Realtor Andrea Beitel, formerly with iPro Realty, at her house in Toronto, in September.Galit Rodan/The Globe and Mail
Realtors owed commission payments delayed for months by the collapse of iPro Realty Ltd. will begin to receive payouts of up to 50 per cent on eligible insurance claims this week, according the Real Estate Council of Ontario’s new administrator.
The move would unfreeze some of the millions of dollars in commission payments. Alternative Risk Services, the insurer, announced the total insurance costs from iPro could top $30-million: “This event is larger in scope and size than any that has occurred in 25 years of the insurance program,” the company said Monday in a statement.
“My first reaction to seeing that e-mail pop up today was joy,” said Andrea Beitel, a former iPro realtor now with Re/Max Professionals Inc. who is owed close to $100,000 in unpaid commission money. “To hear that we are potentially getting 50 per cent right before Christmas and definitely before tax time, I don’t want to get too excited but it’s going to be such a relief to get even a little bit of skin back out of the game.”
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The start of payments is among the first steps the new RECO administrator, Jean Lépine, has taken to make good on a pledge from Premier Doug Ford to cover the commissions. Mr. Ford highlighted the delays faced by realtors when he spoke at the Ontario Real Estate Association’s annual conference on Dec. 1, the same day Mr. Lépine took control of the troubled professional regulator and its governing board of directors was fired.
“They deserve their commissions,” Mr. Ford said of the realtors affected by iPro’s collapse. “We’re going to cover each and every single agent that’s owed every single penny.”
Mr. Lépine said in a statement that RECO’s priority has been to facilitate faster commission payments.
“Over my first few days with the organization, I have seen the Insurance Program Manager’s commitment to move forward swiftly to address the issue.”
RECO has been heavily criticized for its management of the iPro matter, not least because it waited months to freeze the bank accounts of what was one of Ontario’s largest real estate brokerages (with more than 2,400 agents) after its former owners reported on May 19 that $10.5-million in consumer deposits and realtor commissions had gone missing from its trust accounts.
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A report from Dentons Canada has since concluded that former registrar Joseph Richer deviated from RECO’s normal practice of immediately freezing accounts, and instead allowed hundreds of transactions to continue to process through iPro before the trust account mismanagement was disclosed to the public on Aug. 14.
Ms. Beitel is among those who say she was directly affected by the notification delay. A home purchase she negotiated with a buyer client in early June closed six weeks later in July and her $40,000 commission was scheduled to be sent on Aug. 25, the same day RECO belatedly froze iPro’s accounts. Had she known of the issues with iPro in May she says she would have left the brokerage immediately, taking her client with her and not faced an additional three months of waiting to get half the commission she’s owed.
“This year has been basically the Twilight Zone,” Ms. Beitel said. “I had full faith in this brokerage I’d been with for years … that rug got pulled out from under me, and at every turn this debacle just gets worse.”
The AR Services update also confirmed that more than $5-million in claims for consumer deposits related to home-purchase transactions have been paid out already. The update said that it has received more than 2,500 iPro-related claims, and while only about 1,000 of those claims have been assessed, it projects that there currently isn’t enough money under the program to fully pay back affected realtors.
“The combination of the $4-million insurance limits plus amounts expected to be available in the frozen iPro accounts are only sufficient to cover 50 per cent of the estimated total commission claim amounts,” the update continued.
Each claimant will be limited to a maximum of $200,000 insurance coverage, though every claim will also come with a $250 deductible that will be subtracted from what they are owed.