Regulatory overseers in Ontario will soon wield a new slate of fines for real estate brokerages, brokers and sales representatives who run afoul of the rules. The Ontario government is refining and finalizing administrative penalties that have been authorized under the provincial Trust in Real Estate Services Act (TRESA) since 2020, but not yet enacted.
The public is invited to comment on a proposed framework with four violation categories — low, medium, high and critical — and associated fee schedules. Under the legislation, the Real Estate Council of Ontario (RECO) can impose monetary penalties of up to $25,000 at its own discretion, without need for a hearing, while affected parties have the right to appeal to the provincial Licence Appeal Tribunal within 15 days of initial notification of the penalty.
As proposed in a consultation paper posted on Ontario’s regulatory registry, transgressors would only be liable for the maximum $25,000 fine if they committed the same critical violation for a second or further subsequent time within a 24-month period. These are defined as actions that present “a severe risk of direct harm to consumers” and generally involve flouting rules that preserve the integrity of trust accounts. Those are accounts that TRESA mandates to keep clients’ funds (to be used towards real estate transactions) separate from a brokerage’s operating account.
Other types of violations related to inadequate record-keeping, failure to report required information or to meet required deadlines would be classified as low or medium risk — respectively engendering first-time fines of $1,000 and $2,500, then escalating to $2,000 and $5,000 for subsequent occurrences within a 24-month period. Additionally, two high-risk violations for failing to designate or properly disclose the identity of a broker-of-record would merit a first-time of fine $5,000 or $10,000 for subsequent offences within a 24-month period.
It’s proposed that transgressors will have 30 days from notification in which to pay the fee, provided there is no appeal. Depending on the violation, a 10 per cent additional penalty could be applied for each overdue day for payment, which could potentially ratchet a fine up to the $25,000 maximum amount.
Collected fines will be used to cover the operating costs of the administrative penalty system, with excess earnings earmarked for education initiatives and public awareness. Meanwhile, that public awareness agenda includes disclosure of violators’ names and details of their penalties on RECO’s website.
The consultation paper also poses questions related to potential new oversight policies and procedures for accountability within brokerages, additional rules to govern the management of trust accounts and more authority for RECO to issue orders. These are typified as “exploratory in nature” to gather input for future consideration.
The consultation is open for submissions until September 18, 2026.
