QUICK HITS

• The developer’s attempt to add nearly $60,000 in extra fees beyond the APS terms was determined to be a breach of contract.
• Courts ruled that sellers must provide clear documentation and justification for any additional charges listed in statements of adjustments.
• Because the seller breached the APS, buyers were entitled to recover their deposit and upgrade payments
• Because the buyers took possession of the property for at least a year, the buyers were found responsible for paying fees totalling $68,000 to compensate the seller for the time they lived there.

In litigation arising from disputed real estate transactions, courts are frequently confronted with circumstances where a buyer tries to close for less than the agreed sale price.

In many cases where a buyer tries to close for less than the price agreed to by the parties, the buyer is the party in default, and the seller is entitled to retain the deposit paid in addition to seeking other damages from the buyer.

In some cases, however, a failure to close may be due to additional unanticipated charges imposed by the seller on top of the original agreed-upon price. A seller’s demand for more than the agreed purchase price is just as much a default as a buyer’s demand to pay less. Whether or not such charges are permitted is generally determined by the wording of the Agreement of Purchase and Sale (APS) between the parties.

Taheripouresfahani v. Dormer Bond Inc., 2025 ONSC 5833 (CanLII) arose from a dispute between the buyers and the developer/seller of a newly built property in Richmond Hill, Ont.

The purchase and disputed charges

In 2020, the buyers entered into an APS with the developer for the purchase of the property for $761,490. The buyers paid installments of more than $114,000 as a deposit and $11,540 for additional upgrades. The final closing date was to be designated by the developer’s lawyer upon at least 14 days’ notice.

Pursuant to the terms of the APS, the buyers were allowed to move into the property before the final closing date once occupancy was permitted. In April 2023, the buyers moved into the property as permitted and began to make monthly occupancy payments of $3,782.

On July 31, 2023, the developer delivered a notice scheduling the closing date of Sept. 15, 2023.

On Sept. 7, 2023, the developer delivered a Statement of Adjustments to the buyers’ lawyer, which included additional charges totaling almost $60,000. The charges were stated to be for:

• Development charges/increased levies: $8,000 plus HST
• Meters (hydro/gas): $8,163 plus HST
• Vendor’s legal and administrative fees: $8,605 plus HST
• Alternative materials cost: $27,021.08 plus HST

A flurry of correspondence ensued between the lawyers over whether or not the charges were permitted under the APS. The developer offered to reduce some of the charges but demanded a mutual release in return. The buyers refused and demanded that all the additional charges be removed. The transaction was not completed by the Sept. 15, 2023 closing date, but the lawyers continued to exchange correspondence in the following days concerning the statement of adjustments and additional charges.

On Sept. 26, 2023, the developer’s lawyer confirmed that the transaction had been terminated. The developer demanded that the buyers vacate the property.

Court finds sellers in breach

Litigation ensued, with each party moving for summary judgment.

The motion judge noted that a buyer is generally entitled to proof of figures contained in a statement of adjustments: Bellisario et al v. 2200 Bromsgrove Development Inc., 2025 ONSC 2546, at paragraph 61.

The motion judge further noted that the APS specifically stated that the balance due on closing would be adjusted to include “any development, education, park or other levies or imposed charges or taxes by Government Authority”. Accordingly, while the development charge of $8,000 was potentially allowed by the APS, the developer had an obligation to explain how the charge was calculated. The developer had failed to provide any evidence to substantiate the charge, referring only to an unexplained “formula” used by the municipality.

Further, while the APS permitted adjustments for the cost of hydro and gas meter installation, the developer did not provide any documents to the buyers or the court on the motion to demonstrate how the amounts were determined.

A similar issue arose regarding the legal and administrative fees. While the APS provided such fees to be added to the statement of adjustments under specific conditions relating to NSF or “stop-payment” cheques, these did not apply in this case.

Lastly, the motion judge found that none of the “alternative materials cost” charges were provided for in the APS and that there was no evidence to support the amount charged by the developer.

The motion judge concluded that it was not the buyers who breached the APS but the developer who tried to close for more than the agreed-upon price in the APS by adding approximately $60,000 in charges that were either unjustified or not authorized. The developer’s attempt to claim any one of these charges was a violation of the APS.

As a matter of law, the motion judge determined that the demand for additional payment as a condition of closing was an anticipatory breach of contract based on the principles discussed by the Court of Appeal for Ontario in Spirent Communications of Ottawa Limited v. Quake Technologies (Canada) Inc., 2008 ONCA 92, at paragraph 37.

The motion judge decided that buyers were therefore entitled to the return of their deposit and amounts paid for upgrades to the property.

Buyer’s occupancy and financial responsibility

While that result would have ordinarily been determinative of the dispute, the case was unusual due to the fact that the buyers had taken possession of the property in April 2023 and resided in it for at least a year thereafter. By the time of the hearing in 2025, they still had furniture in the property and continued to pay for internet and security cameras. The buyers also refused to consent to an order of possession in favour of the developer. The motion judge found the buyers’ refusal to pay the developer for their possession of the property to be an untenable position.

In the result, therefore, the buyers were found to be responsible for the monthly occupancy of $3,782 up to the date of the decision in October 2025 (totaling $68,076), as well as for reimbursement of property taxes of $6,586.56 paid by the developer during that period and unpaid condominium fees of $3,882.

Costs of the litigation based on the divided success of the summary judgment motions are to be determined.

