Chapter 2: Real Estate - A Regulated Profession

RECO (Real Estate Council of Ontario) - is responsible for regulating the activities of brokerages, brokers, and sales in ON. Its mission is to regulate the activity of trading in real estate in the public interest. The key goals of RECO: 

• establish a code of ethics and complaints process
• Establish education program
• Establish an insurance program
• Achieve real estate act reform

Protecting The Public Interest:

• Registration - standards required to register a brokerage
• Education - requirements for pre-registration for real estate courses 
• Inspections - inspections of brokerages offices 
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• Complaints and Concerns
• Insurance - consumer deposit, errors, commission protection

The Ontario Mobility Act - ensures that workers certified to practice in one province are entitled to be certified in that occupation in ON without examinations or assessments.

Registration Approval - The certificate of registration, once the application is approved, is sent to employing brokerage. It sets out the name, salesperson status, brokerage name, registration number and expiry date. The certificate must be returned to RECO if the registrar suspends, revokes, cancels or refuses to renew the registration.

Maintaining the Registration

1. Articling courses must be completed within 2 years following initial registration (3 courses).
2. Students in pre-registration education will be required to complete only 1 articling course: Principles of Appraisal, Principles of Mortgage Financing, Real Estate Investment Analysis, Property Managment.
3. Every registrant is responsible for registration renewal. To renew the registration, the registrant must meet the educational requirements and apply to renew with RECO.
4. Insurance is based on 12-month policy, which is renewed each year in mid-August. A registrant cannot trade in real estate unless he is insured.

Education Standards

All examinations are 3 hours length. At least 75% must be achieved. Students have 2 chances to pass. Otherwise, the course must be taken again.

Insurance Requirments 

1. Consumer Protection - consumer deposit protection.
2. Registrant Protection - Errors and Omissions / Commission Protection

Policy coverage is on the claim made basis. Claim made against the registrant will be reported to the insurer. Registrants must also report a circumstance (incident or situation that a registrant could reasonably foresee).

RCI (Registrar's Complaints and Inquiries Process) - provides a method of addressing complaints.

​​​​​​​​​​​​​​Brokerage Inspections and Investigations 

Types of Inspections:

1. Routine Inspections - typically, inspectors randomly choose brokerages for inspections. These inspections are conducted to ensure compliance with the Act.
2. Complaint-Initiated Inspections - the registrar may investigate complaints against registrants and those who are trading in real estate without the benefit of registration under the Act.
3. Courtesy Inspections - will conduct by request, to correct problems and improve reporting systems within the brokerage.
4. Reconciliation Inspections - in addition to on-site inspections, brokerages are asked to submit trust account reconciliations, a copy of financial institution, a list of pending trades.

Investigations - procedures, that may result in court action. Investigations can involve search warrants (ордер на обыск), seizures (конфискация), freez orders and applications to Court.