Ontario real estate law update with open bidding option enters into force
New rules for Ontario real estate are coming into force that are meant to provide more clarity and choice for buyers and sellers, though they don't go as far as some had hoped.
The rules, which took effect Friday, include the option for sellers to use an open bidding process, improvements to broker and brokerage disclosures, and ways to avoid conflicts on multiple representation.
The open bidding option gives the seller the choice to disclose submitted bid prices to potential buyers, something they were previously banned from doing.
- Download our app to get local alerts on your device
- Get the latest local updates right to your inbox
Open bidding has been advocated by some, including Ontario Green Party leader Mike Schreiner, as a way to reduce rampant overbidding in real estate and help reduce prices.
"A consistently transparent bidding process will help bring down the skyrocketing price of houses," he said when the Ontario government announced open bidding would be an option for sellers.
The federal Liberals also promised in their 2021 election campaign to end blind bidding because it said not knowing other bids ultimately drives up home prices.
Joseph Richer, registrar at the Real Estate Council of Ontario, said however that there's little research on how blind bidding affects prices, adding there are some indications that open auctions in Australia put upward pressure on prices.
He also said mandating open bidding could lead to negative effects for sellers.
"Keep in mind that in every transaction, there's a buyer and a seller, and that whatever you mandate for one, might be, and probably is at the detriment of the other."
Making it optional gives more options to sellers, Richer said.
"We don't anticipate a big market swing. It might help some parties in some transactions."
Sellers who are having trouble finding buyers might want to allow their agent to disclose bids to attract more, he pointed out as an example.
The option doesn't look that appealing to most sellers in the current market, but real estate agents will likely find some uses, said Randy Oickle, president of Innovation Realty Ltd. in Kanata, Ont.
"(There's) likely going to be some new business models that come along to try to take advantage of new possibilities."
He said he would have liked to see some rules around the process of using open bidding.
"The fact that there's no sort of framework for using it, I think potentially creates challenges."
Oickle said, overall, he sees the changes in the act as quite significant.
Other notable parts of the law include the ability to choose a designated representative.
Previously, if the buyer and sellers' agents worked at the same brokerage, then, given the potential conflict of interest, they would fall under a multiple representation scenario. In these cases, agents were generally only able to act as facilitators, and were limited on how much they could advise clients, including on what is a good price.
By designating specific agents, the buyer and seller under the new rules would free themselves from multiple representation, and agents could advocate more actively on their behalf, said Richer.
"It allows you, if I hire you, you now are free to continue to advocate for me and to offer the services and all your experience that you can bring to bear on my behalf, which you were prohibited from doing under multiple representation."
The updates, Phase 2 of changes under the act, also include an amended code of ethics, new enforcement tools for RECO, and an information guide from the agency that prospective clients are to receive before they agree to having an agent represent them.
As for the federal promise of open bidding, Housing Minister spokesperson Micaal Ahmed said that since real estate generally falls under provincial and territorial jurisdictions, the federal government continues to consult with stakeholders to make a home buyers' bill of rights.
The work is well underway and nearing completion, he said.
This report by The Canadian Press was first published Dec. 1, 2023.
CTVNews.ca Top Stories
![](https://www.ctvnews.ca/polopoly_fs/1.6975593.1721827455!/httpImage/image.jpg_gen/derivatives/landscape_800/image.jpg)
Male, female killed, 2 others injured in 'gun battle' outside Toronto plaza: police
Two people are dead and two others suffered serious injuries following a shooting that police have described as a 'gun battle' outside a plaza in Scarborough, Ont. early Wednesday morning.
These athletes have been named Canada's Olympic flag-bearers
Decorated sprinter Andre De Grasse and Olympic weightlifting champion Maude Charron will carry Canada's flag into the opening ceremonies of the 2024 Olympic Games in Paris on Friday.
Trump rally gunman looked online for information about Kennedy assassination, FBI director says
FBI Director Christopher Wray told lawmakers on Wednesday that a laptop tied to the Trump rally gunman included a Google search of 'How far away was Oswald from Kennedy?'
Bank of Canada cuts interest rate, signals more to come if inflation keeps dropping
The Bank of Canada has decreased its policy interest rate for the second consecutive time and signalled more cuts are coming if inflation continues to ease.
Celine Dion at the Olympics? Singer in Paris 'not a coincidence'
Céline Dion's presence in Paris a few days before the opening ceremony of the Olympic Games is 'not a coincidence,' said French Minister for Sport and the Olympic and Paralympic Games Amélie Oudéa-Castéra.
2 Canadians being 'sent home immediately,' removed from Olympic team after drone incident
An analyst and an assistant coach with Canada Soccer are being removed from the Canadian Olympic Team and 'sent home immediately,' according to the Canadian Olympic Committee.
Privacy commissioner probing customers' claims they can't delete PC Optimum accounts
The Office of the Privacy Commissioner of Canada has opened an investigation into allegations that some Loblaw customers have been unable to delete their PC Optimum accounts.
Republican leaders urge colleagues to steer clear of racist and sexist attacks on Harris
Republican leaders are warning party members against using overtly racist and sexist attacks against U.S. Vice President Kamala Harris, as they and former U.S. president Donald Trump's campaign scramble to adjust to the reality of a new Democratic rival less than four months before Election Day.
Are cold showers good for you? What the science says
You may have seen people jumping into frigid seas or stylish ice baths, claiming these dunks are good for heart health, muscle recovery, stress and more.