TORONTO – Across Ontario, “bidding wars” have become an increasingly common experience for real estate buyers – especially those in competitive markets like Greater Toronto.
Set to take effect on July 1, 2015, a set of key changes to the Real Estate and Business Brokers Act, 2002 (REBBA) will aim to increase the transparency of the process – by requiring additional paperwork to be completed by brokerages representing both the buyer and seller.
Originally granted royal assent in 2013, “Bill 55: The Stronger Protection for Ontario Consumers Act” includes amendments to REBBA that, when put into effect, will require the seller’s brokerage to retain “copies of all written offers.”
The Act also states that if a consumer has submitted a written offer on a property, that consumer is entitled to request to view, via a “registrar,” the total number of other written offers submitted for the same listing.
The responsibility of enforcing the act will lie with the Real Estate Council of Ontario (RECO). To assist brokerages with preparing for the rollout, the Council recently issued a helpful fact sheet outlining the Act’s key stipulations and procedures. Here are a few of the key quotes from the document:
- “The brokerage [representing the seller] must keep a copy of all written offers that it receives, or an equivalent summary document for each offer, for at least one year from the day it is received.”
- “For unsuccessful offers, the brokerage [representing the seller] may retain a summary document instead of retaining the offer in its entirety.” (The fact sheet also contains the details which must be included on each summary document.)
- “All offers must be made in writing […] Written offers must be signed to be valid.”
- “RECO will only disclose the number of written offers received to the person who requested it. RECO will not release any detail regarding the offers, or identify the people who made the offers.”
While RECO will also be responsible for confirming the number of offers on a property, their process for doing so was still under development as of March 20 (when the fact sheet was released). Most likely, though, it will involve contacting the listing brokerage directly to make a request for the documentation – with which the brokerage must always comply.
The Ontario Real Estate Association (OREA) has also gotten involved with preparing for the rollout, by beginning work on a form that can be used to develop “summary documents” for unsuccessful offers. For summary documents as well as offers themselves, brokerages will always have an option to store the documents either electronically or in print.