COVID-19 and real estate: frequently asked questions

RECO

RECO has received a wide variety of questions about real estate trading in light of the COVID-19 pandemic. Please see below for answers to some of the most common questions from registrants. The latest information from RECO is always available on the COVID-19 Notices page.

 

Challenges in closing trades

Will RECO enable the extension of real estate closing dates, without penalty?

RECO does not have the authority to enable the extension of closing dates.

Altering the closing date of a real estate transaction would require amending the agreement of purchase and sale (APS), which is a binding contract between the buyer and the seller. Any change to the closing date in the APS can only be made by written amendment signed by the parties to the agreement. During this unprecedented situation, we encourage all parties to approach such changes with a desire to be flexible and understanding in changing circumstances.

Some brokerages have taken steps to develop and recommend clauses that facilitate COVID-19 related delays. Consider seeking legal advice before including such a clause.

Will RECO enable consumers who can’t close because of COVID-19 to get their deposits back?

It is outside RECO’s authority to require the return of deposits.

Failed transactions must be resolved through an agreement between the buyer and seller, with support from professionals such as real estate salespeople and lawyers. The distribution of deposits may only occur by agreement between the parties, or by court order.

During this unprecedented situation, we encourage all parties to approach such situations with a desire to be flexible and understanding in changing circumstances. Registrants should continue to support their clients to find effective solutions – something they do well.

For more information, see the Registrar’s Bulletin on failed Agreements of Purchase and Sale.

If the Agreement of Purchase and Sale stipulated that the buyer was entitled to a certain number of pre-closing visits, does the seller have to honour this obligation, in light of the changing circumstances?

During this unprecedented situation, we encourage all parties to approach such situations with a desire to be flexible and understanding in changing circumstances. We encourage registrants to continue to support their clients to find creative and effective solutions.

 

Will land registry offices be available to close transactions?

Land registration services are included on the Government of Ontario’s list of essential workplaces, and these services remain available.

Showings and open houses

The Government of Ontario has prohibited the hosting of in-person open houses during the state of emergency. In addition, RECO strongly recommends that brokers and salespeople follow the direction of health officials by limiting showings to situations where they are absolutely necessary. For more information and answers to common questions, please see RECO’s website.

 

Do I still have to attend in-person showings?

RECO strongly recommends that brokerages and salespeople follow the direction of health authorities by limiting in-person showings to situations where they are absolutely necessary.

If you offer to conduct an in-person showing, take steps to reduce the risk of transmission by following guidelines from health authorities: practice proper handwashing and sanitizing procedures and discourage the buyer from touching any surfaces in the home.

Consider asking the buyer to fill out a questionnaire that asks about travel history, COVID-19 symptoms, whether they have been in self-isolation, and so forth. This information can be shared with the occupants of the property. Some brokerages have created forms for this purpose. Ask your employing brokerage if they have created such a tool. Note that, under the Personal Information Protection and Electronic Documents Act (PIPEDA), this information can only be used for the purposes for which it was collected.

You must not allow your client to enter a home unaccompanied by a registrant. Doing so would result in disciplinary action.

If you choose NOT to offer in-person showings, you must explain the circumstances to your clients and explain their alternatives. However, if you cannot make suitable arrangements to meet your client’s needs, you may need to cancel your agreement with them.

The listing agreement with my client stipulates that I will provide an open house. How should I proceed now that they are prohibited?

Although the listing agreement is a binding contract, it is not possible to fulfill the in-person open house provision because it would violate the Government of Ontario’s prohibition on open houses.

Discuss the circumstances and alternatives with your seller. Consider electronic options, and clearly explain the marketing benefits of hosting an open house by using online technologies.

Private showings have not been prohibited, but should only be conducted in situations where they are absolutely necessary.

Properties with tenants

Can showings proceed without the tenant’s consent?

The government has taken steps to modify landlord and tenant rights under these unprecedented times.

These parameters fall under the Residential Tenancies Act, 2006 (RTA), which is enforced by the Landlord and Tenant Board (LTB). It is outside of RECO’s jurisdiction to require a tenant’s consent for showings. However, RECO has recommended that registrants obtain the tenant’s consent.

Registrants must comply with the RTA in all dealings with tenants. Please note that if a landlord is not permitted to do something under the RTA, a registrant cannot do it either. In addition, the landlord’s consent is required for any actions involving tenants.

We encourage all parties to approach such situations with a desire to be flexible and understanding, with full consideration of the risk of transmission associated with in-person showings.

My client is buying a property that is occupied by a tenant. The tenant was issued an eviction notice prior to the Government of Ontario’s temporary ban on evictions. Can the eviction still proceed?

Eviction orders fall under the Residential Tenancies Act, 2006 (RTA), which is enforced by the Landlord and Tenant Board (LTB). It is outside of RECO’s jurisdiction to comment on RTA issues. During this unprecedented situation, we encourage all parties to approach such situations with a desire to be flexible and understanding in changing circumstances. We encourage registrants to continue to support their clients to find creative and effective solutions. Please contact LTB for further guidance.

Proof of identity

What should I do if authorities ask me to prove that I’m registered to trade?

The MyRECO Certificate App allows you to display your RECO registration certificate on your mobile device in real time, providing authorities with proof that you are registered to trade.

If you have a paper certificate, you may also present it to authorities, as an alternative.

Short-term accommodation rentals

Can you clarify the Government of Ontario’s requirement that short-term accommodation rentals can only be provided to individuals who are in need of housing during the emergency period?

In its communications regarding the list of essential workplaces, the Government of Ontario included the following:

 

Short term rentals

(1) Every person who provides short term rentals in rental accommodations shall ensure that any rentals booked after April 4, 2020 are only provided to individuals who are in need of housing during the emergency period.

(2) Subsection (1) does not apply in respect of hotels, motels and student residences.

When facilitating short-term accommodation rentals, brokers and salespeople should use their best judgment to determine whether the individual is in need of housing during the emergency, or whether they are seeking accommodation for other purposes.

The obligations for registrants who facilitate short-term accommodation rentals continue to apply. For more information, please see the Registrar’s Bulletin on the topic

Financial elements of a trade

Can I use electronic funds transfers in lieu of paper cheques?

Yes. Electronic funds transfers (commonly referred to as EFTs) reduce the need for in-person contact in the course of real estate trades. For more information on meeting compliance requirements when using electronic funds transfers, please see the Registrar’s Bulletin on the topic.

How do I fulfill FINTRAC requirements without checking photo ID in person?

FINTRAC’s hub for real estate compliance contains a page with detailed requirements for confirming a client’s identification without meeting them in person.

Brokerage offices

Are brokerage offices permitted to remain open, with administrative staff working onsite?

The Government of Ontario has included real estate services on its essential workplaces list. As such, brokerage offices may remain open, with staff working onsite. However, brokerages and their employees must follow the health authority guidelines, including physical distancing and regular handwashing.

Author: bramptonrealestateboard

At the Brampton Real Estate Board (BREB) we believe in the ownership of Real Estate. Our objective is to contribute to the capability and growth of our members in their endeavors by marketing all forms of real property throughout the greater Brampton, Halton Hills and Caledon marketplaces and beyond. The Brampton Real Estate Board is dedicated to providing an environment in which it’s Member REALTORS®, employees, Board of Directors, and Committee volunteers are encouraged to grow, succeed and develop in order to provide the highest level of professional conduct and service.

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