As pressure from the public and real estate community mounts on Real Estate Council of Ontario (RECO) to take action in the iPro Realty. Ltd. fiasco, the industry watchdog has frozen the defunct brokerage’s account and undertaken an independent audit.
RECO’s board announced Monday it had ordered an immediate freeze on iPro accounts, to “safeguard funds and secure business operations,” it said, while an independent audit into the matter by legal firm Dentons Canada LLP will begin immediately, according to a statement.
Demands for action are getting louder after Ontario’s real estate regulator said last week that iPro Realty co-founders Rui Alves and Fedele Colucci will not face charges, despite $10.5 million going missing from the brokerage’s trust accounts.
Toronto real estate lawyer Mark Morris, who has more than 20 years of experience in the field, told Real Estate Magazine he believes RECO’s latest moves are a response to pressure.
“RECO needs to take definitive action and be seen to be doing so to re-establish trust in the profession and amongst the public at large,” said Morris, who heads up Legalclosing.ca. “This was, at a bare minimum, what was required to show that RECO is approaching this seriously and with the intent of reform.”
The freeze of iPro’s accounts means that all transactions will now be processed through ClaimsPro LP, the insurance adjusters for the professional liability policy administered by RECO, said Monday’s statement. The freeze will ensure safeguards are in place while still permitting a process for closure of real estate transactions, said RECO.
Advice for Realtors with client or commission money tied to iPro
Morris’ advice to anyone looking to recover a consumer deposit or commission through RECO’s insurance program is to “file early and file often.”
“The wording of Schedule A of the claims policy states that, as best I can read it, and with the caveat that I’m not an insurance lawyer, it’s first-come, first-served,” he said. “So you really want to get those claims in quickly.”
The total amount of insurance coverage for consumer deposits and commissions is up to $8 million in aggregate ($4 million for each) with an additional limit of $200,000 per individual, per claim (not per transaction).
While the two buckets of insurance money are “virtually identical interms of coverage and effect,” consumers and Realtors will be treated “very different” from each other by RECO, Morris said.
‘Consumers will be made whole’
Morris, who, as the lawyer of record for bankrupt brokerage TheRedPin has seen first-hand how these situations can play out, said RECO “will not allow consumer deposits to be lost, or perceived as lost,” because of the immense breakdown of trust in the industry that would inevitably follow.
“The job of RECO is to regulate on behalf of the public,” said Morris. “Self-regulation is a privilege, and if by virtue of their self-regulation, and the failure of their self-regulation, the consumers are hurt, meaning that they cannot depend on these deposits, then it’s hard to see how you can rebuild trust with the general public again.”
Could Realtors be on the hook?
Morris said he believes that if it comes to it, money owed to consumers could come out of Realtors’ pockets if any amount is outstanding beyond what insurance would cover.
“All deals are being paid by iPro as they conclude from a consumer deposit perspective, and it is my belief that whatever the cost, it will be borne by the Realtors of this province, whether it be by a special assessment or anything else,” he said.
“One way or the other, come hell or high water, the insurance coverage limit of $4 million will not stop RECO from affecting additional monies above and beyond because of the fundamental break in trust that will result,” he said.
How will commissions be paid?
“Technically, they’re supposed to pay it out on the first claims basis, but my guess is based on the way that they handled TheRedPin, it will be paid out on a pro rata basis,” said Morris.
The difference is that with first-come, claimants get 100 per cent until there’s nothing left in the pot. Pro rata means you “assemble the total amount of claims, figure the total amount of discrepancies after the insurance has fully paid it’s $4 million, and then from there you make everyone take an equal haircut,” said Morris.
How can Realtors protect themselves and their clients?
Morris advises Realtors to be vigilant about commission payments and the handling of funds through trust accounts.
He said that delays should never be ignored.
“If people are taking a while to pay your commissions or giving you excuses as to why it is you’re not getting your commissions on closed deals, be suspicious,” he said. “That’s a pretty good lesson from this.”
Also, the rules of which trust accounts can he used for consumer deposits, he said, are flexible.
