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The Ontario government is considering taking control of the province’s real estate regulator after an audit into its handling of what it describes as iPro Realty’s “misappropriation” of funds.
The minister of public and business service delivery says in a statement that the review of the Real Estate Council of Ontario identifies significant issues with the regulator’s practices, processes and procedures.
“These factors contributed to deficiencies in RECO’s response to the iPro matter and created an environment in which the real estate sector has lost confidence in its regulator,” Stephen Crawford wrote in a letter to RECO.
“Ultimately, the Dentons report raises concerns about RECO’s ability to restore public confidence in the real estate services sector and to protect consumers during one of the largest purchases of their lives.”
Crawford has given the RECO board of directors two weeks to respond before he makes a final decision.
RECO said in a statement on its website that it is committed to working collaboratively with the minister to understand the proposed process, scope and next steps and has already starting implementing recommendations from the report.
“The (audit) found that in the iPro matters, the former Registrar deviated from RECO’s typical approach when dealing with situations involving misappropriation of trust funds,” RECO’s board of directors wrote.
“The report highlights a number of recommendations for greater accountability, transparency, and operational improvement which RECO is fully committed to implementing on an expedited timeline.”
The audit found that iPro told RECO that its trust accounts had a $10-million shortfall in May, but the registrar did not freeze or monitor their accounts for nearly three months.