Trust Protection Coverage
The Real Estate Special Compensation Fund was introduced in 2005 under the Real Estate Services Act as a replacement to the bonding requirements that protected trust accounts under the former Real Estate Act. Participation in the fund is mandatory for all licensees. The fund provides protection if a member of the public has suffered a compensable loss through the provision of real estate services in circumstances where money entrusted to a real estate licensee or an unlicensed individual related to the brokerage has been
misappropriated or wrongfully converted,
intentionally not paid over or accounted for, or
obtained by the fraud of that licensee or individual.
Compensation Fund Corporation
The Real Estate Compensation Fund Corporation (RECFC) is responsible for overseeing the compensation fund. Its Board of Directors consists of three directors appointed by the Real Estate Council of British Columbia (RECBC) and two directors appointed by the British Columbia Real Estate Association.
RECBC is responsible for administering the Compensation Fund claim process. Members of the public who believe they may have suffered a compensable loss should immediately contact the RECBC at 604-683-9664, toll-free 1-877-683-9664 or email info @ recbc.ca to the attention of RECBC’s Manager, Compliance. Claimants are encouraged to fully review sections 60 – 72 of the Real Estate Services Act and to seek legal advice.
RECBC will review all claims and if it appears that there may be a compensable loss, the claim will be referred to RECBC’s Compensation Committee which may:
conduct a hearing to determine whether a member of the public has suffered a compensable loss and, if applicable, assess the amount of that loss,
decline to make either a determination or assessment, or both, on the basis that it considers the matter would more effectively be dealt with by a court proceeding, or
postpone conducting a hearing pending the conclusion of a discipline hearing or court proceeding.
If, after a compensation hearing, the Compensation Committee concludes that there has been a compensable loss and assesses the amount, the Compensation Committee will issue a certificate of compensable loss which will direct the RECFC to make a payment to the claimant. Likewise, if a RECBC Disciplinary Hearing Committee or the Superintendent of Real Estate determines, after a hearing, that there has been a compensable loss and assesses the amount, a Compensation Committee will issue a certificate.
The RECFC is obligated to pay out once a certificate of compensable loss has been issued by the Compensation Committee. Payment is limited to a maximum of $100,000 for a single claimant. In the case of a single brokerage, payments are limited to a maximum of $500,000 in total regardless of the number of claimants. Payments are adjusted for amounts already recovered from other sources.
Deference to Court
If the Compensation Committee defers to the court or if a claimant seeks redress through the court process for a compensable loss, written notice of the court proceeding must be provided to the RECBC and, as the RECFC has the option of being a party to any such court proceeding, to the RECFC as well. If the court makes a finding on the evidence of a compensable loss and assesses an amount, that finding is binding on the Compensation Committee and the RECFC in the same manner as a finding of a compensable loss by the Compensation Committee.
Limitations on Recovery
Compensable losses must arise from the provision of real estate services as defined in the Real Estate Services Act. There is no recovery from the Compensation Fund if the loss arises from conduct that occurred prior to 2005.
The time limit for making a claim is two years after the earlier of the date on which the compensable loss occurred or, if the licence of the responsible brokerage was cancelled at any time after the conduct that caused the compensable loss, two years after the date of that cancellation,
A finding of compensable loss must be a decision arising from a hearing on evidence – it cannot arise from a consent order process or from a judgment in default.
A copy of the Real Estate Compensation Fund Corporation’s Annual Report for 2015 is available for download here.
To view the Real Estate Compensation Fund Corporations’ Financial Statements for 2015, please download here.
Should anyone have concerns about Compensation Fund claims they are welcome to contact RECBC at 604-683-9664, toll-free 1-877-683-9664 or email info @ recbc.ca.