“There’s nothing that says that deposits have to be paid to any particular trust account. It can be paid to the buyer’s trust account, the seller’s trust account, the seller’s solicitor’s trust account, [or] the buyer’s solicitor’s trust account.”
Morris emphasized the importance of insurance coverage on trust accounts, something people can ask about before handing over any money.
“All lawyers maintain sufficient coverage per transaction to account for most normal deposits,” he said. “If people are having problems or suspecting that something may be amiss, then just put it into a solicitor’s trust account, there is no difference,” he said.
Morris’s comments for this story are editorial opinion only, and are not to be taken as legal advice.
RECO commits to releasing report by October
RECO said in Monday’s release that the legal auditor is to deliver an interim report to the board by Sept. 30, and then a final report by Oct. 30. RECO said it will release the final report’s recommendations.
An independent accounting firm is also being engaged to oversee iPro’s closure/wind up and will ensure oversight for remaining iPro transactions, as well as providing forensic audit services.
Real Estate Magazine has made several attempts to arrange an interview with RECO.
Editor’s note: This story was updated on the morning of Aug. 27 to clarify information about where consumer deposits can be held.
Courtney Zwicker is a digital reporter and associate editor for REM. Based in Atlantic Canada, she has over a decade of experience covering daily business news.
if they are not charged then wth is going on RECO?
I heard they will most likely be Charged federally and provincially once the investigation is done. If RECO charges them I heard they will only get up to 2 years where as provincially and federally they will get a lot more….
You need to get out of iCloud Gord…. It’s an iPro 2.0!
The notion of “freezing the accounts” is nonsense talk. RECO was already in control of the accounts of the former brokerage and the insurance company was also already heavily involved.
Was Mr. Richer fired for cause? Was he entitled to severance – if so how much?
Looks like the sweetheart legal agreement in place via Mr. Richer’s largesse is “being reviewed” by Dentons but likely cannot be reversed.
Also a “forensic audit” is being ordered? What kind of audit was done before?
All hogwash and window dressing.
The CEO of RECO is compromised by being a former colleague of Mr. Alves for many years. Same with most of the Board.
They should all step down immediately or be removed and replaced by the MInistry.
This scandal is an unmitigated disgrace.
One unfortunate matter in this fiasco, that hasn’t been addressed, is the money iPro was supposed to be remitting, on realtors’ behalf, to CRA for quarterly remittances and HST. Some realtors chose to take advantage of this “service” iPro offered. The money was withdrawn from commission paid out but the remittances were not made. I feel so badly for my colleagues who have been affected by this area of the theft as there is no insurance coverage for this type of loss.
Raymond you raise great points. Reco’s latest actions feel like surface-level gestures when the real issue is failure of oversight. I don’t believe the Reco board and CEO are doing favours for a colleague but the optics are undeniable. The perception alone makes their continued leadership untenable. Steinfeld and Buchanan will forever be synonymous with what is undoubtedly the greatest lapse of oversight by a reco board… or any real estate board in the country (which is a remarkable feat in this industry). For the sake of restoring credibility and confidence in this industry the only path forward is full resignation or immediate removal and replacement by the ministry.
The questions keep piling up, the answers aren’t coming.
It is true that a commission trust account is not required under REBBA 2002/TRESA. Only one is required: “in which shall be deposited all money that comes into brokerage’s hands in trust for other persons in connection with the brokerage’s business,”
The Commission Protection Insurance policy though specifies that a commission trust account is where monies received by the brokerage to satisfy commission payable, damages plus taxes is held in trust, used only for the receipt and disbursement of commission trust funds and which shall be “separate and apart from the statutory trust account that a Brokerage is required to maintain for customer and or client funds.
Its Consumer Deposit protection outlines that a loss means, loss of deposit in the form of moneys or other property which has been or, in the normal course in a trade in real estate,…but does not include Commission.
Assuming iPro had a commission trust account, the question then is, since the commission part of any funds misappropriated from the customer/client trust account was not yet earned or transferred to the commission trust account, does the deposit protection clause mean that the commission portion which is probably most of the deposit, is not covered under the policy?
