The Real Estate Council of Ontario (RECO) has issued an order to freeze the bank accounts of Oakville, Ont.-based Rexig Realty Investment Group. The regulator has also issued a proposal to revoke the registrations of both the brokerage and Broker Paul Poliszot, the brokerage’s director and president. 

The measures, announced Oct. 30 under the Trust in Real Estate Services Act, 2002 (TRESA), are intended to protect consumer deposits. RECO says the freeze order prevents funds from being withdrawn from the brokerage’s bank accounts. It uses freeze orders “when necessary” to ensure that money held in brokerage accounts is not at risk of being misused.

Rexig, which employs 10 agents according to the regulator, remains open. RECO says the broker of record will oversee remaining transactions and facilitate the transfer of agents and active listings to other brokerages.

Appeal process

A proposal to revoke registration is issued when the Registrar believes a brokerage or registrant is not entitled to registration. The decision can be appealed within 15 days. If no appeal is filed, Rexig and Poliszot’s registrations will be terminated, and they will no longer be permitted to trade in real estate.

Poliszot did not respond to Real Estate Magazine’s request for comment.

In a 2021 interview with REM, Poliszot described his firm as working “much like a real estate investment bank,” advising smaller investors — such as medical professionals, lawyers and entrepreneurs — on building real estate portfolios.

Province reviewing iPro audit

The enforcement action comes as the Ontario government confirms it has received Dentons Canada’s audit into RECO’s handling of the iPro Realty scandal, which involved the alleged misuse of millions in trust funds. Minister Stephen Crawford has said the findings will be made public once his review is complete, though no timeline has been given.

Consumers and agents affected by the Rexig freeze order are encouraged to contact RECO.

Editor’s note: Realty Executives has no affiliation with Rexig Realty Investment Group Ltd. A previous reference has been removed to avoid confusion.

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QUICK HITS

• Buyer refused $1.8-million farm purchase, alleging unlicensed gas wells breached environmental warranty in APS.
  
• The court ruled the warranty covered environmental matters, not gas wells; seller was entitled to $250,000 deposit plus damages.
  
• Real estate agent’s sloppy paperwork led to RECO warning, but conduct did not constitute legal negligence, the judge decided.
  
• Case highlights the distinction between professional conduct rules and negligence law; imperfect work isn’t always actionable negligence.

In disputes between a buyer and seller arising from an aborted transaction, the real estate professionals involved may be dragged into the dispute for their roles in the circumstances at issue. 

Real estate agents have a duty to act in accordance with the applicable standard of care and may be liable for damages when their conduct fails to meet this requirement. However, conduct may be imperfect or sloppy without amounting to negligence, as demonstrated by the trial decision in Duad Inc. v. Shi, 2025 ONSC 5258 (CanLII).

Failed farm sale

The litigation arose from the aborted sale of a farm property in Hamilton, Ont., which the buyer had agreed to purchase for $1.8 million pursuant to the terms of an “as is, where is” Agreement of Purchase and Sale (“APS”). The buyer claimed that two gas wells located on the property were not licenced and could not be legally operated. The buyer refused to complete the purchase, taking the position that the seller had breached an environmental warranty in the APS.

The seller sued the buyer for forfeiture of the deposit of $250,000 and consequential damages. The seller’s position was that the environmental warranty in the APS did not cover the gas wells and that the buyer was simply looking for an excuse to refuse to complete the transaction. Even after the transaction failed to close, the seller offered to address any issues with the gas wells, but the buyer refused to revive the deal.

Disputes involving the agent

The buyer and the seller also sued the real estate brokerage and agent, who had represented both parties in the transaction. The buyer claimed that the agent breached his duties as a Realtor by failing to follow instructions in respect of the wording of the APS and failing to disclose that he was also the agent for the seller, whose interests the agent was alleged to have preferred. Among other things, the buyer claimed that the agent inserted the “as it is, where it is” clause without his consent and misled him about the status of the wells. In turn, the seller sought contribution and indemnity from the agent for any liability to the buyer.

At trial, the court found in favour of the seller. The trial judge reviewed the wording of the warranty and found that it was intended to address “environmental matters” and not the gas wells. Immediately below the environmental warranty in the APS was a clause obliging the seller “To terminate all free use of well gas for neighbor houses”. Below this clause, both sides agreed that the property would be sold “as it is, where it is”.

While there was a specific term in the APS that addressed disconnecting gas to the neighbouring properties, there was no reference in the environmental warranty to the gas wells. Further, in the trial judge’s view, there was no evidence that the seller had breached any warranty regarding the state of the gas wells.

The seller was therefore entitled to the deposit and was awarded consequential damages relating to the costs of $287,296.57 incurred before re-selling the property, to which the deposit would be credited. The seller did not incur a loss from having to sell the property at a lower price, but rather incurred significant costs to carry and maintain the property before the resale.

Regulatory warning

As for the claim against the real estate agent, the trial judge noted that the agent had been subject to a disciplinary warning decision by the Real Estate Council of Ontario (RECO), arising from the transaction. RECO found that the agent erroneously used outdated forms from a previous transaction of the subject property to produce the offer, and he had forgotten to delete a name from an earlier Confirmation and Co-operation form, which he had used as a precedent. The warning also noted that while the brokerage was identified as both the listing and the co-operating brokerage in the APS, he failed to provide a written disclosure of the nature of his relationship to each party prior to the offer.

