The Real Estate Agents' Licensing Act

The Legislative Committee worked to bring about legislation on the licensing of real estate agents. Legislation relating to the industry before 1929 included "The Land Titles Act" and "The Real Estate Commission Act," both passed in 1906.

The first effort to bring in additional legislation was initiated by the Calgary Real Estate Board. In 1919 it proposed a law requiring real estate brokers to be licensed. To obtain this license, the names of ten residents in the locality of the proposed business were required along with a bond and a license fee of $100. Ten dollars was charged for each salesman working under the license. According to Edmund Taylor, the legislation was needed because of the operations of unqualified or unscrupulous people who discredited the industry.

This initiative prompted a conference in Calgary on December 12, 1919, of real estate men in the province, including representatives from Edmonton. The meeting produced a number of revisions to meet the concerns of other real estate agents in the province. However, while there was strong support from the industry, no legislation came about.

By March 21, 1927, a draft copy of the legislation was approved for presentation to Premier Brownlee and Attorney General John Lymburn. The provincial government provided further encouragement when on June 6, 1927, Lymburn made a presentation to the Association. Henry Brace, the superintendent of insurance, also met with the Association to suggest revisions.

The draft bill was introduced into the Alberta Legislature on February 3 and debate began on February 16. The draft bill required all real estate agents to be bonded in the sum of $1,000. It also outlined a fee schedule based on the size of the town in which the transaction took place. The fee was $10 in towns and cities of 5,000 or more; $7.50 in towns or cities of less than 5,000, and $3 elsewhere in the province. The license fee for a real estate salesman was set at $3, and $1 was to be charged if the license had to be amended or reinstated.

Considerable opposition to the bill arose because trust companies and lawyers were exempt from paying the bond required from full-time real estate agents. Archie Matheson the member for Vegreville - led the attack on this provision of the draft bill. He was supported by Gordon Foster, the member for Hand Hills, and P. Christophers, the member for Rocky Mountain House. Both appeared to have a deep-rooted antipathy towards the legal profession. Christophers expressed the view that "while he was not familiar with lawyers he knew enough to keep out if their clutches."

This criticism of lawyers brought Liberal leader Joe Shaw and Attorney General John Lymburn to their defence. Shaw pointed out that: "no matter how much a limited number of lawyers may have erred in the past, that one swallow does not make a summer, and that lawyers breaking the law had no special privileges when they came before the law." Attorney General John Lymburn also defended the business morality of lawyers, indicating that it was as high, if not higher, as in any other business, including farming.

Following the debate on the morality of lawyers, the House resumed its debate on the bill. In the end, trust companies could engage in the real estate business without payment of the bond but members of the law society were barred from business of this nature. Foster and Matheson also tried to change the amount of the bond from $1,000 to $5,000 and then to $2,000 but both amendments were defeated.

Further debate took place on March 19, when Lorne Proudfoot, the member from Acadia, raised other objections. His criticism, reported in the Edmonton Bulletin, was that legislation of this type especially in rural districts where people were acquainted one with another, was superfluous. To the best of his knowledge there had been no demand for such legislation.

If the government desired these fees for a source of revenue let that declaration be made without fear or favour. He thought this was not the best method of protecting people from being beaten out if their money.

He submitted farmers might just as well be licensed so that they wouldn't put all the large potatoes on the top of the sack or water their milk. The whole trend of legislation of this type was becoming ridiculous. In addition it would work a hardship on the small man whose turn over was limited.

Proudfoot's suggestion that bonding be reduced or eliminated altogether was favourably received. Passage of the bill thus became dependent on resolving the issue of bonding.

With the passage of the bill in jeopardy, the Edmonton Real Estate Association considered revisions to their original draft and intensified their lobbying efforts in support of this legislation in anticipation of its resubmission in 1929. On April 2, 1928, John MacIntosh suggested that a petition signed by a representative body of real estate men might have some influence with them. Requesting support from local Boards of Trade was also suggested. In August the Edmonton Real Estate Association also launched a fundraising effort. Edmonton and Calgary were expected to contribute $3,000 each, Lethbridge and Medicine Hat to contribute $100 each, and all other towns to contribute $50 each. It is not known if they reached their target.

Despite considerable support for keeping the bonding provisions and financial donations from such organizations as the Alberta Real Estate Association, the Edmonton Real Estate Association changed its views on the bonding issue. With the elimination of the bonding provision, the bill was passed in the 1929 sitting. It received royal assent by March 20.

This bill was significant because it was the first step by the government to require persons to furnish some assurance of their qualifications to act as real estate agents. The Real Estate Agents' Licensing Act included definitions of a real estate agent and a salesman, of a superintendent as a regulatory authority, as well as licensing requirements, grounds for suspension or cancellation, contravention, penalties, and fees.

After the passage of the bill, the Edmonton Real Estate Association continued to consider improvements. At the executive meeting on December 30, 1929, it was suggested that the Real Estate Act be amended to make it an offence to pay a commission to anyone other than a licensed agent and that all agents must furnish a bond. These and other suggestions were forwarded to the Legislative Committee for action.

The Edmonton Real Estate Association also worked closely with the administrator of the act, Henry Brace, to ensure its enforcement.

Matthew A. Hammond was one individual whose conduct concerned the Association. At the October 21, 1929, meeting, Messrs. Hake and Winterburn complained that he loitered outside their office and solicited their customers. It was decided that the president would interview Brace to see if there was any remedy against such tactics. The president later reported that an inspector had cautioned Hammond, who had promised not to repeat the offence. Brace also said that if Hammond could be convicted under any city bylaw Brace would not hesitate to cancel his license.

Other issues dealt with by special committees created by the Association through to 1939 included the development of a standardized commissions schedule and standardized forms. In the fall of 1927, work began on revising the interim contract form, standard listing form, and the offer-to-purchase form.

This article is extracted from John Gilpin, Responsible Enterprise: A History of Edmonton Real Estate & the Edmonton Real Estate Board. (Edmonton: Edmonton Real Estate Board, 1997). The Heritage Community Foundation and the Alberta Real Estate Foundation would like to thank John Gilpin and the REALTORS® Association of Edmonton for permission to reproduce this material.