The policy further states that the insurer defends the insured client which would be iPro not the claimant. If then the answer to the above question is yes, a lot of agents whose deals closed after the money was misappropriated from the statutory deposit trust account are in for a tough slog in court against the insurer’s lawyers who are defending iPro. A great deal of luck is needed to win against Lloyd’s.
Adding insult to injury, the claimant agents, not the insured, suffer a $250 deductible on each claim.
Importantly, RECO should be clarifying the impact of this policy clause: “The Insured will give notice, by submitting a detailed Notice of Claim in the prescribed form, of a Claim or an Occurrence that could result in a Claim to the Insurers as soon as practicable.
iPro, the insured, did not give notice as soon as practicable. Did RECO, which is the group’s named insured, give notice in May when it was first discovered and if not, how does a delay for waiting to recover some of the funds, affect the insurers’ liability to settle?
Well, for not being either a Lawyer or an Insurance Appraiser you most certainly raise some interesting and salient questions, thank you for doing so. It seems that this could be a long legal battle for many. If there is no remedy through the insurer perhaps the remedy for some may lie in the civil court.
Once again I will say perhaps it is time for the regulation of Brokers and Realtors to be handed back to the Ministry. How could it possibly not be at this point in time?
Doesn’t it seem strange that the police have not already stepped in on this matter? Under almost any other circumstances arrests would have already been made – no?
Well it may interest people to know that Mr. Alves has connections in the Peel Regional Police force where he served as a volunteer auxillary officer for many years.
RECO may want to consider handing the file to another force.
If there are 80,000 Realtors in Ontario (likely more) paying RECO $500 each last week, then RECO has just collected $40,000,000 (yes, $40 MILLION) to cover the cost of the insurance program and to pay its own staff and run operations. Next year, the same or more will be collected. If there is ANY TALK of a special assessment to Realtors this must be quashed immediately. There is plenty of money to cover all lossess. Perhaps RECO needs to cut back its own operations and look at the way it buys insurance. I recall many years ago when my broker had about 100 salespeople and we had to buy our own insurance. It cost 1/3 of what RECO charged the next year when they took over the insurance program. There is lots of money to go around; perhaps we need to examine where all of it has been going.
Closer to 96K, Bob.
Last I heard we had approx 96K realtors in Ontario, approx. 70K in the GTA.
I was thinking the same. All the fees that RECO collects every year and all the penalties that are imposed on Realtors for breaking the rules, where is all that money going? What does RECO do with all that money. Also, RECO found about the missing money in May and very convenient they decided to turn a blind eye to the fact that money was being stolen. They just gave the thieves enough time to take as much money as they could and take it out of Canada. I wonder up to what point is RECO really involved and particiated in the wwhole thing. I also agree that the entire Board of Directors of RECO should be let go and investigated very carefully as to what was the real motivation for keeping the theft hidden.
Bob,
I am in total agreement with you, kind of ironic that this was disclosed the last day our insurance was due to RECO.
There is a lot of mention of a forensic audit for iPro.
What we need to see is a full investigation of RECO and their handling of this breach of trust. At this point, what we know doesn’t look good.
In an industry that struggles daily to convince consumers we are professional and trustworthy, our own regulatory body needs to do the right thing and quickly.
Whether it’s true or not, this smells of insider protectionism, and nothing but swift action against the perpetrators and a thorough investigation by RECO will have any hope of regaining the public’s trust.
If there’s any left.
RECO, until recently, and ORE in this province has been governed by registrants. Registrants, experienced in their fields, are not well trained governors. That should be obvious for so many reasons.
Bob Van de Vrande notes a simple distinction…how can the insurance coverage buying power of all registrants collectively cost more per capita than the coverage individual brokerages or groups obtain. A reason could be the coverages differ, most likely though it is that government is the buyer and that always seems to cost more.
