Making a Claim Based on Fraud or Breach of Trust

Applications based on fraud or breach of trust require a Judgement from the Courts.

An application to the Fund must include:

1. A true copy of the Judgment obtained against the industry professional citing they committed fraud or breach of trust (a default judgment is not sufficient)
2. A copy of the Statement of Claim or other document that started the action which led to the judgment
3. Evidence satisfactory to the Council that the judgment is final—e.g. obtaining a Certificate of No Appeal from the court the judgment was issued from after the appeal period has expired
4. An Irrevocable Assignment of the Judgment from the applicant to the Council, in a form acceptable to the Council (RECA can provide this form)
5. A Statutory Declaration stating that the applicant did not participate in nor was willfully blind to the fraud or breach of trust of the industry professional (RECA can provide this form)
6. Any other information and documents prescribed by the Real Estate Act Ministerial Regulations

You should also advise of any attempts made to collect on the judgment.

Filing a Lawsuit

Any person intending to make a claim against the Fund must:

1. Provide immediate notice to RECA that you have started an action—Failure to provide notice may result in RECA barring your claim for compensation
2. Notify RECA before you note anyone in default–Note in default is a step a plaintiff can take when a defendant does not file a statement of defense within the limits set by the court, and obtain a judgment and damages without the defendants’ participation. RECA has the right to intervene in these cases and must have the opportunity to decide before you note any industry member in default. Again, failure to provide this notice may result in RECA barring your claim for compensation
3. Default Judgments are not sufficient—claimants must obtain a finding from the court that the industry professional has committed fraud or breach of trust. That is, a judge must review the facts and make a finding that there has been a fraud or breach of trust.

Where to File Your Lawsuit

You may sue in Provincial Court or in the Court of Queen’s Bench. Provincial Court is often faster, less expensive and less legally complicated than the Court of Queen’s Bench. However, judgment recovery amounts differ between the two courts. You should contact the courts or a lawyer for more information in order to determine what court process better suits the specifics of your case.

Time Limits for Filing a Lawsuit

There are time limits to file a statement of claim with the courts, and a failure to abide by the time limits will result in RECA barring your claim (See Limitations Act). For more information regarding time limits for filing a claim, please refer to the Alberta Courts website.

Making a Claim Based on a Failure to Disburse or Account for Money Held in Trust (Section 25 of the Act)

You do not require a judgement from the Courts when making a claim for compensation resulting from a failure to disburse or account for monies held in trust under section 25 of the Real Estate Act.

Industry professionals hold money in trust for clients and consumers, and must account for that money and disburse it in accordance with the terms of trust in Offers to Purchase or relationships agreements.

Failure to account or disburse trust money contravenes the Real Estate Act.

Claimants to the Fund for such a situation must provide the Council with:

1. A Statutory Declaration that contains:
   1. particulars of the basis of the claim
   2. a statement that the applicant did not participate in and was not willfully blind to the actions of the industry professional
2. Any other information and documents prescribed by the Real Estate Act Ministerial Regulations.

RECA can provide a Statutory Declaration form.