On June 3, 2020, major changes were announced to the Real 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 on licensing 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 the publicmembers;
b) four separate Industry Councils, being
1) Residential Real Estate
2) Commercial Real Estate and Commercial Property Management
3) Residential and Condominium Property Management; and
4) 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 Requirements for 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.
For more information please contact Dionne Levesque or Stuart Gray.