Governance Review of RECA
As you all know, Service Alberta released the KPMG Governance Review Report of the Real Estate Council of Alberta on July 5, 2019. As RECA reported in November 2018, the Minister of Service Alberta notified RECA he was undertaking a review of RECA under section 76 of the Real Estate Act. The review commenced in January 2019 when KPMG was appointed as the reviewer.
I want to be clear, this report deals with the work of RECA Council Members, and not RECA Administration. The other side of the overall review, the operational review, is currently under development and has no release date at this time.
The major findings of the governance report include significant interpersonal conflict amongst Council and Administration, Council not focused on strategic issues, Council not having a constructive relationship with industry associations, Council not exercising adequate oversight of RECA, and minimal public representation on Council—one industry association has the ability to control the majority of Council member appointments, and that contributes to the other governance challenges.
This is a very serious report that Council is taking seriously. Council worked closely with a representative of Service Alberta at our July 17, 2019 meeting to discuss working together to address the findings of the report and move forward in the best interest of the industry and Albertans. Council will work cooperatively with Service Alberta as the Minister decides what, if any, recommendations he will advance.
RECA will keep all stakeholders informed, immediately, upon any further developments stemming from this review.
Regulatory Work Continues
Throughout the review and in spite of the governance challenges identified in the report, the core regulatory functions of RECA continued at the usual high-performing level.
Licensing, education, investigations, and hearings continue as normal. In fact, two new consultations are open and announced elsewhere in this Regulator.
The first consultation deals with proposed changes to the Real Estate Act Rules regarding Mortgage Broker Standards of Practice. This is the final stage of an enormous, multi-year effort to update and modernize mortgage broker standards of practice to better protect consumers and better reflect the modern economy, including the rules surrounding private lending. I urge all stakeholders to review the consultation paper and proposed rules closely.
A second consultation also officially open is on proposed amendments to the Residential Measurement Standard (RMS). RECA recently consulted on the possible consequences of the current standard for measuring semi-detached and attached properties (paint-to-paint). Feedback to that consultation resulted in the creation of an ad hoc committee on the RMS, which after several meetings has proposed changes to the RMS. Council is asking for your input on these proposed changes. Again, please read the consultation paper carefully before providing input.
This is self-regulation in action. It is your opportunity to provide input on the rules governing your work.
On a final note, I am saddened to announce that Amina Deiab, the Council Member appointed by the Minister of Service Alberta, and my Council colleague for the last two years, resigned from Council effective July 12, 2019. Amina’s education, skills and unceasing efforts as a public member will be missed. Council awaits the Minister’s replacement appointment to Council.