This did not amount to negligence, however. The trial judge accepted the opinion of a standard of care expert for the agent, who opined that the RECO decision was essentially a “slap on the wrist” for sloppy paperwork.

In the circumstances, there was no indication that the buyer was misled by the agent’s role in representing both parties to the transaction, and the buyer failed to substantiate his claims concerning the terms in the APS. Among other things, the court noted that the buyer continued to work with the agent to try to complete the deal after it initially failed to close. In the trial judge’s view, the agent’s conduct, “while clearly imperfect, did not fall below the relevant standard of care.”

The difference between sloppiness and negligence 

The trial judge referred to Charter-York Ltd v. Hurst (1978) 2 R.P.R 272 (Ont. H.C.), where a vendor’s real estate agent incorrectly advised a purchaser that the acreage being sold was contiguous. The purchaser was allowed out of the transaction, and the agent was liable to the vendor for the loss of an opportunity to sell the land prior to a decline in market value caused by the introduction of land speculation legislation. The misrepresentation in that case was a consequence of the agent’s failure to make adequate inquiries about the land. The buyer failed to establish that the agent in this matter had breached the standard of care by failing to make any required inquiries about the farm property when acting for the parties.

Of note, the issue of the gas well licences was only raised by the buyer for the first time at closing, which supported the agent’s position that the buyer either did not have the funds to close or he had a change of heart about the purchase. Further, the buyer did not adduce any expert evidence that the agent fell below the standard of care required of a Realtor to refute the expert evidence that the agent fulfilled his duty to his respective clients.  There was no indication that the buyer was misled by the agent’s role. The agent tried to make the deal work for both parties, preparing four amendments to the original APS.

The claims of the buyer and seller against the agent were therefore dismissed.

The case underscores the fact that imperfect or sloppy conduct may not amount to professional negligence, even where a formal regulatory warning has been made. The Supreme Court of Canada has affirmed that there is an important distinction between the rules governing professional conduct and the law of negligence as breach of one does not necessarily involve breach of the other: Galambos v. Perez, 2009 SCC 48, at paragraph 29. What could have been a narrow dispute between a buyer and seller over a deposit was complicated by the additional claims made against the professional involved, which may result in cost consequences for the parties who pursued those allegations through trial. 

James R.G. Cook

James Cook is a partner at Gardiner Roberts in Toronto and has been with the firm since he articled there in 2002. As a litigator in the firm’s Dispute Resolution Group, he has experience in a broad range of commercial, real estate and professional liability litigation. Phone 416-865-6628; email jcook@grllp.com. This article is provided for educational purposes only and does not necessarily reflect the views of Gardiner Roberts LLP.

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An update released by RECO on Wednesday offers a glimpse into the insurance payout situation for consumers and agents. In August, Mississauga-based iPro was forced to close after the discovery of a $10.5-million shortfall in its trust account. 

The fallout has been concerning and confusing for many of those affected. 

Since Aug. 29, the insurance program manager has been paying eligible consumer deposit claims submitted under the professional liability insurance program. Consumer deposit claims are being paid on a rolling basis, in line with transaction closure dates, said RECO.

The path is not as straightforward for agent commissions. The program manager is currently investigating outstanding commission protection claims, said RECO.

“This process is complex, as it must balance the number of claims against the available funds and insurance limits,” reads the notice. “While commission-related claims can sometimes take years to resolve, our goal is to finish the process within months, not years.”

RECO said the proper assessment of claims must be meticulous. 

In some cases, it said, transactions appear to have been reassigned to other brokerages, which is “complicating the process of determining which claims are valid.”

RECO said it will provide another update within the next eight weeks.

The total amount of insurance coverage for consumer deposits and commissions is up to $8 million in aggregate ($4 million for each) with an additional limit of $200,000 per individual, per claim (not per transaction), RECO has publicly stated.

Real Estate Magazine asked RECO how many claims have been submitted, to which a spokesperson replied, “Unfortunately, we do not have that information available at this time.”

Interim report not publicly released

RECO also said Wednesday that the interim report from Dentons Canada LLP, which is conducting an independent review of the iPro matter, was shared with Minister of Public and Business Service Delivery and Procurement Stephen Crawford.

The final report is due on Oct. 30. RECO said under Crawford’s direction, the findings will be made public after the ministry has had the opportunity to review the final report.

Courtney Zwicker

Courtney Zwicker is a digital reporter and associate editor for REM. Based in Atlantic Canada, she has over a decade of experience covering daily business news.

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“The suggestion that millions of dollars was diverted for our personal use is false,” he said in a written statement, first reported on by the Toronto Star and obtained by Real Estate Magazine.

The co-founder of the collapsed brokerage admits to “serious mistakes” and says he has regrets for the “chaos” caused to industry peers, iPro’s former agents and consumers. 

He owns up to using trust account funds, calling it “misguided attempts to save the company,” which grew at warp speed over the last decade to 17 offices and 2,400 agents across Ontario.

“We failed everyone,” he wrote.

The statement was not signed by his business partner Fedele Colucci. 

Alves said iPro is not the only brokerage in Ontario that operates by moving trust account funds into its general accounts.

He called it a “vulnerability in the system,” and one that Real Estate Council of Ontario (RECO) should consider addressing.

RECO has been under fire by the industry and consumers for its handling of the iPro situation. It said it became aware of the trust account shortfall in May, leaving many to question why the public wasn’t notified until August. 

