If you are a Real Estate Agent in Ontario, you likely felt a chill go through the industry this week.
On February 4, 2026, the Real Estate Council of Ontario (RECO) issued Freeze Orders against four Save Max brokerages in Mississauga.
The allegation? That $2.7 million was “unlawfully disbursed” from Real Estate Trust Accounts to pay for operational expenses like credit cards, loans, and property management fees.
While Save Max’s legal team argues that “no funds are missing” and the money was replaced before month-end reconciliations, RECO has taken the “nuclear option”: Immediate Suspension Orders and Proposals to Revoke Registration.
The “New” RECO: Aggressive and Unforgiving
Why is RECO reacting so aggressively? Context matters. After facing heavy criticism (and a provincial audit) for its slow response to the iPro Realty scandal in late 2025, where a $10 million shortfall went unnoticed for months, RECO is now under immense pressure to look tough.
The message is clear: RECO is no longer waiting for the money to be “missing.” If the Trust Account is treated like a piggy bank, even temporarily, they will shut you down.
The Trap for Individual Agents
If you are a salesperson at a brokerage facing a freeze order, you are the collateral damage.
- Your Commissions: Frozen. You now have to apply through RECO’s insurance program to get paid, a process that can take months.
- Your Listings: In limbo. You cannot trade while your brokerage is suspended.
- Your License: If you are a Director, Manager, or even a senior agent with signing authority, you could be named in the disciplinary proceedings for “failure to supervise.”
“My Broker Said It’s Fine” Is Not a Defence
In the Save Max case, the defense argues that because funds were returned to the trust account, RECO actions are disproportionate. From a regulatory perspective, this is a dangerous gamble. The Trust in Real Estate Services Act, 2002, S.O. 2002, c. 30, Sched. C (TRESA) creates strict rules for trust funds (see section 27(1) of the Act). “Borrowing” from the trust is often treated as misappropriation, regardless of whether the broker or brokerage intended to pay it back, or actually paid it back.
What You Must Do
- Watch Your Trust Account: If you see delays in commission payouts or “creative” accounting at your brokerage, do not ignore it.
- Get Independent Counsel: If your brokerage is under investigation, do not rely on the brokerage’s lawyer. Their job is to save the company, not your license. You need your own advocate.
- Separate Your Liability: If you are a Broker of Record or Manager, ensure you have paper trails proving you questioned any irregular transfers.
The Bottom Line: RECO has taken the gloves off. If your brokerage is borrowing from the Trust Account, you need to be prepared to deal with RECO.
FAQ: RECO Freeze Orders & Trust Account Rules
Q: What exactly did the Save Max brokerages allegedly do?
A: According to RECO, four Save Max brokerages in Mississauga “unlawfully disbursed” approximately $2.7 million from their Real Estate Trust Accounts. RECO alleges these funds were used to cover operational expenses like credit card balances, loan payments, and property management fees, which is a direct violation of the TRESA.
Q: My brokerage’s accounts were just frozen by RECO. How do I get my unpaid commissions?
A: Once RECO issues a Freeze Order, the brokerage can no longer pay you directly. You cannot simply ask your Broker of Record to cut you a cheque. You must file a commission protection claim through RECO’s insurance program. Unfortunately, as we saw with the iPro Realty collapse, this claims process can take months to resolve.
Q: Can I be held personally liable if my Broker of Record misuses the trust account?
A: It all depends on circumstances of each case. However, if you are a Director, Officer, Branch Manager, or a senior agent with signing authority, there is a higher chance that you may end up dealing with RECO.
Q: What should I do if my brokerage is under investigation by RECO?
A: Get independent legal counsel immediately. Do not rely on the brokerage’s lawyer. The brokerage’s legal team is hired to protect the corporation and the primary owners, not your individual real estate license. If you are asked to provide a statement to RECO investigators, you should consider retaining a regulatory defense lawyer to ensure you do not accidentally implicate yourself.
This commentary is for informational purposes only and does not constitute legal advice. Contact Tamir Litigation Law Firm today at 416-499-1676 or visit tamirlitigation.com to learn how you can protect your licence and your reputation. You can also message us on WhatsApp for a free initial chat.