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In a rare move, Ontario’s real estate regulator has frozen the bank accounts of a North York Re/MAX brokerage after an inspection turned up financial irregularities at Re/MAX Right Choice Inc.
It has been more than six years since the Real Estate Council of Ontario (RECO) issued a freeze order, the agency said on Thursday.
Freeze orders are invoked against brokerages to prevent them from improperly withdrawing the deposit money consumers put down when they buy a home, said a notice from RECO on Thursday.
Brokerages are not allowed to use the deposits or the agent commissions, also usually held in trust, for other purposes.
Re/MAX Right Choice Inc. is located on Yonge St. near Steeles Ave.; the brokerage did not return calls from the Star left with its answering service.
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RECO has not contacted police in connection to the case, but it said its investigation is continuing and other action could be taken as required.
“Our focus has been to protect consumers by preventing funds from being withdrawn from the brokerage’s accounts,” it said.
Re/MAX Integra said it terminated its franchise agreement with Re/MAX Right Choice on Oct. 23, prior to the RECO investigation.
RECO’s notice, published on its website, provides contact information for home buyers and sellers who may be concerned about their transactions with Re/MAX Right Choice. It also offers contacts for employees, agents and other brokerages who may have been dealing with Right Choice.
Consumer home deposits up to $ 100,000 are insured by the Consumer Deposit Insurance Corporation.
Ontario is the only province that also insures real estate commissions for fraud, insolvency or misappropriation of funds by a brokerage. Commissions are covered up to $ 100,000 per claim, but that may be pro-rated if the total claims against a brokerage add up to more than $ 3 million.
In August, RECO fined Homelife Victory Realty in Richmond Hill $ 250,000 after it pled guilty in an Ontario court to mishandling its trust accounts, which were found to be short of funds.
Both the brokerage, which filed for bankruptcy in February 2016, and its broker of record, Victor Fishman, had their real estate registration terminated.