RECO takes regulatory action against two brokerages, MEhome Realty (Ontario) Inc. and 5I5J Realty Inc.

The Real Estate Council of Ontario (RECO) has taken regulatory action under the Trust in Real Estate Services Act, 2002 (TRESA), in relation to two brokerages that are affiliated, MEhome Realty (Ontario) Inc. and 5I5J Realty Inc.

Summary of Key Findings

RECO has issued Freeze Orders against MEhome Realty (Ontario) Inc. and 5I5J Realty Inc.

Following ongoing inspections of both brokerages, RECO identified the following:

Numerous unlawful disbursements from both brokerages Real Estate Trust Accounts.
A significant preliminary shortfall of approximately $525,000 in the MEhome Realty (Ontario) Inc. Real Estate Trust Account and approximately $40,000 in the 5I5J Realty Inc. Real Estate Trust Account that the brokerages have been unable to correct.
Unlawfully disbursed funds were used outside of the terms of the trust for brokerage operating expenses.

While the inspection is still ongoing and the total amount of funds missing or unlawfully dispersed is still being confirmed, RECO is taking immediate action to freeze the accounts at both brokerages to protect consumers and real estate agents.

Regulatory Actions Being Taken

Real Estate Trust Account requirements exist to protect consumers and ensure that real estate transactions close as intended. These funds must be held in trust strictly for their designated purposes: to secure deposits, facilitate the completion of transactions, and be disbursed in accordance with the terms of the trust. They are not to be used for operating expenses, cash flow support, investments, or any other purpose outside what the law expressly permits.

Any deviation from these requirements, intentional or otherwise, is a serious contravention of TRESA. It undermines consumer confidence, jeopardizes the integrity of the transaction process, and ultimately damages the trust the public places in real estate agents.

Name	Role	Regulatory Action
MEhome Realty (Ontario) Inc. 9120 Leslie St. Unit: 101 Richmond Hill, ON L4B 3J9	Brokerage	Freeze Order (Real Estate Trust Account, Commission Trust Account and General Account)
5I5J Realty Inc. 9120 Leslie St. Unit: 104 Richmond Hill, ON L4B 3J9	Brokerage	Freeze Order (Real Estate Trust Account, Commission Trust Account and General Account)

Safeguarding Funds Held in Trust

Earlier this afternoon, RECO issued Freeze Orders on the bank accounts of MEhome Realty (Ontario) Inc. and 5I5J Realty Inc. to protect consumer deposits and commissions.

Freezing trust accounts is the strongest safeguard available to ensure that funds held in trust are protected and not accessed for purposes beyond those they are legally intended to serve. To access the funds, individuals must now go through the insurance claims process.

As the province’s real estate services regulator, RECO is taking the necessary steps to ensure both consumers and real estate agents are protected.

RECO is actively engaged in this matter and further regulatory action may follow.

Additional Resources

RECO recognizes that both consumers and approximately 130 real estate agents involved with the identified brokerages will be affected by this matter. Additional information and resources can be found on the MEhome Realty (Ontario) Inc. and 5I5J Realty Inc. resource page.