Alberta Real Estate
The COVID-19 pandemic has affected almost every aspect of Albertans’ lives. It is understandable that you would be concerned when selling your home at this time. However, there are ways to do it safely to reduce the possibility of contracting COVID-19.
Before proceeding with viewings you should understand your personal risk tolerance with COVID-19. Do you, or does anyone in your family, have any health conditions that put you at greater risk? Do you work in an essential service? Are you comfortable knowing that you can’t guarantee people viewing your home will know for sure whether they’ve been in contact with someone who has the virus? Once you gauge your tolerance, speak to your real estate professional about any concerns you have with opening your home to outside visitors.
Based on your concerns, you and your real estate professional can find options to minimize your risk and ease your mind, including:
- reducing in-person viewing through virtual communications. You can post photos and videos of your home online so only serious buyers have to enter your home.
- screening potential viewers for symptoms of COVID-19. You do not have to allow anyone into your residence if you feel that an individual may pose a risk to you. Your real estate professional can help draft questions to ask buyers, tenants, and their representatives about their health and travel information.
- getting acknowledgement of viewing conditions in writing. Work with your real estate professional to develop a list of conditions for viewings such as using gloves, masks or hand sanitizer, or limiting the number of people at any time or during a specific time period. Keep in mind that viewing terms are subject to negotiation between parties. Have your real estate professional put them in writing and require the buyers and their professionals to sign off on the agreed upon terms. Please always bear in mind, if you make the viewing conditions too strict, the potential buyers have the option to simply go looking for something else.
- communicating viewing conditions to property measurement companies, virtual tour companies and home inspectors. Some appraisals can also be done through virtual tours.
- taking extra precautions to clean and sanitize your home before and after any viewings or inspections. Discuss with your real estate professional who will be responsible for cleaning and sanitizing high-touch areas of your home before and after.
It’s important to have these discussions with your real estate professional so you can document all conditions in writing. Getting written confirmation and acknowledgement of conditions can ensure that all parties involved agree and understand the processes they need to follow to help mitigate the risk. This goes a long way to eliminating any confusion.
Many aspects of real estate transactions like meetings, property viewings, and open houses require interacting with numerous people. As we are facing a global health issue, knowing your risks and options is essential.
Real estate related services have been deemed essential by the Government of Alberta, so there is a chance that your real estate professional will still be hard at work.
Visit the COVID-19 page on the COVID-19 for Real Estate Consumers—provides detailed information, including information for real estate buyers. This information will continue to be updated as the COVID-19 situation in Alberta evolves.
Share this story: Can I still sell my house during the COVID-19 pandemic?
The following is a case study on response to a confirmed case of COVID-19 in a commercial building. It is based on an actual event from March 2020, as described by Jon Douglas, Menkes Property Management during a video discussion with BOMA Canada. RECA encourages commercial property managers to review the details and use the information as guidance for creating their own COVID-19 case response protocol.