The decision demonstrates that sellers seeking to impose additional charges on the agreed-upon purchase price will need to ground such charges in the specific terms of the APS and have an obligation to provide satisfactory back-up documentation to substantiate the charges. Buyers who take possession of a property before closing should be prepared to compensate a seller for their time in possession of the property before it is re-sold to another buyer.

James R.G. Cook

James Cook is a partner at Gardiner Roberts in Toronto and has been with the firm since he articled there in 2002. As a litigator in the firm’s Dispute Resolution Group, he has experience in a broad range of commercial, real estate and professional liability litigation. Phone 416-865-6628; email jcook@grllp.com. This article is provided for educational purposes only and does not necessarily reflect the views of Gardiner Roberts LLP.

The post Buyers win after developer tries to up the price by $60,000 at closing appeared first on REM.

It was signed months, maybe even years ago, and the agent was already partially paid. Those funds are long gone, having been used to run their business and their life. Now, the developer is demanding those funds back in full.

It’s a reality more Realtors face in a market experiencing an uptick in failed new construction deals. 

The numbers are dismal: Urban Nation reports 10 projects were cancelled in 2025’s third quarter alone, bringing the year-to-date cancelled total to 18 projects and 4,040 units.  

“Prior to 2022, it was rare to see a deal fall through,” said David Ionico, partner at McHugh Whitmore law firm in Stoney Creek, Ont. “In recent years, it is unfortunately a common occurrence, and I refer failed deals to litigation on what seems like a weekly basis.”

Ionico said that reasons for failed deals vary, but most recently, they have been due to purchaser financing issues.

“Lenders seem to have gotten stricter with their requirements and are more cautious to lend,” Ionico said. “Additionally, appraisals are coming in much lower than expected at the time of purchase, resulting in purchasers not being able to obtain enough funds to close.”

Implications for agents 

Unlike the average confirmation of co-operation form for the sale of existing homes, new developers typically have Realtors sign a document called an “Agreement to Co-operate.”

It’s a schedule outlining conditions for staggered commission payouts. For example, the first commission payment of one per cent is sent upon successful completion of the building’s roof. The second payout of one per cent is sent once the developer receives a mortgage commitment, and so forth. The condition criteria and commission percentages vary from developer to developer.

There is an important clause within this agreement that has become increasingly common: the repayment clause. 

Also called a “clawback clause,” this condition allows developers to rescind commissions previously paid to Realtors should buyers be unable to close. 

A poor understanding of terms may be hurting agents

Sam Hassaan, broker of record at Royal LePage Real Estate Services in Oakville, Ont., agrees that these clauses have become the “industry standard for most major developers.” 

He said agents typically do not raise concerns about the clause – perhaps because they don’t fully comprehend them.

“A significant number of agents do sign these agreements without fully understanding the ramifications and financial risks when the deal does not close,” said Hassaan.

While Realtors may get the short end of the proverbial stick with clawback clauses, developers include this clause for a reason.

“Put simply, a lot of deals aren’t closing and, as with other types of real estate transactions, the expectation is that the non-defaulting party won’t pay any commissions if the deal doesn’t close through no fault of their own,” said Ionico. “These clauses also incentivize co-operating agents to bring purchasers that are likely to close.”

‘Read before you sign’

Hassaan notes that repayment clause enforcement has become prominent in the current market, particularly in areas with high volumes of new development such as the Greater Toronto Area. While Hassaan advises Realtors to try and negotiate this clawback clause, Ionico states negotiating this clause would be dependent on the developer.

“I’m not sure my builder clients would negotiate this, given the higher risk of deals falling through these days,” said Ionico.

And while Ionico has seen agents try to contest repayment clauses, it usually doesn’t go far.

“I’ve seen agents dispute clawback clauses but never with a legal justification to do so. Assuming the clause is properly drafted, its enforceability is undisputable.”

Knowledge is the best defense for Realtors who want to delve into the world of new development sales. While Ontario’s Real Estate Salesperson Program includes sessions on new constructions, some brokerages also offer pre-con training.

As an extra precaution, Royal LePage Real Estate Services also implemented a brokerage policy for pre-construction deals. If multiple commission installments are woven into a deal, their policy is to hold the funds until the deal’s final closing. While this could mean a significant delay in commission payout, it protects the Realtor and brokerage from being unable to pay back the developer if the deal fails to close.

Realtors can take similar measures to protect their finances should their brokerages not have such policies in place. This could be as simple as setting aside your first or second installment in a separate account for safekeeping until the final payout is complete and the deal successfully closed.

For Ionico, the best advice he gives is simple: “Read before you sign,” he said. “If anything is unclear, it’s best to have a lawyer look at it.”

Diana Faria

Having stepped into the world of real estate as a receptionist over a decade ago, Diana worked in the industry at different capacities and climbed the ladder since. She has supported Realtors as a front desk assistant, organized incoming paperwork as a deals admin, and processed closings as a head-office accountant. Working at several brokerages gave her insight into their inner workings, from recruiting, social media marketing, commission payouts, and everything in between.

The face of real estate is often portrayed as a confident Realtor, but the hardworking cogs within the real estate machine — office admins, assistants, receptionists, and clerks — are often forgotten. Using her real estate and journalism experience, Diana sheds light on everything going on behind the scenes, while keeping the machine humming along.

The post Clawback clauses hit hard as pre-con closings collapse appeared first on REM.

