The Real Estate Council of Alberta shoots for a September completion for its rules review and consultations.George Lee, Local Journalism Initiative Reporter

A group that regulates more than 15,000 Alberta agents, brokers and other real estate professionals continues to restructure and refocus in the aftermath of a government-instigated shakeup in 2019 and 2020.

The Real Estate Council of Alberta is midway through a comprehensive rules review that includes consultations with licensees, other stakeholders and the Alberta government.

Consultations are projected to end in September, and after that RECA will likely send rule changes to the province for ministerial approval.

An expansion of the number of industry councils RECA uses in its governance to seven from four could be within proposals that make it to the minister. The change would mean a more streamlined licensure approach that’s easier for consumers to understand and licensees to navigate, the regulator’s consultation materials suggest.

Another expected result would be improved consumer protection from professional misconduct by allowing licensees to better target their education needs and by making it less likely that they practise beyond their expertise, RECA materials say.

A government-commissioned report by KPMG completed in 2019 found that RECA’s council of the day was bogged down in non-strategic work, clashes with industry associations and infighting. RECA had failed to keep up with current regulatory standards in consumer protection, wasn’t providing adequate oversight of operations and wasn’t accountable enough, KPMG found.

The organization was likely too moribund to sort out its problems without dramatic changes, said recommendations made by the professional services giant. These included the dismissal of its council.

The province agreed, amending the Real Estate Act in 2020, firing RECA’s council, and appointing an administrator.

RECA has operated for more than three years under a governance model that came into force with the 2020 act amendments, RECA’s communications and connections manager said in an email response to Local Journalism Initiative questions.

“RECA has enacted nearly all changes recommended by the KPMG Governance Review Report from 2019, and we’re looking forward to continuing to protect and inform consumers, enhance the industry, and prevent and suppress fraud,” said Bryan Douey.

Today’s governance model features a board with three public members and four industry council representatives. Each council is composed of three members elected by its licensees plus two public members.

The current structure means a single licensee sometimes end up reporting to more than one council, but RECA’s consultation materials suggest that could change to one council per licence.

Each of the new model’s seven councils would represent a separate sector: residential real estate brokerage; commercial real estate brokerage; commercial property management; residential property management; condominium management; mortgage brokerage; and agribusiness brokerage. Agribusiness is a new category, designed to clear up confusion between farms and acreage-style residential properties.

RECA acknowledges in its consultation materials that the change to seven councils “could create some temporary transition issues for those who wish to practice in multiple sectors, could reduce the availability of licensees in certain industry sectors, and may require more coordination and communication across industry councils.”

One MLA thinks the Alberta government should be on high alert for incoming red tape. Lacombe-Ponoka member Jennifer Johnson, the sole Independent member of the legislature, said a “fifth distinct licence” could be on its way, a move that would burden those who manage and deal in real estate with added time-consuming processes and an onerous financial burden.

In Dec. 4 questions in the legislature, Johnson noted that many Albertans regulated by RECA already require multiple licences. She wanted to know how the government will hold consultations.

Short answer: it won’t. Consultations are the job of RECA itself.

“RECA told me and the licensees that the proposed changes would not result in any additional costs for Albertans, and I look forward to seeing that,” said Minister of Service Alberta and Red Tape Dale Nally, the member for Morinville-St. Alberta.

Changes to the real estate council’s rules require ministerial approval, Nally added. “I can assure you that I will be paying close attention to any changes to ensure that RECA does not impose significant costs on licensees or add any unnecessary red tape for Albertans,” the UCP cabinet minister said.

RECA’s consultation materials say: “RECA and many stakeholders have indicated (the seven-council model) will streamline and simplify the licensing framework, reduce red tape, create a single accountability point between licensees and their industry council, increase consumer protection by discouraging work out of a licensee’s area of expertise, allow for more robust and specialized licensing education, and allow for industry councils to communicate more effectively.”

In the RECA communications manager’s email, he called protecting consumers and removing red tape primary focuses of the rules review. Rules that affect a licensee’s business and serve no consumer protection purpose are prime for removal.

“RECA believes in right touch regulation, meaning we want to regulate the industry only as far as needed to protect consumers, and not to create any undue hardship on licensees and the economic activity they create for our province,” Douey said.

RECA is iterating potential changes in a phased approach projected to end in September.

The organization regulated 19,425 licensees in 2023, its most recent annual report says. The biggest category was residential real estate, with 15,049 licensees, followed by commercial real estate and property management at 10,519, residential property and condo management at 5,143, and mortgage brokers at 2,922.

(One person can have than one licence, which explains the discrepancy between reported licensees and the 15,000 estimate of total persons with licences.)

Disciplining licensees and dealing with complaints is a big part of RECA’s work. In 2023, complaints and investigations totalled 1,182. Of those, RECA reported that it found no issue or that no issue existed in 819 instances.

The regulator uncovered 51 serious issues, resulting in 15 proceedings such as hearings before a panel. Administrative penalties numbered 19, letters of reprimand 17.

Under a category called educational approach, RECA employed alternative complaint resolution 247 times, letters of warning 11 times and advisory notes 64 times.

Preventing fraud by educating the public is a strategic focus of today’s RECA. The organization has identified seniors and new Canadians as two groups often targeted by real estate fraudsters.

To educate consumers on what it does and how consumers can protect themselves, RECA held seminars and workshops in 2023, and also placed newcomer-focused radio advertising.

By George Lee, Local Journalism Initiative Reporter

Original Published on Feb 21, 2024 at 08:21