It’s that time of year! New OREA forms and form updates for the real estate industry (cue the happy dance)!
While many of the changes this year are minor in nature, being aware of the updates as a consumer as well as a real estate salesperson/broker is important. These changes take effect as of January 1, 2020 so get well-versed in what’s new so you are prepared and ready to go. The links to each form will lead real estate agents to the appropriate forms on the OREA website. The forms are also at the bottom of this blog post for consumers to review directly.
1. Form 170: Consent To Advertise: you normally see it hidden in a brokerage’s standard Schedule B giving listing and co-operating real estate agents consent to advertise the sale price or other information pertaining to the sale of the listing. This misguided consent to advertising clause hidden in a schedule to an agreement does a decent job of ensuring that real estate salespeople/brokers cover their butts when it comes to RECO’s Code of Ethics regarding consent to advertise, which says:
(7) A registrant shall not include anything in an advertisement that could reasonably be used to identify a party to the acquisition or disposition of an interest in real estate unless the party has consented in writing. O. Reg. 580/05, s. 36 (7).
(8) A registrant shall not include anything in an advertisement that could reasonably be used to identify specific real estate unless the owner of the real estate has consented in writing. O. Reg. 580/05, s. 36 (8).
(9) A registrant shall not include anything in an advertisement that could reasonably be used to determine any of the contents of an agreement that deals with the conveyance of an interest in real estate, including any provision of the agreement relating to the price, unless the parties to the agreement have consented in writing. O. Reg. 580/05, s. 36 (9).
However, it doesn’t look very professional as this consent shouldn’t be tied into the other offer details. This should be a separate discussion from the offer and now it is. Form 170 covers this consent as it relates to sale price, anything that could identify any part to the sale, identification of the property and other terms related to the Agreement of Purchase and Sale. The form must be initialled by both parties and there is no expiry date unless specifically noted in the form. In addition, this form notes that advertising can only take effect once all conditions (if any) are fulfilled and the sale has become firm.
What does this mean for consumers? You may have seen this clause noted in an agreement of purchase and sale in the past. You should now be asked to sign a separate form relating to advertising and it shouldn’t form part of the deal. It is your choice whether or not you want to consent to allow your real estate agent and the other side’s real estate agent to be able to advertise details of the sale. If you are a private person, having the sale details advertised may make you uncomfortable and you shouldn’t be obligated to sign the form. However, if you are comfortable with allowing the sale of the home to be advertised, this gives your real estate agent a great opportunity to spread the word about his/her services, which helps their business.
What does this mean for REALTORS®? Get this new form signed and you will have the ability to advertise the sale. Review the pros and cons with your client and ask your colleague to do the same with their client so you show that you are obtaining consent in a more professional and straightforward way. If your broker of record or manager hasn’t done so already, ask that they remove the consent to advertise from the brokerage’s standard schedule B so that you can take care of this consent separately when the deal is firm.
2. Form 653: Co-Brokerage Agreement Between Buyer Brokerages: at times, real estate agents may be asked to work with a past client or be referred business in a trading area that may not be their forte. Instead of referring it out, real estate agents now have the ability to collaborate! This form allows real estate agents and brokers to work with colleagues from other brokerages to represent a buyer client as best as possible. I can see this working with agents that might not be strong in a certain area but they are eager to learn from an experienced agent in that particular trading area. Whether it’s for a commercial transaction, a rural property or a certain geographic area, this form can work well when two agents want to work together from different brokerages.
What does this mean for consumers? If your go-to real estate agent is not familiar with the type of home or area you are looking to purchase, it still gives you the option to work with him/her along with another agent who is well versed in the type of search you are conducting. Sometimes, your real estate agent may opt to refer you directly to someone else, in which case a separate referral agreement (Form 641) can be signed and a referral fee is paid from the agent that has been referred the business to your own real estate agent for referring the business (usually around 25% of the commission earned). However, if your real estate agent prefers to remain more active and can collaborate with another agent from another brokerage, they can sign this agreement to work together.