This week, RECO obtained several court orders, with one of them freezing Alves and Colucci’s assets. RECO is pursuing iPro for removing and misusing consumer deposits and agent commissions held in trust. 

RECO said in its original court application that it is seeking to trace the flow of trust funds that were diverted and return them to the trust accounts.

iPro’s offices shut down on Aug. 19. The total amount missing is now closer to $6.5 million, since the brokerage’s assets were sold to iCloud Realty for $3 million.

Police investigation in ‘early stages’

The Ontario Provincial Police (OPP) Anti-Rackets Branch is in the early stages of an investigation related to iPro.

OPP spokesperson Eric Cranton told Real Estate Magazine on Thursday that the police service cannot speculate on how long the investigation will take or what the outcome will be.

“We will take the time needed to conduct a complete and thorough investigation,” wrote Cranton.

Courtney Zwicker

Courtney Zwicker is a digital reporter and associate editor for REM. Based in Atlantic Canada, she has over a decade of experience covering daily business news.

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Recent public statements from association leadership have echoed this outrage, calling the scandal “deplorable” and pledging to do everything possible to prevent a repeat. In the same breath, however, those statements concede that associations lack authority to intervene directly. That contradiction, angry but powerless, deserves scrutiny.

What almost no one has covered is the irony of what followed: boards and associations rushing into the spotlight to demand change.

The letter

On Sept. 3, nine of Ontario’s largest boards joined the Ontario Real Estate Association (OREA) in a public letter calling for the Real Estate Council of Ontario (RECO) to be placed under the Ontario Ombudsman. The letter reads, “Make RECO subject to independent oversight by the Ontario Ombudsman.”

It sounds bold.

It isn’t.

The Ombudsman’s own statute is explicit. Section 14 of the Ombudsman Act bars complaints about self-regulating professions such as lawyers, doctors, or nurses. RECO is a delegated administrative authority, funded by industry but operating at arm’s length, and therefore outside its jurisdiction.

If what boards really mean is that Ontario should legislate RECO into a fully public agency subject to Ombudsman oversight, then they should say so. Instead, they imply the Ombudsman already has that power. That is not advocacy. It misstates the effect of the statute.

Which leaves two explanations:

• Boards may not fully appreciate the limits of the Ombudsman’s role; or
• They do, but have not been fully clear with members about what their ask really means, which is the end of self-regulation.

Either way, Realtors deserve clarity from organizations funded by their dues.

Compliance vs. regulation

This distinction matters. 

Boards enforce MLS rules and the Realtor Code. That is compliance. Compliance means setting professional standards for how members interact with one another, how listings are input and displayed, and how disputes within the membership are handled. At its best, compliance keeps the MLS orderly and the professional culture consistent. It is inward-facing, designed to manage the conduct of members within an association.

Regulation is different. Regulation belongs to the state. RECO audits trust accounts, suspends registrations, and prosecutes misconduct under TRESA. Regulation is outward-facing, with the authority to protect consumers, safeguard deposits, and impose penalties that go well beyond membership discipline. Unlike compliance, regulation carries the force of law.

The two roles are not interchangeable. A board can fine a member for breaching MLS policy, but it cannot seize a trust account or revoke a license. RECO can. A board can enforce courtesy and accuracy in listing data, but it cannot investigate fraud or order restitution to a consumer. RECO can.

Conflating the two is not advocacy, it is overreach. And if we acted outside of our competence the way boards are attempting to, they would face RECO discipline.

Precedent they will not say out loud

The ask for Ombudsman oversight is not an abstract gesture. There is precedent, and it tells us exactly what this would mean.

In British Columbia, self-regulation collapsed after a 2016 investigation into shadow flipping and assignment fraud. The provincial government acted swiftly. The Real Estate Council of B.C., once the industry’s self-regulator, was stripped of authority. Oversight was shifted to the Superintendent of Real Estate. By 2021, regulation was fully consolidated under the B.C. Financial Services Authority (BCFSA).

The industry’s self-governing experiment was over.

In Québec, the same outcome arrived earlier. In 1994, the government created the OACIQ, a statutory regulator reporting directly to the Ministry of Finance. The move followed years of concern about weak enforcement by the industry’s predecessor body, the ACAIQ. The province concluded that consumer protection required a public regulator.

These are not tweaks. They are full structural shifts away from self-regulation.

So, if Ontario boards understand these precedents, they are quietly asking to end self-regulation without saying so outright. If they do not, then they are making an ask without appreciating its true implications. Either way, Realtors are left in the dark.

Ontario’s pattern of failure

This is not the first time governance in Ontario real estate has failed the public.

RECO has long been criticized for being reactive rather than proactive: slow to audit, slow to respond to complaints, and often opaque in its processes. The iPro scandal is the latest headline, but it is not an isolated event.

Boards have their own pattern. As of September 2025, RECO’s public discipline database lists decisions involving some sitting directors of Ontario real estate boards. These are breaches of the same statute that boards now want to advise on. 

A body led in part by individuals sanctioned under the very law they seek to shape cannot credibly position itself as an authority on regulatory reform. That tension should matter to every Realtor asked to fund these advocacy efforts.

That alone should give pause before positioning boards as credible voices on regulation.

Authority without liability

Brokerages carry liability. They hold trust accounts. They manage compliance systems. They face consumers when deals collapse. Registrants carry personal liability under TRESA.

