Effective July 1, 2015, brokerages across Ontario acting on behalf of sellers must meet new requirements for handling offers.
The changes stem from Bill 55, the Stronger Protection for Ontario Consumers Act, 2013. To review the relevant changes, see section 35.1 of the Real Estate and Business Brokers Act, 2002 (REBBA 2002) and section 19.1 of Ontario Regulation 579/05 made under REBBA 2002.
The changes are intended to increase the transparency of the offer process, but it’s important to remember that real estate professionals are required to conduct a fair and transparent offer process.
Brokerages are responsible for developing the processes and policies necessary to be compliant, and for training its employees on those processes and policies.
When you are representing the seller
You cannot indicate that you have received an offer unless you have received a written offer. Please keep in mind that written offers must be signed to be valid.
The brokerage must keep a copy of all written offers that it receives, or a complete summary document for each offer, for at least one year from the day it is received.
The offers may be stored electronically or as a hard copy. For the purposes of the new amendments, each counter offer made by a buyer and received by the seller’s representative is considered an offer, so the brokerage must retain records for the original offer and every change made to it during negotiations. Though offers from a seller to a buyer are not covered by this amendment, they should continue to be retained by the seller’s representative.
For unsuccessful offers, the brokerage may retain a summary document instead of retaining the offer in its entirety. The Ontario Real Estate Association (OREA) has a form for this purpose, but a brokerage may create its own form, provided it contains the required information.
It’s important to note that the summary document may be used only when the buyer is making an offer through a brokerage (brokerage acting for the buyer). For offers coming from a buyer directly, the brokerage must retain the offer in its entirety.
The summary document must include:
The name and signature of the buyer.
The name and contact information of the seller.
The name of the buyer’s brokerage and their representative.
The name of the seller’s brokerage and their representative.
The address, legal description or other identifier of the property.
The date and time the offer was made.
The date and time the offer was received by the brokerage, and how the offer was received,
such as in person or by fax.
The date of presentation, if the brokerage presented the offer to the seller.
The date and time, if any, until which the offer was irrevocable.
When you are representing the buyer
All offers must be made in writing. Please keep in mind that written offers must be signed to be valid.
Process to confirm the number of offers that a property received
For the purposes of the new amendments, if you are a person who has made a written offer or if you are a registrant acting on behalf of someone who has made an offer, you can request that RECO determine how many written offers the listing brokerage received for the seller on that property. You may use the RECO complaint form for your request.
Upon receipt of a completed complaint form, RECO may contact the listing brokerage to confirm the number of offers that a property received. RECO may also request documentation for each offer (either the entire offer or the summary document). The brokerage is required to provide this information to RECO upon request.
RECO will only disclose the number of written offers received to the person who requested it. RECO will not release any detail regarding the offers, or identify the people who made the offers.