What is RECA’s Mandate and How is It Different from Industry Associations?

This is the Fourth Part in a series on Self-Regulation by Executive Director Bob Myroniuk 

I was employed with the Alberta Government in 1994 when we first met with representatives of the Alberta Real Estate Association (AREA) to discuss the idea of transferring the responsibility of regulating the real estate industry from the Government and the Office of the Superintendent of Real Estate to the industry itself.

In order to implement that idea, the Real Estate Act of Alberta (REA) was passed in 1995 establishing the Real Estate Council of Alberta (RECA) as a non-profit corporation and giving it responsibility for regulation of the industry. The REA defined its purposes, outlined its powers and responsibilities, and created a legislative framework for RECA to fulfill its mandate.

While it is the governing body for the real estate industry, the mandate of RECA is essentially to serve the public interest. One of the things that may not be appreciated is the REA and regulatory model it establishes for RECA is based on the self-regulatory model of the traditional professions such as accountants, engineers, doctors and lawyers. In other words, the model we work under is designed to facilitate professionalism and responsible self-regulation.

RECA is also responsible for administration of the REA including complaint handling, conducting investigations, conducting audits, holding hearings, acting as the trustee of the Real Estate Assurance Fund, and providing services to improve the industry.

So if RECA is the governing body, what is the role of industry associations and real estate boards?

It is important to understand all industry associations (including real estate boards) are private membership organizations membership is voluntary. They are also referred to as “trade associations”. Their boards of directors are made up exclusively of association members whose primary role is to serve the interests of their members. They are fiduciaries of the funds they raise from their members and the assets of the association.

The goal of every trade association is to provide services to their members. For example, MLS® is a service of CREA that is provided to REALTORS® through local real estate boards or REALTOR® associations. Membership in a real estate board is voluntary, but members are required to abide by the bylaws of the association and follow the rules related to MLS®.

Just to be clear, RECA has no jurisdiction over real estate boards and associations or responsibility for MLS® rules. For example, the 2010 Consent Agreement between CREA and the Competition Bureau on the issue of “mere postings” is not a matter related to the mandate of RECA.

*Examples of trade associations and services they provide include the following:

• AREA provides courses on current industry issues, forms used in real estate transactions e.g. ( Purchase Contract), studies and projects to advance the interests of REALTORS®;
• the Alberta Mortgage Broker Association (AMBA) provides insurance services and educational programs for its members; and,
• the Building Owners and Managers Associations (BOMA) in Edmonton and Calgary provide advocacy on behalf of their members, research, courses and conferences.

*Note: This information is for illustrative purposes only and is not intended to a description of all the trade associations or organizations associated with the various sectors within the real estate industry, or the services they provide. For more information contact the organizations directly.

Trade associations also provide advocacy and representation on behalf of their members in matters of interest to the membership. This includes promoting the association, promoting the services of their members to the public, and lobbying governments and regulatory bodies such as RECA. The views expressed by an association may or may not reflect the views of RECA.

In some situations, the interests being advanced by an industry association may coincide with the public interest mandate of RECA. For example, most industry associations support the goal of increasing professionalism within their membership. As a result, they may be involved in the delivery of education programs specific to the needs of their members. The goal of a better educated and professional industry is one shared with RECA and is in the public interest.

In most cases, when RECA is considering changes to the standards of practice set out in the Rules, it will seek input from industry members and the trade associations to gain their perspectives and insights into the changes under consideration. The information and advice received from the associations is taken into account in RECA’s decision making process. While industry associations provide their perspective, RECA is the governing body and is responsible for making and enforcing the rules.

Notwithstanding the differences in the mandates of RECA and the various trade associations, it is in the interest of the industry and the public for the various organizations to communicate with each other and, when it is appropriate, work together or partner on projects that advance the interests of all stakeholders.

The key is ensure there is a clear understanding and of the different responsibilities of each organization and maintaining respect for the decisions that each takes in order to pursue their respective mandates.