The Real Estate Council of Ontario’s administrator says he could shut down the troubled regulator.

Jean Lépine told The Toronto Star that he has not ruled out disbanding RECO as he works under a tight 12-month mandate to reform it in the wake of the iPro Realty scandal, which has given the regulator a black eye. A shutdown is among a number of options that he is considering.

“I’m not discounting anything. … I’m trying to work as fast as I can, having just arrived here, to try and implement changes that will set us up better for the future,” Lépine, who began his duties December 1, told the Star.

Premier Doug Ford’s government installed Lépine as administrator after RECO concealed a $10.5-million trust-account shortfall at iPro, for months, allowing hundreds of millions of dollars in transactions to proceed while the brokerage’s owners exited the business. Lépine fired the regulator’s entire board on his first day and accepted the resignation of of then-CEO Brenda Buchanan, who left the organization December 30.

After assuming CEO duties temporarily, he faces skepticism from industry members who argue that RECO requires deeper structural reform.

Industry leaders told the Star that the most urgent priority is a stronger, more automated auditing system to prevent another trust account failure. They made their comments before RECO announced Wednesday that it has immediately suspended two brokers of record and four leaders, while also freezing trust accounts, at Mississaugua, Ont.-headquartered Save Max brokerages.

The regulator is seeking to revoke the registrations of brokers of record Raman Duha and Nidhi Duha and has proposed to revoke their registrations, along with those of four Save Max locations in Mississauga. RECO alleges that $2.7 million was unlawfully disbursed from the company’s trust accounts, demonstrating “clear and repeated breaches of the Real Estate and Brokers Act.

RECO said the actions came after it launched an investigation into Save Max in Deceember 2024.

Many industry leaders have criticized the pace of change at RECO thus far, so far, warning that without immediate improvements to oversight, further breaches are inevitable. Others say Lépine deserves time to consult with stakeholders and understand a complex sector before imposing sweeping reforms.

“I don’t intend to do this just in house,” Lépine told the Star. “We’ll work with experts and we’ll work with the sector and I intend to have summits and town halls — something this organization, I would say, hasn’t done a great job at.”

Some critics argue the problems at RECO are so entrenched that Ontario should eliminate the stand-alone regulator altogether and fold real estate oversight into an existing financial regulator, similar to what British Columbia has already done. In 2021, B.C. integrated its Real Estate Council and superintendent into the BC Financial Services Authority, creating a single regulator for financial services to strengthen consumer protection after concerns that self-regulation was no longer sufficient.

Lépine told the Star that his mandate is to deliver meaningful consumer-protection improvements and report back to the province by the end of the year, adding that all options remain on the table as the review continues.

“Clearly change is required here and that’s what I’m going to do,” he told his interviewer. “I’m going to make sure that we take action, not just talk about it.”

But Lépine’s critics contend that the communications, government-relations and crisis-management specialist lacks sufficient real estate industry experience. He has recruited new executives who report directly to him and introduced eight initiatives designed to form a comprehensive plan that will drive RECO’s focus in 2026.

The administrator has arranged for former iPro brokers to receive 100% of payments owed to them after he and RECO’s insurer said they could get far less. He also told the Star in recent days that about $5 million in consumer-deposit claims have been paid out and all affected consumers have gotten their full deposits back.

But industry leaders do not want RECO to remain a self-governing regulator that polices itself. Ontario Real Estate Association President Cathy Polan is calling for her organization to be allowed to assume some of RECO’s responsibilities to lighten the regulator’s workload.

“When you take on too much, like they have, things fall through the cracks,” she told the Star.

Ron Butler, a veteran mortgage broker and outspoken critic of RECO, was not encouraged by Lépine’s pledges to reform the regulator. He and other industry leaders do not believe that RECO has a place in the province’s real estate landscape, the Star reported.

“Culture change and a consumer-awareness campaign is not going to address the necessary fundamentals of making sure nobody cheats,” Butler told the Star. “Bold change is folding RECO into FSRA.”

FSRA is the acronym for the Financial Services Regulatory Agency of Ontario, which regulates important financial sectors trusted to handle customer funds, including mortgage brokers, insurance, credit unions, and pension plans.

“The reality is that [RECO] did enormous wrong,” Butler told the Star. “The call to develop an active plan that will lead right back to industry members taking control of RECO does not seem like a good idea to me.”

Photo: iPro