Every month, Kate Teves, HR consultant, recruiter and founder of The HR Pro, answers Realtors’ questions about anything and everything related to human resources. Have a question for Kate? Send her an email.

Question: How can I structure bonus clauses in employment contracts to avoid future conflict?

Kate: One of the many things real estate and HR have in common is that they both rely on clarity.

Whether it’s a purchase agreement or a floor plan, details are crucial. Yet when it comes to employment contracts drafted by brokerages, teams or even single agents hiring an admin assistant, bonus structures are too often written with the legal equivalent of invisible ink. 

We have even heard that they have been specifically advised by consultants not to put any tangible definitions around bonuses into contracts. While the vagueness (“It’s just a discretionary bonus, we’ll figure it out later”) may seem harmless, figuring it out later carries the risk of a lawsuit down the road.

What about the courts? They won’t provide much sympathy to brokerages or agents. In Ontario and across Canada, judges treat brokerages the same way they treat banks, tech firms, or investment companies. A vague bonus clause can easily lead to a six-figure liability.

As Sheldon Cooper from The Big Bang Theory taught us while reinforcing the dreaded roommate agreement: “Ambiguity in a contract benefits the party that did not draft it.”

A few examples 

Take Chapman v. GPM Investment Management. The executive’s contract tied his bonus to “10 per cent of pretax profit.” Simple? Not at all. 

When the company sold a piece of real estate, it tried to exclude the capital gain from “profit.” The court disagreed, ruling that without crystal-clear exclusions, “profit” meant all profit, including a big land sale. 

Costly lesson: In real estate, where profits often swing on a single deal, fuzzy bonus definitions can make or break a balance sheet.

Or look at Matthews v. Ocean Nutrition and Paquette v. TeraGo Networks, two leading cases on bonuses during termination. Both decisions hammered home the point that, unless a contract clearly says otherwise, employees can claim bonuses they “would have earned” during their reasonable notice period. 

Imagine a brokerage manager terminated in November, only to claim a year’s worth of bonus payouts tied to the next spring’s sales surge. If your clause just says “must be actively employed,” that may not be enough.

Then there’s Boyer v. Callidus, where unclear policies on bonuses and stock options left a company paying nearly $1.8 million. Swap “stock options” for “profit-sharing pools” or “branch manager bonuses” and you can see the parallel: courts will force payouts if the language doesn’t explicitly cut them off.

Spell out bonus clauses like a business contract

Brokerages are unique workplaces. Besides agents, who work on commission splits, brokerages often pay staff, office managers, marketing coordinators, deal secretaries and even senior administrators a salary plus bonuses tied to retention, profitability, recruitment targets or profit sharing. These bonuses can be, and usually are, as informal as “If we hit X deals this quarter, you’ll get $Y.”

But what happens if that employee resigns mid-quarter? Or is it terminated before payouts? Without precise contract wording, Ontario courts will likely side with the employee, awarding the bonus (and possibly tacking on additional damages).

It’s easy to picture – a brokerage promises its office manager a “growth bonus” for every new agent recruited, but doesn’t define whether the bonus is payable immediately or only after the agent survives a retention period. Cue dispute.

Another common scenario: A branch administrator is told they’ll receive a “profit-share” at year-end, but the brokerage never clarifies whether “profit” means before or after head office expenses. Enter the Chapman precedent, and a costly recalculation.

The solution isn’t complicated; it just requires care. Bonus clauses in brokerage contracts should be drafted with the same precision as an Agreement of Purchase and Sale. Spell out:

• What exactly triggers the bonus (specific KPIs, profit definitions, timelines).
• Whether the employee must be employed on the payout date.
• How disputes will be resolved.
• Concrete examples of calculations (e.g., “If office profit is $500,000, bonus pool is $50,000, divided as follows…”).

Yes, it feels tedious. But so does staging a vacant property, and we all know buyers are more likely to pay top dollar for a home that looks complete. Courts are the same: they reward employers who “stage” their contracts properly.

Write it clearly. Put it in the contract. And save the surprises for your client gift baskets, not your bottom line.

Kate Teves

Kate Teves is the founder and COO of the HR Pro, a recruiter and a Human Resources Professional who focuses on the real estate industry by finding incredible people to support solopreneurs, teams and brokerages.  She also helps leaders and managers build HR processes and design a culture and mindset that facilitate business growth and employee development.

The post Ask Kate: How do you keep bonus promises clear and conflict-free? appeared first on REM.

The company confirmed in a statement to Real Estate Magazine that a decision was issued this week, enabling Re/Max to move forward with addressing allegations in the Sunderland and McFall cases, which claim that existing rules mandating homesellers to pay buyer brokerage commissions inflate costs and limit competition.

Re/Max first revealed the settlement agreement in February. 

“Re/Max Canada is pleased the court has approved our settlement in the Sunderland and McFall cases, and we thank the court for its thoughtful review and decision,” reads a statement provided to REM. “Since the beginning of this process, Re/Max has been focused on supporting our network and reinforcing the strength of the brand. Our community of trusted, productive professionals will continue to deliver exceptional value to buyers and sellers across the country.”

Re/Max has maintained that the settlement is not an admission of wrongdoing.

This development follows similar settlements in the United States, where Re/Max and other major real estate companies, as well as the National Association of Realtors (NAR), agreed to financial settlements to resolve claims of anticompetitive commission practices.

