The province’s consumer watchdog has agreed to find a third party to review Saskatchewan’s real estate regulations after its handling of a scandal was called into question. The Financial and Consumer Affairs Authority of Saskatchewan (FCAA) says the superintendent of real estate within the FCAA will lead the search for the independent review. An update on its website said the review will include “an assessment of the effectiveness of Saskatchewan’s existing real estate regulatory framework, including any potential gaps and opportunities for improvement.” The announcement comes after a spat between the Saskatchewan Realtors Association and the Saskatchewan Real Estate Commission played out on Friday with media releases from both sides criticizing one another after the commission levied its stiffest penalties possible for two realtors who worked closely with Epic Alliance. On Thursday, Paul Chavady and Jerry Hallgrimson were each suspended from trading real estate for six months and fined $100,000 after the commission reviewed 147 transactions selling homes for Epic Alliance — a real estate company that raised $211.9 million from investors through a series of schemes before it collapsed with nearly all of the money vanishing in 2022. Saskatchewan Realtors Association CEO Chris Guérette said membership was “angered and disappointed” at the decision the commission landed on. She said a major point of contention was allowing Chavady and Hallgrimson, two business partners, to serve their suspensions consecutively instead of concurrently, which could allow their business to operate uninterrupted. “How the decision was applied with the suspension undercuts everything in that decision,” Guérette said. Chavady, who spoke with CTV News, said he and Hallgrimson were not a part of Epic Alliance. He added their relationship with Epic Alliance was not that of a traditional realtor. He said Epic would approach the pair with much of the work already complete — the sale price, conditions, buyers and possession date — prior to drafting up the paperwork and listing the home. “I understand that the real estate commission states that this means we’ve underrepresented the buyers,” Chavady said. “We signed a consent order, so we can agree. But I think it’s important to have that context that all of this was agreed to ahead of time and everything came with a certified appraisal.” Chavady characterized the commission finding him and Hallgrimson guilty on 106 counts of professional misconduct for failing to include required information as “incomplete paperwork.” “Not putting the buyer’s or seller’s address on the sales documents. That’s fine. We understand that that was wrong,” he said. Mike Russell, a Saskatoon lawyer who represented dozens of investors and applied to have a court-appointed investigation into Epic Alliance, was disappointed with Thursday’s decision. “This is wholly inadequate,” he said. “It’s the weakest decision I’ve ever seen.” Russell took issue with the commission’s 34-page decision not naming Epic Alliance once, and instead calling it “InvestCo.” He said the commission’s decision didn’t look at the larger problem the two men had in affecting the real estate profession and the many investors who lost their money. He also disputed a paragraph which said “there is no evidence” both Hallgrimson and Chavaday enjoyed a benefit as a result of their repeated breaches. “It says that the there’s no evidence he even made any money off of it? That’s a joke.” Guérette says changes may include beefing up regulations or looking at a different governance structure. She hopes a review of the system in place will not only prevent another scandal from affecting the real estate industry, but will also modernize the province’s standards. “We’re calling for a third-party review because we have seen the success of that,” she said. “It’s the benefits for everybody of what can happen with a third-party review. We’ve seen a similar crisis in Alberta. We’ve seen a similar crisis in Ontario — and the numbers that we see with Epic Alliance in this case are actually larger.” The FCAA didn’t say when a final report would be available, but said the intent is to ensure Saskatchewan’s real estate regulatory system is effective and accountable.
