The province’s real estate watchdog is immediately freezing iPro Realty Ltd.’s funding as it probes the Toronto-area brokerage for its multi-million-dollar shortfall.
On Monday, the Real Estate Council of Ontario (RECO) said it is doing this to “safeguard funds and secure business operations” as it carries out a comprehensive audit into the real estate brokerage.
RECO shuttered iPro earlier this month due to a “significant shortfall” of $10 million in commission and consumer deposit trust accounts. That figure is now believed to be less than $8 million, RECO says.
The brokerage had 17 branches, including two in Mississauga and three in Toronto, and employed roughly 2,400 agents.
Freezing iPro’s accounts protects homebuyers and sellers during this time, RECO says, as all transactions will now be processed through ClaimsPro LP, an insurance adjusting firm.
The real estate regulator says it will thoroughly communicate with anyone with pending transactions, including information on what to do next.
“RECO’s board of directors takes its responsibility to protect consumers and registrants seriously. We have directed the CEO 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,” RECO chair Katie Steinfeld said in a news release.
Dentons Canada LLP is helming an independent audit into iPro and is expected to provide an interim report to RECO by Sept. 30 with the full report completed a month later. RECO’s CEO, Brenda Buchanan, will review all compliance files as well as the audit, investigation and enforcement procedures, the board says.
The real estate regulator said it knew of iPro’s significant financial shortfall before a scheduled inspection of the brokerage’s accounts.
“The funds that were unaccounted for were to have been held in the consumer deposit and commission trust accounts, but we have not yet confirmed the number of consumers or agents affected,” Joseph Richer previously told CTV News Toronto. Richer, the registrar appointed under the Trust in Real Estate Services Act, 2002, has since left RECO.
“This is a serious breach of iPro’s responsibilities under the law and to its consumers and agents.”
Peel Regional Police confirmed to CTV News Toronto that RECO contacted police on Aug. 15 to notify their fraud bureau of its ongoing investigation into the “potential improprieties” within the Mississauga-based brokerage.
“Although a criminal investigation has not yet commenced, a referral from RECO to the police may occur in the future subject to the Fraud Bureau’s receipt of a full briefing with respect to RECO’s findings and available evidence to date,” Const. Tyler Bell-Morena said in an emailed statement.
“An assessment of the information for criminal process suitability will then take place in line with the Fraud Bureau’s intake procedure.”
Steinfeld says she knows most agents and brokers deliver professional services to the public, and do so with the “highest level of integrity.”
“The entire board is deeply committed to the effective regulation of the sector and expects that rogue players be held to account for their actions,” she said in Monday’s release.
“All real estate transactions must be completed with the utmost honesty and integrity and consumers in Ontario must be protected.”
With files from CTV News Toronto’s Phil Tsekouras