Resources for consumers and registrants affected by regulatory actions taken against Save Max brokerages

RECO recognizes that consumers who have been represented by Save Max Real Estate Inc. (“Save Max”), Save Max First Choice Real Estate Inc. (“First Choice”), Save Max Supreme Real Estate Inc. (“Supreme”), and Save Max Ace Real Estate (“Ace”), (collectively referred to as “the Brokerages”) and agents/brokerages who have buyer or seller clients in a transaction involving the Brokerages will be affected by the actions being taken and will require additional information and support. If you are among the affected, here are some resources to help.

Resources

For buyers and sellers: Please contact your agent. In the event of a pending transaction, you may need to file a consumer deposit insurance claim.
For agents: Agents with outstanding commissions should file a commission protection insurance claim.

Additional contact information

The following contacts are available to assist those with questions or concerns about the impact of the Freeze Orders:

Home sellers and buyers with questions about a pending sale or purchase, or any commissions owed to the Brokerages please contact RECO:
Dipak Parmar
Phone: 416-207-3118
Toll Free: 1-800-245-6910, ext. 3118
Email: Dipak@reco.on.ca

Home buyers or sellers with questions about consumer deposits and insurance claims, please contact RECO:
Jeremy Meuris
Phone: 416-207-4875
Toll Free: 1-800-245-6910
E-mail: insurance@reco.on.ca

Brokerages involved in trades with the Brokerages where the Brokerages are holding the deposit and/or are owed commissions by the Brokerages, please contact RECO:
Jeremy Meuris
Phone: 416-207-4875
Toll Free: 1-800-245-6910
E-mail: insurance@reco.on.ca

Agents or former agents of the Brokerages, with questions about commissions, please contact the claims adjuster for RECO’s insurance program:
ClaimsPro
Phone: 1-877-740-1913
Fax: 1-866-735-1033
E-mail: claims@reco-claims.ca

Note: The insurer requires one Notice of Claim Commission Protection form to be completed and submitted for each trade.

Agents with questions about how to transfer their registration to a different brokerage, please contact RECO:
Leena Kaiprath
Phone: 416-207-4823
Toll Free: 1-800-245-6910 ext. 4823
Email: leena@reco.on.ca

Information for home buyers and sellers

I am an impacted consumer. Will I lose my deposit because of the Freeze Order?
A Freeze Order was put in place to safeguard funds. At this stage, the matter is being managed through the insurance process, and we encourage anyone with consumer deposits held at any of the impacted brokerages to submit a consumer deposit insurance claim. Payment of any claim is subject to the terms of the insurance policy.

I have a deposit that is held by the Brokerages. Do I have to go through the consumer deposit insurance claims process?
Yes. Please file a consumer deposit insurance claim with the RECO Insurance department.

I sold a house through the Brokerages, and the closing date is approaching. Is the deal still valid?
A Freeze Order does not affect the validity of the Agreement of Purchase and Sale. Sellers or buyers who are concerned about whether their pending sale or purchase will close as scheduled should seek advice from their lawyer. For general inquiries about deals that are closing and how the Freeze Order may impact them, you may contact:

Attn: Dipak Parmar
Phone: 416-207-3118
Toll Free: 1-800-245-6910, ext. 3118
Email: Dipak@reco.on.ca

Are seller or buyer representation agreements with the Brokerages still valid?
The Brokerages’ registrations have been suspended and cannot trade in real estate. It is recommended that buyers and sellers who have signed representation agreements with the Brokerages to seek advice from their lawyer.

My client sold a house listed by the Brokerages and is expecting a portion of the deposit when the transaction closes. What should my client do?
Consumers who are owed deposit money from one of the Brokerages when a transaction closes can submit consumer deposit insurance claims with RECO. Payment of any claim is subject to the terms of the insurance policy.

Please file a consumer deposit insurance claim under the professional liability insurance program.

Registrant insurance claims process

I am a real estate agent with commissions owed to me. How long will it take for the insurer to evaluate a commission claim?
The insurer conducts its own investigation and will work to expedite claims as quickly as possible. Payment of any claim is subject to the terms of the insurance policy. 

I know that there have been insurance claims because of the iPro matter. Will there be insurance coverage available for this event?
Yes. This is a separate event and will not be affected by other matters for which insurance claims are being made. 

How do I get paid commissions owing from a brokerage under a Freeze Order?
Agents with outstanding commissions should file an insurance claim under the commission protection coverage for loss of commissions.

