Government tells regulatory board: "you’re fired!"

Infighting and lack of oversight lead to divisions that could ultimately threaten the future of one of Canada's real estate regulators

Government tells regulatory board: "you’re fired!"

The Alberta government is moving to fire the entire board that regulates the provincial real-estate industry on the grounds it is hopelessly dysfunctional and wracked by infighting.

Service Alberta Minister Nate Glubish has tabled legislation that will allow the province to dismiss the eight remaining members of the board and appoint an interim administrator until a new board is in place.

Glubish says the problems plaguing the Real Estate Council of Alberta (RECA) have gone on too long and critical work is not being addressed.

“The Real Estate Council of Alberta has failed to provide effective governance and oversight over the real-estate industry,” he said to the house.

“Our focus with this bill is to protect the overall operations of the council and its critically important role, and to restore Albertans’ trust in the real estate regulator.”

Glubish said immediate action is needed.

If the legislation passes, the appointed interim administrator will take over the regulatory functions of RECA for up to one year, including overseeing the transition to a new council.

The decision follows an outside audit report on the council commissioned by Service Alberta earlier this year. The government engaged KPMG to conduct a review that consisted of interviews and reviewing documentation in order to make a high-level assessment of the Real Estate Council of Alberta's performance against established criteria. KPMG considered findings in light of common and leading governance practices for non-profit and regulatory entities of a similar scale, and has provided advice in this report to the Minister on recommended actions relating to Council’s governance.

Among other things, KPMG found that the board had been spending too much time on internal and administrative matters, adding that focus committees had been left empty, meetings had not been held and there had been a lack of oversight on finances and spending.

“There are too many issues with the current composition and operations of council to enable an effective governance body,” the report reads.

“Dismissing only a subset of council could contribute to a further deterioration in trust amongst council, administration and industry.”

The report also added that the council doesn’t have enough public members, as 10 of the 12 positions on the board were held by members of the real estate industry. Glubish said that this monopolization led to some of the issues.

Four members resigned from the council following the release of the KPMG report.

Brad Mitchell, CEO of the Alberta Real Estate Association, told CBC radio that the move to fire the board was “a great first step”, adding that there have been a number of problems over the last few years.

An example, he said, was the recent advertising regulations dictating the font size of the realtor’s name and the brokerage name on signs, ensuring that the two were equal. In other words, Mitchell said, a “red tape regulation” that didn’t really help anybody.

NDP critic Jon Carson said the plan is good in principle, but it’s critical that qualified people be picked for the new board.

“We’re going to be working very hard to ensure that moving forward, regular Albertans are appointed to this board and that it's not just used as another opportunity for the (United Conservative Party) to appoint their friends and insiders,” said Carson.

In 2018, RECA licensed 12,639 real estate brokers and sales associates, 2,319 mortgage brokers and associates and 634 appraisers. The council also disciplines and trains members.

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