Real Estate Amendment Act 2020 has Come into Force
| February 09, 2021
Introduced on June 3, 2020, Bill 20, the Real Estate Amendment Act 2020 came into force on December 1, 2020. Bill 20 outlined changes to the Real Estate Act, adding renewed focus to RECA’s mandate, removing real estate appraisal activities from the Real Estate Act, and adding condominium managers as a licensed sector in Alberta.
Bill 20 also set out a new governance structure for RECA, including a new Board of Directors and Industry Councils that oversee the four industries licensed under the Real Estate Act.
The four Industry Councils—residential property management, commercial real estate and property management, residential real estate, and mortgage brokerage—each made up of three licensees elected from that sector plus two members of the public appointed by the Minister of Service Alberta.
These Industry Councils will be responsible for setting 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.
Additionally, licensees looking to permanently withdraw from the industry will now need to apply to the relevant Industry Council(s), 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.
Under the old governance model, the industry advisory committees were just that, advisory. They did not have the power to make rules, set standards, or undertake enforcement. Now, Industry Councils have these responsibilities, which will result in more responsive regulation in each sector.
Board of Directors
The Board of Directors will now be comprised of a member from each Industry Council and three members of the public appointed by the Minister of Service Alberta, one of whom must be the Board Chair. The Board of Directors will be responsible for RECA’s strategic direction and corporate governance.
Both the Board and Industry Councils will have to follow policy directives issued by the Minister in respect to matters of concern to the Minister, such as matters relating to red tape concerns or consumer protection.
In addition to the changes at the governance level, Bill 20 split the administrative powers that were previously under the purview of the Executive Director of RECA. Under the new Act, the Registrar is appointed by, and accountable to, the Board of Directors. The Registrar will now be responsible for sanctioning licensees under certain circumstances.
Other Notable Changes
RECA is now working to divest itself from the delivery of pre-licensing and re-licensing education in order to focus on regulation.
RECA has been working with the Government of Alberta since 2014 to create a regulatory model, standards of practice, and legislative changes required to have condominium managers regulated by RECA. While condominium managers are now included in the Real Estate Act, they are not yet required to hold a license with RECA. It is expected that the licensing process will be in place by December 1, 2021.
The Government of Alberta has decided real estate appraisal will be directly regulated by the three industry associations.
Reporting and transparency requirements for RECA have now been expanded and codified. In addition to adding legislated timelines around when Board and Industry Council meeting minutes must be posted, RECA must also provide the Minister of Service Alberta with annual budgets and business plans and meet expanded reporting
requirements for the Annual Report.
What it All Means
In short, under the new Act, RECA can provide more targeted and responsive regulation, there is greater consumer representation, and greater transparency.