Boards carry none of that risk. They can make public statements, lobby governments, and issue demands without ever sharing the burden of liability.

That is authority without liability. It is not advocacy. If it’s anything, it’s performance without consequence.

Advocacy failure

Boards defend their role by pointing to advocacy as part of their mandate.

Sure, but advocacy without accuracy is malpractice.

If the Ombudsman cannot, under statute, take jurisdiction over RECO today, then telling the public otherwise is misleading.

If boards actually mean that self-regulation should end, then failing to tell their members directly is not transparent.

And if boards acknowledge they cannot directly intervene in the very scandal prompting these calls, then how can they claim authority in reshaping the rules of regulation itself?

Either way, Realtors are paying for advocacy that fails the test of accuracy.

From symptom to system

The Ombudsman letter is not an isolated misstep. It is a symptom of a deeper imbalance in organized real estate: boards exercise authority without liability. They lobby on regulation while carrying no regulatory risk. They control essential infrastructure while carrying no ownership duty.

If we want oversight that works, it is not enough to fix RECO. We need to fix the system that empowers boards to misstate and overreach in the first place.

A structural fix

Members fund the show, yet they never vote on the script. If boards want to call for external oversight, they should accept internal oversight first. That requires structural reform.

A share-capital model is not radical. It is alignment. It means that those who carry the liability, being registrants and brokerages, also carry the authority.

Here’s how it could work:

Shares would be issued to brokerages and individual Realtors. Votes could be capped to prevent dominance by any single firm, with limits on how many votes one shareholder can hold. Major decisions (structural mergers, policy positions, advocacy campaigns, large financial commitments) would require shareholder approval. Directors would answer to owners, not just to each other. With modern platforms, registrants could cast those votes electronically in days, faster than boards now move behind closed doors.

And we already have a precedent set.

Associations behave like corporations by outsourcing essentials into for-profit subsidiaries. MLS systems are the clearest example. Ontario’s MLS infrastructure has consolidated onto a dominant, board-controlled platform used by most Realtors in the province. The sole shareholder is one board. Other associations subscribe, but they do not govern. In corporate law, directors owe their duty to the corporation. When that corporation’s sole shareholder is one board, governance incentives align with that board. Subscriber associations are counterparties, not owners.

That matters.

Contract rights are not control rights. Advisory councils advise; they do not govern. Exiting a province-wide MLS is theoretically possible and practically punitive. The most important tool Realtors have is controlled by an entity that owes them no ownership duty and where they hold no votes.

What should be for us and by us is neither.

And yet associations still applauded this arrangement. By subscribing, they subordinated their members’ governance voice to a competitor’s corporate control. That is not collaboration. It is a surrender of member sovereignty.

A share-capital model flips the script. Instead of boards owning the corporation Realtors rely on, Realtors would own the corporation boards rely on. It makes ownership explicit. It gives Realtors direct votes on advocacy. It forces disclosure of lobbying. It requires governance frameworks to expire on a fixed cycle unless renewed. And it ensures that when boards speak, they do so with a mandate earned from those who carry the liability.

The MLS precedent proves the door is open. Essentials can be corporatized. The only unresolved question is whether Realtors will remain disenfranchised subscribers or become owners. This is the natural endpoint of trends boards themselves have set in motion.

Conclusion

There are only two explanations for the Ombudsman ask. Either boards do not fully understand the system, or they do, and are not telling members the truth. Neither is acceptable.

If Ontario is moving toward the B.C. and Québec model, then say it plainly. Admit what is really on the table. And put the people who actually carry liability at the center of the conversation.

Oversight without liability is theatre, and the play has gone on long enough.

Brandon Reay

Brandon Reay brings a multifaceted background in real estate practice, policy, and governance. Before stepping into brokerage leadership, Brandon spent several years in organized real estate, contributing to strategic initiatives and advocacy efforts with CREA and OREA, and various Chambers of Commerce. His work has included shaping housing policy, supporting regulatory reform, and improving REALTOR® engagement across the country.

Brandon’s approach blends hands-on brokerage experience with a systems-level understanding of how policy, market forces, and professional standards intersect. He is known for helping professionals navigate evolving market conditions and advocating for higher standards within the industry. In addition to his leadership role at RE/MAX Hallmark Realty Group, he remains an active REALTOR® focused on agent development, business strategy, and client service.

Brandon regularly contributes commentary on market trends to media outlets and industry publications and has served as a spokesperson on housing issues in Ottawa. He is also a frequent speaker at real estate events, offering data-driven insights on brokerage strategy, professionalism, and the future of the industry.

He holds a Master of Business Administration from the Sprott School of Business. Brandon lives in Ottawa, where he remains closely involved in local policy discussions on housing affordability and real estate governance.

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The following is the text from the undertaking agreement signed on Aug. 8 by iPro Realty Ltd. principals Fedele Colucci and Rui Alves, and Joseph Richer, former Real Estate Council of Ontario registrar. The agreement is contained within RECO’s motion record filed with the Ontario Superior Court of Justice, which can be found here.

