For more than thirty years Ontario real estate practitioners have been lobbying government for a greater say in the management of their industry. Early in 1997, the Honourable David Tsubouchi, Minister of Consumer and Commercial Relations, announced the creation of the Real Estate Council of Ontario RECO's business is presided over by a twelve person Board of Directors, nine of whom are real estate brokers and salespersons and three directors who serve at the pleasure of the Minister of Consumer and Commercial Relations and represent Consumer Business and Government interests in Ontario.

Empowered to administer the Real Estate and Business Brokers Act, RECO's mandate is massive and includes not only the responsibility to educate and register all 48,000 brokers and salespersons, but more importantly imposes upon the industry the responsibility of ensuring a safe and fair marketplace. As a result, consumer protection is the primary function of the Council.

With that in mind the inaugural directors of the Council quickly defined RECO's priorities. Chief among those were; the creation of a new and industry wide mandatory Code of Ethics, drafting recommendations for a new real estate act to regulate the industry, enhanced consumer protection, and a review of the education system, with a view of strengthening and expanding industrial and commercial programs. Task forces were established to investigate these issues, through consultation with stakeholders, mainly members and consumers and to report the findings to the Board for implementation.

On January 13 of this year, well over 2,000 brokers and salespersons gathered in snow bound Toronto to review the Council's efforts to date and to ratify and adopt three by-laws which will change Ontario's real estate industry. Chief among those new bylaws was the introduction of Membership By-law which sets out membership requirements, introduces classes of membership recognizing expertise and specialization, provides for the introduction of consumer protection plans and includes a long awaited industry wide, mandatory Code of Ethics binding on all its member brokers and salespersons. This and other administrative by-laws were overwhelmingly adopted by the Membership and paves the way for a regulation change to the Real Estate and Business Brokers Act later this spring.

The Code of Ethics which is expected to take effect early next year, sets out the minimum level of professional conduct consumers can expect from real estate brokers and salespersons. RECO's Code like most is modeled on the Golden Rule. Its twenty four rules require members to treat consumers, both clients and customers fairly, honestly and with integrity. While each rule is important, there are a number which will affect buyers and sellers directly on a daily basis. Briefly, the new Code requires a member when acting in a professional capacity to:

• endeavor to protect and promote the best interest of the client
• endeavor to protect the public against fraud, misrepresentation or unethical practice
• maintain and enhance the Member's degree of skill and competence
• render services based on the Member's knowledge, training, qualifications and expertise
• disclose the nature of the salesperson's role and service offered in writing, enter into written Representation Agreements with clients at the earliest opportunity
• disclose the financial aspects of a transaction to a transaction and to disclose any personal interest
• ensure all agreements regarding transactions are accurate, clear, concise and in writing and that all parties receive a copy of the documents
• not disclose confidential information about a client without the client's consent except when required to do so by law
• not to physically, sexually, emotionally or verbally abuse a client, customer or other party
• not to make a false statement or participate in creating any document if the Member knows or ought to know is false or misleading
• to discover and verify pertinent facts relating to a property or transaction
• and not to discriminate or to participate in discrimination against a person.

The new Code when implemented next year following a industry wide education process puts into writing the voluntary code most real estate salespeople have followed for years. In addition to the creation of the Code of Ethics, the Membership by-law sets out procedures to handle and adjudicate complaints received by the Council against a Member. Over the remainder of this year RECO will create the Complaints and Compliance process and hire staff to administer it. Complainants will be advised of the process and be informed of any decisions. Penalties for breaches of the Membership By law including the Code can be severe and include:

• directing a Member to pay an administrative penalty of up to $25,000.00 ($50,000.00 if a Corporation)
• direct a Member to comply with specified terms, conditions or limitations on the Member's practice
• remove or transfer a class of membership
• place a Member on probation for up to 2 years
• suspend a Member's membership or
• revoke a Member's membership in the Council.

Another area where the Council has effected change is with the introduction of three classes of membership. These include a General Class open to all Brokers and Salespersons and separate Residential and Industrial, Commercial and Investment (IC&I) Classes of membership which identifies a Member as being a Broker, having at least 5 years of experience in a specialized field and having achieved a level of education and experience sufficient to warrant admission into a specialist class of membership. This is seen as a reasonable and easy identifier of a Member's level of competence which consumers can use when selecting a real estate professional. Consumer protection will continue to be at the forefront of RECO's mandate. Over the next few years consumers can expect to see the introduction of Mandatory Continuing Education programs for all real estate practioners, a requirement that all brokers and salespersons carry Errors and Omissions Insurance to protect the public from innocent misrepresentation and omission which can occur with transactions and the creation of a Compensation Program which will protect further Consumers trust funds.

Terry Landon is Vice President and the Broker of Record of RE/MAX Cornwall Realty Inc., real estate brokerage, a founding Director of the Real Estate Council of Ontario, Past President of the Cornwall and District Real Estate Board and a proud member of Team Cornwall.

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