The Ford government has fired the entire board of directors at Ontario’s real estate regulator to fix what the premier on Monday called “a total mess.”
The Real Estate Council of Ontario (RECO) confirmed to the Star all eight members of its board “cease to hold office upon the appointment of the Administrator.”
Jean Lépine, who started this week as the administrator, was appointed by the province, which formally assumed control of the organization on Monday in the wake of the iPro scandal.
Stephen Crawford, minister of Public and Business Service Delivery and Procurement, which oversees the regulator, gave Lépine “exclusive right to exercise all the powers and perform all the duties of the board, officers, and members of RECO,” he wrote in a Nov. 28 letter to the regulator’s board chair Katie Steinfeld and CEO Brenda Buchanan.
In a brief written statement on Monday, Lépine said he will spend the next several weeks “engaging across the sector to listen, learn, and gather insights” that will help him restore public confidence in RECO.
A formal minister’s order dated Nov. 28 and made public today sets out the board’s dismissal and the terms of Lépine’s appointment, for which he will earn $2,000 per day.
The order does not explicitly say who else within RECO may soon be out of a job, but several industry insiders told the Star the administrator is expected to “clean house.”
Lépine’s appointment followed widespread concerns about the regulator’s ability to protect consumers from theft and fraud in the wake of the iPro Realty scandal, which saw the co-founders of one of Ontario’s largest brokerages strike a deal with RECO to evade charges and fines after they “illegally disbursed” more than $10 million from the company’s trust accounts, which held consumer deposits.
RECO failed to immediately alert the public to what it called an unprecedented financial breach. Instead, it allowed iPro co-founders Rui Alves, a former RECO board member, and Fedele Colucci to continue operating their business for three months, transacting more than $700 million in residential real estate sales, a Star investigation reported.
The minister’s written order tasks Lépine, a communications expert with a background in government and industry relations, with implementing measures “to bring about systemic change within RECO and to restore public trust and confidence in RECO and the real estate services sector.”
By March 31, Lépine is expected to deliver to the ministry a plan for improving RECO’s governance and organizational structures, culture, and operational policies. He must submit a progress report by June 30 and a final report by Dec. 31, which will be made public, according to the minister’s order.
At an industry conference hosted by the Ontario Real Estate Association (OREA) on Monday, Premier Doug Ford spoke publicly for the first time about the regulator’s failures. He told delegates his government was going to “fix” the “total mess” at RECO.
“I’ve been getting a lot of calls lately from real estate agents, and we’re gonna fix that total mess over at RECO there,” said Ford, speaking at the Hilton in downtown Toronto. “I’ve asked Minister Crawford, I’ve asked my chief of staff, I need a briefing every single day (on RECO).”
Ford said his “biggest concern” was ensuring real estate agents who lost their commission in the iPro case get paid the full amount owed to them.
“My biggest concern is get that money into their pockets. If we have to cover ‘em, these people work their backs off. They deserve the commission. We’re gonna cover each and every single agent that’s owed every single penny. And the lesson, make sure we keep an eye on this and never let it happen again.”
RECO, a non-profit organization funded by its 100,000-plus members, will be paying for Lépine’s services, Crawford’s ministry order states.
“The Administrator shall be remunerated at the rate of $2,000 per diem, for up to 250 calendar days, beginning as of the date the Order is made, and up to a maximum remuneration rate of $500,000. The per diem rate is based on a 7.25 hour day and five (5) day work week.”
The order notes “per diem” is the amount payable for work periods in excess of three hours daily. RECO is also expected to pay additional work-related costs incurred by Lépine up to a maximum of $35,000.
Lépine has spent the last two decades working in communications, government and investor relations. Most recently he served as “chief strategy officer” for Ontario One Call, a public safety administrative authority that people are legally required to call before digging for a project.