Before the confirmed case
In January/February, Menkes:
- implemented additional cleaning for high-touch points
- placed hand-sanitizer dispensers in lobbies and common spaces
- launched hand washing campaign using posters and social media posts and elevator screens
- issued a tenant notice outlining these measures and shared information made available by Toronto Public Health
Mar 5th: more planning
Property leaders came together for an emergency call to discuss COVID-19 and actions that needed to be taken. They:
- planned communications in the event of a confirmed case
- templates/drafts were created for 10 communications
- created an internal response protocol
- contacted external providers for disinfecting spaces
- staff were asked to log all floors they were present on
March 17th: confirmed case of COVID-19 was reported
At 8:35pm a tenant notified Menkes that there was a confirmed case of COVID-19 within their employee pool and that the individual had been at work. The response protocol was implemented:
- the menkes General manager was notified and immediately implemented the COVID-19 protocol
- Public Health was already aware of the case and did not need to be contacted by Menkes
- a housekeeping specialty team was mobilized to disinfect common spaces, floors, elevator cabs, and parking elevators (in addition to the day-to-day cleaning that was occurring)
- the general manager participated in a conference call with the tenant (employer with confirmed case) to review the Menkes protocols and learn steps the tenant was taking
- the tenant confirmed all employees were working from home until further instructed
- Menkes leadership:
- connected via conference call to bring everyone up to speed
- sent out notice to all staff on site: security, parking
- sent out a building-wide tenant notice regarding the confirmed case and notifying tenants that Menkes was implementing their draft protocol
- drafted a script for responding to tenant calls. The script indicated they could not confirm information about the tenant or the employee affected. They could only communicate when that employee was last in the building
March 18 @ 3am: response protocol was running
The disinfecting of all floors was completed and a notice of this was sent to all tenants. Menkes:
- connected with Toronto Public Health to review Menkes procedures, protocols and information
- sent out tenant communications confirming
- contractors would continue disinfecting high-touch points
- there was low risk to other tenants in the building
- they were following Public Health direction
- they could not release any information about the tenant or individual with the confirmed case
- to reduce risk to operations staff, they would not be responding to non-urgent work orders while occupants were in the building—things like changing lights would happen over night (operations staff adjusted schedules)
March 18th 11am: media inquiries
Menkes released a statement with what information they could share. One Toronto media outlet released false information stating the building had been sealed and quarantined, which started an all-out panic where building tenants, other media outlets and tenants/managers of neighbouring buildings began calling for information. Menkes:
- staff were instructed to take down information of the caller but not answer any questions
- released a tenant notice about the media situation and the false information
- released corrected information, forcing the media outlet was forced to post a correction
- confirmed with tenants that the building was open and safe
- sent notice to contractors and vendors confirming the building was safe for people to come into for work
March 19: response review and follow up
- management had a conference call to review protocol and discuss lessons learned, and update protocol for future cases based on experience
- staff reached out to tenants to discuss protocols for when happens to them (because it’s more a case of when, not if)
I’m selling my home, and the potential buyers also want to use my real estate professional to represent them. Is that allowed?
Yes, that’s allowed. The situation you’re referring to is called transaction brokerage. Transaction brokerage is a service option when your real estate professional represents a buyer client interested in purchasing the property in which you are the seller client. The reverse is also true—transaction brokerage is a service option when you’re interested in buying a property and the property’s seller is also represented by your real estate professional.
When a real estate professional works on behalf of only one client in a transaction—the buyer or the seller—they have legal responsibilities, which include:
- undivided loyalty to their client
- acting in their client’s best interest at all times
- the duty to avoid conflicts of interest
- the duty to disclose conflicts of interest when they arrive.
Transaction brokerage changes the services your real estate professional is able to provide to you and to the other party in the transaction. A real estate professional who is working with both the buyer and the seller in a transaction cannot fulfill all of their legal responsibilities because there is a conflict between the best interests of the buyer and those of the seller. The buyer wants to pay as little as possible for the property, while the seller wants to sell their property for the highest possible price. It is impossible for a real estate professional to advocate for and represent the best interests of a buyer client AND seller client in the same transaction.
This is when and why transaction brokerage becomes an option. In transaction brokerage, the real estate professional will provide facilitation services to you and the other party. These services include:
- helping the buyer and seller negotiate an agreement
- giving the buyer and seller property statistics and information, including comparative information from listing services and local databases
- providing and preparing agreements of purchase and sale, and other relevant documents according to the buyer and seller’s instructions
A transaction facilitator has to treat both parties in an even-handed, objective, and impartial manner. They must remain neutral, not advocate for either you or the buyer, and they cannot provide confidential advice.
Before a real estate professional proceeds with transaction brokerage, both the buyer and the seller need to provide their informed consent by signing an Agreement to Represent both Buyer and Seller. Informed consent means each client understands the facts, implications, and future consequences of providing their consent. You do not have to consent to transaction brokerage. If you don’t consent to it, or the other party doesn’t, there are other options available to you such as seeking representation from a different real estate professional.