WHEREAS Fedele Colucci is registered as a broker under the Trust in Real Estate Services Act, 2002 is the broker of record, an officer and a shareholder of iPro Realty Ltd.;

WHEREAS Rui Alves is registered as a broker under TRESA and is an officer and a shareholder of iPro Realty Ltd.;

WHEREAS iPro Realty Ltd. is registered as a brokerage under TRESA;

WHEREAS an inspection conducted in May 2025 determined that there was a significant shortage in the Brokerage’s real estate trust account and commission trust account (The RETA and CTA) of approximately ten million five hundred thousand dollars
($10,500,000);

WHEREAS Colucci and Alves have undertaken efforts towards complete restitution;

AND WHEREAS the Brokerage has entered into an agreement wherein it will receive the sum of three million dollars ($3,000,000) from the proposed brokerage of iCloud Realty Ltd. on or before July 31, 2025;

NOW THEREFORE, in consideration of the mutual covenants and promises set out below, the Parties agree as follows:

1. Colucci, Alves, and the Brokerage each agrees and undertakes to cancel their registrations no later than August 19, 2025, by providing notice of cancellation in writing to RECO and if they fail to do so, then they each hereby direct RECO to cancel their registrations on August 20, 2025.

2. Colucci, Alves, and the Brokerage each agrees and undertakes that any monies or other Brokerage related remuneration owing, now or in the future, to Alves or Colucci shall not be paid to them, but shall instead be deposited into the Trust Accounts shortfall.

3. Colucci, Alves, and the Brokerage each agrees and undertakes to transfer all the Brokerage’s receivable funds, including direct entitlements (such as transaction remuneration share, monthly/desk fees, etc.), to the Brokerage Trust Accounts, to be applied to the Brokerage’s trust shortfalls , with the exception of amounts are identified in advance and communicated to RECO prior to payment.

4. Colucci, Alves, and the Brokerage each agrees and undertakes to immediately deposit all funds received under any agreement with iCloud Realty Ltd.to the Trust Accounts, to be applied to the Brokerage’s trust shortfalls.

5. Colucci, Alves, and the Brokerage each agrees and undertakes that all funds held at the time of execution of this Undertaking Agreement, in any financial institution accounts in the name of Hippo Holdings Corporation shall immediately be transferred to the Brokerage’s Trust Accounts, to be applied to the Brokerage’s trust shortfalls.

6. Colucci, Alves, and the Brokerage each agrees and undertakes to make best efforts to ensure that consumer deposits received in trust by the Brokerage on or after May 19, 2025 will be reserved and allocated for the transactions for which the deposits were received, and not to satisfy Brokerage obligations pertaining to earlier deposits that were misappropriated for other Brokerage business or
transactions.

7. Colucci, Alves, and the Brokerage each agrees and undertakes that they, and the person designated to act as the broker of record during the course of the Brokerage wind-up, will manage the distribution of funds from the Trust Accounts under the guidance of RECO and the Professional Liability Insurance Program administration.

8. Colucci, Alves, and the Brokerage each agrees and undertakes that any and all surplus funds remaining Trust Accounts following the closing of all pending Brokerage transactions, will be conveyed to RECO’s Professional Liability Program administration.

9. Colucci, Alves, and the Brokerage each agrees and undertakes that as of August 15, 2025 they will not receive or deposit any new consumer funds into the RETA.

10. Colucci, Alves, and the Brokerage each agrees and undertakes to terminate all client representation agreements at the earliest practicable opportunity and further agrees to facilitate the sharing or transfer of any related information or documentation with a new brokerage of the client’s choice.

11. Colucci, Alves, and the Brokerage each agrees and undertakes to provide the Registrar, no later than August 12, 2025, with:

i. a comprehensive list of all Brokerage liabilities;

ii. the May 2025 and June 2025 reconciliations of all accounts maintained by the Brokerage including accounts in the name of other entities maintained by Colucci, Alves, and the Brokerage;

iii. the May 2025 and June 2025 official financial institution statements of account for all accounts maintained by the Brokerage, including accounts in the name of other entities maintained by Colucci, Alves, and the Brokerage, including cancelled cheques;

iv. a list of all pending trades, including transactions pending completion and active representation agreements, with details regarding the timeline for concluding the trade, whether transaction completion or representation agreement termination;

v. A report detailing the total gross remuneration outstanding to each salesperson and broker within the brokerage for pending trades; and

vi. A report detailing the total gross remuneration owing to each salesperson and broker within the brokerage for completed trades.

12. Colucci, Alves, and the Brokerage each agrees and undertakes that, on or before August 11, 2025, they will hire a broker under TRESA to assume the responsibilities and obligations of the broker of record for the Brokerage to wind up the operations of the Brokerage, with the wind-up to commence no later than August 19, 2025. They further agree and undertake to hire an Ontario Certified Public Accountant , who is in good standing with CPA Ontario, to oversee and conduct the proper, effective and efficient execution of the Brokerage wind-up. They further agree that the person assuming the role of broker of record must be approved by RECO and have brokerage management
experience and the CPA Ontario member must be approved by RECO.

