Former iPro Realty Ltd. agent Nayaki Penumarthy says the impacts of the $10-million trust account scandal that came to the surface in August has left scars on her and her family.
The Burlington-based Realtor said she’s owed $170,000 in sales commissions, which has affected her ability to pay her bills, and even resulted in her being in the hospital with anxiety and stress.
“It’s devastating, to say the least,” she told Real Estate Magazine. “It has put me in a very bad emotional state.”
Penumarthy, now an agent with Royal LePage, is one of hundreds of Ontario agents who for months have been waiting to recoup their compensation that was lost from iPro’s trust account.
On Aug. 15, Real Estate Council of Ontario (RECO) announced Mississauga-based iPro would close that week after a significant shortfall was identified in its accounts. RECO, which regulates real estate agents and brokerages in the province, ordered a freeze on iPro’s accounts to safeguard funds.
The result has been financial turmoil for agents like Penumarthy, who was with iPro for about a year.
In total, she estimates she’s out close to $200,000, when factoring in the $30,000 to $40,000 she paid out of pocket for the staging, photography, cleaning and marketing for her listings that she hasn’t been compensated for.
“I’ve been back on my mortgage, I’ve been back on my taxes. I don’t know how they expect me to pay my personal income taxes,” she said.
Penumarthy said among her biggest frustrations is the lack of clarity on when agents will be paid out.
Agents get organized for peaceful protest
Penumarthy will join her peers of affected agents and descend on Queen’s Park in Toronto on Friday to raise awareness for the financial hardships Realtors have faced since iPro’s collapse and push for stronger government intervention.
Protest volunteer Maria Florez is expecting a turnout of more than 200 people.
“We need to make noise. We need to make the government help us,” she said. “They’re the only ones who can do anything right now because it’s been very clear that RECO doesn’t want to.”
She said RECO “won’t even speak to us,” and that the community of affected agents has requested to talk to RECO several times.
Florez, who’s with Right at Home Realty, said she’s owed $50,000 after representing a buyer who bought a house that was listed by an iPro agent.
She said a community of 250 affected agents has congregated on the messaging platform WhatsApp, which led to the protest being planned.
Consumers paid, while agents wait
RECO has directed agents to submit claims through Claims Pro LP. Consumers whose deposits were lost are already being paid out of the professional liability insurance program.
“We Realtors pay for that insurance annually out of our own pockets. Our insurance covers the consumer deposits, and it covers the commission deposits,” she said. “So we don’t understand why we haven’t seen one cent.”
Florez says she’s struggling to meet basic needs, like veterinary expenses and winter tires.
It’s not only financially taxing, but emotionally as well, she said, referencing sleepless nights and anxiety.
“We were counting on that money to pay our bills, because, in real estate, you live paycheck by paycheck,” she said. “It’s been a hard year on the industry. I had to work really hard for that money.”
Details on the agent payout process coming soon, says RECO
In an email to REM, RECO said that while commission-related claims can sometimes take years to resolve, the insurance program manager handling the matter has stated its goal is to finish the process within months. RECO said the insurance program manager has committed to providing its next update by the end of November.
“As with all insurance events, there is a requirement to treat claimants equitably,” said a RECO spokesperson.
Once frozen, funds in the trust account cannot be accessed without a court order, which requires specific confirmation of the entitlements, said RECO.
“However, the insurance program manager is not in a position to seek court approval for commission protection claims, as claims are still being received and processed. Once all claims have been received and reviewed, a plan for the disbursement of funds and next steps in the process will be developed,” said RECO.
RECO said the deadline to submit a claim is two years after the date of the event, May 19, 2025. RECO has encouraged agents who are eligible for coverage to submit their claim forms as soon as they can to move the process forward.
Steinfeld responds to Crawford: ‘We will work collaboratively’
Earlier this month, Minister Stephen Crawford publicly released a letter he wrote to RECO chair Katie Steinfeld in which he states his intention to appoint an administrator to take control and responsibility of RECO, following his review of a scathing report into the industry watchdog’s handling of the iPro debacle.
Steinfeld released her reply on Tuesday, saying: “RECO understands your intent in seeking to appoint an administrator, and you have my commitment that we will work collaboratively with the government to drive the reforms underway and deliver on these shared objectives.”
The Dentons LLP report, which was commissioned by RECO, identified the organization’s troubling internal culture as a contributing factor to the concerning manner in which the iPro matter was dealt with.
Steinfeld said RECO is tackling this head-on, with a new board-approved organizational structure that was developed by CEO Brenda Buchanan.
She said the plan is centered on “strengthening leadership, improving internal communication, and ensuring clearer accountability across the organization, leaning heavily on the strength of the leaders who understand regulatory effectiveness, operations, and the root causes of recent issues.”
She said RECO recognizes the work ahead to restore public trust.
Courtney Zwicker is a digital reporter and associate editor for REM. Based in Atlantic Canada, she has over a decade of experience covering daily business news.