Real Estate Amendment Act 2020 – What You Need To Know
| September 17, 2020
IMPORTANT: As of the publication of the Regulator (September 17, 2020), no sections of Bill 20 have been proclaimed. Until they are, the current Real Estate Act remains in effect.
On June 18, 2020, the Government of Alberta received Royal Assent for Bill 20, the Real Estate Amendment Act 2020. Bill 20 outlines changes to the Real Estate Act that set a new governance structure for RECA, focuses RECA’s mandate, removes real estate appraisal activities from the Real Estate Act and adds condominium managers as a licensed profession in Alberta.
The primary changes to the Real Estate Act in Bill 20
Governance Structure
The creation of four Industry Councils (residential property management, commercial real estate and property management, residential real estate, and mortgage brokerage), each made up of three industry professionals elected from that Industry Council’s sector, and two members of the public appointed by the Minister of Service Alberta. These Industry Councils will be responsible for setting the standards of practice and their enforcement.
The creation of a Board of Directors made up of a member from each Industry Council and three members of the public appointed by the Minister of Service Alberta. The Board of Directors will be responsible for RECA’s strategic direction and corporate governance.
What’s different?
Higher proportion of consumer representation. Under the old structure, committees and Council had limited consumer representation. Of the 12 members on Council, only two were members of the public. Under the new structure the public will have greater representation through the Industry Council and Board of Directors appointments. This follows a worldwide trend in self-governance.
More authority within each industry sector. Under the existing committee/council system, the industry advisory committees were just that: advisory. They did not have the power to make rules, set standards, or undertake enforcement. Under the new governance model, Industry Councils have these responsibilities.
Industry professionals will now be elected to Industry Councils. Under the new Act, licensees will be elected directly to Industry Councils by the industry professionals who practice in those sectors.
The Addition of Condominium Managers to the Real Estate Act
Implementing condominium manager regulation in Alberta began with the passing of the Condominium Property Amendment Act in 2014. Since then, RECA has worked with the Government of Alberta to create a regulatory model, standards of practice, and legislative changes required to have condominium managers regulated by RECA. When fully proclaimed, the new Real Estate Act will officially begin regulating condominium managers as part of the property management sectors.
On August 14, 2020, RECA began consulting stakeholders on the draft standards of practice agreed to by the Condominium Managers Implementation Advisory Committee. Take part in the consultation by going to RECA’s Industry and Government Consultation page. RECA will continue to notify stakeholders with further developments.
Removal of Appraisers from the Real Estate Act
Appraisers first became regulated by RECA when they were added to the Real Estate Act in 2004. Many of the standards appraisers must meet come through their industry associations, and membership in one of the three recognized associations was a requirement for licensing with RECA. The Government of Alberta has decided appraisal regulation being moved directly to the three industry associations will adequately regulate and reduce red tape in the real estate appraisal industry.
Focusing of RECA’s Mandate
Service Alberta has communicated that Regulations being developed will require RECA to divest itself from the delivery of pre-licensing and re-licensing education.
Under the new Industry Council model, each Industry Council will set out the conditions for a person to become and remain a licensee of the industry to which the Industry Council relates, including minimum standards for conduct and education requirements.
Changing Enforcement Powers
Splitting Administrative Powers. When this Act is proclaimed fully, the powers of the Executive Director of RECA to sanction licensees under certain circumstances will pass to the Registrar. The Registrar is currently a position hired by the Executive Director and derives the authority to sanction when delegated to do so by the Executive Director. Under the new Act, the Registrar will be a position appointed by, and accountable to, the Board of Directors.
Changes to lifetime withdrawals. Currently applications for lifetime withdrawals from industry are made to the Council, who may accept or deny the application. Under the new Act, applications will be made to the licensee’s Industry Council, who may accept or deny the application. Additionally, Industry Councils will be required to reject applications when there are allegations of fraud or criminal activity against the licensee.
Transparency
Bill 20 expands and codifies the reporting and transparency requirements for RECA. RECA began posting Council meeting agendas and minutes in January 2018, and Bill 20 has legislated timelines around when these must be posted. Under Bill 20, RECA must also provide the Minister of Service Alberta with annual budgets and business plans, and expanded the reporting requirements for the Annual Report.
Policy Directives
The Board and Industry Councils will have to follow policy directives issued by the Minister in respect to matters of concern to the Minister. These matters may relate to red tape concerns or consumer protection.
How will this all work going forward?
This is a very important question, and RECA is currently working with Service Alberta to answer it. Many of the details of how this new framework will work operationally will be worked out in the Real Estate Act Regulations, which Service Alberta is currently writing, and through the implementation process already underway. Service Alberta is leading the transition process, and is working closely with industry stakeholders, including representatives from the Alberta Real Estate Association, the Alberta Mortgage Brokers Association, BOMA Calgary and Edmonton, CCI North and South, the real estate legal community, and more.
When decisions are made, and processes finalized, all industry stakeholders will be notified.
When other changes are approved, RECA will inform all stakeholders immediately.