Bob notes that RECO collects insurance premiums of about about $40M annually, more or maybe less. At 112k registrants and insurance premium before taxes and fees this year of about $480, I put the number at closer to $54M. 2024 FS say it is $46M.
RECO has net assets approximating $38M and insurance reserves in that amount to about $12M.
There is no cause to have the burden fall to REALTORS® from the failed governance and failed administrative oversight in the matters at hand. There is plenty of funds, which were from registrants to begin with.
What is warranted is get the registrants out from the role of governors and put in place, not bureaucrats and appointees, but truly experienced and capable corporate governors, pay them a stipend commensurate with their contribution and grow RECO’s regulatory and financial health to unheard of heights.
Agree if any shortfall it should be RECO paying out after insurance not short-falling the agents. We go after these bandits lock them up!! RECO”made a deal” with them then RECO work out that deal however you want, consumers and agents should not take any short fall in this not a nickel!!
Today I am embarrassed to say I was a realtor for 55 years.
When the owners of I Pro decided to deliberately steal money from 2400 Salespeople and clients who trusted them, was the day the music stoped for me. This did not happen overnight, this was not writing a 10 million cheque, this was on going for a while, and everyday these brokers looked their Salespeople and their clients in the eye and said “trust me”.
This act deserves to have their assets seized and jail time for sure!
As for RECO, anyone, employee or board member who was aware of this back in May needs to be fired as they are just as complicit as Joe.
Every month a Broker of Record does a reconciliation of their Real Estate Trust Account, every month it must be perfect.
I have said for years, that at the least, a year end reconciliation be sent to RECO signed off by an outside accounting firm. The RECO inspection process was joke.
Salespeople, have to shoulder some of the responsibility also, as Independent Contractors who are joining their business up with a Broker, most spend no time whatsoever ever vetting their new Broker. He, or she, is a nice person, or offering the cheapest deal is where many Salespeople attach their business to.
When Salespeople looked to join our company, I always said our books were open. We are financially strong, your money, your clients money are protected, we were the only company I knew of that paid daily, back then.
I have bought Real Estate Brokerages in the past that were in trouble, always an asset sale and always if the Trust account was perfect, and we handled the closings, Salespeople and clients were always paid in full.
This asset sale between I Pro and I Cloud smacks of collusion and secret payouts, with the Brokers winning and the Salespeople and clients losing.
Sadly, manly of I Pro’s 2400 salespeople will be out there looking for the next cheapest Brokerage out there and jeopardizing their clients money and their commissions again. They do not treat their business, like a business.
Yes today I am ashamed to be called a Realtor, and sadden for the thousands of great Brokers and wonderful Salespeople out there who abide by the rules, today your reputation has been tainted by two Brokers who chose to steal other people money.
Ron, your expressed embarrassment is understandable. Respectfully, though, us who have no direct responsibility for the affair ought to wear any shame, IMO.
It is very understandable to promote that any person aware of this debacle ought to be accountable: fired, removed as RECO director, criminally charged, and be made to be financially accountable personally. Directors are not exempt from a personal liability if they are found to be negligent, and negligence seems pretty obvious to most. It might just be though, the accountability may fall through the cracks of the law.
In addition to your sound suggestion for external audit reporting to RECO, there ought to be a simpler way to manage trust account activity and its inherent complexity and risk. TRESA puts all the privileges and obligations upon brokerages; would it not be nice to have the risk that seems to be paid for by all registrants (insurance, assessments that some now propose) be aligned with rewards to them also in gained interest benefits. The regulations have some responsibility for this occurance.
Salespeople, have to shoulder some of the responsibility also, as Independent Contractors who are joining their business up with a Broker, most spend no time whatsoever ever vetting their new Broker. He, or she, is a nice person, or offering the cheapest deal is where many Salespeople attach their business to.
When Salespeople looked to join our company, I always said our books were open. We are financially strong, your money, your clients money are protected, we were the only company I knew of that paid daily, back then.
Saddened for the many who will be harmed by the situation. We all can and should be. Ashamed to think our regulated system of professional conduct and regulatory compliance, we all can and should be.
