Government Introduces New and Amended Regulations: Incorporations & Advertising Terms

Apologies, due to an internal error the following e-blast was not sent out to Executive Officers on October 1, 2020. Please see the following:

On October 1, 2020, the Ontario Government introduced new and amended regulations to the Real Estate and Business Brokers Act, 2002 (REBBA), regarding personal real estate corporations (PRECs) and advertising terms.

Personal Real Estate Corporations (PRECs)

The legislation has been amended to permit a brokerage to pay remuneration owed to a salesperson or broker for trading in real estate to a corporation that meets specific criteria.

The corporation is referred to as a PREC. A PREC is a corporation that a salesperson or broker may establish that is permitted to directly receive from a brokerage remuneration that is earned by the registrant. The use of a PREC may have financial advantages for the salesperson or broker. 

The new rules allow for, but do not require, the use of a PREC.

Based on each registrant’s personal circumstances, there are advantages and disadvantages to the creation and use of a PREC. Registrants are encouraged to consult financial and other experts on whether a PREC is the right approach for them. It’s also important to speak to the broker of record to inquire whether the brokerage is willing to enter an agreement with the PREC. Brokerages are not obligated to do so.

For more information regarding PRECs, click here.

Advertising Terms

The Code of Ethics under REBBA has been amended to permit the use of new terms, in addition to those currently permitted, to be used to describe a salesperson and broker. Eligible registrants who wish to do so may now use the new terms.

Brokers, other than the Broker of Record, are now permitted to use the following additional descriptors:

·        Real estate agent

·        Broker real estate agent

·        REALTOR® (limited to CREA members in good standing)

·        REALTOR® broker (limited to CREA members in good standing)

Salespersons are now permitted to use the following additional descriptors:

·        Real estate agent

·        REALTOR® (limited to CREA members in good standing)

·        REALTOR® salesperson (limited to CREA members in good standing)

For more information regarding advertising terms, click here.

Stay tuned for additional materials and resources coming soon to RECO’s website. If you have any questions, please contact registration@reco.on.ca