As artificial intelligence rapidly transforms how industries operate, real estate regulators are stepping up efforts to ensure consumer protection keeps pace with technological innovation. The Real Estate Council of Ontario (RECO) has published formal guidance outlining clear expectations for how real estate agents and brokerages must integrate artificial intelligence into their daily operations while strictly adhering to their existing regulatory and legal obligations.
Released in October, the regulatory guidance arrives at a pivotal moment. Across the province and the broader real estate sector, AI tools have quickly evolved from novel experiments into everyday utilities. Real estate professionals now routinely turn to automated systems for drafting client communications, preparing complex transaction documents, conducting preliminary market research, and generating sophisticated marketing materials.
Rather than reacting to major infractions after consumer harm has already occurred, RECO explained that the new guidance reflects a deliberate shift toward proactive regulation. By setting expectations early and helping agents establish safe, compliant practices as technology continues to evolve, the regulator aims to preemptively curb misleading advertising, privacy breaches, and ethical missteps.
Central to RECO’s message is an uncompromising stance on accountability: agents and brokerages remain entirely responsible for all information, representations, and decisions involving AI, including absolute compliance with the Trust in Real Estate Services Act (TRESA) and the associated Code of Ethics.
“AI should be used by real estate registrants for support only and never a replacement for professional judgment,” RECO states on its official website, setting a foundational boundary for the industry.
The regulator warns that content generated by artificial intelligence frequently contains errors, outdated information, or completely false data—a phenomenon commonly referred to in the tech sector as hallucination. Consequently, agents are strictly required to independently verify all AI-generated content before sharing it with clients, prospective buyers, sellers, or the general public.
“You remain responsible for ensuring that any information provided to clients or the public is truthful, accurate and not misleading,” the guidelines state, underscoring that delegating a task to an algorithm does not dilute a professional’s legal duties.
Violations Could Result in Fines, Suspension or Revocation
The consequences for failing to maintain professional oversight are severe. RECO confirmed that agents and brokerages who breach TRESA or the Code of Ethics regulation through their careless, improper, or deceptive use of AI face severe regulatory penalties, including substantial fines, formal suspension of registration, or the complete revocation of their license to practice.
“The regulatory action RECO takes depends on the specific facts and circumstances of each case,” the regulator said in response to inquiries from Real Estate Magazine (REM).
Crucially, RECO clarified that the new guidance does not introduce entirely novel obligations or establish a separate, standalone enforcement framework specifically for artificial intelligence. Instead, existing rules and ethical standards apply universally, regardless of whether a violation is committed manually or assisted by an algorithm.
Under this framework, existing rules apply equally whether an agent uses AI to draft a misleading property listing description, digitally alters an image in a way that misrepresents a home’s actual condition or permanent features, or improperly discloses confidential client information to a third-party platform.
Consumers who suspect that a property listing, social media post, or general advertisement is inaccurate, deceptive, or misleading due to the unvetted use of artificial intelligence are encouraged to submit a formal complaint directly to RECO for investigation.
Privacy, Advertising and Brokerage Responsibilities
Beyond the accuracy of listings, the guidance addresses critical privacy concerns, issuing a strong warning against entering sensitive, proprietary, or confidential client information into public, unsecure AI platforms.
When asked to clarify how this strict warning aligns with general requirements regarding written client consent before entering personal details or contract terms into technological tools, RECO emphasized that both instructions simply reinforce agents’ enduring confidentiality obligations.
“Personal, financial or confidential client or transaction information should never be entered into public AI platforms,” the regulator stated firmly.
RECO noted that confidential client information cannot be legally disclosed without explicit client consent, and that both individual registrants and brokerages carry a statutory duty to protect personal information under applicable privacy principles.
In the realm of marketing and advertising, RECO’s rules are equally precise. Digitally altered property images must be clearly and conspicuously labelled so that consumers are never under false impressions about a property’s physical reality, and images must accurately reflect permanent features. Furthermore, any AI-generated advertising must fully comply with TRESA requirements, including mandatory rules surrounding clear and prominent brokerage identification.
To manage these operational risks effectively, the regulator advises brokerages to establish robust internal safeguards. “Brokerages should establish clear internal policies, training, and an approved tool list to ensure agents use AI safely,” the guidelines recommend.
Individual sales representatives and brokers are likewise encouraged to ensure that any software or AI applications they choose to adopt strictly align with brokerage-wide policies and have received explicit approval from their broker of record.
RECO also recommends thoroughly reviewing the privacy practices and security measures of third-party vendors, particularly when existing, familiar real estate software platforms introduce new, automated AI features. To minimize operational and legal risks, the regulator advises professionals to utilize specialized tools built specifically for the real estate industry rather than generic, public-facing applications.
Regarding intellectual property, the guidance directs agents to create original marketing copy and creative content or to secure proper authorization before adapting or copying material originally produced by competing brokerages.
AI Policies Taking Shape Across Canada
Ontario’s regulatory update arrives as real estate boards, associations, and provincial regulators across Canada grapple with the rapid proliferation of artificial intelligence and seek cohesive ways to monitor its impact. The British Columbia Financial Services Authority (BCFSA), for instance, published its own comprehensive AI guidelines in February 2024 to address similar industry developments in Western Canada.
Meanwhile, in a June website post, the Canadian Real Estate Association (CREA) emphasized that the integration of artificial intelligence does not diminish a Realtor’s professional responsibilities. CREA highlighted obligations related to advertising accuracy under the Realtor Code and announced that it was actively developing additional educational resources and best practices to help members navigate technology responsibly.
As Real Estate Magazine reported in March, formal rules governing AI-altered listing photographs and the methods used to enforce them continue to vary significantly across the country, with some regional real estate boards already issuing financial penalties and disciplinary notices for advertising violations.