- Can a real estate professional represent both the sellers and the buyers?
I just spent $50,000 to finish my basement with high-end finishings. Now, I’m listing my house for sale, and my real estate representative says she can’t include the basement square footage in the total size. Why not?
You developed your basement and it’s beautiful. You’re sure any potential buyer would agree that it looks great, and is definitely livable space. But, your real estate professional is correct, the square footage of your basement cannot be included in the size of your home for listing purposes.
In Alberta, real estate professionals are required to follow the Residential Measurement Standard (RMS) when listing a residential property for sale. The RMS contains nine principles that enable real estate professionals, as well as buyers and sellers, to determine and compare the size of residential properties. The RMS sets out the specific parts of a residential property that can be included in its size for listing purposes.
Above grade levels are the levels of a residence that are entirely above grade. Below grade levels are the floor levels of a residence that are partly or fully below grade. If any portion of a level is below grade, the entire level is considered below grade. Below grade spaces include lower levels and basements. The RMS size of a property is, essentially, the sum of its above grade levels. Below grade levels are not included in the RMS area.
Without the RMS in place, there would be little consistency in how real estate professionals, and their sellers, measure and describe their property. Some may want to include their basement (unfinished or not), some may include an enclosed sunroom, while others may include the space created by a bow or bay window.
The RMS provides a consistent means of measuring, and describing, residential property size in Alberta.
Sellers, and their real estate representatives, are welcome to include additional measurement information in their listings, but the primary size listed in the listing must be the size according to the RMS.
Sellers need to remember that size isn’t the only factor that will affect a property’s list or selling price. Other factors include location, condition, quality of finishing, layout, and even type of ownership. You may not be able to include the square footage of your basement in the total square footage of your home, but the features of your home will set it apart from other properties. Size matters, but it’s not the only thing that matters.
I’ve been working with an agent, but she’s going on holidays for 2 weeks. She’s going to arrange for someone else at her brokerage to take care of my listing while she’s gone. Do I have to sign a new contract with this person?
The short answer is no, but you may have to make changes to your existing contract depending on what type of brokerage you’re working with: common law or designated agency.
In a common law brokerage, your service agreement (contract) is with the brokerage, which means that essentially, you’re agreeing to work with any or all licensees at the brokerage. Because the agreement you signed is with the brokerage, any licensee from that brokerage can work with you under your existing agreement. The individual or individuals you have been working with are working with you on behalf of the brokerage.
In a designated agency brokerage, your service agreement is still with the brokerage, but only the individual (or individuals) named on the agreement are designated to work with you on behalf of the brokerage. If this is the case, and the individual your real estate agent wants you to work with for a couple of weeks isn’t specifically named on the agreement, the brokerage will have to designate, in writing, the other individual to work with you. You and the brokerage can amend your original agreement to include this new person as another designated agent for you.
Another option that is available when you’re working with a designated agency brokerage is that at the outset of your agreement, the brokerage designates more than one individual to work with you on behalf of the brokerage. This is completely acceptable, and will save you from having to amend the original agreement in the event the primary individual you’re working with becomes unavailable during the term of your agreement. When you’re signing your agreement, talk to your agent about their availability, vacation plans, and whether there are other agents within the brokerage that they sometimes partner with.
More than fifty percent of real estate professionals in Alberta are registered with a designated agency brokerage. Your agent should have explained whether their brokerage operates under common law or designated agency when you first started working together, and should have explained the differences.
- Can I work with different professionals from the same brokerage without signing a new contract?
I saw on the news that fraudsters are being charged with unlicensed real estate trading. Why do you need a licence to buy or sell property?
First things first. You don’t need a licence to buy or sell property; consumers are always free to buy or sell their own property. When you need a licence, though, is when you’re helping someone else buy or sell property.