Settlement details

According to a notice published in August by Toronto law firm Kalloghlian Myers LLP, the settlement requires three things of Re/Max:

1. Pay $7.8 million
2. Cooperate in the ongoing prosecution of the class actions against the non-settling defendants
3. Implement several changes, including “ending the practice of requiring its franchisees and their affiliated brokers, salespersons and agents to join or to be members of a real estate board or association defendant or to follow the rules alleged to give rise to damages claimed in this proceeding.”

Courtney Zwicker

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.

The post Court approves Re/Max Canada’s $7.8-million class action settlement appeared first on REM.

QUICK HITS

• Buyer refused $1.8-million farm purchase, alleging unlicensed gas wells breached environmental warranty in APS.
  
• The court ruled the warranty covered environmental matters, not gas wells; seller was entitled to $250,000 deposit plus damages.
  
• Real estate agent’s sloppy paperwork led to RECO warning, but conduct did not constitute legal negligence, the judge decided.
  
• Case highlights the distinction between professional conduct rules and negligence law; imperfect work isn’t always actionable negligence.

In disputes between a buyer and seller arising from an aborted transaction, the real estate professionals involved may be dragged into the dispute for their roles in the circumstances at issue. 

Real estate agents have a duty to act in accordance with the applicable standard of care and may be liable for damages when their conduct fails to meet this requirement. However, conduct may be imperfect or sloppy without amounting to negligence, as demonstrated by the trial decision in Duad Inc. v. Shi, 2025 ONSC 5258 (CanLII).

Failed farm sale

The litigation arose from the aborted sale of a farm property in Hamilton, Ont., which the buyer had agreed to purchase for $1.8 million pursuant to the terms of an “as is, where is” Agreement of Purchase and Sale (“APS”). The buyer claimed that two gas wells located on the property were not licenced and could not be legally operated. The buyer refused to complete the purchase, taking the position that the seller had breached an environmental warranty in the APS.

The seller sued the buyer for forfeiture of the deposit of $250,000 and consequential damages. The seller’s position was that the environmental warranty in the APS did not cover the gas wells and that the buyer was simply looking for an excuse to refuse to complete the transaction. Even after the transaction failed to close, the seller offered to address any issues with the gas wells, but the buyer refused to revive the deal.

Disputes involving the agent

The buyer and the seller also sued the real estate brokerage and agent, who had represented both parties in the transaction. The buyer claimed that the agent breached his duties as a Realtor by failing to follow instructions in respect of the wording of the APS and failing to disclose that he was also the agent for the seller, whose interests the agent was alleged to have preferred. Among other things, the buyer claimed that the agent inserted the “as it is, where it is” clause without his consent and misled him about the status of the wells. In turn, the seller sought contribution and indemnity from the agent for any liability to the buyer.

At trial, the court found in favour of the seller. The trial judge reviewed the wording of the warranty and found that it was intended to address “environmental matters” and not the gas wells. Immediately below the environmental warranty in the APS was a clause obliging the seller “To terminate all free use of well gas for neighbor houses”. Below this clause, both sides agreed that the property would be sold “as it is, where it is”.

While there was a specific term in the APS that addressed disconnecting gas to the neighbouring properties, there was no reference in the environmental warranty to the gas wells. Further, in the trial judge’s view, there was no evidence that the seller had breached any warranty regarding the state of the gas wells.

The seller was therefore entitled to the deposit and was awarded consequential damages relating to the costs of $287,296.57 incurred before re-selling the property, to which the deposit would be credited. The seller did not incur a loss from having to sell the property at a lower price, but rather incurred significant costs to carry and maintain the property before the resale.

Regulatory warning

As for the claim against the real estate agent, the trial judge noted that the agent had been subject to a disciplinary warning decision by the Real Estate Council of Ontario (RECO), arising from the transaction. RECO found that the agent erroneously used outdated forms from a previous transaction of the subject property to produce the offer, and he had forgotten to delete a name from an earlier Confirmation and Co-operation form, which he had used as a precedent. The warning also noted that while the brokerage was identified as both the listing and the co-operating brokerage in the APS, he failed to provide a written disclosure of the nature of his relationship to each party prior to the offer.

This did not amount to negligence, however. The trial judge accepted the opinion of a standard of care expert for the agent, who opined that the RECO decision was essentially a “slap on the wrist” for sloppy paperwork.

In the circumstances, there was no indication that the buyer was misled by the agent’s role in representing both parties to the transaction, and the buyer failed to substantiate his claims concerning the terms in the APS. Among other things, the court noted that the buyer continued to work with the agent to try to complete the deal after it initially failed to close. In the trial judge’s view, the agent’s conduct, “while clearly imperfect, did not fall below the relevant standard of care.”

The difference between sloppiness and negligence 

The trial judge referred to Charter-York Ltd v. Hurst (1978) 2 R.P.R 272 (Ont. H.C.), where a vendor’s real estate agent incorrectly advised a purchaser that the acreage being sold was contiguous. The purchaser was allowed out of the transaction, and the agent was liable to the vendor for the loss of an opportunity to sell the land prior to a decline in market value caused by the introduction of land speculation legislation. The misrepresentation in that case was a consequence of the agent’s failure to make adequate inquiries about the land. The buyer failed to establish that the agent in this matter had breached the standard of care by failing to make any required inquiries about the farm property when acting for the parties.

