For the Record: June 2026

You’re invited to RECO’s 2026 virtual Annual General Meeting on June 25, 2026, at 10 a.m. Learn more and register to attend.

RECO recently announced key governance changes pertaining to its Board of Directors.

Read about RECO’s new governance model and framework. Learn how this transition strengthens consumer protection while ensuring registrants maintain a voice in strengthening the real estate services sector.

Read the announcement: New financial filing requirements for brokerages to strengthen consumer protection.

You can now complete the mandatory 2026 Update Course as part of your continuing education requirements. You will be automatically enrolled in the course if it is time for you to complete your continuing education requirements.

The course is divided into two parts:

• Part 1: Professional Practice - Representing a Buyer Client
• Part 2: Professional Practice - Representing a Seller Client

After taking this course, you will have clear expectations of how your professionalism impacts representation, including establishing client relationships, reinforcing loyalty, selecting properties with a client, preparing a property for a successful sale, and maintaining proper documentation.

You are required to complete your continuing education to maintain your RECO registration. In addition to the Update Course, you must successfully complete two elective courses during your two-year registration cycle.

Access the course through your MyWeb account.

As a real estate agent, you play a vital role in supporting consumers through one of the most significant financial transactions of their life. Based on TRESA obligations, you are required to provide a copy of the RECO Information Guide to all prospective clients before providing any assistance or services.

Sharing the Guide with your clients helps them make informed decisions about their buying or selling journey including:

• The benefits of working with a real estate agent
• Strategies for helping consumers find reputable agents in Ontario
• Client roles and responsibilities in the real estate transaction process
• Risks associated with self-representation in real estate
• Understanding multiple representation situations and potential risks

Stay compliant: Review RECO Bulletin 2.1 RECO Information Guide to ensure you are meeting your obligations under TRESA.

Selling your own property doesn’t suspend your professional obligations

A recent disciplinary case highlights your responsibility to comply with the Trust in Real Estate Services Act, 2002 (TRESA), formerly known as the Real Estate and Business Brokers Act, 2002 (REBBA). This includes complying with TRESA and its regulations (such as the Code of Ethics), even when you are selling your own property.

Key facts of the case

• An agent had their own property for sale (referred to here as the agent/seller).
• Buyers represented by another brokerage purchased the property.
• Before the completion date, an amendment was made to change one of the buyers.
• The agent/seller additionally agreed to assist the buyers in securing their financing.
• Due to financing issues, the completion date was delayed.
• During the delay period, the agent/seller gave the buyers possession of the property and agreed to a temporary rental arrangement while financing was finalized.  
• All communication between the agent/seller and the buyers bypassed the buyers’ agent.
• Ultimately, when financing was not secured, the transaction failed. The buyers continued to pay rent and expressed interest in remaining in the home.
• The agreement of purchase and sale was formally terminated, and the deposit was returned to the buyers.
• After the deposit had been returned, the agent/seller went to the property and became involved in a physical altercation with the buyers. Police were called, and the agent-seller falsely claimed the buyers were occupying the property illegally.

Decision

The discipline panel found that the agent/seller acted unprofessionally by:  

• Negotiating directly with the client of another brokerage.  
• Engaging in a physical altercation with the buyers, and
• Misleading the police to believe that the buyers were residing at the property unlawfully.

The panel found the real estate agent had breached s.3, 7(1), 37, 38, 39 & 40 of the REBBA Code of Ethics and ordered the agent to pay a fine of $17,000 and complete an educational course.

You are expected to meet the following professional conduct obligations set out in TRESA:

• Respect the client relationships established by other agents.
• Do not communicate directly with another agent’s client without that agent’s written consent.
• Avoid making false, misleading, or inaccurate representations in any professional context. 

If you are acting as your own agent in a transaction, you must take additional precautions to avoid conflicts of interest and act with integrity, good faith, and courtesy.

Stay compliant: Review RECO Bulletin 1.1 – Professional Conduct to ensure you are meeting your professional conduct expectations, under the Code of Ethics regulation.

