Setting Standards

Alberta Queens Bench Confirms RECA is the Standards Setting Body for Alberta Real Estate Professionals

While there are many interesting aspects to Power v. Goodram, 2012 ABQB 50, perhaps of most relevance to Alberta industry professionals is that Justice M.C. Erb confirms the Real Estate Council of Alberta (RECA) as the standards setting body for real estate professionals in Alberta.

In this case, the MLS® listing included a disclaimer that “all measurements and other information important to buyer to be verified by Buyers Agent and/or Buyer” and provided “Information herein deemed reliable but not guaranteed.” The Court found that even with such disclaimers, a seller’s real estate agent cannot completely avoid professional responsibilities and a duty of care.

As it considered the conduct of the listing agent, the Court noted the well-established principle that a real estate agent acting for a party in a property transaction must provide his or her services to the standard of a reasonably competent real estate agent and must exercise reasonable care, skill and knowledge.

In the decision, the Court finds RECA is the standards setting body, which is responsible for setting standards for competency and reasonable care, skill and knowledge. Justice Erb wrote:

In this case the standard of care for a reasonably prudent realtor* is set out in the Real Estate Council of Alberta’s Real Estate Act Rules, which mandate the professional obligations for all licensed realtors in Alberta. Under the Rules, when a realtor makes a claim or puts forward any fact or information, they are required to make certain it is correct and accurate. A realtor is not permitted to make representations or to act recklessly in a way that misleads or deceives any person or is likely to do so: see Real Estate Act Rules, s. 1(1)(t), s. 41(j), s. 42(a).

The Real Estate Act Rules also provides for a requirement that realtors are required to act with competency on a continuing basis in all areas in which the industry member provides services. Real estate industry professionals are not permitted to participate in the creation of any contract or document the individual knows or ought to know is not legally binding, confusing or does not reflect an agreement already in place.

The standards of practice, including the standard of care, set by RECA and laid out in the Real Estate Act and Rules are fundamental to the practice of real estate in Alberta.

(Note: The Real Estate Council of Alberta is responsible for licensing and governing real estate and mortgage brokerage licensees, which includes REALTORS® in the province of Alberta. REALTOR® is a term trademarked by the Canadian Real Estate Association used specifically for their members. In this matter, Justice Erb used the term “realtor,” which RECA takes as meaning licensed Alberta real estate professionals.)

What do you think of the Court’s decision in this matter?