Of note, the issue of the gas well licences was only raised by the buyer for the first time at closing, which supported the agent’s position that the buyer either did not have the funds to close or he had a change of heart about the purchase. Further, the buyer did not adduce any expert evidence that the agent fell below the standard of care required of a Realtor to refute the expert evidence that the agent fulfilled his duty to his respective clients.  There was no indication that the buyer was misled by the agent’s role. The agent tried to make the deal work for both parties, preparing four amendments to the original APS.

The claims of the buyer and seller against the agent were therefore dismissed.

The case underscores the fact that imperfect or sloppy conduct may not amount to professional negligence, even where a formal regulatory warning has been made. The Supreme Court of Canada has affirmed that there is an important distinction between the rules governing professional conduct and the law of negligence as breach of one does not necessarily involve breach of the other: Galambos v. Perez, 2009 SCC 48, at paragraph 29. What could have been a narrow dispute between a buyer and seller over a deposit was complicated by the additional claims made against the professional involved, which may result in cost consequences for the parties who pursued those allegations through trial. 

James R.G. Cook

James Cook is a partner at Gardiner Roberts in Toronto and has been with the firm since he articled there in 2002. As a litigator in the firm’s Dispute Resolution Group, he has experience in a broad range of commercial, real estate and professional liability litigation. Phone 416-865-6628; email jcook@grllp.com. This article is provided for educational purposes only and does not necessarily reflect the views of Gardiner Roberts LLP.

The post Agent’s work was sloppy – but not negligent, Ontario judge rules appeared first on REM.

“The suggestion that millions of dollars was diverted for our personal use is false,” he said in a written statement, first reported on by the Toronto Star and obtained by Real Estate Magazine.

The co-founder of the collapsed brokerage admits to “serious mistakes” and says he has regrets for the “chaos” caused to industry peers, iPro’s former agents and consumers. 

He owns up to using trust account funds, calling it “misguided attempts to save the company,” which grew at warp speed over the last decade to 17 offices and 2,400 agents across Ontario.

“We failed everyone,” he wrote.

The statement was not signed by his business partner Fedele Colucci. 

Alves said iPro is not the only brokerage in Ontario that operates by moving trust account funds into its general accounts.

He called it a “vulnerability in the system,” and one that Real Estate Council of Ontario (RECO) should consider addressing.

RECO has been under fire by the industry and consumers for its handling of the iPro situation. It said it became aware of the trust account shortfall in May, leaving many to question why the public wasn’t notified until August. 

This week, RECO obtained several court orders, with one of them freezing Alves and Colucci’s assets. RECO is pursuing iPro for removing and misusing consumer deposits and agent commissions held in trust. 

RECO said in its original court application that it is seeking to trace the flow of trust funds that were diverted and return them to the trust accounts.

iPro’s offices shut down on Aug. 19. The total amount missing is now closer to $6.5 million, since the brokerage’s assets were sold to iCloud Realty for $3 million.

Police investigation in ‘early stages’

The Ontario Provincial Police (OPP) Anti-Rackets Branch is in the early stages of an investigation related to iPro.

OPP spokesperson Eric Cranton told Real Estate Magazine on Thursday that the police service cannot speculate on how long the investigation will take or what the outcome will be.

“We will take the time needed to conduct a complete and thorough investigation,” wrote Cranton.

Courtney Zwicker

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.

The post Trust money used to ‘save’ struggling iPro, not for personal gain: Alves appeared first on REM.

The following is the text from the undertaking agreement signed on Aug. 8 by iPro Realty Ltd. principals Fedele Colucci and Rui Alves, and Joseph Richer, former Real Estate Council of Ontario registrar. The agreement is contained within RECO’s motion record filed with the Ontario Superior Court of Justice, which can be found here.

WHEREAS Fedele Colucci is registered as a broker under the Trust in Real Estate Services Act, 2002 is the broker of record, an officer and a shareholder of iPro Realty Ltd.;

WHEREAS Rui Alves is registered as a broker under TRESA and is an officer and a shareholder of iPro Realty Ltd.;

WHEREAS iPro Realty Ltd. is registered as a brokerage under TRESA;

WHEREAS an inspection conducted in May 2025 determined that there was a significant shortage in the Brokerage’s real estate trust account and commission trust account (The RETA and CTA) of approximately ten million five hundred thousand dollars
($10,500,000);

WHEREAS Colucci and Alves have undertaken efforts towards complete restitution;

AND WHEREAS the Brokerage has entered into an agreement wherein it will receive the sum of three million dollars ($3,000,000) from the proposed brokerage of iCloud Realty Ltd. on or before July 31, 2025;

NOW THEREFORE, in consideration of the mutual covenants and promises set out below, the Parties agree as follows:

1. Colucci, Alves, and the Brokerage each agrees and undertakes to cancel their registrations no later than August 19, 2025, by providing notice of cancellation in writing to RECO and if they fail to do so, then they each hereby direct RECO to cancel their registrations on August 20, 2025.

2. Colucci, Alves, and the Brokerage each agrees and undertakes that any monies or other Brokerage related remuneration owing, now or in the future, to Alves or Colucci shall not be paid to them, but shall instead be deposited into the Trust Accounts shortfall.

3. Colucci, Alves, and the Brokerage each agrees and undertakes to transfer all the Brokerage’s receivable funds, including direct entitlements (such as transaction remuneration share, monthly/desk fees, etc.), to the Brokerage Trust Accounts, to be applied to the Brokerage’s trust shortfalls , with the exception of amounts are identified in advance and communicated to RECO prior to payment.