The individuals you’ve seen in the news are people who are not licensed as real estate professionals, who say they will help consumers buy and sell property, but instead, they are actually participating in various fraud schemes. That’s why they’re in the news.
Still, unlicensed trading in real estate remains a serious issue and not just because of the fraud that sometimes results. Under the Real Estate Act of Alberta, anyone trading in real estate, dealing in mortgages, performing real estate appraisals, or providing property management services requires a licence from the Real Estate Council of Alberta (RECA). It’s the law.
Buying a home is one of the largest financial commitments most people will ever make. Why would you want to trust that transaction with someone who doesn’t have education, experience, and a regulatory body behind them?
When you hire a licensed real estate professional, you can trust they’ve completed pre-licensing education, their background has been reviewed, they carry errors and omissions insurance, they’re required to complete ongoing education, and you can feel confident that a regulatory body will hold them accountable for their actions. All real estate licensees are required to carry errors and omissions insurance, and there’s a Consumer Protection Fund available in the very rare event a consumer suffers a financial loss as a result of fraud, breach of trust, or a failure to disburse or account for money held in trust by an industry member.
Think about it, you don’t want people driving on the road who don’t have a driver’s licence, right? If someone has a driver’s licence, it means they passed a competency test, and there’s an unwritten agreement that they’ll follow the rules of the road. If they don’t, they can be fined or even lose their licence. The same thing applies to licensed real estate professionals. If they violate the rules, RECA has the authority to discipline them, which can include licence suspension or cancellation.
When someone doesn’t have a real estate licence, and represents a consumer in a real estate deal, the consumer has no assurances that the person has knowledge or training, and there’s nowhere to go—other than court—if something goes wrong.
I want to hire a real estate agent and I’ve noticed some have designations after their name, such as Accredited Buyer Representative or Certified Condominium Specialist. Are these important?
Whether or not they are important is up to you. Usually, designations after a real estate agent’s name indicate additional education or experience in a particular area that resulted in a designation or certification from an industry body. If you are in the market for a condominium, maybe hiring someone who has a Certified Condominium Specialist designation will make you more comfortable. It’s entirely up to you.
Typically, to receive these types of designations, a real estate agent will have to complete additional education and/or attain a certain level of experience. For example, the National Association of REALTORS®, an industry trade association, offers an education program to attain an Accredited Buyer’s Representative (ABR) designation.
In addition to formal designations from industry trade associations, some real estate professionals may also claim particular expertise or experience. That expertise or experience may relate to a geographical area (for example, they’ll call themselves “Downtown Neighbourhood Specialist”), or in a type of property (for example, “Your Farm and Ranch Specialist”).
When making these claims, a real estate agent needs to ensure they can demonstrate the qualification or experience they are claiming. If an industry professional advertises particular qualifications or expertise, the Courts and RECA will typically hold them to a higher standard. That means if a real estate agent has never assisted a buyer or seller with a condominium, they shouldn’t call themselves a condominium specialist. But, if they do, and RECA receives a complaint about their conduct when assisting a condominium buyer or seller, RECA will hold them to a higher standard than someone who does not call themselves an “expert” or “specialist.”
At the end of the day, what you think is important when hiring a real estate agent is up to you. If a real estate agent you’re talking to has an additional industry designation, ask them about it. Find out what it took to attain it, and how they keep their designation current. If you’re seeking a specific type of property or have a desire to stay in a specific area, you may want to seek out a real estate agent who indicates—and can prove—extensive experience and expertise in that area. In all cases, though, ask questions to figure out what is important to you, and who you’re comfortable working with.
I listed my house with a real estate agent after seeing their ads all over my community, but my showings and correspondence are always with another member of the real estate agent’s ‘team.’ Is that allowed? I thought I was hiring the person in the advertising.
On the surface of it, there’s nothing wrong with what you’ve described, but it’s important that the agent didn’t mislead you into thinking you were hiring just them.
