reco for the rd · 7 winter 2015 impact on the profession the research also indicated that most...
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RECOrdF O R T H E
RECOrdPUBLISHED BY THE REAL ESTATE COUNCIL OF ONTARIO • WINTER 2016
NEW REGISTRAR’S BULLETINS TACKLE
COMMISSIONS AND REFERRAL FEES
WE ASKED,
WE HEARD YOU,
AND WE’RE
TAKING ACTION.
RECO IS ‘RENOVATING’
HOW WE OPERATE
2 W I N T E R 2 0 1 6
MESSAGE FROM THE CHAIR RECO BOARD OF DIRECTORS
By Jody Lavoie, Chair, RECO Board of Directors
GOOD THINGS HAPPEN WHEN WE TALK TO REGISTRANTSOn behalf of everyone at RECO, I’d like
to wish all of you a happy new year.
It’s a time when people often look back
at the year that was, and look forward
to changes in the year ahead.
Looking back on 2015, we had an
open conversation with brokers,
salespeople and industry leaders about
how they see RECO and what we
can do better. As a result of those
conversations, we’re making significant
changes to how we operate. Looking
forward to the coming year, registrants
will start to see the impact of these
improvements.
The theme of this newsletter is:
We asked, we heard you, and we’re
taking action.
But first, let me step back and tell you
why reaching out to registrants like
you was so important.
WORKING TOGETHERWhat do chattels, bidding wars,
and basement apartments have in
common? They’re three key issues that
buyers often deal with, and in each
case RECO uses them to highlight how
a registered real estate professional
can help.
RECO works to protect the public
interest and enhance consumer
confidence in the real estate
profession, but we can’t do that
without you. Brokers and salespeople
like you are on the ground, day in
and day out, helping buyers and
sellers navigate a complex real estate
environment. RECO and the real
estate sector need to work together
to ensure consumers are given the
best possible advice and service.
It’s RECO’s role to help registrants do
that by encouraging you to follow
leading practices, ensuring that you
are well-equipped to meet the needs
of your clients. And, when necessary,
it’s our role to use the complaints and
inspections processes to make sure the
rules are followed.
A well-regulated real estate sector
increases consumer trust, and that’s a
positive outcome for everyone. That’s
why we turned to you for advice on
how RECO can work better with you
to meet our common objectives.
TAKING ACTIONThis newsletter is focused on those
conversations, as well as the important
changes that we’re making based on
what we’ve heard.
The changes fall into four categories:
• More clarity when we communicate
about the rules;
• Changes to the RECO complaints
process;
• Improved customer service; and,
• Increased consultation with the pro-
fession through an advisory council.
It’s important to note that there is much
that RECO does well, and we want to
build on that success. Think of it like
a renovation—we’re keeping the best
parts of the house, and improving the
areas that need some attention.
This doesn’t mark the end of our
consultation with you. We want to
keep the conversation going through
the advisory council, webinars with
industry leaders, local events and our
recently-completed registrant survey.
I hope you’ll agree that these changes
will have a positive impact on the real
estate profession.
MESSAGE FROM THE CHAIR RECO BOARD OF DIRECTORS
COMPLAINTS AND INSPECTIONS SURVEYSJANUARY TO SEPTEMBER 2015
103 people who fi led complaints
175 registrants subject of a complaint
302 registrants subject of an inspection
Asked about:
• Staff professionalism and knowledge;
• Information they received in letters and via website;
• Perceived fairness of the process;
• Timeliness of the process; and,
• Overall satisfaction with the process.
Complaints and inspections surveys are ongoing so
that we can measure changes over time.
WE ASKED HERE’S HOW WE REACHED OUT TO REGISTRANTS
Less than two years
2-5 years
6-10 years
11-15 years
16-20 years
21-25 years
More than 25 years
35%
5%17%
22%
8%
3%
10%
YEARS OFEXPERIENCE
FORQUESTIONNAIRERESPONDENTS
one-on-one phone interviews with
Brokers of Record, industry leaders,
and executive offi cers at real estate
boards
PHASE TWO - QUESTIONNAIRE TO CONFIRM AND EXPAND WHAT WE HEARDSample representative of the industry. Included:
• Varying levels of experience (see chart below);
• Salespeople and brokers; and,
• Registrants on residential and commercial side.
registrants in electronic
discussion groups
PHASE ONE - FREE FORM DISCUSSION
49
40
REGISTRANT OUTREACH• Conducted by The Portage Group.
