Ontario creates new rules for real estate brokerages in light of iPro Realty scandal
Ontario real estate brokerages will soon be required to submit annual financial filings to the province’s industry regulator in a move it says will “strengthen financial oversight.”
Starting Oct. 1, all brokerages will be required to “attest to and submit” information about financial statements, trust and access, unclaimed trust monies and compliance attestations, the Real Estate Council of Ontario (RECO) said.
RECO said Tuesday the new regulations apply a “proactive oversight model” and will use the data to “inform its risk framework and focus regulatory resources where risks to consumers are greatest.”
“Ontarians buying or selling a home should have complete confidence that deposits are protected,” Stephen Crawford, minister of public and business service delivery and procurement, said in a news release. “This initiative delivers on our government’s commitment to strengthen consumer protection, improve oversight and address risks before they escalate.”
The move comes in the wake of a scandal involving iPro Realty. Its co-founders were accused of misusing millions from trust accounts to cover operating expenses and payments to investors.
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RECO said the shortfalls amounted to about $10.5 million, calling it a “serious breach” of the agency’s responsibilities under the law and to its customers and agents. The agency was forced to close in August 2025, leaving 2,400 agents to seek work elsewhere.
In October 2025, RECO announced that agents could expect 50 per cent of their unpaid commissions, a number that was upped to 100 per cent in January.
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“RECO is enabling the full payment of all eligible commission protection claims. Funds from RECO’s insurance program stability fund are being placed in a protected trust to address the shortfall that RECO believes resulted from the misappropriation of trust funds by iPro’s principals, while concerted recovery efforts continue,” Jean Lépine, administrator and acting CEO for RECO, said in a news release at the time.
RECO said it will work with brokerages to protect consumers from any kind of financial mismanagement.
These changes will help RECO spot red flags earlier, intervene rapidly, and take timely and effective regulatory action where consumer funds and commissions are at risk,” Lépine said.
RECO added it plans to introduce monthly trust reconciliation reporting requirements in 2027, which will further enhance its audit framework, marking “a definitive shift towards a more proactive, data-informed regulator.”
Originally published on globalnews.ca — View original
