Toronto real estate board criticized for keeping president on during RECO investigation

On Aug. 5, the Real Estate Council of Ontario (RECO) posted notices on its website referring On the Block Realty Inc., which Steinfeld cofounded with his wife, Katie Steinfeld, to its discipline committee for trust account violations, which include improperly disbursing trust funds, failing to report trust account shortfalls, and not complying with trust account and “record-keeping requirements.”

Katie Steinfeld, who is the former chair of RECO’s board of directors and was a member of the discipline and appeals committee, acts as broker of record for On the Block Realty and was also referred to the discipline committee.

Steinfeld and her husband previously told the Star that no money was missing or misappropriated, and that in each case, money was deposited “inadvertently and temporarily” in the wrong account. The mistakes were caught during their monthly reconciliation process and rectified, they said, noting the amounts ranged from $442 to $7,000.

TRREB’s decision to keep Daniel Steinfeld in his position as president has some calling for his immediate resignation, others saying he should temporarily step down and supporters saying that he should only step down if warranted once the discipline committee delivers its final verdict.

John W. Meehan, broker and former TRREB president, said Steinfeld faces a “moral and ethical decision” given that his brokerage failed to comply with standard trust account regulation.

“I know I would never have found myself in this type of quagmire, but my moral and ethical compass would have guided me to step away had it occurred,” Meehan said.

TRREB’s CEO Don DiMichele said that Steinfeld is following the board’s conflict-of-interest policy, and will be guided by it as he continues to work as president of the board.

“Mr. Steinfeld and the board have agreed that he will recuse himself from all discussion and consideration of RECO-related matters,” he said in a statement to the Star.

Steinfeld told the Star that he and his wife are fully cooperating with RECO, and he hopes the case can be “resolved promptly.”

“Because this is an ongoing matter before RECO, we think it’s best to not elaborate beyond the statement that we issued last week,” he said in a written statement.

Real estate community divided 

Meehan said he would struggle to lead the board if his brokerage was found to be in violation of real estate legislation.

“I would have difficulty in leading an organization that governs those who are to follow rules, guidelines, policies and reprimand those who are alleged to have violated them.”

Jeff Mount, real estate agent at Web Max Realty, said that Steinfeld should resign as his professional and personal life are overshadowing the work of TRREB’s members and hurting public perception of the industry, which is at an all-time low, especially after the iPro scandal that unfolded last year. 

Mount said he wrote to Steinfeld directly, saying it was in the best interest of the industry for him to resign immediately, adding that “trust in real estate begins at the top.”

He also noted that Steinfeld was appointed as TRREB’s president while his wife was the chair of RECO, which he says led to a conflict of interest from the start of his appointment.

“If TRREB has conflict-of-interest policies in place, how did they allow the election of Daniel to go through?”

On social media, some realtors have posted their support for Steinfeld, with one person saying that the public should wait “for the facts to come out before judgment.”

Don Inouye, the Real Estate Institute of Canada’s CEO — who focuses on governance, ethics and raising professional standards — said there does not need to be an automatic expectation of resignation based on allegations or investigations.

However, from an ethical governance perspective, “leaders should carefully consider both actual and perceived conflicts of interest, as well as the potential impact on public confidence in their organization.”

“The appropriate response will depend on the specific circumstances, but maintaining trust, transparency and accountability should always be guiding principles,” he said.

No communication from TRREB

TRREB members confirmed to the Star that they have not received any internal communication from Steinfeld or the board on RECO’s investigation, and how TRREB will navigate the current situation.

DiMichele said that TRREB will continue to respond, “to any questions we receive from our members.”

Toronto real estate agent Sean Mayers said it would be “good for our industry governing bodies and leaders to notify realtors as to what is happening.” 

“It concerns me that there doesn’t seem to be a collective communication message yet,” adding that it gives “another black eye” to the real estate industry. 

“Most realtors, they’re just doing their jobs. And nobody really wants the actions or alleged mistakes of one brokerage to be a reflection of the entire profession. So, that is a concern because it erodes public confidence in me as a realtor, let alone the industry that I represent.”