The RECO/iPro Fallout: What Happened, Why It Matters, and What Comes Next
These are just my reflections, and your own experiences or opinions may lead you somewhere different — and that’s completely okay.
Over the past few weeks, conversations with our colleagues in Ontario have had one common theme: the RECO/iPro situation
- and wow, what a storm it’s become.
For anyone outside Ontario, RECO is the Real Estate Council of Ontario, the regulatory body responsible for consumer protection and industry oversight - similar to what the Manitoba Financial Services Agency (formerly the Manitoba Securities Commission) does here. Both regulators are tasked with safeguarding the public through enforcement of their respective legislation (Ontario’s Real Estate and Business Brokers Act and Manitoba’s Real Estate Services Act).
A Significant Move: Ontario Government Takes Control of RECO
In late November 2025, the Ontario government announced it would take direct control of RECO and appoint an external administrator effective December 1.
The administrator, Jean Lépine, was selected following an independent audit that raised serious concerns about how RECO handled one of the largest brokerage-related trust account failures in recent memory.
According to Ontario’s Minister of Public and Business Service Delivery, the decision reflects a widespread loss of confidence in RECO’s ability to fulfill its mandate and protect the public interest. Industry organizations - including the Ontario Real Estate Association - have publicly supported the intervention, calling it a necessary reset toward transparency and accountability.
What Sparked the Takeover: The iPro Realty Trust Account Scandal
The immediate trigger was the fallout from iPro Realty Ltd., a major Ontario brokerage accused of mishandling millions in trust funds - money belonging to consumers and Realtors.
The audit (conducted by Dentons Canada LLP) found:
A trust shortfall of approximately $10.5 million that was not immediately frozen or secured.
A prolonged period of inaction after the shortfall was reported, during which iPro continued operating and processing transactions.
A regulatory response that deviated from established procedures, raising concerns about decision-making, documentation, oversight, and communication.
Serious governance gaps within RECO, including internal accountability and enforcement issues.
Taken together, the findings suggested that the regulator responsible for protecting the public failed to act decisively at a critical moment.
What the Government Is Doing Now
With the administrator now in place, RECO’s board and leadership structure have effectively been replaced - at least temporarily.
The goals of the intervention are clear:
Restore consumer and industry confidence
Strengthen oversight and governance
Ensure future enforcement is timely, transparent, and aligned with public protections
Review RECO’s internal processes, culture, and accountability mechanisms
Industry groups have expressed optimism that this marks a turning point toward a more robust and responsive regulatory environment.
Why This Matters for Realtors, Brokers, and Clients Alike
Rebuilding Trust
Consumers rely on regulators to safeguard deposits, commissions, and the integrity of real estate transactions. A failure of this scale shakes trust - and rebuilding it requires strong corrective action.
Higher Standards and Stronger Oversight
This kind of intervention signals that governments will step in when self-regulation falls short. It may lead to stricter auditing, tougher enforcement, and more rigorous compliance expectations for brokerages across Canada.
Short-Term Uncertainty - Long-Term Stability
There may be temporary pauses or reviews of licensing files, complaints, or enforcement processes. But over time, this should lead to clearer rules and stronger protections for everyone.
A Reminder for the Industry
Ethics and transparency are not optional in real estate. When trust accounts, consumer funds, or compliance practices are compromised, the ripple effects are enormous - and regulators are now showing they are willing to intervene decisively.
What We Expect Moving Forward
With the administrator’s oversight, we will likely see:
A full review of RECO’s governance and administrative structure
Updated or modernized enforcement protocols
Greater transparency around disciplinary outcomes
Expanded trust-account monitoring and inspection processes
Potential ripple effects across other provincial regulators who may feel increased pressure to tighten oversight
As professionals, it’s our responsibility to stay informed - and to help our clients feel confident that their transactions are safe, secure, and supported by strong internal systems.
Timeline of Key Events
2021
RECO conducts an inspection of iPro Realty.
No further public disciplinary actions are recorded in the subsequent years.
