Ontario Watchdog Seeks Asset Freeze for iPro Realty Amid Allegations

The Real Estate Council of Ontario (RECO) has initiated legal proceedings to freeze the assets of iPro Realty and its former executives as it investigates a significant alleged shortfall involving the brokerage. RECO filed a notice of application with the Ontario Superior Court of Justice, seeking an injunction that would not only freeze assets but also allow the tracing of diverted trust funds for restitution to the affected accounts.

In August, RECO shut down iPro Realty due to a reported shortfall in commission and consumer deposit trust accounts, initially estimated at $10 million. Subsequent assessments indicated that the actual figure may be closer to $8 million. The brokerage operated 17 branches, including locations in Mississauga and Toronto, and employed approximately 2,400 agents.

RECO Chair Katie Steinfeld emphasized the gravity of the situation, stating, “Consumers and agents placed their trust in iPro, and that trust was violated. RECO is committed to seeking justice for affected agents and consumers by using all available remedies to recover the funds that should have remained in trust.”

The allegations suggest that iPro’s former principals, along with other involved parties, engaged in a scheme that involved the systematic diversion and misuse of consumer deposits and agent commissions held in trust. To further investigate these claims, Dentons Canada LLP has been tasked with conducting an independent audit of iPro Realty, which is expected to produce an interim report by the end of September 2023.

While Peel police have acknowledged their awareness of the situation since August 15, 2023, they have stated that the investigation remains primarily under RECO’s jurisdiction at this time. The latest legal action taken by RECO aims to establish a clear path toward recovering the misappropriated funds.

In a recent news release, RECO reiterated its commitment to consumer protection and accountability within the real estate sector, stating, “RECO’s priority remains protecting Ontario consumers and registrants, ensuring accountability, and restoring confidence in the real estate sector.”

As of now, CTV News Toronto has reached out to iPro Realty for comments regarding the allegations, but no response has been received. The unfolding situation raises serious concerns about the integrity of real estate practices in Ontario and the potential repercussions for both consumers and agents involved.