The Ontario government is considering taking over the Real Estate Council of Ontario (RECO) after a major audit criticized the regulator’s handling of a reported $10-million trust fund shortfall involving iPro Realty.
The audit, conducted by Dentons, found significant procedural failures and raised concerns about RECO’s ability to protect homebuyers and restore trust in the real estate sector.
In a strongly worded letter, Public and Business Service Delivery Minister Stephen Crawford said the report identified serious issues with RECO’s processes, decision-making, and oversight responsibilities.
Crawford has given RECO’s board of directors two weeks to respond before he decides whether to place the regulator under direct provincial control.
According to the audit, iPro Realty alerted RECO in May that its trust accounts were short by $10 million.
Despite this, the registrar did not freeze or closely monitor iPro’s accounts for nearly three months — a delay the report says deviated from RECO’s usual approach to potential misappropriation cases.
RECO released a statement acknowledging the concerns and confirmed it has already begun implementing the recommendations.