Trust accounts: Consumer protection is a shared responsibility

An open letter by Jean Lépine, Interim Chief Executive Officer, Real Estate Council of Ontario (RECO)

Trust accounts sit at the very heart of consumer confidence in Ontario’s real estate sector.

Every day, Ontarians entrust brokerages with deposits representing life-changing transactions: the purchase of a first home, the sale of a family property, or the leasing of a commercial space that supports a business. Consumers rightly expect that these funds will be protected, managed appropriately, and available when required.

That expectation is not optional. It is fundamental to the integrity of the real estate profession.

As Ontario’s real estate services regulator, RECO has a clear mandate to protect consumers and promote confidence in the marketplace. That responsibility includes ensuring that brokerages maintain proper controls over trust accounts and that any risks to consumer funds are identified before they become problems.

For that reason, RECO is advancing a more modern, risk-based oversight and inspection framework that includes annual financial filings and strengthened trust account oversight.

The Annual Financial Filing is a mandatory regulatory requirement for brokerages. It is designed to provide RECO with more consistent financial information and improve our ability to identify risk, target regulatory attention, and intervene earlier when concerns emerge.

Annual financial filings provide important information about the financial condition and operational health of brokerages. More regular financial information and trust account oversight provide greater visibility into how consumer funds are being managed. Together, these measures allow the regulator to identify emerging risks earlier, focus oversight where it is most needed, and intervene before consumers are harmed.

This is not about creating unnecessary administrative burden. It is about bringing regulatory oversight in line with modern risk management practices. Regulators across many sectors increasingly rely on financial reporting and risk indicators to direct resources where the potential for consumer harm is greatest. Real estate in Ontario should be no different.

With that increased oversight also comes accountability.

Brokerages are responsible for submitting complete and accurate financial information by the October 30, 2026 deadline. RECO’s priority is to support brokerages in meeting that obligation, including through guidance, training, and implementation support. But where a brokerage remains non-compliant after the filing deadline, RECO will take progressive regulatory action.

Enforcement actions will include late-filing penalties, referral to RECO’s Discipline Committee with public disclosure on our Regulatory Actions webpage, and, for continued non-compliance, suspension or potential revocation of registration.

The objective is not enforcement for its own sake. It is to establish a clear expectation that financial oversight and the stewardship of consumer funds are fundamental regulatory obligations.

But regulatory oversight alone is not enough. The responsibility for protecting trust monies cannot rest solely with RECO.

Real estate boards and sector associations have long played a central role in fostering professionalism, setting expectations, and promoting ethical conduct among their members. They maintain codes of conduct that establish standards of behaviour beyond the minimum legal requirements. These organizations are uniquely positioned to influence culture, reinforce professional obligations, and hold members accountable for conduct that falls short of industry expectations.

When registrants fail to follow established standards relating to trust account management, boards and associations should not view these matters as solely the regulator’s concern. While most registrants maintain high standards of professionalism and integrity, every instance of non-compliance undermines public confidence. The stewardship of consumer funds is a professional obligation that reflects directly on the reputation and credibility of the entire sector.

Consumers do not distinguish between regulators, boards, associations and brokerages when trust monies are mishandled. They see a real estate profession that has failed to meet its obligations.

That is why the future of trust account oversight must be viewed as a shared responsibility.

RECO must continue to strengthen its risk-based oversight framework, conduct inspections, analyze financial information, and take regulatory action where necessary. At the same time, boards and associations must reinforce the importance of trust account stewardship through education, professional standards, peer accountability, and meaningful consequences when codes of conduct are breached.

The goal is not to create overlapping systems. The goal is to create complementary systems. One system focuses on regulatory compliance and consumer protection. The other focuses on professional accountability and industry leadership. Together, they create a stronger framework than either could achieve alone.

RECO is working hard to ensure Ontario’s real estate sector earns and maintains a reputation for professionalism. Protecting that reputation requires vigilance, transparency, and a collective commitment from the sector to safeguarding the interests of consumers.

Trust accounts are not merely an administrative requirement. They represent a promise to the public that the funds entrusted to a brokerage will be managed with care, integrity, and accountability.

RECO is prepared to do its part. Every participant in the real estate ecosystem must also do theirs.