4. Colucci, Alves, and the Brokerage each agrees and undertakes to immediately deposit all funds received under any agreement with iCloud Realty Ltd.to the Trust Accounts, to be applied to the Brokerage’s trust shortfalls.

5. Colucci, Alves, and the Brokerage each agrees and undertakes that all funds held at the time of execution of this Undertaking Agreement, in any financial institution accounts in the name of Hippo Holdings Corporation shall immediately be transferred to the Brokerage’s Trust Accounts, to be applied to the Brokerage’s trust shortfalls.

6. Colucci, Alves, and the Brokerage each agrees and undertakes to make best efforts to ensure that consumer deposits received in trust by the Brokerage on or after May 19, 2025 will be reserved and allocated for the transactions for which the deposits were received, and not to satisfy Brokerage obligations pertaining to earlier deposits that were misappropriated for other Brokerage business or
transactions.

7. Colucci, Alves, and the Brokerage each agrees and undertakes that they, and the person designated to act as the broker of record during the course of the Brokerage wind-up, will manage the distribution of funds from the Trust Accounts under the guidance of RECO and the Professional Liability Insurance Program administration.

8. Colucci, Alves, and the Brokerage each agrees and undertakes that any and all surplus funds remaining Trust Accounts following the closing of all pending Brokerage transactions, will be conveyed to RECO’s Professional Liability Program administration.

9. Colucci, Alves, and the Brokerage each agrees and undertakes that as of August 15, 2025 they will not receive or deposit any new consumer funds into the RETA.

10. Colucci, Alves, and the Brokerage each agrees and undertakes to terminate all client representation agreements at the earliest practicable opportunity and further agrees to facilitate the sharing or transfer of any related information or documentation with a new brokerage of the client’s choice.

11. Colucci, Alves, and the Brokerage each agrees and undertakes to provide the Registrar, no later than August 12, 2025, with:

i. a comprehensive list of all Brokerage liabilities;

ii. the May 2025 and June 2025 reconciliations of all accounts maintained by the Brokerage including accounts in the name of other entities maintained by Colucci, Alves, and the Brokerage;

iii. the May 2025 and June 2025 official financial institution statements of account for all accounts maintained by the Brokerage, including accounts in the name of other entities maintained by Colucci, Alves, and the Brokerage, including cancelled cheques;

iv. a list of all pending trades, including transactions pending completion and active representation agreements, with details regarding the timeline for concluding the trade, whether transaction completion or representation agreement termination;

v. A report detailing the total gross remuneration outstanding to each salesperson and broker within the brokerage for pending trades; and

vi. A report detailing the total gross remuneration owing to each salesperson and broker within the brokerage for completed trades.

12. Colucci, Alves, and the Brokerage each agrees and undertakes that, on or before August 11, 2025, they will hire a broker under TRESA to assume the responsibilities and obligations of the broker of record for the Brokerage to wind up the operations of the Brokerage, with the wind-up to commence no later than August 19, 2025. They further agree and undertake to hire an Ontario Certified Public Accountant , who is in good standing with CPA Ontario, to oversee and conduct the proper, effective and efficient execution of the Brokerage wind-up. They further agree that the person assuming the role of broker of record must be approved by RECO and have brokerage management
experience and the CPA Ontario member must be approved by RECO.

13. Colucci, Alves, and the Brokerage each agrees and undertakes that commencing August 27, 2025, and until the activities of the Brokerage are wound up, the Brokerage shall provide RECO delivered every Wednesday no later than 5:00 P.M. current to the previous Friday, detailing Brokerage wind-up activities completed, including, but not limited to the following information and documentation:

i. The July 2025 reconciliation of all accounts maintained by the Brokerage including accounts in the name of other entities maintained by Colucci, Alves, and the Brokerage;

ii. The July 2025 official financial institution statements of account for all accounts maintained by the Brokerage, including accounts in the name of other entities maintained by Colucci, Alves, and the Brokerage, including cancelled cheques;

iii. An updated list of all trades completed since July 31, 2025, accompanied by final trade record sheets that detail all disbursements for each trade;

iv. An updated list of all trades that failed to complete, detailing the status of any deposit funds related to the trade;

v. An updated list of representation agreements that continue to be active with the Brokerage, detailing the timeline for termination of the agreement;

vi. An updated list of all pending transactions, detailing for each transaction: the address of the property that is the subject of the trade; names of the buyer and the seller; their respective brokerages; completion date; Multiple Listing Service (MLS®) number; amount of deposit being held by the Brokerage; outstanding remuneration; transaction completion date; and the date by which any outstanding conditions are to be waived or fulfilled;

vii. For each pending transaction transferred to another brokerage, details of which brokerage, and whether the trust funds connected to that trade have been transferred from the Brokerage;

viii. The monetary quantum of liabilities for all accounts operated by the Brokerage including but limited to the RETA and CTA of the Brokerage and of iPro Realty Inc.;

ix. The sum of all funds disbursed;

x. A current financial institution statement of account for all accounts maintained by the Brokerage, including accounts in the name of other entities maintained by Colucci, Alves, and the Brokerage indicating all account activity within the reporting period; and

xi. Any other information, documentation or reports as RECO may request.