13. Colucci, Alves, and the Brokerage each agrees and undertakes that commencing August 27, 2025, and until the activities of the Brokerage are wound up, the Brokerage shall provide RECO delivered every Wednesday no later than 5:00 P.M. current to the previous Friday, detailing Brokerage wind-up activities completed, including, but not limited to the following information and documentation:

i. The July 2025 reconciliation of all accounts maintained by the Brokerage including accounts in the name of other entities maintained by Colucci, Alves, and the Brokerage;

ii. The July 2025 official financial institution statements of account for all accounts maintained by the Brokerage, including accounts in the name of other entities maintained by Colucci, Alves, and the Brokerage, including cancelled cheques;

iii. An updated list of all trades completed since July 31, 2025, accompanied by final trade record sheets that detail all disbursements for each trade;

iv. An updated list of all trades that failed to complete, detailing the status of any deposit funds related to the trade;

v. An updated list of representation agreements that continue to be active with the Brokerage, detailing the timeline for termination of the agreement;

vi. An updated list of all pending transactions, detailing for each transaction: the address of the property that is the subject of the trade; names of the buyer and the seller; their respective brokerages; completion date; Multiple Listing Service (MLS®) number; amount of deposit being held by the Brokerage; outstanding remuneration; transaction completion date; and the date by which any outstanding conditions are to be waived or fulfilled;

vii. For each pending transaction transferred to another brokerage, details of which brokerage, and whether the trust funds connected to that trade have been transferred from the Brokerage;

viii. The monetary quantum of liabilities for all accounts operated by the Brokerage including but limited to the RETA and CTA of the Brokerage and of iPro Realty Inc.;

ix. The sum of all funds disbursed;

x. A current financial institution statement of account for all accounts maintained by the Brokerage, including accounts in the name of other entities maintained by Colucci, Alves, and the Brokerage indicating all account activity within the reporting period; and

xi. Any other information, documentation or reports as RECO may request.

14. Colucci and Alves each agrees and undertakes to not seek, at any future time, registration under TRESA or any successor legislation, and further acknowledges, understands and agrees that:

i. The Undertaking Agreement is binding, permanent, and irrevocable;

ii. The Undertaking Agreement expressly prohibits Alves s right, eligibility and entitlement, however so arising, to registration under TRESA or any successor legislation at any future time;

iii. Colucci and Alves each expressly and irrevocably waive any and all rights, no matter howsoever arising, to seek registration under TRESA or any successor legislation; and

iv. Any future attempt to seek registration under TRESA, or any successor legislation, shall be considered a fundamental breach of the Undertaking Agreement and shall constitute valid, reasonable and sufficient grounds for refusal and/or denial of an application for registration, including, amongst other things, constituting reasonable grounds for belief that Colucci and Alves will not carry on business, under TRESA or any successor legislation, in accordance with law and with integrity and honesty.

15. Effective the date of the cancellation of their registration, neither Colucci nor Alves shall, in any manner, trade in real estate, subject to the exceptions under section 5 of TRESA, or similar provision under any successor legislation. Further, Colucci and Alves each agrees, represents and warrants that, from the date of the cancellation of their registration, neither shall act as a sole proprietor, partner, shareholder,
officer, director, branch manager, interested person or associated person of any brokerage registered under TRESA or any successor legislation, nor engage in any activity that could reasonably be interpreted as performing the functions of any of the aforementioned roles and positions.

16. Colucci and Alves and the Brokerage each agrees and undertakes to cooperate fully with any inquiry or investigation surrounding the past conduct and operation of the Brokerage, and to provide to RECO, through counsel, a full account of the financial issues affecting the Brokerage. This includes but is not limited to: identifying all investors from whom the Brokerage accepted funds, specifying the amounts
received from each investor, payments made to each investor and outstanding amounts owing to each investor; detailing the creation and use of bank accounts including accounts in the name of other entities maintained by Colucci, Alves, and the Brokerage; and describing any systems implemented in respect of the financial operations of the Brokerage.

17. In consideration of, and in reliance upon the terms of this agreement, RECO agrees and undertakes to not request of the Court that Provincial Offences Act charges be filed against Colucci and Alves and to not take any further administrative action against Colucci and Alves.

18. Colucci, Alves, and the Brokerage each acknowledges and agrees that nothing in the Undertaking Agreement restricts RECO and/or the Registrar from taking any action against Colucci and/or Alves with respect to any new conduct on unrelated matters.

19. Colucci, Alves, and the Brokerage each further agrees and undertakes to cooperate fully with RECO and any other party in all activities that support the efficient and effective wind-up of the Brokerage, for the benefit and convenience of all impacted parties.

20. Colucci, Alves, and the Brokerage each understands that the Undertaking Agreement is not confidential and information of the circumstances surrounding the Brokerage wind-up may be disclosed to the public at the sole discretion of the Registrar.

21. Colucci and Alves each agrees to not make any representations that are inconsistent with the Undertaking Agreement.

22. If any term of the Undertaking Agreement is deemed to be invalid, illegal, unenforceable or a mutual mistake, the Parties may elect to sever that term from the agreement and the remaining terms shall remain in full force and effect.

23. The Undertaking Agreement may be executed in counterparts, and a scanned or electronic copy shall constitute a valid and binding agreement between the Parties.

24. Colucci, Alves, and the Brokerage each acknowledges and agrees that each has had an opportunity to obtain independent legal advice in respect of the terms of the Undertaking Agreement, has read this agreement in its entirety, understands its contents and is signing this agreement freely and voluntarily without duress or undue influence from any person.

The post See the agreement RECO’s former registrar signed with iPro’s Colucci and Alves appeared first on REM.

Below is a letter written by Ontario Real Estate Association (OREA) president Cathy Polan, which was sent to the association’s membership and obtained by Real Estate Magazine. 

I’ve been a Realtor for over 16 years, and in that time, I have never seen anything more deplorable than what I’ve seen happen with the Real Estate Council of Ontario (RECO) in the wake of the iPro Realty Ltd. scandal. Thousands of agents and consumers have been left without commissions, without deposits, and without a hope for the future.

