By Darrell Lloyd

The Alberta Real Estate Association plans to hold an online vote for its members Oct. 1-3, asking whether they are in favour of AREA investing a portion of their existing annual dues to protect commissions for all members. Sounds great on the surface but is it really?

The stated reason behind this ongoing debate is the 2015 closure of two brokerages in Calgary, that left a large number of Realtors out of work and many without commissions they were owed. These brokerages did not carry on the good business practice of paying out commissions to their Realtors immediately upon receiving the funds, as most brokerages do. If that practice was followed by all brokerages, the tragic loss to the affected members would have been minimal.

AREA mentions that Ontario and B.C. both have commission protection insurance in place. In an article from REM in 2016, the cost effectiveness to Ontario Realtors was questioned. At a cost in excess of $400 per member annually, insurance companies would have taken in almost 100 times more than the $4.5 million they have paid out during the term of that plan to date. It’s a windfall for insurance companies on the backs of Ontario Realtors.

AREA states that, due to operational efficiencies and improvements since 2015, it can now afford to cover the cost of insurance for all members from their existing annual fees. Although I applaud the streamlining of AREA’s operations, let’s not forget the massive increase to AREA’s annual fees that helped facilitate its current financial situation. Perhaps a reduction in those fees might better serve the members in Alberta, verses commission insurance being forced on Realtors, the vast majority of whom will never need it because their brokerages follow the good business practice of paying out commissions as soon as the funds are received.

Perhaps worst of all, by conducting a direct vote and “majority wins” attitude, AREA is eliminating the voice of independent boards throughout the province. Our Board of Directors voiced their disapproval of forcing commission insurance upon its members more than a year ago and we weren’t alone. However, although there are 10 boards in Alberta, the Calgary Board, where the brokerage closures took place, has the majority of Realtor members in Alberta and can carry the motion on its own, even if all the remaining members in Alberta speak out against it.

AREA would like you to believe that there will be no cost for the insurance coverage for its members. Nothing is free. When was the last time you saw your car or home insurance policy decrease in price? It’s easy to hide the insurance cost increases within AREA’s annual dues and blame the increase on other operational costs. Alberta Realtors need to look a little deeper, past the sugar-coated pill that AREA is offering. Loss of commissions from brokerage closures, though tragic, are rare, are preventable and not worth the additional cost of the fees, hidden or not, to Alberta’s Realtors.


  1. I would also encourage Alberta’s realtors to become fully informed on this topic as AREA suggests. Unfortunately, you’ll only receive one side of the story from AREA. I’ve read through their articles on the subject and one thing became abundantly clear. AREA is totally geared up to impose this new fee on Alberta’s realtors, with no mention of any alternative. There is no thought given to prevention. No thought of educating realtors on the signs of questionable transactions within a brokerage that could be warning signs of possible fraud or abuse and what could be done to protect yourself against it. They’ve taken the easiest possible route. Impose a fee on realtors. How long will the flags of these two failed brokerages be waived in our faces as an excuse to hit us with another fee? These cases are rare but the fees we will pay, will remain with us for the rest of our careers.
    You can put a tuxedo on a dog…but it is still a dog. Saying that the fee is covered within an existing fee, with no further charge to realtors, is misleading. Are we currently being overcharged on our annual fees? Are they guaranteeing it will never increase? An increase would certainly be easy enough to hide within future annual fee increases by AREA. I for one am tired of being grabbed by the ankles and shaken upside down to get every last dime out of me for fees. If you feel as I do, then make sure you vote NO to this simplistic and costly solution being proposed by AREA. If they succeed in imposing it on realtors, you’ll have the rest of your career in real estate to think about it.

      • If 51% or more of ALL REALTORS in Alberta vote in favour of the fee, then AREA would be implementing a fee that the majority want.
        If proceeding based on 51% or more of those who respond online, then that is IMPOSING the fee.
        Here’s the problem. The vote online may only get a limited response. If only 1000 realtors responded within the given time frame, then potentially 501 voters would be able to impose a new fee on 10,500+ realtors in Alberta. That’s not right. If AREA doesn’t have a consensus from over 5,250+ realtors to proceed with the fee, then they are imposing it. And who is in charge of counting the votes? AREA, who is all set to go ahead with the fee? Maybe the big cities at CREA’s AGM had it right all along!

        • Darrell, to insinuate the AREA would somehow miscount the votes is not only misguided but wrong. Vote no and encourage others to vote no, that’s your right as a member. AREA has no position on the vote, only that the members should vote. Suggesting your vote should somehow count for more than others is very odd indeed.

  2. There are several incorrect assumptions in this letter. We would encourage any members with questions not already answered on our website ( to submit them to us, so that they can be answered as we update the FAQs. We also will be encouraging participation in person or through remote access to our upcoming townhall on the subject.

    AREA recognizes there are good arguments to be made for and against this offering, which is why the Board is calling a vote of our members. We encourage all members to get educated on the topic, discuss it with colleagues and – most importantly – to contribute their voice to the decision. We want to allow members to make a fully informed decision.

  3. I am more in favour of commission monies going into a separate trust account..why can we not protect our commissions this problem protecting the public ..yet where is our protection?

    • It’s unfortunate that while the public has RECA to regulate and audit trust accounts, realtors have no one. A separate trust account that is still accessible by a brokerage without being regulated and audited, is unlikely to protect a realtor’s commission. The best protection against fraudulent use of funds is prevention. If realtors are paid out when the money from a transaction is received, it’s less likely that misuse will occur. After all, when a co-operating brokerage brings a buyer, are the funds not distributed between brokerages right away when received? Why not pay the realtors at the same time. Most brokerages operate this way and risk to a realtor’s commission is minimal. If your commission is not paid out right away then perhaps it’s time to commence a dialog between the brokerage’s realtors and broker to make that the norm.

      • great advice…however I once worked for a brokerage that did pay out the day or two after possession and the cheque still bounced..I gave my notice that day and left.

  4. This seems like another attempt by AREA to justify their existence so nobody decides to part ways with them.

  5. I am a Broker with a small firm in southern Ab. It appears to me that the boards and the various regulatory bodies could be doing more to oversee the Brokerages and their business practices. I am totally against having additional costs whether directed at a specific insurance or buried within the annual fees.

  6. It sounds as if your comments are a dissenting vote while serving on the AREA’s Board of Directors. The issue is not whether one board has more votes than another, the issue is AREA’s attempt to protect REALTORS from a legal flaw in the Real Estate Act of Alberta. Regional disparity will always exist within Alberta amongst the Real Estate boards. This idea is an important issue for all Alberta REALTORS, and this vote is a proactive step in the right direction to let REALTORS decide it’s validity or not.

  7. Quick clarification, that here in Ontario the ~$400/year insurance cost is not just for commission protection, in fact the majority of that cost is for our Errors and Omissions coverage. It also includes Consumer Deposit insurance now, along with the Commission Protection.

    I agree with the need for mandatory E&O, but I totally agree with this article, for commission protection insurance, the ‘good’ are paying for the misdeeds of the ‘bad’.
    We are getting ripped off here in ONT, but because there are so many new Realtors the overall cost has remained static, and so there haven’t been much complaints.

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