On June 3, 2020, major changes were announced to theReal
Estate Act, the legislation that governs realtors, mortgage
brokers, appraisers, and property managers in Alberta. The changes
stem from a 2019 KMPG review which criticized RECA’s former
counsel, following which the council was dismissed and an
administrator was appointed.
While most of changes relate to governance and oversight of
RECA, of particular note to condominium managers is that they will
officially be managed under RECA. The timeline to complete that
process remains unclear as as it depends on how quickly RECA
develops manager licensing requirements.
Another major change for realtors, brokers and managers is that
RECA will not longer be offering educational requirements.
Education will be provided through qualified third parties.
Further changes are summarized below.
Industries Regulated by RECA
- Condominium managers will be
regulated by RECA (once the licensing process is developed) - Appraisers will no longer be
regulated by RECA but still must belong to one of three other
appraisal industry associations - All property management, including
condominium management will be considered a separate activity (not
as a “trade in real estate”)
Mandate and Education
Ove the next two years, RECA will transition out of providing
licensing education.RECA will now focus onlicensing and
regulation.Industry Councils will set out education
requirements and third party providers will provide education.
Governance
RECA’s governance will now be split into:
- a)a Board of Directors responsible
for running RECA composed of one member appointed from each
Industry Council (below), three public members appointed by the
Minister and a Chair, to be one of thepublicmembers; - b)four separate Industry Councils,
being
- Residential Real Estate
- Commercial Real Estate and Commercial
Property Management - Residential and Condominium Property
Management; and - Mortgage Brokers
Industry Councils will be made up three elected industry
members, two public Members appointed by the Minster, and a chair
to be elected within each Industry Council.
Bylaws and Rules
RECA bylaws will be passed by the Board of Directors. Industry
Councils will then set rules to establish industry standards
including education and licencing requirements for their
industry.
Roles and Responsibilities
The Executive Director will be responsible for the
administration of RECA, including hiring of a Registrar who will be
responsible for investigations and enforcement. Annual performance
reviews will be conducted for both the Registrar and the Executive
Director. The RECA bylaws will separate roles of the Board, the
Industry Councils, the ED and the Registrar.
Dispute Resolution
To reduce internal conflicts and limit legal expenses, a dispute
resolution will be put in place for the Board and Industry Council
members by the Board that will be used if:
- a Board Member or Industry Council
Member has allegedly engaged in a prohibited act under the Real
Estate Act or - if there are conflicts within
Industry Council, within the Board or between a Board and an
Industry Council
Prohibited actions include using confidential information for
personal gain, impeding the purposes of the Board or Industry
Council, breaking rules for their industry in the course of
business. Members may be suspended during the dispute resolution
process or removed is it is determined they violated the Act.
Lifetime Withdrawals
Industry Council will not be allowed to accept a withdrawal if
allegations of fraud or criminal activity have been made that
warrant an investigation. This is to ensure these allegations are
fully investigated and referred to the appropriate authorities.
Government Intervention/Oversight
After a review, the Minister will have the power to dismiss
Board members, Industry Council members, or employees if the review
support this action, without further Order. The Minister will be
able to issue orders for RECA to take specific action without doing
a review first.
New Transparency Requirementsfor minutes,
agendas, salaries/honoraria and disclosure of annual business plan
and financial plan
Separation– Board/Industry council
members will not be on hearing and appeal panels. Hearing and
appeal panels will be made up of licensees and members of the
public.
Originally published 09 July, 2020
About
Mackrell International – Canada – Scott Venturo LLP is
a full service business law firm in Calgary, AB and a member of
Mackrell International. Mackrell International – Canada is
comprised of four independent law firms in Alberta, British
Columbia, Ontario and Quebec. Each firm is regionally based and
well-connected in our communities, an advantage shared with our
clients. With close relations amongst our Canadian member firms, we
are committed to working with clients who have legal needs in
multiple jurisdictions within Canada.
This article is intended to be an overview and is for
informational purposes only.