Between January and March 2026, RECO completed 433 brokerage inspections and identified 2018 deficiencies. While some of these issues may seem minor in isolation, their high frequency across the sector increases overall risk to both brokerages and consumers.

To help you protect and inform your business, upcoming editions of For the Record will break down each of the top 10 areas of non-compliance that occur during inspections in detail. We will clarify the regulatory intent behind each requirement and provide practical tools to help you strengthen your internal controls.

Here are the top 10 legislative deficiencies uncovered during recent inspections:

1. Monthly reconciliation
2. Trade record sheets
3. Trust account maintenance
4. Real Estate Trust Account Designation
5. Advertising
6. Contents of written agreements
7. Shortfall
8. Records of trust money transactions
9. Authorization of transactions
10. Notice of changes to the Registrar

The most common area of brokerage non-compliance is failing to complete reconciliations correctly and within the prescribed timelines.

As brokers of record, you are required to review your trust accounts reconciliations monthly. This safeguard is designed to protect consumer funds and to promptly alert the brokerage about any discrepancies within its Real Estate Trust Account (RETA).

Reconciliations serve as an early warning system, helping to identify issues before they escalate into more serious problems. In the first quarter of 2026, RECO identified the following issues in brokerages that failed to complete proper reconciliations:

1. A brokerage was unaware that, for over a two-year period, 26 fraudulent cheques had been cashed in its trust account.
2. Several instances in different brokerages where funds were disbursed from the RETA without receipt of the corresponding deposit cheques. The cheque was recorded as received; however, the buyer had not delivered it to the brokerage. The brokerage proceeded to pay commissions and disburse funds it had never received.
3. Administrative errors, such as funds being deposited into the wrong account, erroneous electronic transfers and other procedural errors. A deposit cheque was returned by the bank, and the brokerage disbursed the funds. The brokerage is now in litigation with the parties to the trade.

In each of these cases, the brokerage was required to immediately replace the missing trust funds, resulting in significant financial loss to the brokerage.

To support you, we have produced a short instructional video on the brokerage administration resources page that walks through each section of the reconciliation process in detail. Please review the video carefully to make sure you fully understand your responsibilities and the expectations for completing an accurate and compliant reconciliation.

If you do not use formal accounting software, a sample reconciliation template is available for your reference on the brokerage administration resources page. The sample is intended to serve as a practical guide to help organize records and complete the reconciliation process in a clear and consistent manner.

Stay tuned for details on trade record sheets, the second most frequent deficiency, in the next issue of For the Record.

We have created a monthly compliance checklist to help you and your brokerage strengthen compliance.

As a broker of record, you are responsible for the management and supervision of the brokerage. This includes maintaining proper records, implementing effective compliance procedures, trust account management, monitoring advertising and trade documentation, and addressing any areas of non-compliance in a timely manner.

Using this monthly checklist can help you stay in accordance with your regulatory obligations.

A recent discipline highlights the broad compliance responsibilities of brokers of record and the serious consequences that can result when those obligations are not met.

In this case, a brokerage was found to have been deficient in several areas related to brokerage operations, including:

1. Failing to maintain the required books and records, which prevented RECO from fully inspecting the brokerage.
2. Obstructing an inspection.
3. Failing to notify RECO of changes to registration information within five days.
4. Failing to respond to a complaint.

In this case, the brokerage was terminated, and the broker of record is prohibited from seeking registration with RECO for 15 months.

This case serves as an important reminder that regulatory compliance extends beyond sales conduct. As a broker of record, you are expected to:

• Maintain compliant brokerage operations, including monthly trust account reconciliations
• Cooperate fully with inspections.
• Ensure information filed with RECO remains accurate and current, including notifying the Registrar about significant changes to one’s registration
• Respond to complaints when received.

Failure to meet these obligations may result in disciplinary action, restrictions on registration, reputational harm, and other penalties.