When you list your home with a real estate professional, you’re actually listing your home with their brokerage; the company they work for. The agent you deal with is the person working on your behalf as the representative of the brokerage.
If the brokerage is a common law brokerage, it technically means that all of the individuals within that brokerage are working on your behalf, and the law assumes they all have the same information about you and your property. If you’re working with an individual from a common law brokerage, then yes, other real estate professionals within that brokerage work for you as well, and can take care of your showings, provide services to you, and negotiate on your behalf.
If the brokerage is a designated agency brokerage, the real estate professional you’re working directly with needs to be named in the listing agreement as a designated agent. Additional individuals can also be named and they jointly will be your “designated agents.” They will be your representative(s) in your transaction on behalf of the brokerage. Other individuals in the brokerage who are not named in the listing agreement do not have a working relationship with you or your listing. Your agent(s) cannot share your information with other individuals within the brokerage, and they will not provide services to you or work on your behalf.
Whether you’re working with a common law or designated agency brokerage, when you sign your listing agreement—be clear with your real estate professional about who you want to be directly working with. If you want to only deal with the individual you’re meeting with, tell them, and see what they have to say. Some real estate professionals will only work as part of a team and won’t be prepared to offer such a guarantee.
Don’t sign anything you’re not comfortable with. If you expect to work with the individual whose face is in all the advertising, make sure you make that clear in writing and discuss it with them before you hire them.
If the person in the advertising says you’ll be communicating and working with only them, and it turns out you deal with their team or others within the brokerage, and never see or hear from them again, there could be grounds for a complaint if they misled you about your working relationship.
A few years ago I bought an infill duplex from a builder who had it listed as 2,000 sq. ft. I’ve decided to sell, but my real estate professional says they must advertise my place as 1,900 sq. ft. Why is my house smaller now?
The truth is, your house isn’t smaller. The difference in size is because of the measurement standards your real estate professional must follow versus how the builder measured the property when they built it and sold it to you.
The Real Estate Council of Alberta (RECA) requires licensed real estate professionals to measure and advertise the above grade area of residential properties using the Residential Measurement Standard (RMS). The RMS is a principles-based standard for determining floor area that ensures consistent measurement practices. When licensed real estate professionals measure using the same standard, consumers can make direct comparisons, and not have to worry that one listing includes the garage, a covered porch, or other feature, and another listing does not.
RECA doesn’t license Alberta home builders, so they do not use the same measurement standard.
For attached or semi-detached properties, such as your duplex, the RMS requires real estate professionals to measure the floor area from “paint-to-paint.” This means they take measurements from the interior walls at their longest points.
Builders often measure from the exterior foundation of a duplex, to the midway point of the common wall between the two duplex units. They’re measuring the building they built, not just your living space from paint-to-paint.
For newly built properties, there is often a direct and proportional correlation between the property size and the sale price. The builder bases this correlation on the dollar amount per square foot of their costs. Thus, builders often base their asking and/or sale price directly on the property size. In resale properties, there isn’t the same kind of direct and proportional correlation.
RECA believes measuring using the RMS provides a more accurate representation of the actual living space in your home. By including the thickness of the exterior walls and half of your common wall in their measurement, the builder advertises a slightly higher square footage. That’s why they sold it to you as a 2,000 sq. ft. property, but your listing now has it measured at 1,900 sq. ft.
When representing a residential seller, the real estate professional has to use the property’s RMS size, but a seller can also ask their real estate professional to include additional measurement information in the comments. If your real estate professional provides an additional size representation, they must ensure they disclose how they determined the size and what it includes, and it can’t be misleading.
For example, if you have a fully developed basement that you feel adds a lot of value, your real estate professional can include that space in your listing as an additional measurement, as long as they first list the RMS area and disclose that the additional measurement includes below grade living area.
I’d like to get out of my home purchase because the seller’s real estate agent lied to me about something. If I file a complaint with the Real Estate Council of Alberta, will that get me out of my purchase?
