The government of Alberta has decided to fire all eight remaining members of the Real Estate Council of Alberta (RECA) and appoint an official administrator as recommended by a consultant asked to investigate the conflict on the council.
"By every measure, [RECA] has received a failing grade," Service Alberta Minister Nate Glubish said shortly after introducing the Real Estate Amendment Act 2019 in the Alberta legislature. The proposed legislation gives Glubish the power to implement the recommendations.
If the legislation is passed, the official administrator will take over the functions of RECA, which regulates the province’s real estate industry, for up to a year, and oversee the transition to a new council.
Auditing firm KPMG launched a review in January after Service Alberta received several dozen complaints from industry and the public dating back to 2016. The review cited toxic and dysfunctional interpersonal relationships within the council, between the council and RECA administration, and the council and the industry as problems too entrenched to be remedied.
"Based on the evidence outlined, it would appear that the most effective and timely way to resolve council's governance challenges would be to dismiss all council members," said KPMG’s report, sent to Glubish in June. "There are too many issues with the current composition and operations of council to enable an effective governance body."
The report outlined poor relations with the industry associations RECA represents and a tendency for members to spend 80% of their time discussing governance issues instead of considering the strategic and regulatory matters on which it is supposed to focus. Also, council members weren’t exercising sufficient oversight over RECA finances and spending.
The KPMG report also said that RECA doesn’t have enough public members, as 10 of the 12 spots on the board are real-estate industry members. Glubish said that one industry association’s ability to control most of the spots contributed to the problems identified in the report.
Four members resigned from RECA following the release of the report, while Glubish will dismiss the remaining eight, according to CBC News.