Have you ever seen one of those daytime television commercials featuring lawyers that start with the line: “You may be entitled to financial compensation if…”?
That’s the first thought that came to mind for Realtor and instructor with Greater Vancouver Realtors, Gemma Wilson when asked about B.C.’s Real Estate Compensation Fund Corporation (RECFC).
What is RECFC?
The Real Estate Compensation Fund Corporation, first established in 2005, is a non-profit organization in B.C. that “provides financial protection for members of the public who have lost money because of the actions of a real estate professional.”
Despite being little known by those in the real estate industry, the fund itself is substantial, currently valued at $24.9-million. RECFC paid around $25,000 in claims in 2024 and less than $8,400 in 2023, meaning less than 0.1 per cent of the fund’s total value has been paid out in claims.
“Realtors are made aware of this at some point when they apply for their licence,” says Wilson. “This is a fee that’s worked in as part of the licence renewal every two years. But are they cognizant of it? Not especially.”
RECFC covers cases in which a consumer has entrusted money to a real estate professional or unlicensed person at a brokerage, and their money (specifically, a deposit) has been:
- misappropriated or wrongfully converted
- intentionally not paid over or accounted for
- obtained by fraud.
Recent changes and strategic direction
RECFC was overseen by the Real Estate Council until 2020 when it was folded into B.C. Financial Services Authority (BCFSA). Anna Solnickova currently serves as the executive officer for RECFC. It is run by five board members, who are compensated at a nominal level. Since taking on the role in September 2023, the board has made it their mission to increase public awareness, modernize systems, and strengthen strategic planning.
“Last year, for the first time we developed a strategic plan where we identified our pillars and we’re really leaning into collaboration, communication and education,” comments Solnickova.
Clarifying RECFC’s role
What would be the simplest way to describe what RECFC does to a Realtor who may not be familiar with the organization? Wilson likens it to a “settlement bank,” while Solnickova emphasizes the importance of a clearly defined mission.
“The best way to think about it and the way I describe it is we are there to protect the consumer against fraud by a real estate agent,” Solnickova adds.
Fund utilization and surplus concerns
So, at nearly $25-million, is RECFC holding too much capital relative to its intended purpose?
“The question to be raised is does the consumer know that this option is available,” comments Wilson. “It’s akin to the grants and bursaries that don’t get marketed or utilized. I can’t speak to the fund holding too much capital as I’m not aware of the director’s resolutions. As a member paying into the fund, I’m confident to say I would appreciate the funds being given back to its members in the form of pension or extended health programs.”
Actions to address fund surplus
Solnickova acknowledges the large discrepancy and is actively identifying action steps. One recent measure includes a fee hiatus for Realtors.
“We stopped collecting assessments from licences in 2023 and that was for a two-year period,” she shares. “The board met recently, and given the health of the fund and the low volume of claims, have decided to extend that fee hiatus for an additional year. So, the growth in the fund is strictly a product of good investment decisions and stewardship and low volumes of claims.”
Consumer awareness and limitations
RECFC operates ultimately in the best interests of the consumer and the public. Wilson emphasizes the importance for consumers to know their protections.
“They should know that this is separate from disciplinary case results,” she says.
However, there are limitations. Solnickova highlights, “Our mandate is restricted to compensable loss as it pertains to deposits,” she explains. “The legislation we’re mandated under is the Real Estate Services Act. So, unless the government decides to change the wording in RESA or our mandate under RESA there is nothing that we can do. Our hands are very tied and we have to just take our orders from BCFSA, and BCFSA relies on the wording in RESA when making decisions on claims.”
Cross-Canada comparison
Throughout Canada, other provinces and territories have similar funds, albeit with different mandates and regulations, such as the Real Estate Assurance Fund in Alberta and the Land Titles Assurance Fund in Ontario.
The RECFC has considerable work ahead, investigating how best to utilize the existing fund value while enhancing education and advocacy efforts.
“We’re on a mission to have more people know about our RECFC and the purpose that we serve,” says…
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