Getting to know RECA: Complaint Analysis

 A key function of self-regulating or professional organizations is to ensure members comply with the standards of conduct for protecting the public interest, which includes consumers and the industry, when it is not detrimental to consumers. 

The process for ensuring compliance must be carried out in accordance with requirements outlined under the organization’s governing legislation and the principles of natural justice. Adherence to these standards not only means that the organization ensures it is complying with the law, it also gains the confidence of its industry members.

To maintain public confidence, professional organizations must have an easy accessible, comprehensive, and transparent process for complainants.  The Real Estate Council of Alberta (RECA), like other professional regulatory organizations, is tasked with this responsibility and has developed a process that adheres to all these concepts.   

The standards of practice for real estate, mortgage brokerage and real estate appraisal industry members are outlined in the Real Estate Act (Act), the Real Estate Act Regulations (Regulations) and Rules made pursuant to the Real Estate Act.  The process that RECA follows to enforce the Act, the Regulations and the Rules as it relates to industry members is called conduct proceedings.  RECA has divided the conduct proceedings process into three sections.  These sections are complaint analysis, investigation and discipline.  This article focuses exclusively on the complaint analysis process.

RECA receives a variety of complaints but can only investigate complaints about industry members that are related to an alleged failure to follow standards of business practice as set out in the Act, Regulations and Rules.  As investigations are intrusive, RECA treats every complaint it receives seriously, and each complaint is reviewed fully to ensure that only those complaints that concern conduct deserving of sanction are investigated.

Before an investigation is initiated, a complaint must meet certain criteria that is in compliance with the intent of section 38(1) (a) of the Act.  Some of these criteria are laid out under section 21 of the Regulations. To determine whether the criterion is met, RECA conducts a complaint analysis.

There are seven criteria that RECA examines before it commences an investigation.  Two of the most important criteria examined are: 

• the matter must fall under the Real Estate Council’s jurisdiction (i.e. it must concern a breach of the Act, Regulations or Rules).
• sufficient evidence must indicate the likelihood that an industry member was involved in conduct deserving sanction. The complainant, in issuing their complaint, is required to provide details of the alleged breach and evidence that supports their conclusion that the breach occurred. An investigation will not be opened based on hearsay or suspicion.

A significant number of the complaints that RECA receives are outside of RECA’s jurisdiction and relate to contractual disputes between buyers and sellers, landlords and tenants or lenders and borrowers. In these type of complaints, industry members are frequently unfairly accused when another individual is at fault. An industry member is often cited in the complaint because they are often considered the “face” of the client or may be following the clients’ lawful instructions.  In these cases, the complaint is directed to another forum such as civil proceedings or alternative disciplinary body.

When a member of the public makes a complaint it usually starts by contacting RECA’s information officers. RECA’s information officers review the information received over the phone by complainants. If the complaint relates to the actions of an industry member and there appears to be sufficient evidence to indicate a likelihood of conduct deserving of sanction, the complainant is then asked to submit their complaint in writing.

RECA receives complaints from the public, industry members and law enforcement. RECA staff also come across information that would suggest that a particular individual may have been involved in conduct deserving of sanction.  Depending on the reliability of the information and seriousness of the alleged misconduct, the Executive Director, under clause 38(1)(b) of the Act, may wish to investigate a matter and in such cases RECA will be named as the complainant. 

Information officers receive approximately 100 phone calls and 38 emails a month in regards to potential complaints. The investigations administrator and the complaint analysts receive approximately 3 written complaints daily and 60 complaints a month and are in daily receipt of information in relation to existing complaints and inquiries regarding status and disposition.

A complaint analysis can result in a variety of outcomes.  However, most complaints are not investigated. For example, from July 1st 2006, to September, 2007, RECA completed 587 complaint evaluations.   Only 116 were referred to for investigation. The following table is an overview of the closed complaints during this time.  

Evaluation of Closed Complaints

TOTAL COMPLAINTS PROCESSED	587
Referred to other agencies or processes            (mostly referrals to law enforcement)	37
Referred to for Investigation	116
Issued advisory information	134
Sent warning letter	13
Other   (no jurisdiction or valid complaint)	287

 

 

 

 

 

 

 

 

Complaints that do not satisfy the relevant criteria are refused or referred to other agencies or processes.  Where a complaint satisfies the standards warranting an investigation a letter is sent to the industry member notifying them that an investigation has commenced.  The industry member named in the complaint will be notified in writing of the complaint details and receive a written and detailed description of the matter under investigation, or the complainant’s letter and supporting documents.

Sometimes there are technical breaches of the Act, Regulations or Rules. In these cases RECA prefers to work personally with the industry member named in the complaint to both alert them to any concerns and bring about a positive change in practice. Provided no previous advisories have been issued to the industry member, efforts will be made to resolve minor issues informally and constructively through advisory correspondence rather than through the investigation and disciplinary process. A letter is sent to the named industry member as a service so that any potential actions deserving of sanction are addressed. The information in the letter assists the industry member to fulfill their responsibilities as an industry member under the Act, Regulations and Rules. 

Currently, the complaint analyst team is comprised of an investigations administrator and three complaint analysts. The investigations administrator is responsible for acknowledging the complaint and administering the complaint.  The complaint analysts are responsible for analyzing all complaints received by RECA. This includes the preparation of a complaint analysis report for the review by the Director of Investigations for all matters where information gathered indicates conduct deserving of sanction or unauthorized practice.

As part of the complaint evaluation, the complaint analyst may interview witnesses and gather information, documentation and data from brokerages, public bodies, industry associations, expert witnesses, law enforcement agencies and government databases. The complaint analyst fields questions from industry members, unauthorized persons and complainants regarding the complaint evaluation process.

At the end of the review, the complaint analyst will make recommendations to the Director on whether complaints warrant a formal investigation or if the matter may be dealt with through alternative measures. Alternative measures include a warning letter, advisory information or other. If the complaint does not warrant further investigation, the complaint analyst will correspond with complainants and the industry member who was named in the complaint. When warranted, the complaint analyst will prepare advisory information correspondence to an industry member. If further investigation is warranted, the complaint analyst will transfer the file to the investigations team.

Two of the three analysts employed by RECA are former industry members with real estate and mortgage brokerage backgrounds while the third is a former information officer.

All decisions on whether an investigation is opened are made by the Director of Audit and Investigations. The director may obtain legal advice and consult with the Director of Industry Standards in order to make this decision.

RECA is mandated to protect consumers and to provide services that enhance and improve the industry and the business of industry professionals. To that end RECA is committed to the continued development of procedures to streamline the complaint process, using an interactive complaint form that will guide consumers where they believe the conduct of an industry member is deserving of sanction. The core document and text components for this interactive form are currently under development by the Audit and Investigations Unit.

To learn more about the complaint and the evaluation process in its entirety, please read the ‘Guide to Complaints for Consumers’ which can be found on RECA’s website, www.reca.ca.

 

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