In toronto real estate, RECO provides protection to consumers who work with a real-estate broker or salesperson to buy or sell a home. The main difference with RECO is that Tarion protects consumers by backstopping the builders’ warranty on new homes or condos.
Tarion administers the new home warranty and regulates new home and condominium builders. Like RECO, it works to protect consumers in Ontario’s real-estate market.
More specifically, Tarion administers the Ontario New Home Warranties Plan Act, which provides warranty coverage on almost every new home in the province, and steps in when a builder cannot or will not fulfil its warranty obligations.
RECO regulates the conduct of real-estate brokers, brokerages and salespersons and it can act when breaches of the Real Estate and Business Brokers Act 2002 (REBBA 2002) occur.
New home builders and their sales staff do not have to be registered with RECO, but some builders do employ a registered brokerage to market their homes. However, if you are interested in buying a new home you can hire a real-estate brokerage to represent you.
Tarion is responsible for licensing builders in Ontario. It will investigate and even prosecute those who build or sell new homes or condos without being registered. Before builders can get a licence, they must prove they have the technical, customer-service and financial capabilities to successfully build homes.
Ontario’s new home warranty offers deposit protection, compensation for delayed closings and one-year, two-year and seven-year warranties. Most warranty issues are resolved by the builder without Tarion’s involvement. However, if a warranty dispute continues, Tarion will work with both the buyer and the builder to resolve the problem.
Tarion also promotes high standards of new home construction and educates home buyers about their new home warranty rights.
RECO’s responsibilities are similar to Tarion’s in that it has a dual responsibility to educate consumers and to promote and enforce legislated standards of service and behaviour of licensed practitioners.
If something goes wrong during a transaction and you want to complain about your representative or his or her brokerage, RECO will investigate.
It can discipline or prosecute registrants for professional misconduct. Further, if RECO believes an individual will not carry on business with integrity, honesty or financial responsibility, it can suspend or revoke its ability to trade in real estate.
RECO also provides consumers with insurance. The deposit you have put down on a home is to be held in trust. The deposit is insured against loss, insolvency or misappropriation if it is paid to a brokerage registered under REBBA 2002.
While RECO and Tarion have different areas of responsibility, both organizations follow the principle that an informed buyer is more likely to have a positive experience. If you’re looking into purchasing a new home, and want a more complete description of Tarion’s role, go to Tarion’s website at tarion.com.
Read the full post in Toronto Star
