The Ontario government has formally notified its real estate regulator, the Real Estate Council of Ontario (RECO), that it may take control if it is dissatisfied with the findings of an ongoing audit related to the iPro Realty scandal. Minister Stephen Crawford sent a two-page letter outlining the government's expectations for the review to RECO board chair Katie Steinfeld.

Crawford emphasized that the audit should be comprehensive, stating it must "examine the roles, responsibilities, actions and decisions" of all RECO staff, management, and board members involved in the iPro Realty case. In May, RECO's investigation revealed that iPro Realty co-founders Rui Alves, a former RECO board member, and Fedele Colucci had "illegally disbursed" $10.5 million from the brokerage’s consumer deposit and commission trust accounts.

Following this, RECO facilitated the transfer of 2,400 employees from iPro Realty to iCloud Realty and reached an agreement that allowed Alves and Colucci to avoid charges and fines. This financial breach is noted as the largest ever investigated by RECO.

Earlier this week, RECO announced it had hired Dentons Canada to conduct the audit, which is expected to be completed by late October. Crawford's letter indicates he expects regular updates on the audit's progress. While RECO has stated it will publish recommendations from Dentons' final report, Crawford insists that the findings should also be made public.

"Following this, I will assess whether further oversight measures or remediation are warranted," Crawford wrote. He added, "If I am not satisfied with the conduct or the findings of the audit, I will not hesitate to take further measures, including through the appointment of an administrator to assume control of RECO."

Crawford's letter did not instruct RECO to initiate a police investigation, which raised concerns for the Ontario Real Estate Association (OREA). OREA President Cathy Polan expressed that trust in the regulator has been severely damaged. "Without decisive reform, it will continue to undermine the businesses of hardworking agents, the confidence of consumers, and the stability of Ontario’s housing market," she stated. Polan urged the Minister to request the Ontario Provincial Police to investigate proactively if RECO does not.

OREA is also advocating for the Ontario Ombudsman to extend oversight to RECO, noting that over 1,000 other arms-length government agencies are under the Ombudsman’s jurisdiction, while RECO remains exempt.

In response to the letter, Steinfeld confirmed that the board is committed to restoring public confidence in the real estate sector. "We appreciate that the Minister has set out clear expectations for how the important work of the independent comprehensive audit is to be conducted," she said. Steinfeld assured that the RECO Board will strive to protect the rights, deposits, and commissions of affected homeowners, agents, and brokerages, aiming for greater transparency and enhanced consumer protection measures.