When regulation fails — and government intervenes: What’s happening at RECO
Published: December 1, 2025
Author: Nick & Zina Gewarges
For over two decades, the Real Estate Council of Ontario (RECO) has served as the independent regulator overseeing real estate professionals (salespersons, brokers, and brokerages) in Ontario. Its job: administer and enforce the law under the Trust in Real Estate Services Act (TRESA), ensure consumer protection, register real estate professionals, and uphold ethical, transparent standards in the real estate sector.
But in late November 2025 — in a move with major implications for the real estate industry and consumers — the provincial government announced it is formally taking over control of RECO. Source: CityNEWS
What triggered the takeover: The iPro scandal and a damning audit
The catalyst for this dramatic intervention was the collapse of a brokerage, iPro Realty Ltd., and revelations about financial mis-management tied to its trust accounts. iPro told RECO in May 2025 that it had a $10 million shortfall in its trust fund — money meant to hold deposit funds or commissions on behalf of clients. Source: REM
Despite this massive shortfall, RECO’s registrar did not freeze iPro’s accounts or take formal enforcement action for nearly three months. Instead, leadership opted for an informal “undertaking agreement” — a serious departure from standard enforcement protocol, according to a subsequent audit by Dentons Canada LLP. Source: Ontario
The Dentons report unearthed systemic problems: unclear policies, a lack of documentation, and a culture within RECO that failed to support accountability. The audit described RECO’s decision-making as “unilateral and sheltered,” with an “empowered registrar” allowed to act without meaningful oversight.
These aren’t trivial missteps. For many real estate professionals, brokers, and clients, RECO’s failure to act quickly and decisively has resulted in misplaced trust — with serious financial and emotional consequences for agents waiting on commissions and consumers uncertain whether their deposits remain protected.