14. Colucci and Alves each agrees and undertakes to not seek, at any future time, registration under TRESA or any successor legislation, and further acknowledges, understands and agrees that:

i. The Undertaking Agreement is binding, permanent, and irrevocable;

ii. The Undertaking Agreement expressly prohibits Alves s right, eligibility and entitlement, however so arising, to registration under TRESA or any successor legislation at any future time;

iii. Colucci and Alves each expressly and irrevocably waive any and all rights, no matter howsoever arising, to seek registration under TRESA or any successor legislation; and

iv. Any future attempt to seek registration under TRESA, or any successor legislation, shall be considered a fundamental breach of the Undertaking Agreement and shall constitute valid, reasonable and sufficient grounds for refusal and/or denial of an application for registration, including, amongst other things, constituting reasonable grounds for belief that Colucci and Alves will not carry on business, under TRESA or any successor legislation, in accordance with law and with integrity and honesty.

15. Effective the date of the cancellation of their registration, neither Colucci nor Alves shall, in any manner, trade in real estate, subject to the exceptions under section 5 of TRESA, or similar provision under any successor legislation. Further, Colucci and Alves each agrees, represents and warrants that, from the date of the cancellation of their registration, neither shall act as a sole proprietor, partner, shareholder,
officer, director, branch manager, interested person or associated person of any brokerage registered under TRESA or any successor legislation, nor engage in any activity that could reasonably be interpreted as performing the functions of any of the aforementioned roles and positions.

16. Colucci and Alves and the Brokerage each agrees and undertakes to cooperate fully with any inquiry or investigation surrounding the past conduct and operation of the Brokerage, and to provide to RECO, through counsel, a full account of the financial issues affecting the Brokerage. This includes but is not limited to: identifying all investors from whom the Brokerage accepted funds, specifying the amounts
received from each investor, payments made to each investor and outstanding amounts owing to each investor; detailing the creation and use of bank accounts including accounts in the name of other entities maintained by Colucci, Alves, and the Brokerage; and describing any systems implemented in respect of the financial operations of the Brokerage.

17. In consideration of, and in reliance upon the terms of this agreement, RECO agrees and undertakes to not request of the Court that Provincial Offences Act charges be filed against Colucci and Alves and to not take any further administrative action against Colucci and Alves.

18. Colucci, Alves, and the Brokerage each acknowledges and agrees that nothing in the Undertaking Agreement restricts RECO and/or the Registrar from taking any action against Colucci and/or Alves with respect to any new conduct on unrelated matters.

19. Colucci, Alves, and the Brokerage each further agrees and undertakes to cooperate fully with RECO and any other party in all activities that support the efficient and effective wind-up of the Brokerage, for the benefit and convenience of all impacted parties.

20. Colucci, Alves, and the Brokerage each understands that the Undertaking Agreement is not confidential and information of the circumstances surrounding the Brokerage wind-up may be disclosed to the public at the sole discretion of the Registrar.

21. Colucci and Alves each agrees to not make any representations that are inconsistent with the Undertaking Agreement.

22. If any term of the Undertaking Agreement is deemed to be invalid, illegal, unenforceable or a mutual mistake, the Parties may elect to sever that term from the agreement and the remaining terms shall remain in full force and effect.

23. The Undertaking Agreement may be executed in counterparts, and a scanned or electronic copy shall constitute a valid and binding agreement between the Parties.

24. Colucci, Alves, and the Brokerage each acknowledges and agrees that each has had an opportunity to obtain independent legal advice in respect of the terms of the Undertaking Agreement, has read this agreement in its entirety, understands its contents and is signing this agreement freely and voluntarily without duress or undue influence from any person.

The post See the agreement RECO’s former registrar signed with iPro’s Colucci and Alves appeared first on REM.

Below is a letter written by Ontario Real Estate Association (OREA) president Cathy Polan, which was sent to the association’s membership and obtained by Real Estate Magazine. 

I’ve been a Realtor for over 16 years, and in that time, I have never seen anything more deplorable than what I’ve seen happen with the Real Estate Council of Ontario (RECO) in the wake of the iPro Realty Ltd. scandal. Thousands of agents and consumers have been left without commissions, without deposits, and without a hope for the future.

I know you are all constantly receiving troubling information on this matter, and I am too. I am as angry and frustrated as you are. This should not have happened, and I will do everything in my power to ensure something like this never happens again.

Our members and those affected deserve to have answers and deserve retribution. OREA is having ongoing conversations with government officials and industry leaders calling for action to be taken to ensure the integrity of our industry is upheld. Though we do not have the authority to intervene directly on behalf of our members regarding this matter, we have taken every opportunity to engage RECO and the Government of Ontario in an effort to assist those affected and have to date released six public statements regarding this issue.

I want to assure you that OREA is in no way being complacent, but there are limits to what we can do. This matter is currently the subject of an ongoing police investigation, and is before the courts with an independent investigation being done by Dentons LLP, with ministerial oversight. That is why it is imperative that we let the professionals do what they need to do – in the sincere hope that justice will be done.

This situation has only further demonstrated the far-reaching impact that regulatory decisions can have on Ontario’s buyers, sellers, real estate professionals, and overall consumer confidence in the real estate market and industry. OREA will continue in our advocacy efforts with government to ensure that when it comes to ethics and consumer protections, both Realtors and Ontarians can have confidence in Ontario’s real estate market and its regulation – and we will continue to update members as we have more information to share.

I cannot undo what has been done, but moving forward, I promise to do everything I can to make sure that this never happens again.

Cathy Polan

Cathy Polan is president of the Ontario Real Estate Association.

The post ‘I have never seen anything more deplorable’: Polan on RECO and iPro fallout appeared first on REM.