I know you are all constantly receiving troubling information on this matter, and I am too. I am as angry and frustrated as you are. This should not have happened, and I will do everything in my power to ensure something like this never happens again.

Our members and those affected deserve to have answers and deserve retribution. OREA is having ongoing conversations with government officials and industry leaders calling for action to be taken to ensure the integrity of our industry is upheld. Though we do not have the authority to intervene directly on behalf of our members regarding this matter, we have taken every opportunity to engage RECO and the Government of Ontario in an effort to assist those affected and have to date released six public statements regarding this issue.

I want to assure you that OREA is in no way being complacent, but there are limits to what we can do. This matter is currently the subject of an ongoing police investigation, and is before the courts with an independent investigation being done by Dentons LLP, with ministerial oversight. That is why it is imperative that we let the professionals do what they need to do – in the sincere hope that justice will be done.

This situation has only further demonstrated the far-reaching impact that regulatory decisions can have on Ontario’s buyers, sellers, real estate professionals, and overall consumer confidence in the real estate market and industry. OREA will continue in our advocacy efforts with government to ensure that when it comes to ethics and consumer protections, both Realtors and Ontarians can have confidence in Ontario’s real estate market and its regulation – and we will continue to update members as we have more information to share.

I cannot undo what has been done, but moving forward, I promise to do everything I can to make sure that this never happens again.

Cathy Polan

Cathy Polan is president of the Ontario Real Estate Association.

The post ‘I have never seen anything more deplorable’: Polan on RECO and iPro fallout appeared first on REM.

Justice William Black of the Ontario Superior Court of Justice heard the matter virtually. RECO is pursuing iPro for removing and misusing consumer deposits and agent commissions held in trust. 

RECO said in its original court application that it is seeking to trace the flow of trust funds that were diverted and return them to the trust accounts from which they were taken.

iPro’s 17 offices shut down on Aug. 19, affecting 2,400 agents, following the discovery of  $10.5 million missing from the brokerage’s trust accounts. The total amount missing is now closer to $6.5 million, since the brokerage’s assets were sold to iCloud Realty for $3 million.

Justice Black’s orders specifically include a Mareva injunction, or a freezing order, which prevents the respondents from moving assets before the case is resolved.

 Under a separate order, iPro’s former principals may apply for an order specifying the amount of funds they are entitled to spend on “ordinary living expenses, and legal advice and representation.”

Norwich Relief was also ordered, which compels banks to deliver to RECO any and all records pertaining to the respondents’ assets and accounts. 

The list of respondents includes companies that either Colucci, Alves, or both are directors of, including: IP Holding Realty Ltd., Hippo Holdings Corporation, Sutton Group Professional Real Estate Services Inc., Alco Motors Ltd., and Alco Rent-A-Car Ltd.

In total, roughly $30 million of funds that should have been held in trust were instead commingled with the firm’s general account or sent elsewhere, according to court filings.

For more details, find court documents related to the matter here.

Courtney Zwicker

Courtney Zwicker is a digital reporter and associate editor for REM. Based in Atlantic Canada, she has over a decade of experience covering daily business news.

The post RECO lands court order to freeze iPro founders’ assets appeared first on REM.

New evidence filed by the Real Estate Council of Ontario (RECO) last week in the ongoing court action against Colucci, Alves, and their companies reveals what appears to be a complex scheme of trust fund misappropriation by iPro’s former owners through a network of accounts and entities.

RECO, in the case filed with the Ontario Superior Court of Justice, argues that Colucci and Alves “systematically misused trust funds” by moving them into operating accounts and related companies, and, through direct payments, to themselves and their associates.

Findings from the 700 pages of affidavits of RECO CEO Brenda Buchanan and forensic accountant Alessandra Leggio Di Matteo show a massive diversion of funds siphoned from iPro’s legal trust accounts into regular operating accounts.

In total, roughly $30 million of funds that should have been held in trust were instead commingled with the firm’s general account or sent elsewhere.

At least $14.3 million was moved via electronic transfers and $10.1 million via cheques from the brokerage’s trust accounts into its general accounts, court documents show. An additional $2.63 million in trust cheques were made out to “iPro Realty Ltd.” but deposited into unknown destinations.

The documents, prepared by RECO’s counsel Dentons Canada, also show iPro Realty Inc. – a separate entity from the brokerage – transferred $3.4 million from its own trust accounts to its general account, and wrote hundreds of thousands in cheques from its trust to iPro’s other accounts.

In a statement, RECO said these affidavits set out to prove its assertion that a deliberate trust scheme was orchestrated by iPro’s former principals and related parties “to divert and misuse consumer deposits and agent commissions that were required to be held in trust on their behalf.”

“This scheme represents a serious breach of fiduciary, statutory, and ethical obligations, and has harmed consumers, registrants, and the broader real estate sector,” said RECO.

RECO’s proceeding seeks a freeze of assets and further requests a court order that will permit RECO to trace the flow of trust funds that were diverted and return them to the trust accounts from which they were taken.

The list of respondents includes companies that either Colucci, Alves, or both are directors of, including: IP Holding Realty Ltd., Hippo Holdings Corporation, Sutton Group Professional Real Estate Services Inc., Alco Motors Ltd., and Alco Rent-A-Car Ltd.

