TRESA – TRUST IN REAL ESTATE SERVICES ACT
(WHAT BUYERS AND SELLERS NEED TO KNOW!!!)
As of December 1st 2023, TRESA has officially replaced the Real Estate and Business Brokers Act in Canada.
There have been significant changes in the real estate industry in Canada with the introduction of TRESA, replacing the Real Estate and Business Brokers Act, on December 1st 2023. Let me summarize some of the key changes for both buyers and sellers:
- Elimination of Customer Representation: The option for agents to provide “Customer Representation” to buyers is no longer permitted. Buyers now have two options:
- Choose to be represented by an agent and become a “client.”
- Choose to be a “self-represented party” and go through the process alone.
- Representation Agreements: Buyers looking to work with an agent can sign either a “Buyer Representation Agreement” for full representation or a “Limited Service Representation Agreement” for a trial period with specified terms.
- Self-Represented Parties (SRP): Buyers choosing to go it alone as a “buyer self-represented party” should be aware of the risks involved. Agents working with SRP’s are restricted from offering “Customer Service Representation” and showing properties listed outside the agency’s brokerage office. Agents working with SRP’s are restricted and advising, guiding or preparing documents on the SRP’s behalf.
- Transition Period for Existing Clients: Buyers working with an agent before December 1st, 2023, with supporting documentation, can continue to do so with “implied consent” until March 1st, 2024.
- Bid Options: Sellers now have the option of choosing between “Closed” bid offers or “Open” bid offers.
- Closed Bid Scenario: Details of any offer may not be shared with other competing buyer agents.
- Open Bid Scenario: Sellers can instruct their agent to disclose all or only the best aspects of each offer.
- Communication Requirements: In an open bid process, sellers must communicate in writing to all competing agents. Additionally, buyers have the right to revoke their offer if they do not want their information shared.
- Self-Represented Parties (SRP): Sellers may also choose to go it alone as a “self-represented party” and should also be aware of the risks involved. Agents working with SRP’s are restricted from offering “Customer Service Representation” and advising, guiding or preparing documents on the SRP’s behalf.
These changes aim to redefine the relationships between buyers, sellers, and agents, providing more clarity and options in the real estate transaction process. It’s crucial for all parties involved to familiarize themselves with the new regulations outlined in the RECO INFORMATION GUIDE.
If you have any questions, please feel free to contact me for clarification.