RECO releases details of brokerage financial filing regime set to launch this fall

The Real Estate Council of Ontario (RECO) is preparing to collect financial data from every brokerage in the province as part of a new oversight framework aimed at detecting and preventing potential problems earlier.

Jean Lépine, administrator and acting chief executive of RECO (photo: contributed).

Beginning Oct. 1, all Ontario brokerages will be required to submit annual financial information to RECO through a new digital reporting platform. RECO says the data will help identify risks, guide inspections and strengthen consumer protection.

RECO first announced the initiative in March as part of a broader effort to strengthen financial oversight and trust account monitoring within the province’s real estate sector. Tuesday’s announcement provides additional details about filing requirements, deadlines and how the information will be used.

“We’re going to get a bunch of information from 3,800 different brokerages and we’ll work through that information to determine which brokerages we’re going to visit,” said Jean Lépine, administrator and acting chief executive of RECO, in an interview with Real Estate Magazine.

According to RECO, annual filings will include information from a brokerage’s financial statements, details about trust assets and liabilities, information on unclaimed trust monies and compliance attestations from the broker of record.

How it works

The filings will be submitted through a reporting tool developed in-house by RECO and integrated into the MyWeb portal already used by registrants.

RECO says the information collected will help modernize its oversight approach by allowing it to identify anomalies and potential areas of concern more efficiently. The data will be used to inform RECO’s risk framework and help determine where regulatory resources should be focused.

Monthly reporting coming next

RECO plans to introduce monthly trust reconciliation reporting requirements in 2027. RECO said it will provide brokerages with additional details and guidance in advance of the next phase.

RECO said the future monthly reporting requirements will provide more current information to help monitor trends, identify emerging issues and respond more quickly to potential risks.

Tech-supported analysis

Lépine said RECO will use a combination of technology and human review to analyze submissions.

“In today’s world in digital spaces, you have a combination of AI and people, but there’s definitely people,” he said

Lépine said the information being requested is not new to brokerages.

“There’s nothing that brokerages don’t already develop and provide when asked,” he said.

“We’re going to have a proactive oversight opportunity where we identify where consumers or registrants are at-risk before they’re put in harm’s way.”

Enforcement action possible for non-compliance

Brokerages that fail to submit annual financial filings by the required deadline could face enforcement action under the Trust in Real Estate Services Act.

According to RECO, potential consequences may include a requirement to provide financial statements certified by a licensed public accountant, as well as proposals for suspension, refusal to renew or revocation of registration.

RECO said it will not publish pass-or-fail results related to annual financial filings.

However, enforcement actions arising from the review process or from failures to comply with filing requirements may be made public.

“What RECO will publish is the regulatory actions that come from the analysis of this work,” Lépine said.

“Where there are issues, we’ll investigate, we’ll audit, etcetera, and the regulatory actions that stem from this will be published.”

Reforms continue in wake of iPro matter

The announcement comes as RECO continues to deal with the consequences of the $10-million iPro matter, which triggered a scathing audit by Dentons Canada LLP and prompted the Ontario government to appoint Lépine as administrator in December 2025. 

Since then, more than 500 consumer claims have since been processed and closed. As of February, payments had been made available for more than 1,100 commission claims, representing approximately half of claims where commission is owed on closed real estate transactions.

Lépine said RECO views the annual filing regime as one element of a broader effort to strengthen confidence in the sector.

“RECO’s job is to ensure that consumers are protected in their transactions, and the sector as a whole has said that we need to elevate the practice, ensure that confidence is rebuilt, and this is one element of that rebuild process,” he said.

The annual filing portal will open Oct. 1. Brokerages with fiscal years ending between Aug. 1, 2025, and July 31, 2026, must submit an initial filing by Oct. 30.

For fiscal years ending on or after Aug. 1, 2026, annual financial filings must be submitted within 90 days of a brokerage’s fiscal year-end date.

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