The Ford government is warning it may step in to take control of Ontario’s real estate watchdog after a scandal involving collapsed brokerage iPro Realty left realtors unable to access millions in client deposits and commissions.
Public and Business Service Delivery Minister Stephen Crawford said Friday that an independent audit must provide clear answers about how the Real Estate Council of Ontario (RECO) handled the situation. “If I am not satisfied with the conduct or the findings of the audit, I will not hesitate to take further measures, including through the appointment of an administrator to assume control of RECO,” he warned.
The crisis stems from accusations that iPro Realty’s co-founders, Rui Alves and Fedel Colucci, diverted more than $10 million from trust accounts that were supposed to safeguard homebuyer deposits and realtor commissions. A RECO investigation in May found the funds were instead used for operating expenses and investor payouts. Despite the findings, the pair were not charged or fined, and iPro continued handling roughly $720 million in real estate transactions in the months that followed.
The fallout has been devastating for realtors. Toronto-area agent Nazie Moseni said she is locked out of $150,000, describing the situation as “not a joke.” She accused RECO of failing its duty, saying, “They are playing with our financial lives.” Fellow realtor Teuta Guci said nearly $1 million of her commissions are tied up, leaving her struggling to pay staff and cover expenses. “Those that are affected don’t have money to buy houses or pay their mortgages,” she said.
Mortgage broker Ron Butler called it an “unforgivable lapse” that RECO allowed the trust accounts to remain active after the misconduct came to light. He argued the regulator should have immediately shut down iPro, adding, “The government must step in in a big way and take over RECO.”
Amid mounting anger, RECO’s registrar Joseph Richer resigned earlier this month. The regulator has since hired law firm Dentons to audit its decision-making. But for many realtors, the damage is already done. “Why should we take the brunt of someone else’s mistake?” said realtor Nitin Hira. “We are being left high and dry.”
Ontario’s five largest realtor associations issued a joint statement Friday supporting a full government-led review of RECO’s governance, with calls for stronger accountability, Ombudsman oversight, and tighter enforcement tools. “Recent events, including the iPro Realty investigation, have highlighted the need for enhanced transparency and accountability at Ontario’s real estate regulator,” the statement read.
With millions frozen in trust accounts and no immediate solution in sight, frustrated realtors are planning to return to RECO’s offices this week, demanding answers and urgent action to restore confidence in the province’s real estate system.