It looks like Ontario’s troubled real estate regulator is here to stay. On Thursday, the Real Estate Council of Ontario announced a three-year plan to reform the industry watchdog from within.
Industry insiders are calling the announcement “lipstick on a pig” and a “whitewash” that won’t protect consumers or restore public confidence in the sector.
Jean Lépine, RECO’s government-appointed administrator and acting CEO, released a statement on Thursday that outlined organizational priorities, a new corporate structure and executive team.
The priorities include a “culture renewal plan underpinned by a new performance management system,” an initiative he called “regulatory modernization,” and “renewed governance.”
“These initiatives represent significant and bold change, and it’s very clear that we need to prioritize meaningful and consistent engagement with our stakeholders, including the real estate services sector and consumers,” said Lépine, who was appointed late last year by Ontario’s Ministry of Public and Business Service Delivery and Procurement after RECO failed to protect homebuyers and agents in an unprecedented financial breach by the founders of iPro Realty, one of Ontario’s largest brokerages.
Lépine also announced the hiring of two new senior executives, which is stirring controversy as it appears the positions were not publicly posted.
Emilee Escobar, chief corporate officer at the Condominium Authority of Ontario, will be RECO’s new “chief strategy and corporate officer.” RECO’s new “chief regulatory modernization officer,” Samantha Pinto, worked with Lépine at Ontario One Call and spent 13 years at the Ministry of Public and Business Service Delivery and Procurement.
Lépine said Pinto’s experience “will help RECO build a more agile, sector- and consumer-focused regulatory framework.”
Nicole Koteff, a lawyer and realtor who worked at RECO years before the iPro scandal broke, says the announcements come across as performative.
“The regulations can’t be changed by RECO,” Koteff says, noting RECO’s job is to enforce regulations created by the province.
“I don’t understand why people are being hired in a vacuum without these positions being properly advertised or advertised at all on RECO’s website,” Koteff added. “They’re not being transparent, which is what got them into trouble in the first place.”
Koteff says the initiatives feel “performative … they’re putting lipstick on a pig.”
Veteran mortgage broker Ron Butler called the announcement a “whitewash.”
“This is not a transformation,” he said. “It’s rehab for RECO. They’re trying to polish it up to the point where the government believes it can be handed back over to the industry, which is not a good idea.”
RECO’s insurer, Alternative Risk Services, projects a total loss of around $30 million. Around $5 million in consumer deposit claims related to iPro Realty deals has been paid so far.
“This event is larger in scope and size than any that has occurred in 25 years of the insurance program,” Alternative Risk Services said in an information notice it circulated in December, adding that there currently isn’t enough money under the program to fully pay back affected realtors, who are expected to receive roughly half of what they are owed.
