Ontario assigns administrator to oversee real estate regulatory authority
The Ontario government has appointed an administrator to oversee the Real Estate Council of Ontario (RECO) in response to serious regulatory failures. This decision comes after a troubling mismanagement case involving iPro Realty Ltd. Stephen Crawford, the Minister of Public and Business Service Delivery and Procurement, announced the appointment of Jean Lépine, effective December 1.
Background on RECO and the iPro Incident
RECO, a non-profit organization, regulates over 110,000 realtors and brokers in Ontario. Recently, the council faced criticism after it was revealed that more than $10 million was misappropriated from iPro Realty Ltd.’s trust accounts. iPro, once one of the largest brokerages in the province with over 2,400 realtors, prompted intense scrutiny of RECO’s operations.
On November 13, Mr. Crawford indicated his intention to appoint an administrator following a report by the law firm Dentons Canada LLP. The report highlighted significant concerns about RECO’s organizational culture and handling of the iPro Realty case.
Appointment of Jean Lépine
Jean Lépine, a seasoned communications executive, will oversee the operations at RECO. He has held various roles within federal and provincial governments and was most recently the chief strategy officer for Ontario One Call, recognized for its public safety campaigns. His expertise is expected to aid in restoring credibility to the regulator.
Legal Framework for the Appointment
Under provincial legislation, the cabinet has the authority to appoint an administrator, effectively superseding existing board members. This legal provision allows for immediate board removal, placing power in the hands of the newly appointed administrator.
Industry Reactions to the Appointment
- Cathy Polan, president of the Ontario Real Estate Association, supports this move as essential for RECO to fulfill its consumer protection role.
- Former RECO board member John Lusink advocates for a major reset within the organization, suggesting that the administrator refer to a 2022 Auditor-General’s report highlighting deficiencies in financial inspections.
RECO’s chair, Katie Steinfeld, expressed that the board had begun addressing concerns about its organizational effectiveness. She conveyed intentions to collaborate with the government while defending RECO’s management of the iPro affair.
Looking Ahead
This governmental intervention raises expectations for a significant transformation within RECO. Stakeholders hope this shakeup will enhance the regulatory oversight in Ontario’s real estate sector, ultimately benefiting consumers and maintaining industry standards.
