Ontario Brokerage Act Does Not Apply to Commercial RE, REALpac Argues

The Real Property Association of Canada (REALpac) is lobbying the Ontario government to make dramatic changes to the province’s Real Estate & Business Brokers Act – REBBA, arguing it is obsolete and not suitable for commercial real estate.

REBBA, a 30-year-old piece of law, gets in the way of day to day business operations, results in unnecessary costs, courses and duplication of oversight for the commercial real estate industry, REALpac contends in its 2012 policy briefing.

“Our overriding issue with it is that it is fully outdated at this point and it is more a reflection of residential real estate, it doesn’t necessarily catch the intricacies about what commercial real estate is all about,” said Ryan Eickmeier, REALpac’s Manager of Government Relations and Policy.

“Our problem is that you have folks that are overseeing this act that don’t necessarily understand commercial real estate. We don’t think the act is applicable to us.”

The industry association, which wants to make changes to the act and create a blueprint for similar regulation changes in other provinces, has specific proposals mind. They include:

• An exemption for regulated and large institutions having an ownership stake;
• Allowing the use of property management software;
• An exemption for large transactions;
• Ensuring that on-line trading systems for commercial properties shall not constitute an activity “in furtherance to a trade”;
• Removal of advance consent required for the appointment of directors and officers of large commercial owners;
• Removal of unnecessary courses and training; and,
• Recognition of equivalent training and accreditation.

“It is red tape, unnecessary and it basically delays everyday business,” said Eickmeier. “Some companies will keep a retired broker on staff just so they can rubber stamp it. Then you have people who have MBAs and PhDs having to go and take residential real estate courses that are not applicable to anything that they do just to adhere to this act.

“It is outdated and we would like to see it gone and we think that it would help business operate more freely,” he said. “In a perfect world we would get rid of it but we would also accept some key changes to it.”

REALpac argues that it would make more sense to create courses or educational programs that apply directly to the commercial real estate rather than the ad hoc training available today. “I know that is something that the industry is trying to do, is really get a core, How do you succeed in commercial real estate,” program. “`There is still so much that is (not covered in commercial real estate education). A lot of the CEOs who are leaving companies now, they learned on the go.”

REALpac has been pushing for changes to REBBA for years but has been stymied by politics and a changing cast of senior ministry personnel, explained Eickmeier. “We are on our third minister in under two years,” he said.

“It is not just the ministers, it is the staff turnover. So the second you have a relationship with one of their policy advisors which we did every time a new minister came in, the second they leave (the policy advisor leaves as well) and the file just gets buried and people have to relearn everything.”

The association is in the midst of having its first meeting with the new Ontario Consumer Services Minister, Margarett Best.

REALpac also intends to have meetings with the Ontario Real Estate Association to discuss the possibility of a joint strategy to make changes to REBBA. “I know they have issues with it as well,” said the REALpac government relations executive.

Paul is a writer, editor and media trainer based in Toronto with over 25 years of experience as a business reporter. He has written for Canada’s major news services on…

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Paul is a writer, editor and media trainer based in Toronto with over 25 years of experience as a business reporter. He has written for Canada’s major news services on…

Read more

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