A Toronto brokerage’s bank accounts have been ordered frozen to protect consumer deposits after Ontario’s real estate professional regulatory body discovered “a substantial amount” missing.
The Real Estate Council of Ontario decreed a freeze for the first time in around six years on November 1 against RE/MAX Right Choice Inc.
“This is very rare,” RECO spokesman Daniel Roukema told The Canadian Press.
Roukema did not elaborate further on the sum of money in question. The Toronto brokerage, located at Centerpoint Mall in the north part of the city, did not immediately respond to requests for comment and its website appeared to be down.
RECO discovered the discrepancy between how much money the brokerage should have held in trust in its accounts and the amount it possessed last week during a routine check, Roukema said.
People making an offer to buy a home in Ontario must provide proof of a deposit – typically about 5% of the sale price – to the seller either when the offer is made or shortly thereafter. The brokerage of the realtor representing the buyer will hold the deposit in the brokerage’s real estate trust account until it must be paid to the seller on the closing date.
RECO froze the brokerage’s accounts to protect consumers from further harm, Roukema said. The Council is urging homebuyers and sellers who are involved with the agency or their lawyers to contact the council, he said.
“If anyone has deposited money, then they do have options to file a claim,” he noted. The Canada Deposit Insurance Corporation protects eligible deposits at its member financial institutions up to $100,000.
RECO’s investigation is ongoing and the council has not been in contact with police, Roukema said.
RE/MAX Integra, a sub-franchisor that represents about a third of the worldwide RE/MAX network, terminated Right Choice as one of its franchises on October 23 – prior to RECO beginning its investigation, said Galen Wright, a consultant with Toronto-based FleishmanHillard’s reputation management practice.
“We recognize that buying a home is one of the most important decisions a person can make,” Wright said. “We pride ourselves on the values of honesty, fairness, and accountability, and we support RECO in their efforts to protect consumers.”
RE/MAX Integra is unable to provide further details on why it terminated the brokerage’s contract, he said.