VANCOUVER — The bank accounts of a Toronto brokerage are frozen to protect consumer deposits after Ontario’s real estate professional regulatory body discovered “a substantial amount” missing.
The Real Estate Council of Ontario issued a freeze order for the first time in about six years on Nov. 1 against RE/MAX Right Choice Inc.
“This is very rare,” said RECO spokesman Daniel Roukema, who could 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. A person with the mall’s answering service told The Canadian Press the office appeared to be closed, despite its hours indicating it should be open until 9 p.m. ET.
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 five per cent 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.
It’s 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 Monday, Oct. 23 — prior to RECO beginning its investigation, said Galen Wright, a consultant with Toronto-based FleishmanHillard’s reputation management practice, in an email.
“We recognize that buying a home is one of the most important decisions a person can make,” he 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.