• Portage provided expertise with gathering this type
of information and acted as a neutral third-party.
4 W I N T E R 2 0 1 6
HOW REGISTRANTS SEE RECO
When you think of RECO does the image of a
school principal come to mind? Research
participants were asked to list three words to
describe RECO. The word to the right shows
the top 25 words that survey respondents used
to describe RECO. The larger words show the
responses that were more common. Much like
a school principal, many registrants see RECO
as knowledgeable, professional and fair.
HEARDYOU
WE
By consulting with registrants and industry leaders, we were able to gain valuable insights into how RECO is seen within the sector, what we are doing well, and where we can make improvements.
5 W I N T E R 2 0 1 6
WHAT RECO IS DOING WELL
Understanding RECO’s role
Registrants have a high understanding of RECO’s role in
enforcing the Code of Ethics and real estate regulations.
There is also a fairly high understanding that RECO’s role
includes protecting and educating the public, but we would
like it to be higher. As a regulator, taking care of
the public is essential to our mandate.
There is confusion about who is responsible for developing
real estate legislation. To be clear – the Ontario government
does it. RECO’s job is to enforce legislation, not write it.
Registrants were evenly split on whether it is RECO’s role to
promote professionalism.
“At RECO, we 100 per cent believe professionalism is integral
to our role,” said CEO Kate Murray. “That said, we fully
agree it is a mission that we share with our colleagues at
local boards, as well as the Canadian Real Estate Association
and Ontario Real Estate Association.” HEARD
“ At RECO, we 100 per cent believe professionalism is integralto our role,” said CEO Kate Murray.
RECO Provincial Government Real Estate Associations Other
RECO MANDATED ROLES %
OTHER SECTOR ROLES %
81 4 14 1
77 8 14 1
81 3 20
67 21 11 1
48 9 39 4
46 1 51 2
74 7 19
50 2 46 2
45 40 15 1
38 3 58 2
14 1 81 4
ENFORCING THE CODE OF ETHICS
ENFORCING REAL ESTATE REGULATIONS
LICENSING REAL ESTATE PROFESSIONALS
PROTECTION OF THE CONSUMER
EDUCATING THE CONSUMER
PROVIDING CONTINUING EDUCATION TO REGISTERED REAL ESTATE PROFESSIONS
ESTABLISHING A CODE OF ETHICS
PROMOTING PROFESSIONALISM
DEVELOPING REAL ESTATE LEGISLATION
PROMOTING THE USE OF REGISTERED REAL ESTATE PROFESSIONALS
OPERATING THE MLS®
7 W I N T E R 2 0 1 5
Impact on the profession
The research also indicated that most registrants believe there is value in being part of a
regulated profession:
• 94 per cent strongly agree or somewhat agree that regulating the real estate profession
can provide great value for registrants.
• 96 per cent strongly agree or somewhat agree that regulation can provide great
value to consumers.
“ It’s encouraging that many registrants see the benefi t of being part of a regulated
profession,”said Registrar Joseph Richer.“Not only does enforcement ensure that the rules
are being followed, but it fosters a sense of trust among home buyers and sellers because
they know real estate professionals are held to a high standard.”
The survey also went a little deeper, asking not just about regulation in general, but about RECO’s role,
and to what degree it had a positive or negative impact on the profession (with 7 indicating the most
positive and 1 being the most negative) .
The average response was 4.4 and while this isn’t bad, it isn’t great either.
“ Basically, some registrants are telling us that we can improve how we operate,”
said Richer. “That’s something that we have taken to heart.”
Worst Case Average response: 4.4 Best Case
1 2 3 4 5 6 7Negative Positive
RECO’s role in regulating the profession has a positive/negative impact on the profession and my career
7 W I N T E R 2 0 1 6
Very satisfi ed: 83.5%
Satisfi ed: 13.8%
Not satisfi ed: 2.7%
High satisfaction with theinspections process
Last year, RECO performed close to 1,000
inspections of brokerages across Ontario to
make sure they are following the rules. The
survey clearly shows registrants agree that
one-on-one contact is a good opportunity for
Brokers of Record to ask questions and confi rm
they are maintaining accurate records.
