New Rules Promote Consumer Protection
Calgary, Alberta – On October 1, 2006, new Real Estate Act Rules took effect. These rules are the result of a two-year project by the Real Estate Council of Alberta to update industry practices and clarify the service relationships between real estate, mortgage, and appraisal professionals in Alberta and their clients. The revisions to the Real Estate Act Rules promote written service agreements and timely disclosures to consumers and are part of the industry’s ongoing commitment to creating consumer confidence through responsible self-regulation. The new Rules are available at www.reca.ca.
The requirements taking effect on October 1st will protect consumers by requiring industry
- Use written service agreements to establish client relationships, unless those agreements are waived in writing by the client. Written service agreements will make the role, representative capacity, and obligations of real estate professionals clear to their clients.
- Disclose when a referral fee will or may be received for forwarding a person’s name and contact information to another service provider.
- Obtain the timely, informed and written consent of both the buyer and seller before entering into dual agency (which occurs when a real estate brokerage or professional represents both the buyer and the seller in a transaction).
- Disclose to mortgage borrowers the brokerage’s relationship with the borrower and with the lender, the range of products offered, how the brokerage will be compensated (including any benefits that will be received from the lender), and any additional fees payable by the borrower.
- Disclose that they are licensed industry professionals during personal real estate trades or mortgage deals, and meet extensive disclosure requirements when dealing with unrepresented consumers in those transactions (e.g. disclose their interest in the transaction and any details that could materially affect the transaction).
Under the Real Estate Act Rules, licensed real estate, mortgage, and appraisal professionals must act honestly, disclose any conflict of interest they may have in the course of providing services to their clients, and disclose all relevant facts known to them affecting the transaction when acting as an exclusive representative.
Consumers are encouraged to use www.reca.ca to conduct a licence search and to ensure that they deal only with licensed professionals. Consumers involved in a transaction in which a licensed professional may have acted improperly can learn about the Real Estate Council’s complaint, investigation, and disciplinary processes online, as well as view recent disciplinary decisions.The Real Estate Council of Alberta (RECA) is an independent, non-government agency, responsible for regulating real estate, mortgage broker, and real estate appraisal professionals under Alberta’s Real Estate Act. RECA is mandated to protect consumers and to provide services that enhance and improve the industry and the business of industry members.