These companies have “knowingly assisted” iPro and its co-founders’ breaches of duties, reads the original application, “and have knowingly received funds impressed with a trust under the (Trust in Real Estate Services Act) and at common law.”

iPro’s 17 offices shut down on Aug. 19, affecting 2,400 agents, following the discovery of $10.5 million missing from the brokerage’s trust accounts. The total amount missing is now closer to $8 million, RECO has said.

Where did the funds go?

RECO is arguing that once funds were improperly in the general accounts, the money was used for a variety of unauthorized purposes, particularly to repay investors and lenders.

The forensic review found $870,158 in cheques issued from iPro’s general accounts to people listed on an internal “IPRO Loans List”.

Similarly, $1.05 million was paid out of Hippo Holdings’ account to names on a “Hippo Investors List,” documents show

Additionally, forensic analysis found Colucci received at least $172,864 via cheques from iPro Realty’s general account, plus $137,795 more via cheques out of Hippo’s account.

Rui Alves likewise received $108,145 in cheques drawn from iPro Ltd. and iPro Inc. general accounts, court documents show.

Moreover, Joselle Alves Personal Real Estate Corporation (owned by Alves’ spouse) received $41,000 in payments, and Meli Colucci (spouse of Colucci) received $42,893, both paid out of iPro’s general accounts.

In its statement to the media, RECO said the evidence demonstrates that the “true state” of the trust accounts was purposefully concealed by:

• Operating multiple accounting systems
• Falsifying records
• Delaying disclosure until immediately before a scheduled inspection

“In doing so, they not only betrayed the trust of thousands of Ontarians but also misled other parties who relied on their compliance,” said RECO.

RECO says it is continuing to cooperate with law enforcement in support of their investigations.

Courtney Zwicker

Courtney Zwicker is a digital reporter and associate editor for REM. Based in Atlantic Canada, she has over a decade of experience covering daily business news.

The post This is where the iPro trust money went, according to RECO evidence appeared first on REM.

RECO has issued a notice of application with the Ontario Superior Court of Justice, asserting that Fedele Colucci and Rui Alves, among others, “orchestrated and executed a trust scheme involving the systematic diversion, removal and misuse of consumer deposit and agent commissions held in trust on their behalf,” reads a statement from RECO released on Friday.

“The trust scheme was a deliberate breach of the iPro respondents’ fiduciary, statutory and ethical obligations, and was executed at the expense of consumers, registrants, and RECO,” reads the statement.

RECO’s proceeding seeks a freeze of assets and further requests a court order that will permit RECO to trace the flow of trust funds that were diverted and return them to the trust accounts from which they were taken.

iPro’s 17 offices shut down on Aug. 19, affecting 2,400 agents, following the discovery of  $10.5 million missing from the brokerage’s trust accounts. The total amount missing is now closer to $8 million, RECO has said.

“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,” said Katie Steinfeld, chair of RECO’s board of directors.

RECO has already undertaken a freeze order of iPro assets, launched a forensic audit of iPro, and is conducting an independent audit of the iPro matter by law firm Dentons. 

“This was a serious breach of trust by iPro’s former leadership. Our commitment is to explore every available legal step to protect consumers and registrants, including pursuing recovery of these funds through the courts,” said Brenda Buchanan, CEO of RECO.

RECO says it is continuing to cooperate with law enforcement in support of their investigations.

The list of respondents includes companies that either Colucci, Alves, or both are directors of, including: IP Holding Realty Ltd., Hippo Holdings Corporation, Sutton Group Professional Real Estate Services Inc., Alco Motors Ltd., and Alco Rent-A-Car Ltd.

These companies have “knowingly assisted” iPro and its co-founders’  breaches of duties, reads the application, “and have knowingly received funds impressed with a trust under the TRESA and at common law.”  

It says various investors in iPro may be added to the court action if they have received trust funds.

Colucci and Alves previously operated a brokerage under Sutton Group before taking their business independent. 

RECO’s timeline of events

According to the application, the following is RECO’s account of the discovery of the shortfall in the trust account:

• May 2025 – RECO scheduled a routine inspection of iPro for May 20
• May 19 – iPro disclosed to RECO a $6.5-million shortfall in the trust that holds consumer funds and a $3.5-million shortfall in the trust that holds agent commissions
  
• May 21-22 – RECO conducted inspections confirming the trust account shortfalls
  
• July 24 – A $3-million payment was made into the consumer trust account, reducing the shortfall

TRREB and OREA respond

In a combined statement, Ontario Real Estate Association (OREA) and Toronto Regional Real Estate Board (TRREB) commended RECO for these efforts, but said “more needs to be done.”

“It’s time for independent oversight of RECO through the Ontario Ombudsman,” reads the statement, signed by OREA president Cathy Polan and TRREB president Elechia Barry-Sproule.

For over eight years, OREA and its membership of nearly 100,000 Realtors have been calling for stronger consumer protections, including increasing accountability and transparency at RECO via ombudsperson oversight.

“We will continue to advocate for reforms that ensure that Realtors and their clients have the utmost confidence in Ontario’s real estate market, its regulator, and the profession as a whole,” says the statement.

Editor’s note: The story was updated on the morning on Sept. 13 with comments from OREA and TRREB.

Courtney Zwicker

Courtney Zwicker is a digital reporter and associate editor for REM. Based in Atlantic Canada, she has over a decade of experience covering daily business news.

The post RECO initiates court action to recover missing iPro funds appeared first on REM.