The Real Estate Council of Alberta (RECA) won’t be able to help you get out of your purchase, but you are certainly welcome—and encouraged—to file a complaint against the seller’s agent if you believe they lied to you.
RECA’s complaint-handling process is disciplinary in nature. If an industry member breaches the legislation and industry standards that are in place, for example by misrepresenting something, RECA can issue discipline against them. However, RECA can’t get a consumer their money back nor can RECA’s investigation actions bring an end to a purchase/sale between a buyer and a seller.
Home purchases are contractual agreements between consumers—buyers and sellers. Through the Offer to Purchase that you submitted, which the seller accepted, you created legal and binding obligations. RECA does not get involved in these types of contracts between consumers.
In the event that the lie was significant enough that you believe by proceeding with the purchase, you will be financially or otherwise disadvantaged, I suggest you talk to a lawyer as soon as possible. After your purchase closes, you may want to consider legal action against the seller’s agent, or the seller, if you believe they were involved in the misrepresentation.
When you file a complaint with RECA, RECA will review it, collect evidence, and conduct interviews. Penalties issued against industry members can be significant; up to $25,000 per breach—however, despite any of our investigative findings, our disciplinary process will not award you any damages nor will it enable you to get out of your purchase.
You may have heard that RECA has a Consumer Protection Fund, also referred to as the Assurance Fund. The Fund compensates consumers who suffer a financial loss as a result of fraud or breach of trust by an industry member, or an industry member’s failure to disburse or account for money held in trust. Consumers do not receive compensation from this Fund as a result of filing a complaint. Rather, there is an application process which, in some cases, requires a consumer to file a lawsuit against the industry member in question. Visit reca.ca for more information about the Consumer Protection Fund.
I want to learn what I can about the real estate industry in Alberta, but it’s hard to keep track of all the organizations and their acronyms. The regulator, the provincial association, the local real estate board; what do they do, and who’s looking out for me?
This is understandable. The real estate industry has so many players and acronyms that even some industry veterans get them confused at times.
It may make things simpler by thinking about the organizations in two main groups: the regulator and trade associations.
In Alberta, the Real Estate Council of Alberta (RECA) is the regulator of real estate professionals. RECA sets the industry practice standards and is responsible for enforcing them, and all real estate professionals must be licensed by RECA.
RECA’s mandate is to protect consumers. In the unlikely circumstance that your real estate professional breaks the rules that are in place, RECA can investigate the situation and can issue discipline. That discipline can include licence suspension or cancellation, and fines of up to $25,000 per offence. RECA also provides services to real estate professionals that enable them to provide competent, ethical service to consumers. Among other things, these services include a practice advisor, information bulletins, and ongoing education.
The other organizations within the real estate industry that you’ve probably encountered are trade associations. Membership in a real estate industry trade association is voluntary.
In Canada, the primary trade association for residential real estate professionals is the Canadian Real Estate Association (CREA). There are also provincial trade associations that operate under CREA, and there are local real estate Boards, which operate under the provincial associations as well as under CREA.
To make things easier, it may be helpful to think of all of these associations as the same organization, but at different levels (national, provincial, and local). When your real estate professional mentions their ‘board,’ they mean their local real estate board, which is the local level of the national and provincial associations. By being a member of their local board, they are also members of their provincial association and of CREA, the national association.
Broadly speaking, the real estate trade associations work on behalf of their members and their members’ commercial interests. The trade associations own certain trademarks that only their members can use, such as the word REALTOR®, and at the local board level, they operate the local real estate board listing database. Trade associations typically have government relations or lobbying departments, they provide advocacy for their members, and while they have rules their members need to follow, their rules aren’t found in legislation, and they’re not industry-wide requirements or practice standards.
I hope this information helps, but if at any time you feel overwhelmed by acronyms or unsure about any aspect of the real estate industry, contact RECA or let your real estate professional know. Licensed real estate professionals are there to help you understand your transaction and the industry.