TRESA for the Ontario Real Estate Exam: Plain-English Study Guide

What TRESA actually does

TRESA is the statutory framework that gives RECO its authority to regulate brokerages, brokers, and salespersons. It sets the rules for who can trade in real estate, what they must disclose, how trust money is handled, and what happens when things go wrong. If you sell real estate in Ontario without a TRESA-compliant license, you are committing an offence under the Act.

The two roles: client vs customer

TRESA recognizes two relationships you can have with a member of the public:

• Client: a person you represent. You owe them fiduciary duties (loyalty, full disclosure, confidentiality, accounting, obedience to lawful instructions).
• Customer: a person you provide services to without representing them. You owe them honesty and the duty to disclose material facts about a property, but not loyalty or confidentiality.

The distinction matters because actions you must take for a client (e.g., negotiating in their best interest) you specifically must NOT take for a customer when those actions would conflict with another client's interest.

The big change in TRESA: designated representation

Before TRESA's 2023 changes, Ontario used "brokerage representation," meaning the brokerage represented both the buyer and seller in a multiple-representation scenario. TRESA introduced designated representation, where individual agents within the same brokerage can represent only their own client, eliminating the awkward dual-loyalty conflict that brokerage-level representation created.

In practice, two agents from the same brokerage can now represent the buyer and the seller of the same property as if they were from competing brokerages. Each owes fiduciary duty only to their own client.

Multiple representation: still allowed, more disclosure required

If a single agent represents both buyer and seller in the same transaction, that is multiple representation. TRESA still permits it, but only with informed written consent from both parties. The agent must explain in plain language what services will be limited (most importantly, the agent cannot favour one party in negotiations or in disclosing the bottom line).

Multiple representation is a frequent source of RECO complaints. Most experienced agents avoid it for that reason.

Material latent defects: the disclosure rule that catches new agents

A material latent defect is something that affects the safety, health, or use of a property and that a buyer would not discover during a normal inspection. Examples: a hidden water-damage history, an undisclosed previous illegal grow operation, a structural issue concealed behind a finished wall.

TRESA requires you to disclose material latent defects to all parties, not just your client. This overrides the duty of confidentiality you would otherwise owe a seller. If your seller-client tells you about a hidden defect and forbids you from disclosing it, you must disclose it anyway. If you do not, you have committed an offence under TRESA.

Trust money: never touch the principal

Any deposit money you handle on behalf of a client must be deposited into a brokerage trust account within five business days. You may not co-mingle trust money with personal or operating funds. Trust accounting is the single most enforced area in TRESA. RECO routinely audits brokerages and any irregularity in trust accounting can trigger immediate suspension.

As a salesperson, you usually do not handle trust accounts directly because deposits go to your brokerage. But you do hand cheques to the brokerage and you must do so within the timeline. If you forget a deposit cheque in your car for a week, you have technically committed a TRESA breach.

Advertising rules: every ad must include the brokerage

TRESA's advertising rules require that any real estate ad you place (newspaper, social media, yard sign, website, email, anything) must include:

• The brokerage trade name as registered with RECO
• Your registration name (no fake names or trade-only names)
• The brokerage's registered phone number
• If you list the property, the listing brokerage's name as well

Advertising compliance is a frequent source of RECO discipline because so many agents test the boundaries on social media. The rules apply equally to a 12-second TikTok and a full-page newspaper ad.

The Code of Ethics

TRESA's regulations include a Code of Ethics binding on every registrant. The big provisions:

• Best interests: You must promote and protect your client's best interests.
• Honesty: You must not engage in any act or omission that would reasonably be regarded as disgraceful, dishonourable, or unprofessional.
• Competence: You must only provide services within the scope of your competence (do not handle a commercial deal if you have only sold houses).
• Reasonable knowledge: You must keep current with TRESA, the Code, and market conditions.
• Disclosure of conflicts: You must disclose any direct or indirect interest in a transaction (e.g., if you are buying for yourself, your spouse, your business partner).

Self-dealing: special rules for buying/selling personal property

If you are buying or selling property in your own name (or a family member's, or your business's), TRESA requires extra disclosure. You must inform the other party in writing that you are a registrant and that you are acting as a principal in the transaction, not as a representative. Most brokerages require their own additional disclosure forms on top of TRESA's minimum.

Penalties under TRESA

RECO can impose administrative penalties up to $50,000 per offence on a salesperson and up to $250,000 on a brokerage. They can also suspend or revoke registrations. Criminal charges under TRESA carry fines up to $250,000 per individual offence and up to 24 months in prison. RECO publishes its enforcement decisions on its discipline decisions page, and the full text of TRESA is on ontario.ca. Reading a few real cases makes the consequences concrete.

What this means on the exam

Exam questions on TRESA tend to be scenario-based: "Agent A learns X about a property. What is Agent A required to do?" The most common wrong-answer trap is treating client confidentiality as absolute. It is not. Material latent defects, fraud, and certain regulatory disclosures override confidentiality. If a question pits "follow client's instruction" against "disclose under TRESA," disclose under TRESA almost always wins.

Most TRESA breaches by new agents come from inexperience rather than malice. Knowing the rules cold matters because RECO does not accept "I did not know" as a defence.