A trust assurance and practice review is a review and examination of records and activities to ensure compliance with statutory obligations. Sometimes it results in recommendations for changes in control, policy, and procedures.
More simply put, it’s an audit of a brokerage’s accounting and record keeping, record completeness, and trust account practices.
RECA recognizes that undergoing a trust assurance and practice review can be a stressful experience and has adopted the following policies to make the process as positive as possible.
TAPR Officers will:
RECA surveys brokers after the completion of a review. Results indicate the TAPR program has been meeting these objectives.
TAPR selects brokerages according to any of the following criteria:
RECA will also conduct courtesy reviews for new brokers. This review is an educational resource to help ensure new brokers are aware of the provisions of the Real Estate Act as it applies to brokerage accounting. A TAPR Officer will review your books and records and, if necessary, assist you in making changes to ensure compliance with the Act. Contact the TAPR unit to schedule your courtesy review for the next time a TAPR Officer is in your region.
RECA will normally contact the broker in advance and will be flexible in scheduling. In remote locations, there may be less flexibility in scheduling.
We will make reasonable efforts to allow brokers to continue with normal business activities while we complete the TAPR.
We complete most reviews in one day; however, this may vary depending upon the complexity of the brokerage’s operations and the quality of record keeping. Property management reviews often take longer than one day when there are a large number of accounts to review.
We will make an effort to not conduct a review during the year-end report process.
Your TAPR Officer will provide a list of documents they require. If your brokerage keeps your records at the brokerage office, little or no preparation should be required.
The person who maintains the accounting records must attend the review. We do not require the presence of the broker, but many brokers find the process educational when they attend.
The TAPR Officer briefly discuss brokerage’s activities, policies, and procedures with the broker prior to beginning a review.
The review may involve any or all of the following:
In property management reviews, in addition to the above the TAPR Officer will select a sample of properties for detailed testing, including a review of management agreements, leases, and invoices paid on behalf of the properties.
In mortgage broker reviews, in addition to the above – where applicable – the TAPR Officer will select a sample of administered mortgages for detailed testing, including a review of the administration agreements and investor and borrower files. Where investors’ funds are received, the TAPR Officer may review investor, borrower, and loan files, including cost of credit disclosure schedules and lender/investment disclosure statements.
TAPR officers can only review records for the past three years, however, the review will usually cover the period from the last accountant’s report (for a new brokerage, from the start of business) to the present date.
Brokerages Without Trust Funds
All brokerages must maintain adequate books and records and comply with all areas of the legislation, whether trust funds are held or not. For these brokerages, the TAPR Officer may still review:
The TAPR Officer may review any applicable licensing documentation and a sample of appraisal assignments for detailed testing including a review of:
TIP: TAPR Officers find minor breaches of the Real Estate Act or the Rules in nearly all reviews, but seldom refer the matter to the Professional Conduct Review unit. This referral happens for serious cases only. For minor breaches, the TAPR Officer will make suggestions on how to change policy or procedure to come into compliance.
The TAPR Officer will use the following criteria to determine if they should send files to the professional conduct review unit: