Notice to the Real Estate Bar re iPro Realty Ltd. transactions
What are lawyers to do when closing a transaction that involves iPro Realty Ltd?
The regulator, Real Estate Council of Ontario (RECO), closed the brokerage, iPro Realty Ltd. (iPro), effective August 19, 2025.
iPro had 17 offices and 2,400 agents. There was a regulator approved sale of iPro’s assets to a new brokerage, iCloud Realty Ltd. The information indicates that there may be a shortage of trust funds for deposits collected.
RECO advises that all transactions will close as usual notwithstanding these events, advising:
“For commissions that are payable to iPro Realty, please make the cheque out to iPro Realty Ltd. and send the cheque to Dipak Parmar at RECO.
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 ([email protected]) 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.”
Purchasers typically pay a deposit with the offer to the listing brokerage, iPro in this case. On closing, the purchaser is given credit on the statement of adjustment for the deposit they paid. The brokerage credits the seller for the amount of the deposit, up to the amount of the commission and HST on the transaction, with the seller’s lawyer paying any balance to the brokerage. Brokerages send the seller’s lawyer a commission invoice confirming any balance required.
The OREA agreement of purchase and sale (APS) provides an irrevocable direction to the seller’s lawyer to pay the commission out of the sale proceeds:
“I, the Undersigned Seller, agree to the above offer. I hereby irrevocably instruct my lawyer to pay directly to the brokerage(s) with whom I have agreed to pay commission, the unpaid balance of the commission together with applicable Harmonized Sales Tax (and any other taxes as may hereafter be applicable), from the proceeds of the sale prior to any payment to the undersigned on completion, as advised by the brokerage(s) to my lawyer.”
This direction has been upheld in court as being an absolute obligation of the lawyer, even in the face of instructions from the client not to pay the agent’s commission.
Commission invoice?
If you are unsure as to whether there is commission due on closing or have not received an invoice then in advance of closing, please contact Jai Walia ([email protected]) and provide the particulars regarding the transaction including the names of the purchaser and vendor, the address of the property and the identity of the cooperating brokerage.
The balance of any commission should be remitted to RECO as noted above. If there is a surplus deposit over the commission + HST, it should be remitted to the seller, however, the seller will have to file a claim with RECO for the return of that surplus.
RECO recommends that you download a Consumer Deposit Claim Reporting Form or contact RECO and request that a claim reporting form be emailed to you. Complete and submit the signed Claim Reporting Form to the Insurance Department at [email protected]. The claim should be filed as soon as you have the documentation.
Lawyers acting for a seller should have a fulsome discussion with their clients about closing the transaction that involves iPro and get their instructions to proceed.