The real estate industry in Canada is facing a profound reputational challenge in the wake of two high-profile scandals involving iPro Realty Ltd. in Ontario and Re/Max Real Estate (Central) in Calgary.
These incidents have not only shaken consumer confidence but also exposed critical weaknesses in the regulatory oversight meant to protect the public. As millions of dollars are at stake and trust is eroded, industry leaders emphasize that the damage extends beyond the individuals involved, threatening the integrity of the entire profession.
For many Canadians, buying or selling a home remains one of the most significant financial decisions of their lives, and that process depends fundamentally on trust in Realtors.
What happened
iPro Realty, with 2,400 agents and 17 locations, closed down in mid-August over questions about $10.5 million going missing from the brokerage’s trust accounts. Demands for action grew after Ontario’s real estate regulator the Real Estate Council of Ontario (RECO) said that iPro Realty co-founders Rui Alves and Fedele Colucci would not face charges.
The Ontario Provincial Police have since announced that it is launching an investigation into iPro.
The total amount missing is now $8 million, RECO has said. And last week, the Ontario government said it was intervening with a review of RECO.
Details still unfolding on alleged Calgary Ponzi scheme
In May, Re/Max Canada dropped its affiliation to Re/Max Real Estate (Central) in Calgary amid allegations surrounding a multi-million-dollar Ponzi scheme run by a former agent.
The Real Estate Council of Alberta (RECA) completed its disciplinary process for former Realtor Eric Drinkwater. RECA said he admitted to serious breaches, and an independent hearing panel has already found him guilty of conduct deserving of sanction. RECA demonstrated to the panel why a permanent ban is appropriate given the conduct, and it awaits the panel’s final decision on sanctioning.
RECA hearings for David Lem (broker) and Pat Hare (associate and brokerage owner) are slated for October.
‘Everybody has a part to play’
Janice Myers, CEO of the Canadian Real Estate Association, said when trust in the industry is broken, it doesn’t just impact the individuals directly involved; it threatens the reputation of the entire profession.
“It impacts the entire ecosystem that is designed to ensure situations like this don’t happen,” she says.
“In Canada, the Realtor Code represents the highest standard of professional conduct, and boards and associations were founded to set and uphold those standards of professionalism and ethics. In many provinces, they were actually the ones who pushed for the regulatory oversight we see today.”
She said the vast majority of Realtors embody these values, but when misconduct such as what happened at iPro becomes public, people rightfully have questions about trust and transparency.
She says trust is the cornerstone of real estate. Clients need confidence that their Realtor is acting with integrity, while in turn, Realtors trust their clients to be transparent and realistic. It’s this mutual trust that really makes these successful transactions possible.
“What we want is a highly professional, ethical individual, trained and acting with the utmost integrity, working with consumers. We are all aligned, and government is aligned on that, too,” adds Myers.
“Everybody has a part to play, with the backstop of government and the act that governs Realtors being extremely important, as well as the Realtor Code that CREA has. All of those work together to instill that trust.”
The final backdrop, she said, is government ensuring the legislation is up to date, allowing regulatory authorities to act swiftly and take necessary steps in situations like iPro, “where public trust has been broken and millions of dollars have been obviously misdirected.”
‘RECO has failed’: Crawford
Industry insiders widely agree that the root of these scandals lies in regulatory failures.
A spokesperson for Ontario’s Minister of Public and Business Service Delivery and Procurement, Stephen Crawford, said in an email: “As the province’s real estate regulator, RECO has a duty to protect consumers and uphold professional standards in Ontario’s real estate sector. In its handling of the iPro Realty case, the largest case of fraud in Ontario’s real estate history, RECO failed to deliver on (its) core mandate.
“As a result of this mishandling, the Minister will step in to oversee a third-party review of RECO to ensure the process meets professional standards, reflects industry expectations, and restores public trust in Ontario’s real estate regulation.”
In response to an interview request, the RECO media team responded: “We are not providing interviews at this time. Please refer to the public statements available on our website.”
Regulators ‘failing’ on their mandate: AREA CEO
Brad Mitchell, CEO of the Alberta Real Estate Association, says a vast majority of members serve the public in a very professional, courteous, and competent manner. But, like every industry, “we have a few in our industry that don’t do that, and it’s very unfortunate.”
