New Voluntary Broker Resolution Process
| April 29, 2011
The Real Estate Act, and the regulatory model it establishes for RECA, is based on the self-regulatory model of traditional professions such as accountants, engineers, doctors and lawyers. While this is the case, there is one component that has been missing from RECA’s self-regulatory model: mediation.
While the Real Estate Act does not prohibit mediation, it requires all complaints meeting minimum complaint requirements to be investigated. As a result, any mediation initiative must be agreed to by all parties in writing.
RECA’s new mediation initiative is called the Voluntary Broker Resolution Process (VBRP). The intention of the VBRP is to resolve complaints involving breaches that are minor in nature.
Under the VBRP, all parties, the complainant, the industry member subject to the investigation and the broker at the time of the events, must agree to participate in writing. This process is a type of complaint resolution process that will be managed by the broker. If the complaint is resolved through the VBRP, the complaint is withdrawn and the investigation is terminated.
How does the Voluntary Broker Resolution process work?
- An investigator will send the complainant, the industry member subject to the investigation and the broker a letter advising them their complaint meets the criteria for the VBRP;
- The parties are encouraged to seek legal advice;
- If the broker wishes to manage the broker resolution process, he or she will contact the complainant and the industry member subject to the investigation and determine if they are interested in participating in the process;
- If the parties are interested in participating, the broker will be responsible for contacting all parties and managing the resolution process on a without prejudice basis. If the resolution process is successful, the broker will be responsible for ensuring all applicable releases are signed and forwarding to the investigator the complainant’s signed complaint withdrawal form;
- Once the complainant’s withdrawal form is received, the investigation will be terminated.
If any of the parties refuse to participate in the VBRP or if the resolution process fails to obtain a solution that is satisfactory to all parties, RECA’s investigation will proceed.
The time allowed for the resolution process is 40 calendar days. The broker may request extensions when extenuating circumstances exist. If the resolution process is not completed in the time allowed, or in approved extended time, RECA’s investigation will proceed.
Brokers interested in participating in the VBRP process can create an environment that increases the chances for success. The following are suggestions to assist brokers in increasing the efficiency and probably success of the process. Interested brokers should:
- Discuss with their E & O Insurance provider the anticipated dispute resolution process to ensure it does not affect coverage should E & O coverage later become necessary;
- Ensure the parties understand the process is voluntary;
- Give the parties the opportunity to seek legal advice;
- Ensure the parties agree, in writing, that the process is confidential and on a without prejudice basis;
- Request the parties come prepared for the process;
- Set rules for the process, including rules that will help ensure the parties act in good faith and courteously, and rules to ensure the parties focus on facts and rules of order (i.e. to listen to the other parties’ submissions without interruption);
- Suggest to the parties there might be multiple solutions, and to seek win-win solutions;
- Clearly document the settlement terms in writing.
For further information on effective mediation processes and techniques, brokers are encouraged to consult mediation books or websites. Some real estate boards have indicated an interest in assisting brokers with this initiative by providing a neutral location and possibly offering trained mediators.
The VBRP need not always result in a financial settlement. The options for resolution can be varied and are only limited by the imaginations of the participants. Many brokers currently resolve complaints from clients by re-assigning associates and offering future services. These brokers are often successful at maintaining the client’s loyalty and preventing ill will against their brokerage.
The new VBRP has many possible benefits. For brokers, it provides the opportunity to resolve client complaints, maintain their loyalty and reduce any ill-will against the brokerage by the client. Associates and associate brokers learn to recognize mistakes and learn from these mistakes, and if their conduct was deserving of sanction, they avoid sanction. For RECA, it means investigative and disciplinary resources can be diverted to more significant issues. For the public, their trust in industry professionals grows and is reinforced by the demonstration that industry professionals are willing to admit their mistakes, fulfill their responsibilities, and that they are willing to work collaboratively to resolve client and customer complaints. In turn, this also promotes the integrity of the real estate and mortgage brokerage industries by demonstrating effective, responsible self-regulation to the public.
For further information, please see page 11 of the Guide to Investigations for Industry Members.
What do you think of RECA’s new Voluntary Broker Resolution Process?