Effective December 1, 2023, new provincial legislation comes into effect, the “Trust In Real Estate Services Act 2020” or TRESA for short.  This new Act will change the real estate process in term of both selling and buying any type of properties in Ontario.  For REALTORS® and most importantly consumers, TRESA will offer many benefits and greater protection via the implementation of this new Act.  In a number of blog posts, I will cover some of the basics that you need to know.

Let’s begin by looking at the historical difference between being a Client versus a Customer.  Contrary to popular believe and despite the fact those two terms have been randomly exchanged for many years, being a Client or a Customer is not one in the same.

Wat Makes You a “Client”?

If you are working with a REALTOR® either having signed a “Listing Agreement” as a Seller to sell your property or you are a Buyer and have signed a “Buyer Representation Agreement,” you are a Client.  As such, the REALTOR® has been legally appointed to act on your behalf.  They have a fiduciary duty to work for and lookout for your best interests.

What Makes You a “Customer?”

On the flip side if you are simply a Customer, a REALTOR® has an ethical duty to answer your questions or inquiries about a property or real estate manner honestly and fairly but legally they are not representing your interests and have no fiduciary duties to you.  The role of being a “Customer” versus a “Client” in a real estate transaction has been in place for about 30 years so this is by no means new terminology.

In the past, most of us in the real estate profession have always reviewed and had consumers acknowledge via signing, a form titled “Working With a REALTOR®” click here for a copy of the current form.  While reviewing and having consumers sign this form is not required by law, most real estate Brokerages make it mandatory in order to ensure that consumers are fully aware of the relationship they have with the REALTOR® they are dealing with.  Said form clearly outlines the difference between being a Client and a Customer.  Further, the form went on to explain under the heading “What Happens When…” a real estate Brokerage is representing both Seller and Buyer Clients in the same transaction.  This  relationship is known as “Multiple Representation” and it is often referred to by REALTORS® and consumers as “double ending” wherein the Brokerage earns both the selling and buying portion of the commission.  For years Multiple Representation has been a source of controversy and conflict with consumers.  Many consumers do not understanding the concept and lack awareness of who was working for who.  More on that in a future post.

With the passing of TRESA, the definition of consumer relationships in the real estate transaction is changing.  Effective December 1, 2023 there will be no longer be any reference to the term “Customer.”  If a Seller or Buyer has not entered into a “Client” Representation Agreement with a REALTOR® they will then be referred to as a “Self Represented Party.”  While this is new to real estate, the term “Self Represented Party has been around for years in professions such as the legal trade.  Example:  A person facing a charge(s) can go to court without a Lawyer.  As such they are a looking after their own best interests as a “Self Represented Party.”

For the past 10 years I have sat on the Committee at the Ontario Real Estate Association that drafts and revises the over 200 forms that we use across the province for real estate transactions.  The committee’s work this year was more onerous due to the passing and implementation of TRESA.  Any reference to the term “Customer” had to be removed from many of the real estate forms that are currently in use across the province.  Conversely, new forms needed to be drafted dealing with Self Represented Parties.  These include an Acknowledgement and Consent form for Sellers, one for Buyers, and similar forms for Landlords and Tenants pertaining to rentals.

In my next blog post I will cover the issue of Multiple Representation.  As a licensed REALTOR® for over 20 years, Multiple Representation has always been one of the most contentious issues when consumers are engaged in selling and buying a property when one Brokerage is representing both parties.  This is a relationship that many have not understood and it has led to both problems as well as complaints to the Real Estate Council of Ontario who oversees and governs real estate activities on behalf of the provincial government.

More on this in my next blog post titled: Ontario’s “New” Trust In Real Estate Services Act 2020 – What You Need To Know Part 2.  As always I welcome without obligation, any questions you may have on this or any pother real estate related topics.  Contact Me to learn more.