The Re/Max Central and iPro Realty cases aren’t small slip-ups, said Mitchell, they’re glaring examples of regulators failing at the part of their mandate that matters most: protecting the public.
When that doesn’t happen, said Mitchell, consumers pay the price, and trust in the industry is shaken.
He said it’s on both government and industry to get regulation right.
“We’ve had a ton of problems with our regulatory body here in Alberta, and they’ve had the same issues in Ontario,” said Mitchell.
Mitchell says some regulators cozy up to the industry, instead of doing their jobs with independence, and that’s where they’ve “lost their way.”
He said governments need to “strip regulatory bodies down to bare bones” and rebuild.
Mitchell argued that the real estate industry needs proper regulation, since most members want to keep out bad actors. He noted that even people arrested for serious crimes can remain licensed as Realtors, while regulators focus on trivial matters like sign details or measurement rules.
In his view, regulators neglect serious misconduct and instead waste effort on minor technicalities.
RECA responds
In an emailed statement, RECA said the assertion that it has not acted is false. RECA said it prioritized the Drinkwater investigation and has already completed its disciplinary process.
“A profession’s greatest asset is its reputation. The vast majority of industry professionals act with integrity and care for their clients, and we share the frustration and anger felt when fraud occurs,” it said.
“Alberta has strong protections in place. Consumers can use RECA ProCheck to confirm licences and view disciplinary histories. Each sector has distinct education and licensing requirements, and credentials are public. If someone lacks the proper licence, that’s a red flag.
RECA said its processes and mandate are legislated. They’re also guided by case law and legal precedent. Acting without enough evidence (or outside our authority) would invite lawsuits, taint proceedings, and delay justice.
“We work tirelessly within the bounds that the Government of Alberta has established to meet our mandate in protecting consumers,” it said.
“Albertans expect fair, transparent processes. Skipping due process goes against that and risks judicial review that could overturn decisions and sanctions and delay justice for victims. RECA’s responsibility is clear: act decisively when evidence exists, and ensure sanctions stand. That’s how we help protect consumers and preserve trust in the profession.”
A government spokesperson for Minister of Service Alberta and Red Tape Reduction Dale Nally said “the Minister’s schedule doesn’t allow for an interview at this time,” and there was no response when asked to provide a statement.
A lesson in choosing a brokerage
Todd Shyiak, executive vice president of CENTURY 21 Canada, said the iPro collapse is a reminder that the industry must reset its standards. Agents must re-examine what they demand from the brokerages with which they choose to affiliate.
“The lesson is clear: choosing a brokerage based on cost alone is short-sighted calculation. Agents must invest in their career and align with brokerages that will show their value through stability, leadership, and the resources required to deliver the best standard of service to clients,” he says.
“The future of Canadian real estate depends on setting — and meeting — higher expectations. Agents must demand it. Clients deserve it. And our industry’s reputation requires it.”
The recent scandals take away confidence in the industry. They take away confidence in the oversight of the industry.
“Oversight means mandatory regular audits and demanding brokers send in monthly balances of their trust accounts to show they’re copacetic.
“The oversight in our industry has failed time and time again to address one of the core problems in my mind. These brokers they charge nothing, they do nothing, they offer nothing and allow agents to wallow.”
Faith in the process
Alan Tennant, CEO of Calgary Real Estate Board, says it’s always upsetting when to see real estate consumers affected when they shouldn’t be.
“That’s a situation where I think we all know that all of our rules and laws governing real estate need to be fully and effectively enforced. And until we know they haven’t been fully enforced, we have to have some faith in these systems and processes and allow them to unfold,” he says.
“And then, if there’s been a lack in enforcement, then I’m very confident the industry will step up. You know, if I have any concerns about these situations, it’s probably more around the potential for an overreaction. My experience has been that when you get a group of Realtors together in a decision-making role, whether it’s creating rules or managing ethics situations, they always consistently have very high standards and a very low tolerance for noncompliance.
“I think all Realtors need to be concerned about the potential damage to the brand. And they all have a role to play in making sure things are corrected.”
Mario Toneguzzi is a contributing writer for REM. He has more than 40 years of experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald, covering sports, crime, politics, health, faith, city and breaking news, and business. He now works on his own as a freelance writer for several national publications and consultant in communications and media relations/training. Mario was named in 2021 as one of the Top 10 Business Journalists in the World by PR News – the only Canadian to make the list.