Recent improvements to communications recognized
Recently, RECO has ramped up its communications efforts with registrants and industry stakeholders
through improved e-blasts and newsletters, and through more face-to-face interaction at local events.
The positive feedback is encouraging, and we’ll continue building on the strong foundation that
already exists with registrant communications.
AREAS FOR IMPROVEMENTWhen we reached out, we weren’t just looking for the “good news.” We wanted to hear about the areas where we could do better. Read on to learn about the areas registrants identifi ed for improvement, and how RECO istaking action in response to their feedback.
OVERALL SATISFACTION
WITH THE INSPECTIONS
PROCESS
“ It’s encouraging that many registrantssee the benefi t of being part of a regulated profession,” said Registrar Joseph Richer.
Worst Case Average response: 4.4 Best Case
Positive
8 W I N T E R 2 0 1 6
ACTIONWe’re
When we reached out to registrants, they gave us some key insights into how we can do better. Here’s what we heard, and how we’re taking action.
Taking
9 W I N T E R 2 0 1 6
RECO is taking a more educational approach to common discipline issues so that registrants can better understand how to avoid problems in the future. Here are three things that we’re doing:
Practice advisories
We are going to begin issuing practice
advisories that provide registrants with
a practical interpretation of the Code
of Ethics.
Reviewing ads before they run
We’re also changing how we handle
advertising compliance.
In response to a common request, we
will now review ads before they run.
Here’s how it will work:
- If a registrant thinks there may
be compliance problem with an
advertisement, they must first run
it by their broker of record;
- If the Broker of Record is unsure,
the BoR can send it RECO;
- RECO will review the ad and send
back a checklist showing where
there may be a mistake;
- The registrant can then correct the
mistake and issue the compliant
advertisement.
We formally launched this service in
early 2016.
Higher accountability for
ad complaints
In addition, if a registrant has a
complaint about other registrants’
advertisements, it must be submitted
by your Broker of Record. If you are the
subject of an advertising complaint,
your Broker of Record will have to
respond.
We believe that increasing the level
of accountability within brokerages
will help solve most of the advertising
compliance problems. We will
encourage Brokers of Record to
discuss their concerns with each other
first to try to resolve the issue before
submitting a complaint to RECO.
MAKING THE RULES MORE CLEAR
“ Registrants feel there is room to improve when it comes to the support RECO provides when they have questions around compliance.” – Portage final report.
If you are the subject of an advertising complaint, your Broker of Record will have to respond.
1 0 W I N T E R 2 0 1 6
Seventy-five per cent of registrants
who have been the subject of a com-
plaint are satisfied or very satisfied with
RECO’s complaints process. That means
about one quarter are not satisfied.
These responses were unrelated to the
outcome of the complaint – it was
simply about the process itself. So we
are working to make the process better.
Improved communicationWe are:- Updating our website and com-
plaints brochure to make informa-
tion about the process and
possible outcomes more clear;
- Revising the language in letters
and emails to complainants and
respondents to make it more
informational and educational;
- Providing registrants with the
information they need so that
the process is transparent and
they can provide an informed
response; and
- Making sure that all parties feel
that they have the opportunity to
present their side of the story.
CHANGES TO COMPLAINTS PROCESSES“ Many would like to see stronger repercussions for those truly doing ‘wrong’ and more support for those who have simply made a mistake or have made a minor infraction.” – Portage final report.
Expanding our use of dispute resolution (often referred to as mediation)Dispute resolution for complaints of a
less serious nature has two key benefits:
1. The focus is on resolving the
problem through mutual agreement,
rather than discipline or punishment;
and,
2. The complaint is resolved more
quickly, with less administrative
effort for all parties involved.
So we’ve expanded the criteria for a
complaint to qualify as long as the
parties agree to it.
We have also expanded the possible
outcomes. If the complaint doesn’t
warrant disciplinary action, we want
to find an outcome that works for
the parties.
