TRESA
This provision is changing with TRESA.
Old Code
Material facts
21. (1) A broker or salesperson who has a client in respect of the acquisition or disposition of a particular interest in real estate shall take reasonable steps to determine the material facts relating to the acquisition or disposition and, at the earliest practicable opportunity, shall disclose the material facts to the client. O. Reg. 580/05, s. 21 (1).
(2) A broker or salesperson who has a customer in respect of the acquisition or disposition of a particular interest in real estate shall, at the earliest practicable opportunity, disclose to the customer the material facts relating to the acquisition or disposition that are known by or ought to be known by the broker or salesperson. O. Reg. 580/05, s. 21 (2).
New Code
Material facts
22.1 (1) A broker or salesperson who has a client in respect of the acquisition or disposition of a particular interest in real estate shall,
(a) take reasonable steps to determine the material facts relating to the acquisition or disposition;
(b) disclose the material facts to the client as soon as possible after the determination; and
(c) advise the client to consider whether the material facts affect their decision to acquire or dispose of the interest. O. Reg. 357/22, s. 12.
(2) The registrant shall make best efforts to obtain a written acknowledgement from the client indicating that the disclosure and advice mentioned in subsection (1) has been received and, if the client makes the acknowledgement, provide them with a copy of it. O. Reg. 357/22, s. 12.
Comment
The old Code, included the provision to take reasonable steps to determine the material facts. That will remain the same, and that is followed by the obligation to advise your own client of those facts.
There was a slight step down for customers, but since that service level has been eliminated, so has that provision.
Now, the agent not only discloses those facts to their own client, but, they are now directed to follow up, and ensure:
- That the client directs their minds to such facts
- Consider whether such facts actually affect their decision
- Document the decision in writing to be acknowledged by the client.
The above steps are all new, and did not exist under the old Code.
It is interesting that “reasonable steps” have been extended by the courts to mean “investigate, determine and verify”. Naturally, that interpretation will continue.
Brian Madigan LL.B., Broker