I collected a deposit cheque from a consumer just prior to the Freeze Order. Do I deposit that cheque in the frozen trust account of my brokerage?
RECO will arrange to have the money deposited in the brokerage’s frozen account. Please be prepared to provide the certified cheque, bank draft, or money order, payable to the brokerage, and the paperwork in relation to the transaction to RECO staff.

Cheques must not be made out to RECO or include RECO’s address, but should be sent to:

Attn: Dipak Parmar
Real Estate Council of Ontario
1400-3300 Bloor St W, West Tower
Toronto ON M8X 2X2

Please send an email to Dipak when the cheque has been sent (dipak@reco.on.ca), and provide copies of the Agreement of Purchase and Sale, the confirmation of Cooperation and Representation and trade record sheet if one exists in the email, if available.

For more information, please contact:

Dipak Parmar 
Phone: 416-207-3118 
Toll Free: 1-800-245-6910, ext. 3118 
Email: Dipak@reco.on.ca

We owe commissions to the Brokerages. What do we do now?
Your brokerage must pay the full amount of outstanding commission as it normally would.  RECO will arrange to have the money deposited in the brokerage’s frozen account.

For monies that are payable to an impacted brokerage, please make the cheque out to the brokerage and send the cheque to Dipak Parmar at RECO.

Cheques must not be made out to RECO or include RECO’s address, but should be sent to:

Attn: Dipak Parmar
Real Estate Council of Ontario
1400-3300 Bloor St W, West Tower
Toronto ON M8X 2X2

For more information contact:

Dipak Parmar
Phone: 416-207-3118 
Toll Free: 1-800-245-6910, ext. 3118 
Email: Dipak@reco.on.ca

Please note that Electronic Funds Transfers (EFT) will not be accepted. Any monies that are deposited in error to a frozen account cannot be reversed, so please take care when sending monies and provide the requested trade documentation.

RECO hosted an insurance webinar for affected Save Max agents. Below are additional questions that we received during the webinar.

Who should fill out the Commission Protection claim forms?
Registrants who were part of an affected brokerages should complete a Commission Protection claim form for transactions where commissions are owed by the brokerage, or will be owed by the brokerage in the future.

Buyer or cooperating brokerages should submit a Commission Protection claim form for transactions where one of the buyer brokerages’ agents was involved in the transaction.

Claimants should submit one claim form for each transaction where commissions are outstanding, and submit it to the insurance program claims adjuster ClaimsPro LP, according to the contact information available at the top of the form.

When should I submit a claim form?
Consumers with deposits that are held by the brokerage should submit claim forms as soon as possible. Consumers should file a Consumer Deposit Insurance claim with the RECO’s insurance department. The insurer helps close the transaction where required.

Agents or brokerages with outstanding commissions should file an insurance claim under the commission protection coverage for loss of commissions. Please submit claims forms for transactions that have already closed, or are closing the future, including builder deals.

What is the deductible?
There is no deductible for Consumer Deposit claims. The deductible for Commission Protection claims is $250

There is only one deductible applied to a claimant under the occurrence for Commission Protection claims. This is regardless of how many individual transactions are involved. For example, if you have lost commissions on three transactions, only one deductible will be applied to those three transactions.

What does this mean for my representation agreement?
RECO has taken regulatory action against four Save Max brokerages (Save Max Real Estate Inc., Save Max First Choice Real Estate Inc., Save Max Ace Real Estate, and Save Max Supreme Real Estate Inc.). As part of this action, the brokerages’ registrations have been suspended, which means they are no longer permitted to trade in real estate.

We recognize that this situation is stressful and disruptive for consumers who currently have listings or representation agreements with these brokerages. Representation agreements are private contracts between buyers or sellers and a brokerage. In order for a seller to move their listing to another brokerage, or for a buyer to be represented elsewhere, the existing agreement must first be addressed.

Given the complexity and individual circumstances involved, RECO recommends that affected buyers and sellers seek independent legal advice to understand their options and determine the next steps that are in their best interests.

What if I'm part of a real estate team? How should I claim for my portion of the commission?
Each individual who is involved in a transaction should submit a claim form for the amount that they would have been paid by the brokerage. The claims adjusters will review the documentation provided with you.

Can I change the brokerage listed in a transaction whose accounts are now frozen?
An Agreement of Purchase and Sale that was entered into while an affected brokerage was registered remains a binding contract.

Consumers should contact their lawyers about the fulfillment of conditions in the Agreement and for advice regarding next steps.

Any consumer or registrant considering changes to an Agreement—specifically to remove an affected brokerage as the representative of a buyer(s) or seller(s)—should obtain legal advice. This includes an amendment to a Confirmation of Cooperation Agreement, a cancellation of the original Agreement of Purchase and Sale, or any other similar contract.