Ontario Regulator Imposes Mandatory Financial Disclosures Following iPro Realty Collapse
The Real Estate Council of Ontario will this fall require brokerages across the province to make annual financial disclosures aimed at identifying potential mismanagement.
The move is the first of the long-awaited reforms promised by the industry regulator after the financial collapse of iPro Realty Ltd., which was one of Canada’s largest brokerages before it was revealed in August, 2025, that $10-million was missing from its statutorily protected trust accounts.
“Hopefully if we do this right, there are no future iPros,” said Jean Lépine, chief executive officer and administrator of RECO. Nevertheless, he agreed that the steps are just the first in what is likely a series of moves, including introducing requirements for monthly reporting on trust accounts that could come as soon as 2027.
“We had to set a baseline first, which is why we’re doing annual financial filings so that we’ve got something to compare these monthly recs [reconciliations] against,” he said.
As of Oct. 1, the approximately 3,800 brokerage businesses in the province will be required to file annual financial statements for a fiscal year starting Aug. 1, 2025, to July 31, 2026. According to a news release from RECO, brokers who don’t meet the deadline of Oct. 30, 2026, “will be subject to prosecution. Actions may include fines, suspension of registration, refusal to renew registration, or revocation of registration.”
Under the terms of an agreement reached with RECO last August, iPro’s founders and owners – Rui Alves and Fedele Colucci – faced no disciplinary action over the missing $10-million beyond losing their licence to trade real estate. The money has not been recovered.
“We’ve continued to pursue those principals to ensure any moneys taken are going to be returned and recovered,” Mr. Lépine said. “We’re not letting go of that one.”
The handling of the iPro matter resulted in the removal of RECO’s two top executives and its entire board of directors, who were replaced by Mr. Lépine, a special administrator appointed by the province on Dec. 1, 2025, with an agenda to repair trust in the organization and in the real estate profession.
The reviews inside the industry for Mr. Lépine – who has hosted a series of consultations with real estate stakeholders – have so far been mainly positive. Still, some think annual financial filings may not be sufficient to root out future bad actors.
“Frankly, that’s irrelevant, what do you care if somebody operates a profitable business or a non-profitable business,” said Steve Tabrizi, broker/owner and chief operating officer for one of Ontario’s largest brokerages, Re/Max Hallmark Group of Companies.
Mr. Tabrizi hadn’t seen RECO’s proposal yet, but spoke about attending consultations where the idea of annual reports was mooted. He has pushed for a more direct approach of reporting on monthly trust account reconciliations, which he said is the clearest way to screen out financial mismanagement of homebuyer deposits.
“If I tell my CFO to print a trust ledger and match it with the bank balance, it’s simple, he can do it in five minutes,” Mr. Tabrizi said.
Unlike the annual reporting, the monthly reporting won’t be industrywide when it does arrive, but instead will be targeted at brokerages RECO believes pose the highest risk, according to Mr. Lépine. He also said RECO will not report publicly on the results of the financial statements. There will be no data released on “pass-fail” rates, for example.
Annual brokerage filings are a feature of some provinces across Canada such as British Columbia, Saskatchewan and Nova Scotia. RECO’s version will also require brokers to answer questions on debt levels, legal liabilities and confirmation that the broker of record is personally reviewing the trust accounts.
“We’re just catching up to the rest of the country, but it is providing us with an opportunity to be more pro-active in our work as it relates to managing risk,” Mr. Lépine said.
This article was first reported by The Globe and Mail