May 2025
iPro notifies RECO of a $10.5M trust account shortfall affecting deposits and commissions.
RECO schedules a follow-up inspection.
May–July 2025
Despite the trust deficit being known, iPro continues to operate for several months.
Trust accounts are not immediately frozen or restricted.
August 2025
August 14 – RECO announces iPro will close all 17 branch locations by August 19.
iPro’s founders voluntarily surrender their licenses.
The Registrar, Joseph Richer, is removed.
RECO freezes iPro’s trust accounts and commissions an independent audit.
September 2025
Dentons Canada LLP is retained to conduct a full audit.
Steps begin to recover consumer and registrant funds.
Early November 2025
November 13 – Dentons delivers its final report to government.
The audit identifies significant deficiencies in RECO’s internal oversight, governance, and documentation processes.
Minister Stephen Crawford formally warns RECO's board that failure to address the findings would trigger government action.
RECO is given 15 days to respond with a corrective plan.
Late November 2025
November 28 - The Ontario government announces it is assuming control of RECO.
Jean Lépine is appointed as administrator effective December 1, 2025.
Why This Timeline Matters
The months-long gap between discovery and decisive regulatory action was a central failure identified in the audit.
Allowing a brokerage with a known multimillion-dollar shortfall to continue operations raised serious questions about consumer protection.
The swift government takeover following the audit underscores how significantly confidence had eroded.
For consumers, for agents, and for brokerages - this represents a reset. It signals a move toward more rigorous trust-account oversight, better governance, and higher expectations across the industry.
And while this happened in Ontario, the lessons resonate nationwide. Manitoba’s regulators - and certainly its Realtors - are paying close attention. Safeguarding trust is at the core of what we do, and situations like this remind us why strong systems matter.
What this Means for Manitoba
Although this situation unfolded in Ontario, the lessons land loudly here at home.
Manitoba’s regulators will no doubt take note — and REALTORS® certainly are.
Strong systems matter.
Clear oversight matters.
Swift action matters.
The trust Canadians place in us is profound — and moments like this remind all of us why safeguarding that trust is non-negotiable.
My Opinion
I’ve been asked whether something like the RECO/iPro situation would be handled more swiftly here in Manitoba if it ever came to light. And the truth is… I’m not entirely confident in our capacity in Manitoba.
From the outside looking in, the MFSA appears significantly understaffed and stretched thin in practice. Realtors in Manitoba waited nearly three years for clarification on a marketing policy tied to the Real Estate Services Act — a policy introduced in 2022, with formal guidance finally released at the end of 2025.
If you’ve ever tried calling the MFSA, you may understand the frustration. For two weeks straight, I phoned regularly, only to reach a voicemail that was full and instructed me to email instead. That email went unanswered until I begged someone from the Manitoba Real Estate Association to also send an email.
And when it comes to licensing — whether new applications or upgrades (which I’m personally in the process of doing) — brokers across the province have been advising: don’t hold your breath. Approvals that once took days now seem to take weeks. For perspective, when I passed all my courses years ago and submitted proof to the MSC, my real estate license was issued within two business days.
So, could something like the iPro situation happen in Manitoba? From a staffing and response-time perspective, it’s certainly plausible. But here’s where my confidence differs: I do believe our Registrar would treat a matter of this scale with far more urgency. Many of RECO’s failings stemmed from a Registrar who simply did not act. Based on internal RECO documents revealed in court, the decision not to immediately intervene with iPro was made in roughly 22 minutes — a staggering lapse given the gravity of the situation.
In Manitoba, I do believe the regulator’s response would be firmer, faster, and more decisive. And honestly, we’re better off for that.
Here’s hoping we never have to see anything like this unfold in our own backyard — for the sake of both consumers and Realtors alike.
Questions or thoughts? We’d love to hear them.
Email us anytime at hello@queenteam.ca.
Jennifer Queen
Phone: (204) 797-7945
Email: Jennifer@QueenTeam.ca