These though are not exactly the same as being ashamed as a professional among some other of our colleague professionals who fell off the high bar we are meant to perform at. I am not ashamed of being part of the profession. I am more than mortified that our profession does not recognize we are the authors of our own fate.
We can do better. We must do better. And we have to get out of the way of the doing.
I retired 3 years ago after 36 year career as a realtor / appraiser and broker of record. This has to be the darkest moment I can recall for organized real estate. I too am ashamed of the profession at the moment.
Realtors and consumers were seemingly betrayed by the very organization that was put in place to protect them. While two theiving scoundrels get off scot-free!
P.S Where’s the $8 million and how did a former office manager come up with $2.5 million to buy the assets of the company.
This whole thing stinks so bad.
I have been saying this for years.
Our associations especially Treb, OREA, RECO, CREA are all money grabs.
All should have independent audits.
None actually work for us any longer. They are all a joke.
PROFESSIONAL “NOTTTT”
And where are the brokers who do nothing about this either.
Protection????
John, all of them have independent audits and auditors are responsible to report the affairs in relation to the compliance with accepted accounting practices. We the members are responsible for the governance, that includes how finances are managed. If what you mean is an outside assessment of performance, agreed that would be warranted, even so as it might be less than fulsomely satisfying.
Ron Rouse is bang on. This didn’t happen quickly. Any prudent person involved would have see this coming. “Something is rotten in Denmark”
I have never understood how a government can justify a regulatory body being run by the people they are supposed to be regulating. Classic case of hiring the fox to guard the chickens. Ripe for corruption and now everyone seems shocked. This is an industry out of control in more ways than one.
If there are no criminal charges against the owners of IPRO, RECO CEO and board must resign. There was a well known case in the past where the broker only stole $100,000 from trust and he went to jail for a year.
So where exactly did the money go? Deposits supposed to be iron clad trust. Has there been depth audit on the to-and-fro of actual deposit money? e.g. to external account bearing interest. Were there any shortfalls on deposits for completed deals?
In May of this year, end of May. I decided to transfer out of a brokerage that I was with for 15+ years and right into the fire pit of hell that is iPro.
The “broker” that signed me up failed to mention anything about the company about to go belly up.
That “broker” seems to have fallen off of the face of the earth as A RECO search fails to bring up his registration.
RECO was negotiating with iPro for months and knew that there was a significant “shortfall” in their bank accounts yet somehow, RECO didn’t find it necessary to do anything about it or force iPro to not bring on any more agents into their ranks.
RECO basically allowed me and my clients to walk right into the burning hell that we are now in.
On August 7th, an agent called me. It was a weird call. She was almost happy. I guess she saw that I moved to iPro and thought to call. Her message was “Hey you know that iPro is declaring bankruptcy right?”
Speaking to other agents, It seems that many people knew about iPro well ahead of time which imho suggests that our great RECO was leaking confidential information to specific agents.
If RECO wants to investigate, I would start by investigating who it is that was leaking information?
So, I have been paying my dues and my insurance premiums for 17 years?
Now. We are being told that there might not be enough money to cover all of our commissions?
115,000 agents paying 500$ insurance bill is about 56 million dollars?
How much is the cost of running RECO?
Personally, I would be ok with giving all of the people involved in RECO a huge pay cut before they even consider taking one cent out of my pending deals commissions.
Very frustrated for myself and my clients.
Hoping that lots of heads will roll and many will face severe criminal charges once this is all investigated and exposed
You raise a couple points that should concern all agents.
Within RECO’s carefully crafted consumer updates can be found was they want the consumer and agents to conclude yet is not said. Let’s follow along.
Aug. 18 – Toronto Star – “When RECO requested routine pre-inspection information, iPro Realty contacted RECO to disclose the shortfalls,”
Aug. 19 – “An inspection of iPro had been scheduled for late May 2025, however the owners notified RECO of the shortfall immediately prior to the inspection.”
“iPro cannot pay out commissions until the brokerage is closed and a full accounting of outstanding commissions are completed and then assessed against potential insurance coverage.
