Proposed legislation in Canada's largest province could change the way houses are built, bought and sold. The changes to Ontario's laws concerning building code enforcement and the real estate business are designed to enhance consumer protection, but critics say both bills could make some aspects of building and buying a home less consumer-friendly.

The proposed new Real Estate and Business Brokers Act (REBBA) would update one of the province's oldest existing acts -- it was first implemented in the 1930s, and has not had significant updates in more than 30 years.

The government says the new act will provide increased protection for home buyers and sellers by clamping down on misleading advertising, and by implementing a new discipline process that would allow for flexibility in the penalties charged to agents and business brokers who fail to follow a code of ethics.

Maximum fines for those convicted of an offence would be raised to $50,000 from the current maximum of $25,000. Other consumer-friendly initiatives in the act include new rules for the way trust accounts are administered when a brokerage firm shuts down.

But Alan Silverstein, a Toronto real estate lawyer and a member of the Real Estate Council of Ontario (RECO), the administrative authority of the act, doesn't like the proposed legislation because he says it takes power away from RECO and gives it back to the government. He told REM Magazine that if the legislation is passed, "RECO will look like an eviscerated chicken."

A number of rules and regulations tied to the legislation, covering topics such as educational requirements for real estate professionals and insurance issues, have yet to be written. If the legislation is passed, those issues will be determined by the government rather than RECO, Silverstein says.

Another controversial topic is the issue of lawyers being allowed to sell real estate without a real estate licence. Under the current legislation, that's allowed if the transaction occurs during the course of the solicitor's practice.

Bob Aaron, another well-known Toronto real estate lawyer and columnist for a local newspaper, says the new legislation has language that could hamper a lawyer from doing anything that furthers a real estate transaction, which is what lawyers do everyday.

While other RECO board members say the proposed legislation isn't perfect, they say they're satisfied with the changes and pleased that the legislation is moving forward.

Other potential regulatory changes involve Ontario's Building Code Act. In November, the government introduced legislation that it says includes "the most comprehensive and wide-ranging changes to the province's building code enforcement in over 25 years."

The government says the legislation, if passed, would set qualifications for building code knowledge and establish service level standards for municipalities and other local enforcement bodies; streamline the building approvals process and remove red tape; limit building permit fees to the reasonable cost of enforcement; encourage innovation in design and construction; and set insurance requirements for designers and builders.

Perhaps the most controversial part of the legislation would allow municipalities to outsource plan review and construction inspection functions to outside companies, called Registered Code Agencies (RCAs). Municipalities could allow builders to choose their own RCAs.

A member of an opposing political party, New Democrat Michael Prue, told The Canadian Press that he has "some very uneasy feelings" about the idea. "I would shop around and find out which (agency) could guarantee me the fastest result and the time-frame you want to get it...that causes me a great deal of concern," he says.

If that legislation passes, it will take effect in two years.

Both of these new acts have been years in the making, but there could be catch. Ontario Premier Mike Harris recently announced his resignation, and the ruling Progressive Conservative party is in the midst of choosing a new leader. The new premier will be named March 23, and some political analysts are already predicting the new leader will call a snap election. That means dissolving the current government and all the legislation that's currently being debated.

Twice in recent years, proposed changes to the REBBA died on the order paper when the government of the day called an election. If that happens again, it will be back to the drawing board one more time for both acts.

For more articles by Jim Adair, please press here.

Published: January 17, 2002

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Jim Adair is editor of REM: Canada's Real Estate Magazine, a business publication for real estate agents and brokers. He has been writing about Canadian real estate, home building and renovation issues for more than 30 years. You can contact Jim at .