As stated in prior blog posts, the implementation of the province of Ontario’s new Trust In Real Estate Services Act 2020 (TRESA) which takes affect on December 1, 2023 incorporates a number of changes in real estate transactions of all types that will impact both REALTORS® and consumers alike.

In Part 1 I explained TRESA’s impact on the difference between REALTOR’S® relationships with real estate “Clients” versus “Customers” pointing out the fact that they are not one in the same.  Further, with the advent of TRESA, the term “Customer” hence the REALTOR®/Customer relationship will no longer exist under the new legislation.

In Part 2  I covered the issue of “Multiple Representation,”  which in the past has often been a very controversial if not confusing issue with consumers.  Multiple Representation takes place in real estate transactions when a real estate Brokerage and their respective REALTORS® represent both the Seller and the Buyer.  Multiple Representation also exists when a real estate Brokerage represent two or more Buyers competing to purchase the same property  even when the property in question is listed for sale by another Brokerage or perhaps it’s simply a For Sale By Owner.  In those instances where Multiple Representation exists, REALTORS® have always had to explain and obtain written consent from both parties prior to proceeding.  This is still very much the case however new real estate forms have also been created to clearly explain the Multiple Representation relationship and to obtain all parties to the transaction’s written consent.

The implementation of TRESA brings major revisions to these relationships/circumstances and I encourage you to read both Part 1 and Part 2 of my blog.

In this post Part 3, I am going to expand what the new TRESA legislation means in real estate transactions when a Seller, Buyer or both choose not to be represented by a Brokerage and their REALTOR®.  In those situations the party(s) has elected to represent themselves.  A good analogy to clarify this would be those times when a person chooses to go to court to fight a traffic ticket or other legal matter wherein they choose to represent themselves versus engaging a lawyer to represent them.

What Is a “Self-Represented Party” in a Real Estate Transaction?

From a real estate perspective a common example of this would be a home that is listed for sale by the Owner, commonly referred to as a For Sale By Owner or FSBO for short, when the Seller is representing themselves in attempting the sell the property privately.  Under the new TRESA legislation, any consumer whether Seller or Buyer that has chosen not to be represented by a Brokerage and or their REALTOR® will now be defined as a “Self-Represented Party.”  Prior to the implementation of TRESA that person(s) would have been a “Customer” not a “Client” and as previously mentioned the term Customer no longer exists under TRESA.

A Seller or Buyer may for whatever reason, not wish to be represented by or receive services as a Client from a real estate Brokerage and their REALTOR(S)®.  Rather they prefer and and perhaps feel confident to act on their own behalf as a Self-Represented Party.  Nonetheless, we as REALTORS® are obligated to treat every person in a real estate transaction with honesty, fairness and the utmost in integrity.  Unlike in a circumstance where the party is a Client, under TRESA we will not be providing service or representation to a Self-Represented Party.    A REALTOR® however may provide assistance to a Self-Represented Party as directed by the REALTOR’S® client.  This begs the question what is the difference between “service” and “assistance”?

Examples of Assistance

  • Providing assistance to a Self-Represented Party may include showing a property or properties listed for sale.
  • A REALTOR® can take direction (provided it’s legal) from a Self-Represented Party to draft an Offer and present it to the REALTOR’S® Seller client.
  • A REALTOR® may provide assistance to a Self-Represented Party via assisting them with the “mechanics” of drafting an Offer however the REALTOR® in this role cannot provide service such as advice to the Self-Represented Party with respect to what price to offer, what terms and or conditions etc. the Offer should include.
  • In short, the Self-Represented Party has chosen to receive only assistance from the REALTOR® , not “duty of care.”  The REALTOR® and their Brokerage have no fiduciary duty to protect the best interests of the Self-Represented Party.

By providing any form of advice to a Self-represented Party with respect to what price to offer, what terms/conditions should be included in an Offer etc., the REALTOR® runs the risk of establishing an unintended  “Client” relationship with the Self-Represented Party merely by their actions.

In preparing for the new TRESA legislation, the Real Estate Council of Ontario (RECO) is drafting a new “Information Guide” to be released shortly.  This will be a mandatory guide that we as licensed REALTORS® will be required to use in every real estate transaction we are involved in.  When assisting a Self-Represented Party the steps below must be adhered to:

  • The Self-Represented Party must receive the mandatory RECO Information Guide.
  • It will be the responsibility of all licensed REALTORS® representing the Brokerage to provide an explanation of the Information Guide and other documents to a Self-Represented Party.
  • A new Self-Represented Party Acknowledgement and Consent form one for Sellers and one for Buyers has been created serving as a disclosure that the Brokerage and or its REALTOR® will or may be representing a client with respect to the trade and said form will disclose that relationship to all parties which must signed by the Self-Represented Party.
  • The form also outlines the risks that may arise after a Self-Represented Party receives assistance from the Brokerage and the types of assistance that the Brokerage will be permitted to provide a Self-Represented Party.
  • Further, the form recommends that the Self-Represented Party seek professional advice from either another real estate Brokerage or a lawyer etc. and this form requires the Self-Represented Party’s signature(s) confirming this.
  • In summary, the Self-Represented Party is not to rely on the REALTOR’S® skill and or judgement with respect to the real estate transaction as that “Client” relationship does not exist.

While on the surface this may all sound complicated it is not.  For years, we as REALTORS® have dealt with consumers either selling or buying real estate that in some cases were not our “Clients,” rather they were “Customers.”  Many of the problems that have arisen were due to consumers not understanding or having the difference in the REALTOR® relationship explained to them along with other issues such as Multiple Representation and more.  The new TRESA legislation has been established to better clarify these matters to consumers while adding stricter legal obligations for REALTORS® to adhere to.  In my opinion this action was long overdue.

In my next post Part 4, I will cover a new form of relationship that real estate Brokerages may choose implement with their clients which is defined under TRESA as “Designated Representation.   As always I welcome and encourage you to ask any questions or offer any comments as to how the implementation of TRESA which comes into effect on December 1, 2023 may impact your real estate selling or buying situation in the coming months.  For these or any other information, please feel free to Contact Me.