Note it says the audit was scheduled for May but RECO was notified of the shortfall when that audit was requested. RECO does not say what that request date was.
TRESA demands that “A brokerage shall promptly notify the registrar, in writing, if, The brokerage’s liabilities exceed the realizable value of its assets or the brokerage is unable to pay its liabilities as they become due.
It shall also provide to the registrar a letter detailing the exact date it will cease to exist PLUS a list of all trades in real estate that were pending on the date the brokerage ceased to be registered PLUS a statement from the account’s bank showing the balance on the date the brokerage ceased to be registered, PLUS a trust account reconciliation statement prepared by the brokerage that identifies
i. The differences, if any, between the brokerage’s records and the records of the financial institution. ii. The balances in the trust TRESA account…
ii. iv. The persons, if known, who are entitled to each balance.
iii. v. Each balance for which it is not known what persons are entitled to it.
Obviously none of that was relayed to RECO by iPro in May. Nor did RECO adhere to the legislated requirement upon the May disclosure. Of note is that RECO does not indicate an audit or even a visit took place subsequent to receiving notice. We know from the Aug.25 notice, it was only then they seized the bank accounts and since they are now requesting a forensic audit to determine the specifics of the balances due agents, depositors and the government.
To your point about the new brokerages.
The 17 branches have now blossomed into 23. While the initial transfer of almost 1800 iPro agents have declined to 1,541
Aug 8., iCloud Brokerage was registered, followed by 1 branch on the 11th, 5 on the 12th and 4 on the 13th.
RECO issues the first advisory on August 14.
Two days prior, on the 12th, Skybound Realty owned by an ex-iPro Managing Partner who is not the broker of record was registered. On Aug.22, two subsequent branch registrations at the same location followed. That location is currently 118 days still for lease.
RECO managed to register a new brokerage which has no interest in the empty address of service RECO has on record.
It’s what they are glossing over and keeping from the public as they no doubt search for good PR, that’s so repugnant.
RECO, TREBB, and CREA: The Real Estate Mafia Ontarians Never Voted For
If you want to understand why Ontario Realtors are frustrated, just follow the money.
There are over 80,000 Realtors in Ontario today. Each of us pays $500 annually to RECO for insurance, which means RECO just collected $40 million in one shot this year. That’s on top of the regular fees Realtors are forced to pay to other real estate bodies: TRREB (or local boards), OREA, CREA, and additional service fees. The financial burden is staggering.
Here’s what it looks like for many Realtors in Ontario every single year:
RECO Insurance: $500
RECO Registration: $390 (every 2 years = $195/year)
TRREB (Toronto Board) Dues: approx. $1,100
CREA + OREA Fees: approx. $500 combined
Mandatory Health Plan: about $600+ (forced onto Realtors in 2024 with no opt-out option)
That’s close to $3,000 out of pocket per Realtor annually just in mandatory fees. Multiply that by 80,000 Realtors, and you’re looking at nearly a quarter of a billion dollars every year funneling into these organizations.
And what do we get in return? A broken system that fails to protect consumers, fails to support Realtors, and increasingly looks like the shadiest cartel in professional regulation.
Take RECO, for example. Realtors are told that the $500 insurance fee covers errors and omissions, but when brokerages collapse—as we just saw with iPro Realty—millions in consumer deposits vanish, and suddenly there’s talk about whether Realtors might face a “special assessment” to cover the fallout. Special assessment? On top of the $40 million just collected? That’s outrageous.
Years ago, before RECO centralized the insurance program, many brokerages purchased their own coverage privately. Costs were a fraction of what RECO now charges, raising questions about where all this money is really going. Instead of demanding more from Realtors, perhaps RECO should cut back its bloated operations, renegotiate its insurance contracts, and finally be transparent with its books.
Then there’s the mandatory health plan that blindsided the industry in 2024. Realtors were told this would be “good for everyone,” yet there was no consultation, no vote, and most importantly—no opt-out. Why should an independent contractor be forced into a one-size-fits-all benefits plan? Some already had private coverage. Some didn’t want or need it. But like everything else in organized real estate, choice was never on the table. It was shoved down our throats.