Justice William Black of the Ontario Superior Court of Justice heard the matter virtually. RECO is pursuing iPro for removing and misusing consumer deposits and agent commissions held in trust. 

RECO said in its original court application that it is seeking to trace the flow of trust funds that were diverted and return them to the trust accounts from which they were taken.

iPro’s 17 offices shut down on Aug. 19, affecting 2,400 agents, following the discovery of  $10.5 million missing from the brokerage’s trust accounts. The total amount missing is now closer to $6.5 million, since the brokerage’s assets were sold to iCloud Realty for $3 million.

Justice Black’s orders specifically include a Mareva injunction, or a freezing order, which prevents the respondents from moving assets before the case is resolved.

 Under a separate order, iPro’s former principals may apply for an order specifying the amount of funds they are entitled to spend on “ordinary living expenses, and legal advice and representation.”

Norwich Relief was also ordered, which compels banks to deliver to RECO any and all records pertaining to the respondents’ assets and accounts. 

The list of respondents includes companies that either Colucci, Alves, or both are directors of, including: IP Holding Realty Ltd., Hippo Holdings Corporation, Sutton Group Professional Real Estate Services Inc., Alco Motors Ltd., and Alco Rent-A-Car Ltd.

In total, roughly $30 million of funds that should have been held in trust were instead commingled with the firm’s general account or sent elsewhere, according to court filings.

For more details, find court documents related to the matter here.

Courtney Zwicker

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.

The post RECO lands court order to freeze iPro founders’ assets appeared first on REM.

New evidence filed by the Real Estate Council of Ontario (RECO) last week in the ongoing court action against Colucci, Alves, and their companies reveals what appears to be a complex scheme of trust fund misappropriation by iPro’s former owners through a network of accounts and entities.

RECO, in the case filed with the Ontario Superior Court of Justice, argues that Colucci and Alves “systematically misused trust funds” by moving them into operating accounts and related companies, and, through direct payments, to themselves and their associates.

Findings from the 700 pages of affidavits of RECO CEO Brenda Buchanan and forensic accountant Alessandra Leggio Di Matteo show a massive diversion of funds siphoned from iPro’s legal trust accounts into regular operating accounts.

In total, roughly $30 million of funds that should have been held in trust were instead commingled with the firm’s general account or sent elsewhere.

At least $14.3 million was moved via electronic transfers and $10.1 million via cheques from the brokerage’s trust accounts into its general accounts, court documents show. An additional $2.63 million in trust cheques were made out to “iPro Realty Ltd.” but deposited into unknown destinations.

The documents, prepared by RECO’s counsel Dentons Canada, also show iPro Realty Inc. – a separate entity from the brokerage – transferred $3.4 million from its own trust accounts to its general account, and wrote hundreds of thousands in cheques from its trust to iPro’s other accounts.

In a statement, RECO said these affidavits set out to prove its assertion that a deliberate trust scheme was orchestrated by iPro’s former principals and related parties “to divert and misuse consumer deposits and agent commissions that were required to be held in trust on their behalf.”

“This scheme represents a serious breach of fiduciary, statutory, and ethical obligations, and has harmed consumers, registrants, and the broader real estate sector,” said RECO.

RECO’s proceeding seeks a freeze of assets and further requests a court order that will permit RECO to trace the flow of trust funds that were diverted and return them to the trust accounts from which they were taken.

The list of respondents includes companies that either Colucci, Alves, or both are directors of, including: IP Holding Realty Ltd., Hippo Holdings Corporation, Sutton Group Professional Real Estate Services Inc., Alco Motors Ltd., and Alco Rent-A-Car Ltd.

These companies have “knowingly assisted” iPro and its co-founders’ breaches of duties, reads the original application, “and have knowingly received funds impressed with a trust under the (Trust in Real Estate Services Act) and at common law.”

iPro’s 17 offices shut down on Aug. 19, affecting 2,400 agents, following the discovery of $10.5 million missing from the brokerage’s trust accounts. The total amount missing is now closer to $8 million, RECO has said.

Where did the funds go?

RECO is arguing that once funds were improperly in the general accounts, the money was used for a variety of unauthorized purposes, particularly to repay investors and lenders.

The forensic review found $870,158 in cheques issued from iPro’s general accounts to people listed on an internal “IPRO Loans List”.

Similarly, $1.05 million was paid out of Hippo Holdings’ account to names on a “Hippo Investors List,” documents show

Additionally, forensic analysis found Colucci received at least $172,864 via cheques from iPro Realty’s general account, plus $137,795 more via cheques out of Hippo’s account.

Rui Alves likewise received $108,145 in cheques drawn from iPro Ltd. and iPro Inc. general accounts, court documents show.

Moreover, Joselle Alves Personal Real Estate Corporation (owned by Alves’ spouse) received $41,000 in payments, and Meli Colucci (spouse of Colucci) received $42,893, both paid out of iPro’s general accounts.

In its statement to the media, RECO said the evidence demonstrates that the “true state” of the trust accounts was purposefully concealed by:

• Operating multiple accounting systems
• Falsifying records
• Delaying disclosure until immediately before a scheduled inspection

“In doing so, they not only betrayed the trust of thousands of Ontarians but also misled other parties who relied on their compliance,” said RECO.

RECO says it is continuing to cooperate with law enforcement in support of their investigations.

Courtney Zwicker

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.

The post This is where the iPro trust money went, according to RECO evidence appeared first on REM.