What does this mean for REALTORS®? You now have a new way of operating your business – in a more collaborative way with other brokerages. Don’t be afraid to seek out help from your colleagues. A lot of us are eager to work together and learn from each other. You never know – maybe the person you are seeking guidance from will do the same for you in the future. It can be a win-win scenario and it helps to sharpen your business skills for future clients.
3. Form 304: Suspension of Buyer Representation Agreement: need a break? Going out of town? Want an alternative to cancelling a buyer representation agreement? This gives a buyer client and their agent the opportunity to suspend the agreement temporarily for a certain period of time. From the looks of things, this doesn’t extend the length of time of the original representation agreement in effect – it’s just a pause.
What does this mean for consumers? If you want to pause your real estate search, this gives you the ability to do so without a full-out cancellation.
What does this mean for REALTORS®? Buyer clients now have more options – just as seller clients do with Form 241 – Suspension of Listing Agreement. It’s an option and should be offered as such if the right situation arises.
Changes to Forms:
1. Form 242: Cancellation of Listing Agreement and Form 301: Cancellation of Buyer Representation Agreement: a new section has been added to give the reason why the cancellation is happening. This allows the cancellation to be better understood by all parties and leaves any misunderstandings behind.
What does this mean form consumers? It’s never fun to part ways with someone but sometimes it happens and when both parties have the opportunity to share why the cancellation is happening, it helps to put an end to that real estate chapter in a clear and concise way. Having a better understanding why the cancellation occurred allows you the ability to find a more suitable real estate agent moving forward and ensures the same mistake is not made again.
What does this mean for REALTORS®? This is great for brokers of record and managers to track how their agents are doing with their clients. Maybe there is an area of customer service that a particular agent needs some support with. Maybe, some additional courses or mentoring is required. As a real estate agent, reviewing this information with your manager or broker of record is a great idea. Nobody is perfect and sometimes you don’t see eye to eye with your client on a particular search or sale. Understanding what happened and making changes for the future will have a positive impact on your business moving forward.
2. Form 240: Amendment to Listing Agreement: slight change of wording from “Former Listing Price/Former Expiry Date” to “Current Listing Price/Current Expiry Date” to clear up any confusion relating to multiple price changes or expiry dates. Similar changes were made to the following Form #205, #207, #212, #247, #305, #315, #348, #356, #521, #527, #534, $538, #541, #548, #552, and #556.
What does this mean form consumers? Not much – this is just a detail that has led to some confusion for real estate agents in the past. It’s the same form with the same terms.
What does this mean for REALTORS®? Not much – this just helps you to eliminate any confusion relating to the listing price and expiry date.
3. Other: many forms that had a “Witness” signature line have deleted the witness and replaced it with the name of the actual signer.
What does this mean form consumers? Again, not much. You will just be asked to write your name on some forms beside your signature moving forward vs. searching for a witness.
What does this mean for REALTORS®? Minor change – no biggie. If you are using an electronic signature program, there is an option to add a Name Block when your client is signing to automatically fill out your client’s name when they are signing. You now have more use for this option!
Changes to Standard Clauses: none for this year – woohoo!
For a full list of all the changes, real estate agents can refer to OREA’s summary: https://www.orea.com/~/media/Files/Members/OREA-Standard-Forms/Change-Summaries/OREA-Standard-Forms-2020-Summary-of-Revisions.pdf. In addition, OREA is planning a webinar on January 29th, 2020 to address real estate agent questions relating to these changes. This post provides a summary of the most important aspects in our personal opinion. Please take the time to review all of the changes.
REALTORS® – Did you know?
There are 205 OREA standard forms and 300 OREA standard clauses.
According to OREA, the average Realtor uses approximately 15 – 20 standard forms each year.
Reviewing the other forms and clauses you don’t use may assist you in better representing your clients over this next year. Each of these forms were made for our profession so why not educate yourself on the best way to make use of them? OREA makes changes and creates new forms based on the feedback from its members. Make sure you are taking the time to provide this vital feedback so our industry can stay on top of the changing landscape of our real estate businesses.
For last year’s updates and changes, please refer to our blog post: OREA’s New Forms, Clauses & Updates – Your 2019 Coles Notes Review.
FOR CONSUMERS: ALL THE FORMS