RECO Freezes iPro Assets, Launches Internal Review
The Real Estate Council of Ontario has frozen shuttered brokerage iPro Realty’s assets in wake of a scandal that has plagued the regulator and cost its former registrar his job.
The moves come after RECO shut down iPro while deciding not to file charges or fine the company. The firm’s two co-founders also signed undertakings to never apply again to certify the brokerage or serve as brokers.
“RECO’s board of directors takes its responsibility to protect consumers and registrants seriously,” said Katie Steinfeld, RECO’s chair, in a news release. “We have directed the CEO [Brenda Buchanan] to take clear and concrete action to protect homebuyers and sellers and real estate agents and to strengthen our ability to deliver on RECO’s mandate.”
Longtime registrar Joseph Richer was ousted late last week, but industry leaders have contended that he could not have acted on the iPro case without the knowledge or consent of RECO’s top leaders.
The company has acknowledged that it mishandled about $10.5 million placed in trust accounts. RECO said iPro paid back approximately $3 million of that total.
The misplaced money includes consumer funds and broker commissions. ClaimsPro will assist both consumers and brokers with their recovery attempts.
RECO has confirmed that it knew about iPro’s financial mismanagement months ago but did not act until recently.
“It’s absolutely unacceptable that RECO has waited to freeze iPro Realty’s accounts,” Barbara Brindle, executive vice-president of strategy for Re/Max Hallmark Group of Companies, told The Toronto Star.
“It should have been done the moment an impropriety was discovered.”
Brindle serves on the regulator’s professional-practices committee.
RECO’s internal audit will involve Denton’s Canada serving as independent auditor. Denton’s mandate includes conducting an “independent and comprehensive” audit of the iPro matter and Richer’s agreement with the company on the brokerage’s shutdown.
The auditor is also slated to advise RECO’s board on legal options under the provincial Trust in Real Estate Services Act and report on the findings by October 30.
RECO has promised to release the final report’s recommendations.
The regulator has also engaged an unidentified independent accounting firm to oversee iPro’s closure and business windup, ensuring oversight of the brokerage’s remaining transactions and providing forensic-audit services.
Meanwhile, Buchanan will assess all current compliance files; the regulator’s audit, investigation and enforcement procedures; and the future new registrar’s appropriate authority and responsibilities.
Steinfeld said the vast majority of agents and brokers meet the highest level of integrity and deliver professional services. But RECO’s board expects rogue players to be held accountable for their actions.
Realtor.ca has deactivated iPro property listings.
Pictured: Former iPro Realty listing.
Photo: Realtor.ca
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