RECO oversees real estate agents, Tarion regulates builders
I’ll be looking for my first home soon, and I’m trying to wrap my head around the difference between RECO and Tarion. Can you help me sort it out?
I’m glad you’re taking the time to make yourself an informed buyer. RECO and Tarion both work to protect consumers in Ontario’s real estate marketplace, so it’s understandable that there may be confusion about the role each organization plays.
The key difference is that RECO regulates the real estate brokerages, brokers and salespersons that help home buyers and sellers in the province, while Tarion regulates builders of newly constructed homes and protects consumers when builders do not fulfill their warranty obligations.
It’s important to note that home builders who are selling new homes do not have to register with RECO. It’s something to keep in mind if you’re in the market for a new home.
When you work with a registered real estate broker or agent to buy a new or resale home, it’s important to understand the three pillars of RECO’s consumer protection:
Knowledge: Real estate professionals must complete a set curriculum of education courses before they are allowed to trade in real estate. This is followed by mandatory continuing education to keep their knowledge up-to-date and their skills sharp.
Professional standards: Real estate brokers and salespersons are also required to uphold professional standards. That includes treating everyone involved in a transaction with fairness, honesty and integrity, making appropriate disclosures and following rules and regulations that are there to protect consumers.
In the rare instance that something goes wrong and you want to complain about your representative or the brokerage, RECO will investigate the complaint. RECO has the authority to discipline or prosecute registrants for professional misconduct. If there are reasonable grounds to believe that an individual will not carry on business in accordance with law, integrity, honesty or financial responsibility, their ability to trade in real estate can be suspended or revoked. RECO investigates and prosecutes those who trade in real estate without getting their proper registration.
Insurance: Deposit insurance provides you with peace of mind knowing that your hard-earned payment will be held in trust and insured against loss, insolvency or misappropriation by a brokerage. Real estate agents who are registered with RECO also carry mandatory errors and omissions insurance.
If you’re buying a new house or condo, it’s important to understand Tarion’s important role. A basic summary:
New home warranty: Tarion requires builders to provide a warranty that covers such things as deposits, defects and other issues with newly constructed properties. In the event of a dispute, Tarion works with the buyer and the builder to resolve the problem. If the builder is unwilling or unable to fulfill the warranty, Tarion ensures new home buyers receive the statutory warranty coverage they are entitled to.
Licensing: Before they can get a licence, all builders must prove that they have the technical, customer service and financial capabilities necessary to successfully build homes in Ontario. Tarion investigates and prosecutes those who build or sell new homes without a licence. Tarion also promotes high standards of new home construction.
While RECO and Tarion have different areas of responsibility, both organizations operate on the principle that an informed buyer is more likely to have a positive experience. If you’re looking into a new home, and for a more complete description of Tarion’s role, check out Tarion’s website at www.tarion.com.
Joseph Richer is registrar of the Real Estate Council of Ontario (RECO). He oversees and enforces all rules governing real estate professionals in Ontario. Email questions to email@example.com . Find more tips at http://www.reco.on.ca/ reco.on.caEND, follow on Twitter https://twitter.com/recohelps @RECOhelpsEND or on YouTube athttps://www.youtube.com/user/RECOhelps youtube.com/RECOhelpsEND.
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