A Mississauga real estate brokerage has been shut down due to financial mismanagement, affecting 2,400 agents.
The Real Estate Council of Ontario (RECO), the real estate agent and brokerage regulator, finalized an undertaking with iPro Realty Ltd. that will see the wind-up and closure of the brokerage and all of its branches effective Aug. 19.
At the time of a scheduled inspection, a total shortfall of more than $10 million was identified in iPro’s consumer deposit and commission trust accounts, although the amount has declined to less than $8 million at this time, said Joseph Richer, RECO’s registrar.
RECO hasn’t confirmed the number of consumers or agents whose deposits or commissions are affected, he added.
All real estate agents in Ontario are required by law to have professional liability insurance which includes consumer deposit and commission protection but there are limits to each type of coverage under the insurance policy, Richer said.
“This is a serious breach of iPro’s responsibilities under the law and to its consumers and agents. Any further updates will be posted on RECO’s website,” RECO said in a press release on Thursday.
“RECO and the owners of iPro Realty Ltd. have completed an agreement to facilitate the wind-up and closure of the brokerage, to permit the conclusion of current transactions.”
There are approximately 2,400 agents employed by iPro Realty Ltd, operating out of 17 locations including Toronto, North York, Burlington, Scarborough, Brampton, Brantford and Pickering.
The brokerage was co-founded by Rui Alves and Fedele Colucci.
The agreement allows for the completion of current transactions under oversight by RECO, a qualified broker of record, and a chartered public accountant.
RECO said pending transactions will continue to close “in the normal course of business.”
Agents with outstanding commissions should file an insurance claim under the commission protection insurance program using the required forms, the release said.
Buyers and sellers who had consumer deposits are being told to contact their real estate agent, and the transaction should continue to close — but insurance claims for consumers can also be filed, if needed.
“The new leadership of iPro, RECO, and the insurer are working to minimize the impact on consumer deposits,” the release said.
When iPro Realty closes, all active representation agreements with the brokerage will become void.
