8 thoughts on “Feedback Wanted: Option to Segregate Commissions

    • I don’t really see how it could. It’s an unregulated “trust account” so it’s a trust account in name only, which makes it another bank account controlled by the broker.
      Does anything really change under this proposal other a few feel good bellyrubs?

    • Hi Sheila,
      The Consultation Paper outlines how the Alberta Real Estate Association At Risk Commission Working Group requested RECA consider the amended Rule to allow industry to come up with better solutions for the payment of commissions to associates when a brokerage ceases to operate. Providing the option to brokerages to segregate commissions in a non-RECA regulated trust account is a step in this direction. Whether or not commissions held in the other account will be payable to associates in all circumstances will likely depend on the situation. Courts may help make these decisions.

  1. So basically this amendment is proposing to keep the commission into a “Trust Account” in stead of a “General Account” within a brokerage. I don’t think it helps a lot since such “Trust Account ” is not regulated under Real Estate Act. Broker can still easily access into this account and play with commission funds.

  2. I am not understanding how this is any protection for commissions…if the owner is cleaning out the general account…could they not also do the same here? I think it is a wonderful idea if it had controls and regulations in place that would actually protect us. Why can this not be set up with the same protection as trust accounts for the public?

    • Hi Annette,
      To generally answer your question: what’s stopping someone from clearing out this “other” account would be any terms of trust they set up when they created the account (if they decided to set it up as a trust account). This would be different in every case, and the courts would help decide what recourse brokerage professionals may have in such a case.

      In these proposed amendments, RECA will not regulate these “other” accounts.

      Providing for this option for brokerages to segregate commissions into this “other” account is a step to potentially finding a better solution for protecting commissions. The Alberta Real Estate Association At Risk Commission Working Group requested RECA consider this amended Rule.

      RECA must also consider the integrity of the Real Estate Assurance Fund, which protects consumer funds held in trust by a brokerage. RECA is required by provincial legislation (the Real Estate Act) to administer this Fund.

      Please review the consultation paper and submit your feedback on these proposed amendments to consultation@reca.ca, and Council will take your comments into consideration. We want to hear from you.

  3. Until the rules change to where ALL COMMISSIONS MUST be placed into a Brokerage Trust Account[s], governed by succinct operational procedures and regulated/audited on an annual basis, protection of commissions remains in a state of “discussion”, something that has been on-going for the past two years. I would like to think that submission of annual accountant/auditor reports to RECA on Brokerage Trust account[s] not only protects consumers but those that work for consumers – us realtors. This is not possible at present given commissions can be diverted to “where ever” and used “however” and the noted recommendation would not eliminate these type of manoeuvres.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

w

Connecting to %s