be clear about what you want, share all relevant information, respond to your agent promptly, understand your agreement, and pay the fees you agreed to — even if a deal later falls through because of your own default or neglect.

If you take part in a transaction without being a client of a brokerage, you are a self-represented party. Very few people make this choice, and RECO recommends you get independent professional advice first.

You would be responsible for protecting your own interests — researching zoning and permitted use, deciding what the property is worth, deciding what to offer or accept, navigating competing offers, choosing your terms and conditions, and preparing all documents.

If an agent is involved but works for the other side, that agent has a legal duty to act in their client’sbest interest — not yours. They must pass on to their client anything you tell them, including your motivation and the price or terms you would accept. That agent cannot give you advice or opinions, cannot do anything that encourages you to rely on their judgement, and cannot discourage you from working with another brokerage. Any help they give is a service to their client.

Before assisting you, the agent must give you RECO’s Information and Disclosure to Self-represented Party form and walk you through it. You can choose to become a client of a brokerage at any point during the transaction.

When you become a client you sign a representation agreementwith the brokerage (a buyer representation agreement, or a seller representation / listing agreement). It must be in writing and given to you as soon as possible. If you don’t sign one, don’t expect services such as showings.

Ontario has two kinds of representation:

• Brokerage representation— the brokerage and all its agents represent you.
• Designated representation— one or more named agents represent you; the rest of the brokerage must treat you impartially. This reduces the chance of multiple representation. (Introduced December 1, 2023 — ask which model the brokerage uses.)

Review the agreement in detail before signing. Key things to check:

• Designated representative— the name(s), if it is a designated representation agreement.
• Scope— the specific property, area, or property type covered, so it is clear who you owe fees to if you buy.
• Services— there is no standard set; make sure everything you expect is written in.
• Payment amount and terms— you and the brokerage set the amount (a flat fee, a percentage, or both); it is not fixed or approved by RECO or any board. It cannot be based on the difference between the list price and the sale price. The agreement must set out how the amount could change — including if a seller does not cover a buyer’s brokerage fees, or if you consent to multiple representation.
• Termination— every circumstance in which either side can end the agreement, and any penalties. A designated representative cannot be swapped without your agreement.
• Expiry date— must appear prominently on the first page. There is no standard term.
• Holdover clause— may require you to pay the brokerage fee if you buy or sell within a set period after the agreement expires. Agree to the length before you sign.

Note for buyers:a seller might not offer anything toward the fees you owe your brokerage, which can affect how much you can offer — and, depending on your finances, whether you can afford a particular property.

Multiple representationis when a brokerage or a designated representative represents more than one client with competing interests in the same transaction — for example both the buyer and the seller, or two buyers competing for the same property.

It is not allowed unless every client involved agrees in writing. Before you agree, the brokerage must give you written disclosure of how its duties to you change, how the services change, and any change to what you pay. Until all clients have that disclosure and all agree in writing, the brokerage cannot take any further steps for anyone.

If you agree, the brokerage or designated representative:

• must treat each client objectively and impartially;
• cannot give you undivided loyalty or put your interests ahead of the other client;
• cannot advise you on things like the price to offer or accept, or the terms to include.

You can refusemultiple representation — then the brokerage cannot proceed, and should offer alternatives (for example, referring a buyer to another brokerage or designated representative to make the offer). Confidential information you already shared still cannot be disclosed without your written consent.

Competing offers: a buyer who has made an offer is entitled to know the number of competing offers. The seller decides how much more, if any, to share, and must give written direction before any offer content is shared (personal or identifying details are never shared). A buyer can ask their agent how to keep their own offer content private, but the seller can decide to share offer content at any time, possibly without notice.

Ontario brokerages and agents are accountable for their conduct.

First, contact the brokerage.It can often mediate or resolve a concern about an agent or the services under your agreement. RECO’s Public Register lists the broker of record and their contact details. A brokerage cannot ask you to sign anything that requires you to withdraw a complaint to RECO or prevents you from making one.

Then, contact RECO. File through the complaints section of reco.on.ca. RECO reviews the issue, decides whether it has authority to deal with it, and determines next steps.

• The full guide (residential and commercial, standard and printer-friendly): reco.on.ca/RECO-Information-Guide
• The legislation: Trust in Real Estate Services Act, 2002 (TRESA)
• Ready to speak with someone? Find a REMAX Hallmark® agent

Summary prepared by REMAX Hallmark®. “RECO Information Guide” and its contents are produced by the Real Estate Council of Ontario. Content version December 1, 2023.