The Ontario government is reviewing whether to assume direct control of the Real Estate Council of Ontario after an audit reported broad failures in its handling of the iPro Realty case. Minister Stephen Crawford outlined his concerns in a letter to RECO Chair Katie Steinfeld, citing findings from an independent review by Dentons Canada LLP.
Crawford wrote that the audit uncovered “significant issues” in RECO practices, processes, procedures, and culture. He warned that these problems weakened RECO’s response to the iPro file and reduced trust across the real estate sector. He also questioned RECO’s ability to regain public confidence and deliver strong consumer protection.
Crawford told the board he is weighing the appointment of an external administrator to oversee RECO operations. He said this step is under consideration to prevent harm to consumers and restore confidence in the regulator.
RECO launched the audit in August after the closure of iPro Realty. On May 19, RECO reported that iPro co-founders allegedly redirected about eight million dollars from trust accounts intended for down payments and realtor commissions. Despite this shortfall, RECO did not issue charges or fines. The brokerage continued to operate for four more months before shutting down. iPro ran 17 branches across the GTA and employed roughly 2,400 agents.
Crawford gave RECO 15 days to respond. He said the government will move forward with a decision once it reviews the board’s reply. He added that the province will strengthen consumer protections to support confidence in real estate transactions.
RECO acknowledged receipt of the letter Thursday evening and released the full audit report. The review said the former registrar “deviated from RECO’s typical approach when dealing with situations involving misappropriation of trust funds.” It also said the registrar informed the board only after signing an Undertaking Agreement with iPro and its principals.
The report noted that the registrar relied on iPro’s records while negotiating the agreement and did not apply available interim controls. This left iPro accounts unmonitored for almost three months.
The review also raised concerns about a past board role held by iPro principal Rui Alves, stating that the registrar’s approach created a “reasonable apprehension of bias.” The report pointed to a “non-prosecution” clause in the agreement as another factor that risked weakening public confidence.
Former registrar Joseph Richer left his role in mid August. RECO said it will move quickly to adopt all recommendations and will work with the minister on next steps.