Quite often, the parties recognize the
error that has been made and see the
value in making certain the registrant
takes steps to prevent it from happen-
ing again. An apology can make a big
difference when we’re helping them
reach an agreement.
Progressive disciplineRECO is committed to “progressive
discipline.” We want to give registrants
an opportunity to learn from their first
mistake, while still safeguarding the
consumer. Where inappropriate con-
duct is repeated, we will increase the
penalties we will be seeking.
Of course, we will continue to handle
serious complaints with major penalties.
“ An apology can make a big difference when we’re helping parties reach an agreement.”
1 1 W I N T E R 2 0 1 61 0 W I N T E R 2 0 1 6
IMPROVING CUSTOMER SERVICE“ Key concerns revolve around inconsistency in response to inquiries, and
a lack of timely responsiveness to inquiries and processing of registrations, renewals, transfers etc.” – Portage fi nal report
We want to make sure our
talented staff are able to do their
jobs effectively, so we are providing
them with more customer service
training, as well as new tools that
will help ensure that we provide
consistent information.
One issue we have to tackle is the
multiple entry points registrants
face when they want to ask us a
question, whether it be about
compliance, education or
registration. Registrants shouldn’t
have to worry about which
department they need to fi nd
or which email address to use.
So, we are reviewing our internal
processes so that registrants
reach the right person to answer
their question in a fast and
straightforward way.
RECO is also launching an online
“consumer toolkit” that will contain
materials registrants can share with
their clients to help them understand
the benefi ts of working with a
registered real estate professional.
INDUSTRY ADVISORY GROUP“ There is a sense from some registrants that RECOoperates in an ‘ivory tower’ where policies and procedures are developed without suffi cient regard for the realities registrants face ‘in the trenches’.” – Portage fi nal report
CHANGES TO COMPLAINTS PROCESSES
We need to make sure RECO’s
policies refl ect the day-to-day
realities of registrants. And, we have
the perfect pool of expertise to help
us: real estate professionals who
have a lot of practical experience
and knowledge of the real estate
marketplace.
To tap into that expertise, we are
creating an advisory group of
industry representatives that we can
consult when we are considering
our approach to different issues.
This group will have representation
from regions across Ontario.
THIS IS JUST THE STARTWe want to keep the
conversation going–through
the advisory council, by
hosting more webinars and
with our registrant survey.
That way, we will be able to
see how these changes
are being received and
identify areas for further
improvement.
WE ASKED,
WE HEARD YOU,
AND WE’RE
TAKING ACTION.
RECO IS ‘RENOVATING’
HOW WE OPERATE
Do you have questions about referral
fees? Are you thinking about offering
clients a commission rebate or reduc-
tion? New Registrar’s Bulletins tell you
what you need to know about these
issues.
To fi nd them, visit www.reco.on.ca and
navigate to Real Estate Professionals >
Resources > Registrar’s Bulletins
Commission reduction agreements
can be an asset when you’re trying to
facilitate a transaction. This bulletin will
help you understand how to handle a
commission reduction while complying
with the regulations.
Commission rebates to clients and
customers are a legitimate marketing
tool, and a way to differentiate yourself
in the marketplace. This bulletin will
help you ensure that the promotion,
documentation and delivery of a rebate
complies with the regulations.
Referral fees are something registrants
often ask us about. For example,
can you pay referral fees to a non-
registrant? What are your disclosure
obligations when receiving a referral fee
from a mortgage broker? This bulletin
spells out when you pay a referral fee
to a third party or receive a referral fee
from a third party.
New Registrar’s Bulletins tackle commissions and referral fees
Real Estate Council of Ontario
3300 Bloor Street West
Suite 1200, West Tower
Toronto, Ontario M8X 2X2
Tel: 416-207-4800
Toll-Free: 1-800-245-6910
Fax: 416-207-4820
Do you have any comments or inquiries about For the RECOrd
newsletter? Please send them to: [email protected]
Disclaimer: While RECO makes every effort to ensure that the information in this publication is current and accurate, RECO does not warrant or guarantee that it will be free of errors. The information contained in this publication is not intended to cover all situations. It is general information only and users/readers are encouraged to seek their own independent advice for particular fact situations.