Minister resets RECO board, blocking agents from elected seats

A path is outlined to build a new Real Estate Council of Ontario (RECO) board of directors, with an interim board to be established by the end of the year, with new changes being introduced to restrict industry members from being elected.

RECO released a notice on Thursday containing new orders from Minister of Public and Business Service Delivery and Procurement Stephen Crawford. 

The orders establish a transition of oversight from administrator Jean Lépine – who was appointed by the provincial government in the wake of the iPro Realty Ltd. collapse – to “a reconstituted, independent, skills-based” interim five-member board of directors, according to the notice.

The interim board is the first of two phases toward re-establishing a nine-member board of directors, said RECO.

RECO’s former board was let go in December, shortly after Lépine’s appointment.

Brokers, salespeople and brokerage employees can’t be elected

According to the orders, the interim board will be established by Dec. 1. 

Election eligibility has been stripped from people working in the field. Registered brokers and salespersons, as well as directors, officers and members or agents of brokerages or industry associations are not allowed to run. 

RECO says eligibility for elected board membership has been changed to “maintain independence between the regulator and those it regulates.”

Right now, there is no end date specified, a spokesperson for RECO told Real Estate Magazine.

“The changes to the board’s composition required by minister’s orders will allow board members to be selected based on the skills, experience, independence and judgment required to oversee a modern regulator, such as governance expertise, risk management, consumer protection and strategic leadership,” said RECO in an email.

Nominated candidates for elected members must agree in writing that, if they are elected to the board, they will not apply for registration under TRESA for at least a year after serving as a director.

These restrictions do not apply to board members appointed by the minister. 

 Individuals who have not been registered with RECO for at least one year may apply to serve as elected directors.

RECO said perspectives of registrants will be represented by an advisory council, which it will establish before 2027.

The administrator will also update RECO’s membership model from an open to a closed model, where only the board of directors will be members of RECO and have voting rights. 

“This creates a clear separation between decision-makers on consumer protection issues, and the real estate brokerages and agents that RECO oversees,” says the notice.

Building the board

RECO said its first step is an independent public recruitment process for three members of the interim board. An independent panel, supported by a third-party recruitment firm, will recommend three candidates. These members will be joined by two minister-appointed members.

RECO said additional details on completing a nine-person board will come in 2027.

New problem being created?

David Ursino, managing broker at Remax Premier Inc. in Toronto, said he’s supportive of RECO and its mission, and is onboard with building the board back step by step, and with limits in place.

He wonders, however, how long things will go on under this set of rules, and whether people working on the ground will have a chance to be elected again. 

“I can understand there has to be a new way to form a board, a new way to approve things. But that’s got to be interim. It can’t just be forever,” he said. “The hammer needs to be brought down, but maybe you’re hitting the wrong nail to fix that problem.”

Input from those working in the field is critical to an efficient board, said Ursino. 

“Agents are stakeholders in the real estate industry. How can that not come through on the board? If you’re going to have a bunch of professional board members that aren’t really connected or don’t understand our industry, what does that do? It just creates another problem.”

Real Estate Magazine has asked RECO if there is a path toward having elected industry representation back on the board. 

Laser focus on consumer protection

Minister Crawford emphasized that in reinforcing independence at RECO, his primary objective is protecting the public. 

“Ontario consumers deserve a regulator they can trust, and that means one that actually enforces the rules,” he said.

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