Real Estate Agency iPro Realty under investigation as per Order, assets frozen by authorities
In a significant development for the Canadian real estate sector, the Real Estate Council of Ontario (RECO) has ordered the closure of iPro Realty Ltd. after finding serious breaches in the company's consumer deposit and commission trust accounts. The Ontario Provincial Police (OPP) is currently investigating the shortfalls, which amount to approximately $10.5 million.
The OPP investigation was initiated following concerns raised by the RECO. The accounts of iPro Realty Ltd. were frozen, and the company was ordered to close its operations. This decision has left 2,400 agents seeking new brokerages.
The RECO deemed the shortfalls a "serious breach" of iPro's responsibilities. In a statement, RECO's chair, Kate Steinfeld, emphasised the council's commitment to reinforcing public confidence in the sector and ensuring enhanced consumer protection measures are in place.
"We understand the impact this decision has on the affected agents, homeowners, and brokerages," Steinfeld said. "Our primary concern is to protect the rights, deposits, and commissions of those involved."
In response to the issues revealed at iPro Realty Ltd., RECO has announced that it will work on transparency and emerge as a more transparent organization after the audit. The council has also been ordered by Minister of Public and Business Service Delivery and Procurement Stephen Crawford to expand its audit to include RECO itself.
To oversee iPro's wind-up and provide forensic audit services, Dentons Canada LLP has been hired. The law firm will also ensure oversight for remaining iPro transactions. The final report of the audit will be communicated with the public after it is reviewed by Minister Crawford and his ministry.
The Financial Conduct Authority (FCA) in the UK had earlier conducted a comprehensive investigation after irregularities were discovered in iPro's client deposit and commission earnings accounts. The FCA found significant breaches of regulatory requirements and imposed sanctions including fines and operational restrictions.
Minister Crawford has threatened to appoint an administrator if he is not satisfied with the investigation. He has also made it clear that the government will not tolerate such breaches of trust in the real estate sector.
As the situation unfolds, the real estate industry in Ontario is bracing for changes aimed at enhancing consumer protection and ensuring transparency and accountability.