When you add it all up—insurance, board dues, CREA and OREA fees, the health plan—Ontario Realtors are being squeezed harder every year. Meanwhile, the organizations that control us grow fatter, richer, and less accountable.
It’s time to say out loud what many Realtors are already whispering: these bodies—RECO, TREBB, CREA—operate less like professional associations and more like the biggest, shadiest mafia in Ontario. They control our licenses, our insurance, our benefits, our data, our MLS access—our entire ability to work. And they do it without meaningful oversight from the very people funding them.
Realtors deserve transparency. We deserve accountability. And above all, we deserve a say in how our money is being used.
Until that happens, we’re nothing more than captive members of a system that works for itself—not for us, and certainly not for the clients we serve.
Dear RECO.
Don’t even THINK of raising my dues or adding a surcharge to account for any shortfalls in coverage.
Thanks
Something I always noticed about real estate board employees, unions and elected officials on all levels is that none of them could (or did) show up as performers in what they are “overseeing”. When somebody comes along in to any of these “organizations” with a back ground of high or even good performance they are pounded on by all the know-nothing-arians… look around… very sad but very true!
Francis, you nailed it. The ones chasing titles and clout are usually the least qualified to lead. The experience pool is shallow. The people actually running strong businesses and giving back to the industry end up surrounded by low producers who just want a name badge for a conference they’d never pay for themselves, a title for their email signature, and a picture to post on Facebook. Real leaders are too busy doing the work, while the pretenders make sure their failures never see the light of day.
Welcome to organized real estate in Ontario.
Don’t forget to mention the ‘leaders’ that use their position to promote their own business or a family member’s business. DISGRACEFUL
RECO should be covering our deductibles because $250 on every claim is ridiculous.
I’m so angry about all of this.
Reco ceo Michael Beard retired in February 2025. Brenda Buchanan – Reco COO – was appointed ‘interim’ CEO effective February 2025 – meaning she took over from Michael months before May when the ipro theft was discovered.
The reco board changed her title from interim to officially hired as CEO in July – essentially rewarding her ‘interim’ actions from February to July – including the ipro theft and hiding it from realtors and the public for months.
I see agents trying to protect the ceo as if she didn’t come on the scene until July and ‘inherited’ this disaster. UNTRUE. She has been at the centre of it since the beginning and the reco board rewarded her actions with the official CEO title.
What if one of the big reasons for Reco taking their sweet time in doing something about the embezzlement fraud at iPro was due to the timing of it all?
Thinking of this. What happens in May?
Realtor Quest. They were allowing people to party on as the ship was going down.
You know what was funny about all the “reasons” iPro gave for their current predicament?
Rui the real estate pioneer actually blamed Trump partially for what happened. Can you imagine that.
A lot of people need to go to prison for this.
