As the independent office that protects home buyers and sellers by promoting fair and efficient business practices, the Real Estate Division registers real estate brokerages, property management brokerages, salespersons, representatives, and mortgage brokers and sets the registration and business practice requirements for all registrants in the province of Manitoba.
Compliance staff have the authority to conduct reviews of registrants, including real estate brokerages, property management brokerages, mortgage brokers, and restricted mortgage brokers registered in Manitoba to determine if a registered brokerage is complying with real estate or mortgage legislation. Our authority to conduct examinations and analysis is set out in section 79(2) of The Real Estate Services Act and Section 31(1) of The Mortgage Brokers Act, which give us the ability to review all of a registrant’s operations including their transaction files.
We use a risk-based approach to select brokerages for compliance reviews. A registered brokerage may also be selected for review based on a referral from another department within the MFSA or another regulator, if the MFSA receives complaints about the brokerage, or as part of the normal review cycle.
Reviews may be full scope in nature, where we examine the major functional areas of the brokerage’s operations, or limited scope, where we focus on a particular issue.
If a registered brokerage is selected for a compliance review, we will typically provide advance notification and a list of books, files, and records that will be needed during the review. The review will include opening and closing meetings with the brokerage`s registered manager. The duration of the review depends on the complexity of the brokerage’s operations and the nature of the findings noted in the review.
Compliance staff may also perform a spot review without providing prior notice to a brokerage.
Once the review is complete, the brokerage’s registered manager will receive a schedule of findings, which outlines deficiencies found during the review and asks the brokerage to indicate its course of action to correct those deficiencies. If the brokerage addresses all issues satisfactorily, the file will be closed. If the brokerage does not adequately address the deficiencies, we may take further action, such as:
• increasing oversight of the brokerage
• conducting a follow-up review
• imposing terms and conditions
• referring the matter to enforcement
The MFSA may take these steps immediately if a finding is particularly serious.