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In a significant regulatory action, the Real Estate Council of Ontario (RECO) has suspended four Save Max real estate brokerages and two brokers of record—Raman Dua and Nidhi Dua—after discovering that approximately £2.1 million ($2.7 million) in trust funds had been misappropriated. This move not only freezes their bank accounts but also raises questions about the management of trust funds within the real estate sector.
Trust Fund Misuse Uncovered
The suspension, announced on Tuesday, follows a thorough investigation initiated by RECO after receiving a tip about Save Max in December 2024. The council probed into 20 Save Max brokerages, culminating in a forensic review that confirmed the alleged unlawful withdrawal of funds from trust accounts. These accounts are strictly designated for consumer deposits and realtor commissions, yet the investigation revealed that funds were diverted to cover the brokerage’s operational costs, including loan repayments, property management fees, and other expenses.
RECO’s findings indicate a pattern of misuse, with funds allegedly being restored before the end of each month to mask the breaches under the Trust in Real Estate Services Act (TRESA). Jean Lépine, RECO’s newly appointed administrator, emphasised the seriousness of the situation, stating, “Money held in real estate trust accounts does not belong to brokerages. It cannot be used, temporarily or otherwise, for operating expenses.”
Comparison to iPro Realty’s Case
This latest controversy starkly contrasts the iPro Realty Ltd. case, where a staggering £8 million ($10.5 million) went missing from trust accounts in May 2025. Initially kept from public knowledge, iPro’s situation led to widespread discontent when it was revealed, culminating in the freezing of their accounts and the largest claim event in RECO’s history—nearly £24 million ($30 million). The backlash from that incident prompted significant changes at RECO, including leadership shifts and a renewed focus on regulatory oversight.
The council’s current actions reflect a growing commitment to address the vulnerabilities in the management of trust accounts, particularly as the real estate market faces pressures that may lead some brokerages to mismanage funds.
Industry Response and Concerns
Realtors associated with the suspended brokerages have expressed their support for Mr. Dua, citing his integrity and the stability of funds within the brokerage. Mohit Goraya, who leads a sales team under Mr. Dua, described his experience positively, stating that he had received his last commission cheque just last week and had never encountered payment issues. However, amid the uncertainty, Goraya is considering transferring his team to another Save Max franchise.
Industry experts, including veteran realtor Desmond Brown, have voiced concerns over the regulatory framework surrounding trust accounts. Brown suggested that RECO should adopt a more proactive stance, conducting audits of brokerages with financial vulnerabilities rather than waiting for complaints. “We have so many brokerages out there that are strong and they live and work within the rules. It’s a few who are giving the industry a bad name,” he remarked.
Why it Matters
The suspension of these brokerages serves as a critical reminder of the importance of trust fund integrity within the real estate industry. As market dynamics shift, the potential for financial mismanagement increases, making vigilant oversight essential to protect consumers and maintain trust in the sector. With RECO now under scrutiny to enhance its regulatory practices, this incident could lead to significant reforms aimed at safeguarding trust accounts and ensuring compliance among brokerages, ultimately shaping the future of real estate transactions in Ontario.
