Starting July 1, 2015, real estate professionals in Ontario will not be allowed to imply that they have received an offer to purchase unless the offer is in writing and has been signed. The new rules, which have been established by the Liberal government and the Real Estate Council of Ontario (RECO), are designed to eliminate the possibility of phantom bids in multiple offer situations.
It will no longer be open to agents to try to drive up the sale price by saying that they have, or are expecting, another offer that in reality does not exist.
Although the existing rules already indicate that for an offer to be valid it must be signed, the new rules require agents to keep records of the offer. If a potential buyer wishes to confirm that there are multiple offers they can take their request to RECO and the listing agent will be required to show proof of the other offers, however the details of other bids (e.g. the offer price) will not be revealed to other potential purchasers.
Brokers who violate the new rules could face a fine of up to $50,000 and up to two years imprisonment. Agents who violate the new rules could be referred to a disciplinary committee and be ordered to take educational courses and pay up to $25,000 in fines.
Originally published on Slaw.
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