TRESA: General Purpose and Objectives

Looking at the new TRESA legislation, there are several different purposes and objectives.

There are effectively, three phases:

Phase 1

This was introduced in order to permit the real estate profession to incorporate and save money on taxes. This was available to other professions, so why not real estate profession.

Also, they broadened the self-descriptive words that someone in the profession could use to describe themselves. They were widely used anyways, they just simply could not be used in a technical sense as in advertising, like the use of the term REALTOR® , however that can only be used by those who have joined “organized real estate”.

Phase 2

With this most recent Phase, which came into force on 1 December 2023, we saw numerous changes to the Act and the Regulations. By and large, this is by far the most important Phase.

Phase 3

Phase 3 will permit various individuals who are registered to describe themselves as specialists in a particular field. They will obviously require either experience or education, or a combination of both in order to qualify. For example, specialization might include: condominiums, pre-construction, waterfront properties, rural properties, farms, businesses, seniors etc.

The governing body, the Real Estate Council of Ontario would have to agree and authorize such specialties and set out the various requirements.

Purpose and Objectives of TRESA

Informed Consent

It would appear that “informed consent” on behalf of consumers is one of the underlying goals. This is a concept that started in the mid ‘60’s in the United States in the field of medical malpractice. It did have its initial origins in Male v. Hopmans in 1969 before the Ontario Court of Appeal. It escalated in 1979 in the Reibel v. Hughes case before the Supreme Court of Canada. For whatever reason, while it did affect other professions in legal decisions, it really wasn’t embodied in real estate legislation until TRESA.

This concept is underlined by the obligations imposed upon RECO to prepare an Information Guide. This is intended to explain all the business relationships to the consumers.

Document the File

Numerous provisions require agents to document the file. They not only are under an obligation to explain an issue carefully, they are now required to make detailed notes and secure an acknowledgement that the issue was explained, actually, not only explained, but its implications “considered” by them.

Maintain the File

Up until now, the file really might only have consisted of the Agreement of Purchase and Sale, Representation agreements and trade sheets. And, that would be with respect to 123 Main Street.

Now, we will see files for a complete purchase, which would include all the other properties identified, considered and rejected.

For sales, we may also see documentation relating to the disposition of the competitor’s properties, since those would have implications upon the management of the listing.

Decrease in Caveat Emptor

There is a specific disclosure requirement imposed upon Listing agents. Now, they will have to disclose items that previously would have been confidential. This is now  a specific breach of a number of their fiduciary duties. So, that aspect will have to be documented as well.

Increase in Consumer Protection

Most consumers will be represented by their own agent in the transaction. There are no “second rate” consumers, previously referred to simply as “customers”. Everyone will be elevated to a client and agency obligations imposed.

Further, their own agent will have to specifically direct the consumer’s attention to the material facts, They will be documented and recorded in the “new” file to be maintained.

Designated Agency

This really is just confirmation about the way consumers thought anyways.

Consumers who hired Bob Jones to sell their house, never really appreciated that it XYZ Realty, the company for whom Bob Jones worked that was the real and true “agent”. We have been on the incorrect wavelength here for over 30 years, when the concept of sub-agency was largely reduced and the role of customers was introduced. Now, all that that is gone.

A consumer hires Bob Jones and that is precisely who they have. XYZ Realty will provide certain backend services, but representation and agency fall strictly upon Bob Jones.

Open Offers

Consumers in a Seller’s market were looking for transparency when it came to the Offer process. That’s what the polls seemed to indicate. As a consequence, Sellers are now provided the opportunity to disclose all, or part of an Offer, at whatever time or times they decide, and change their minds back and forth throughout the process. They just can’t reveal the identity of the Buyers.

The interesting situation which developed was a response by Buyers as to how they could “opt out” of such a process.

Reduced Conflicts of Interest

The new Code of Ethics under TRESA will restrict conflicts of interest, requiring disclosure by the registrant and consent to proceed by the consumer.


All in all, it would appear that the new TRESA legislation will be of benefit to consumers.

Brian Madigan LL.B., Broker


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