‘We won’t rest’ until commissions are 100% repaid from iPro collapse: Lépine

Agents gathering at Queen’s Park on Tuesday/photo by James Phillips

Real Estate Council of Ontario (RECO) administrator Jean Lépine says he’ll stop at nothing to make sure agents whose commissions were trapped by the iPro Realty Inc. trust scandal get everything they’re owed, recognizing that those affected are running out of patience.  

“The commitment we’ve made is that we won’t rest until that’s done,” he said in an interview. 

Lépine, however, acknowledged there is no clear timeline for having agents made whole, and said he understands concerns that the process is moving too slowly.

“There’s a certain perspective that this isn’t moving fast enough,” he said. “I get that.”

Based on the claims received by mid-December, the projected total losses amount to approximately $30 million, according to the insurance program manager.

Lépine was appointed in November, effectively putting control of the real estate regulator in the provincial government’s hands.

The decision came following Minister Stephen Crawford’s review of a scathing audit by Dentons Canada LLP of RECO’s handling of the $10.5-million iPro Realty Ltd. fraud scandal.  

RECO discovered a “significant shortfall” in iPro’s trust account. However, the regulator did not move to shutter the firm and freeze its assets until August, keeping the trust account breach hidden from the public and agents for three months. Charges were not laid against iPro’s principals. 

Agents actively pursuing full repayment

Lépine spoke with Real Estate Magazine on Tuesday afternoon, just hours after roughly 100 agents descended on Queen’s Park in Toronto to demand “accountability, transparency, and immediate justice” following what demonstrators called “one of the most serious regulatory failures in Canadian real estate history.”

“Partial payments are not justice. Delayed payments are not accountability. Half measures are not protection. Partial action after total failure is not acceptable,” reads a notice sent to the media before the protest. 

On Dec. 16, RECO committed to compensating agents 50 per cent of what they were owed, starting that week. RECO has since clarified that accepting the initial 50 per cent payout does not limit additional payments. 

RECO said it took this approach to ensure claimants received an initial portion of commissions owed as quickly as possible, while it continues to pursue the recovery of additional funds through ongoing civil proceedings.

Lépine noted the financial impact on families during the holiday season and into the new year, adding that RECO plans to improve communication.

“We are committing to making sure that we provide regular updates,” Lépine said, citing insurer activity, civil proceedings, and other actions underway to recoup more funds to release to affected agents.

Progress so far

According to an update released by RECO on Tuesday, the following progress has been made toward repaying agents:

• 50 per cent pro-rated commission payments are underway
• 1,500 of 2,650 claim forms have been processed
• Payment offers have been issued on 700 processed claim forms
• Updated insurance acknowledgement forms have been in place since Dec. 30.

 Approximately $5 million in consumer deposit claims have already been paid.

Virtual town halls and summit planned

Lépine said RECO will soon announce dates for virtual town halls, which will give agents a platform to ask questions.

Additionally, Lépine said he will be inviting “sector leaders” to a summit this month to discuss measures that ensure brokerages are safeguarding funds placed in brokerage trust accounts.

“The goal of the summit is to dig deep into trust account oversight, annual financial filings, the likelihood of insurance reforms and anything related to those three items,” he said.

He did not say specifically who would be invited to the summit.