09/24/2026
Two assumptions we hear often from broker owners, and what the regulation actually says.
First: that a compliance issue belongs to the brokerage, not to you. Ontario Regulation 567/05 requires the broker of record to actively participate in the management of the brokerage, ensure adequate supervision of everyone the brokerage employs, and take reasonable steps to deal with any failure to comply. That obligation is named to the individual, not the brokerage as an entity. Delegating tasks to qualified staff is sound management — RECO is explicit that it doesn’t transfer legal accountability.
Second: that RECO only gets involved when someone complains. There are three paths — inspection, complaint, and self-report. Inspections run under section 20 of the Real Estate and Business Brokers Act, are risk-based, and can be scheduled or unscheduled, so a brokerage with zero complaints on file can still face a finding. And a shortfall found in trust account reconciliations must be self-reported; failing to do so is itself a separate offence.
Which raises the question of what you’d actually show. Angela Paonessa, Compliance Manager at myAbode, has seen brokerages with a polished policy manual still be under-supervising — the gap shows up when the manual exists as a document but not as a working management system. What she looks for is evidence of actual oversight, not written intent: real file review and follow-up, a documented correction process, and someone who can explain who is watching what, how often, and what happens when something is off.
“The practical test is simple: if a regulator asked, ‘Show me how this policy worked on the last three issues,’ could the brokerage point to real examples, or only the manual itself?”
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