On Daniel Foch’s recent YouTube video Mark Morris claimed :
a) buyers and sellers are ok since RECO and the Ontario government won’t let any member of the public lose a dime, since that would completely eliminate trust in the real estate industry;
b) realtors are screwed since the $4 million insurance cap is likely to be exceeded; officially claims are supposed to be paid on a first come first serve basis, but the lawyer believes this will be ignored and payments will be made pro-rata; if so I imagine there may be a law suit or two coming from disgruntled realtors with big unpaid commissions; if RECO arbitrarily changes the rules, they are leaving themselves exposed;
c) the owners probably aren’t guilty of fraud since the company could have been sold for a lot more than $8 million; he thinks they are probably just negligent and taken advantage of by a trusted bookkeeper or third party; maybe – they wouldn’t be the first company to trust the wrong person; this would also explain RECO’s strange actions;
d) he also believes all realtors are going to be hit with a “one-time” special assessment to cover the public side insurance shortfall; his back-of-the envelope calculation is $30 each, which implies a shortfall of maybe $3 to $3.5 million; I’m not sure how good his number is because it doesn’t taken into account all RECO’s extra legal & admin costs;
On the other hand, in December RECO reported $40.4 million in investments and current assets (mostly cash) on the insurance side and another $57 million plus in investments and cash on the operations side; this big pot of money is where they should be covering any shortfall, but I’m not going to hold my breath;
e) Morris also thinks part of the reason RECO dropped the ball is that they don’t have enough auditors and will need to staff up; Ontario’s Auditor General made a similar finding in a November 2022 report, so RECO’s likely to increase head-count and we’ll probably see RECO fees jumping to cover the extra salaries;
f) over the nearly 25 years since the insurance fund was created RECO has paid out a total of $9.1 million in claims. Last year they paid out just $119,950. So an $8 million shortfall is a big deal;
g) Morris thinks builders will use this as an excuse to avoid paying commissions; if iPro no longer existed as a legal entity the sales contract is apparently dead; Morris takes pains to point out that iPro still exists and so long as it does, builders (and presumably all other sellers) remain legally bound by the commission agreement in their contracts;
Then there’s the politics. This mess looks terrible for RECO:
i) the former CEO of RECO retired in February 2025 after 7 years at the helm and was replaced with COO Brenda Buchanan who was formally appointed by the Board on July 21st, 2025; she was with RECO since 2019 and acting CEO since February and should have known this disaster this was coming;
ii) Joseph Richter, the Registrar (really a chief administrative officer), was fired over the debacle. Mr. Richter and Ms. Buchanan were the only staff members thanked by name in the ex-CEO’s last remarks in RECO’s annual report. Richter was a heavy hitter, they’ve just thrown under the bus. This is probably like Trump and Epstein – RECO’s is trying desperately to change the conversation;
(iii) in January 2024 the Ford government imposed a new governance model on RECO which came into effect in June 2024; under Ford’s new model the number of direct industry representatives (i.e. realtors, brokers or employees of brokerages or boards) dropped from 9 to 3, the government continued to appoint 3 representatives directly and RECO handpicked 3 outsiders to help manage itself.
The government appointees are a landlord/tenant board adjudicator and a Durham politician. The third government appointment hasn’t been filled. The 3 outsiders are a law firm CFO, a lawyer who works for Ontario’s accounting regulator and a professional board member who also instructs executive regulators. On the surface, none of these people appear especially knowledgeable about real estate.
The three real estate industry representatives were elected last March after RECO narrowed down 80 applications to 8 acceptable candidates. Under the governing bylaw they could have presented 15 candidates to member voters, but RECO opted for a tight selection list.
Three of the eight permitted candidates were elected, including chair Katie Steinfeld. Katie has been on RECO’s board for 5 years and was re-elected in May for another 4 years. She is married to Daniel Steinfeld, TREB’s 2025 President-Elect.
The two other “industry” reps are brokers from Port Elgin and Windsor whose terms just started on May 29th. I’m sure they wished they’d stayed a million miles away from this mess.
Its not clear how much weak, transitional governance played in this debacle, but its hard to believe the fiasco is all the fault of a rogue regulator. Katie Steinfeld, Brenda Buchanan and the Ford government have a lot more to apologize for.
All Brokers of Record should band together and call a “special meeting” for full disclosure to protect consumers going forward.
Honesty is the best policy. Let’s have this meeting by regions and change the optics of our beautiful business.
Fellow realtors need positive input from the “heavy hitters” of our industry.
The politicians and administrators have done diddly.
We can divided the province in 10 regions and bring out at least 100 Brokers of Record per region.
Let’s have our say and get the media involved with positive news.
Thank God in 42 years I have never encountered the amateurs at the defunct company.
Fellow realtors stay positive.
We have great days ahead.
Worst part is RECO is charging more than 50 million dollars from registrants as insurance (100000 x $500) fee and pay to its favourite insurance company. Now the same insurance company will also charge $250 as deductible from each Registrant for claim. Government should also investigate this as 50 million every year too much money
Such a hefty payment every year to insurance coverage and this outcome. Hopeless