Chair’s Message – October 2019 Image

Chair’s Message – October 2019

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As you are all aware, the Minister of Service Alberta, the Honourable Nate Glubish, introduced Bill 15 into the Alberta Legislature last week. Once passed, this Bill amends the Real Estate Act, dismisses the eight remaining members of Council (4 of whom have terms expiring October 31, 2019), and gives the Minister the authority to appoint an Administrator to act in Council’s place. The Administrator will lead and provide oversight to RECA while Government reviews its governance structure and establishes a new one, and until a new Council can be put in place.

I would like to once again thank the Minister for acting on the governance challenges RECA has been experiencing. I am also glad that the Minister has indicated he will take the time to develop a proper governance structure and appointment process.

The Minister dismissing Council was the right decision.

The Minister’s actions also did not, and do not, come as a shock to me, as the Minister was aware of Council’s dysfunction even before the KPMG Governance Review Report was released in July 2019 that recommended dismissal of this Council.

How did we get here?

This is my second time on Council. I originally served from 2007-2013 and was Chair in 2011. There was a significant difference from when I left in 2013 and when I was reappointed in 2016. As evidenced by the KPMG Governance Review Report, it was extremely disappointing when I found that Council could no longer self-regulate in the same manner it expects licensed professionals to self-regulate. Council meetings were able to move forward with some positive aspects but often devolved to nothing more than the making of accusations lobbed across the Council table.

The six years of Council’s I have previously served on kept RECA’s mandate to protect consumers at the forefront, and we acted in the best interest of our industry, all industry professionals, and consumers. When I arrived on Council once again in 2016, some Council members appeared to be conflicted between the Council’s mandate to protect consumers and their appointing association. Some openly stated they understood, however did not agree with the mandate set for RECA in the Real Estate Act. This is not the foundation of good governance.

What should a new Council look like?

Personally, having spent 32 years on various boards, fulfilling numerous positions, and as a licensed professional with over 30-years’ experience as both a real estate broker and real estate appraiser, I would like to see the Minister approve a governance structure that does not have one association appointing the bulk of Council. Under section 6 of the Real Estate Act, the Alberta Real Estate Association (AREA) directly appoints six Council members, all of whom must be members of AREA, and those six are the majority vote in appointing a further four Council members. That leaves only two positions open, and only one is the public member appointed by the Minister. This has been the core of RECA’s governance failings, particularly in the last three years, and changing this one-sided appointment structure was the major recommendation of the KPMG Governance Review Report.

This had always been a potential issue. In 2009, Council at the time even brought to the attention of the then Progressive Conservative Alberta government the potential for governance challenges arising from this one-sided appointment structure.

How could things be different?

Based on current trends of good governance, as well as the mandate of RECA, I believe that there should be an equal number of consumers/public members and industry professionals on Council. In addition, I believe that the industry members should be comprised of representatives from all industry sectors. The Act should also change to ensure that no industry member is excluded from being able to be appointed to Council based on their membership, or non-membership, with a trade association.

Further to this, all appointments should be made by an independent body, devoid of industry interests, and should be made based on a competency matrix.

A new Council should also have a mechanism for dealing with breaches of the Code of Conduct for Council Members without having to resort to the courts. This has been another issue at the centre of Council’s governance challenges. When Council doesn’t follow its own Rules, there must be a mechanism to enforce compliance.

We had a good thing going

As this will be my last message as Chair, and the last message from Council as it exists today, I would like to take a moment to thank Bob Myroniuk, RECA’s recently retired executive director. Bob helped create RECA in 1995-1996 and raised it into the envy of self-regulatory bodies across North America. Bob was tireless in his defense of self-regulation, and always thought of it as a privilege; one the industry could lose if it did not take it seriously. In fact, RECA’s counterpart in BC lost self-regulation two years ago, and self-regulatory professions the world over are disappearing as consumers lose trust in the professionals being able to police themselves. Bob spent countless hours trying to educate and advise Council when these governance challenges began in 2016.

RECA exists so consumers can trust the professionals helping them make the largest financial decisions of their lives. We appreciate that the Minister has recognized RECA’s great work in its first 20+ years and giving the profession another chance at self-regulation believing that RECA can become the professional regulator it once was, with a new governance structure.

Council is not RECA

Beyond my gratitude to Bob Myroniuk, I would also like to express my continuing support for RECA Staff and Administration. The hard-working, professional staff at RECA continue to provide outstanding services to the public and industry professionals and in doing so provide award-winning education, communications, licensing systems, and investigations. Multiple-award winning in fact. They continued their work even during the height of Council’s dysfunction and won four major international awards this year.

RECA has always been a high-performing regulator, and despite this turbulent time on Council, I believe with a new governance structure set out by the Minister, RECA will regain its place as the top real estate, mortgage brokerage, and real estate appraisal regulator in North America.

Don’t believe everything you read

Finally, it is with extreme regret and shock that I’ve witnessed extensive misleading information about RECA circulate within the industry and the public. I urge you all to review the information RECA sent out yesterday that sets things straight. While RECA has experienced this challenging time, others appear to be spreading inaccurate information to make things appear worse than they are, and to deflect accountability. I urge you to read all the facts and make up your own minds. We have provided you with the links to the relevant information so that you can verify the information and make an evidence-based decision.

In closing

I would like to close by thanking those on Council and in RECA Administration throughout the years who put the consumer first and helped create a regulated environment in our province that consumers could trust. All that hard work was not in vain, as even in this challenging time, the day-to-day regulatory work at RECA continued as if nothing were amiss, and consumers could buy and sell property, get a mortgage, or have their property appraised in Alberta with all the protections of a high-performing regulator.

At the end of my term on October 31, 2019, or when I am dismissed from Council, I will continue to be a licensed real estate broker and real estate appraiser, and I will continue to do my part in ensuring my industry peers understand the privilege of self-regulation, and further, that our biggest asset is an educated, protected public.
It is up to us.

Rob Telford, ICD.D
Chair of RECA