What Every Client Should Know Before We Meet

Before we sit down to talk about your real estate goals, Ontario law requires me to walk you through a document published by the Real Estate Council of Ontario (RECO): the RECO Information Guide. Think of this post as your advance briefing so that when we meet, we can focus on your questions rather than the basics.

Why This Guide Exists

RECO is the regulatory body that licenses and oversees all real estate agents and brokerages in Ontario. The Information Guide was introduced under the Trust in Real Estate Services Act, 2002 and is mandatory.  What this means is that every agent must review it with every client before providing any services. Its purpose is straightforward.  We want to make sure you understand your rights, your options, and the nature of the relationship you're entering into.

What You're Getting When You Work With a Registered Agent

Ontario agents must complete formal education, carry consumer deposit insurance, and hold professional liability insurance before they can be registered with RECO. When you engage a registered agent, you're not just hiring someone to open doors — you're entering a legally defined relationship that comes with specific duties owed to you.

Those duties include:

Undivided loyalty.

Your interests come first — above those of the brokerage, the agent, and every other party in the transaction.

Full disclosure.

Your agent must share everything they know that could influence any decision you make.

Confidentiality.

Information you share — your motivations, your price ceiling or floor, your preferred terms — cannot be shared outside the brokerage without your written consent. This protection continues even after your client relationship ends.

Conflict avoidance.

If a situation arises that could compromise your agent's ability to act in your best interests, they are required to disclose it. They cannot continue serving you without your written agreement.

Understanding the Two Types of Representation 

As of December 1, 2023, Ontario recognizes two distinct types of representation agreements:

Brokerage representation: Means the entire brokerage (and all its agents) represents you. One agent will typically serve as your primary contact, but the brokerage as a whole owes you the full suite of duties described above.

Designated representation: Means a specific agent (or agents) at the brokerage is named as your representative. That person owes you full loyalty. The rest of the brokerage's agents are required to treat you impartially but are not your advocates.

Designated representation matters most in the context of multiple representation, which I'll address below.

The Risks of Going It Alone

You are legally entitled to represent yourself in a real estate transaction.  If you do this is called being a self-represented party. RECO is clear and advises against it unless you have the knowledge and experience to navigate the process independently. Here's the core problem: the other side has a professional agent working solely in their interest. That agent cannot offer you advice, opinions, or guidance.  If they do so they would be a breach of their duty to their own client. They are obligated to pass along anything you tell them.

If you are a self-represented party, the agent on the other side must give you a separate and RECO disclosure form called the Information and Disclosure to Self-represented Party before providing any assistance. That assistance, it's worth being clear about, is rendered in service of their client, not you.

At any point, you can choose to engage your own representation.

What You're Signing: The Representation Agreement

When you become my client, we formalize that relationship through a representation agreement — a contract between you and RE/MAX Real Estate Centre Inc. Here's what to pay close attention to before signing:

1. Scope. For sellers, the agreement identifies the specific property. For buyers, scope can be defined by geography, property type, or specific criteria. If you're searching in multiple areas or for multiple property types and want different agents for each, the scope in each agreement needs to be explicitly defined to avoid commission disputes.
2. Services. There is no standard set of services — brokerages offer different packages. Anything you expect to receive should be in writing. Don't assume.
3. Payment terms. Commission is negotiated — it is not set or regulated by RECO, any government authority, or any real estate board. Your agreement must clearly state what you owe your brokerage, and how that amount changes in various circumstances (including if the seller covers your brokerage fees, or if multiple representation arises).
4. Expiry date. This must appear prominently on the first page of the agreement. There is no standard term. Know when your agreement ends.
5. The holdover clause. Most agreements include one. A holdover clause means that even after your agreement expires, you may owe commission if a transaction closes on a property that was introduced to you during the agreement's term. Review the holdover period carefully before signing.

Multiple Representation: Proceed With Caution

Multiple representation occurs when the same agent, (or same brokerage, in a brokerage representation arrangement) represents more than one party with competing interests in the same transaction. The most common scenarios: the brokerage represents both buyer and seller, or the same agent is acting for two buyers making offers on the same property.

Multiple representation is not permitted without the written consent of all parties involved. Before you're asked to consent, the brokerage must provide a written disclosure explaining precisely how the duties owed to you will change.

And they will change significantly. Under multiple representation, your agent:

• must treat all parties impartially
• cannot advocate for your interests over the other client's
• cannot advise you on price or terms

You are never obligated to agree. If you decline, alternatives exist including perhaps being referred to a different brokerage or designated representative for that specific transaction.

Your Responsibilities as a Client

This is a two-way relationship. To serve you well, I need you to:

• Be candid about what you want and what matters to you
• Respond promptly when I need information or a decision
• Read and understand the terms of your agreement
• Honour the fees you've agreed to, even if a transaction falls through due to your own default

If Something Goes Wrong

Ontario's regulatory framework gives you recourse. If you have a concern about how a transaction was handled, the first step is to raise it with the brokerage's broker of record. If that doesn't resolve it, you can file a complaint directly with RECO at reco.on.ca or by calling 1-800-245-6910. The brokerage cannot ask you to sign anything that prevents you from filing a RECO complaint.

The Bottom Line

The RECO Information Guide exists because real estate transactions are among the most significant financial decisions most people make. Understanding who is working for you, and what that means legally, puts you in a fundamentally stronger position. Read this before we meet, bring your questions, and we'll work through the rest together.

Terry Riddoch

Successfully navigating a commercial or residential real estate transaction requires precision, market knowledge, and an expertly crafted offer that leaves nothing to chance. If you are looking to sell or expand your portfolio let’s connect.

Contact Terry Riddoch today to discuss your commercial real estate strategy. 📱 Cell: 519-591-1725 ✉️ Email: [email protected] 🌐 Website: www.TerryRiddoch.ca