The Ontario Real Estate Council (RECO) recently released an important update in June 2025 for brokerage leadership. It shines a spotlight on how important bookkeeping is for staying compliant.
According to the update, brokers of record are ultimately responsible for making sure trust accounts are managed, balanced, and reported correctly.
The update reminds us that bookkeeping is not optional, it’s a legal requirement. It protects your brokerage from fines and bad publicity. Here’s what this means for you and why you need to keep financial records accurate.
1. You (Broker of Record) Are Always Responsible
RECO makes it clear: “The broker of record is solely responsible for authorizing and monitoring withdrawals from the brokerage’s trust accounts.” You can have someone else do the bookkeeping, but you must still watch over the process. You can’t pass off the responsibility.
2. Trust Accounts Must Be Balanced Every Month
The update stresses that every brokerage must balance its trust accounts each month. This isn’t a suggestion. It’s a rule. Skipping or delaying this step has already led to big fines. One brokerage was hit with a $9,000 penalty for not meeting not meeting its monthly real estate trust account (RETA) reconciliations.
3. Review and Sign Off on Reconciliations Promptly
You don’t just need to complete the work. You also need to “review the information and must sign and date all reconciliations within 30 days after the last day of each month.” This step is a legal requirement. It helps you catch mistakes before they become compliance issues.
4. Use Professionals for Your Bookkeeping
Make sure the people doing your bookkeeping know exactly what RECO expects. “Tasks should only be assigned to individuals with the necessary expertise” to keep your brokerage safe.
5. Keep Good Records and Strong Controls
The update highlights the need for “robust internal controls” and detailed record-keeping. These safeguards protect your brokerage and clients’ money by reducing risks of errors and fraud.
6. Declare Any Unclaimed Trust Money Each Year
Every year, when you renew your application, RECO requires you to say whether you have any unclaimed trust money. Even if you don’t have any, you must submit this declaration on time. It helps you avoid penalties or delays.
7. Fix Mistakes Right Away
Finally, the update has this key advice: “Prompt, accurate reconciliation is the best tool a brokerage has to identify and remedy issues early and reduce risk.” Don’t wait to fix problems. Acting fast can save you from costly penalties.
Conclusion
The RECO June 2025 update sends a strong message: bookkeeping is no longer just paperwork. It is a legal obligation for running a compliant and trustworthy brokerage.
To protect your business, avoid fines, and build trust with clients, now is the time to prioritize expert bookkeeping, timely trust account reconciliations, and close oversight. Have questions or need expert help? Contact KP BOOKS CO now to make sure your brokerage is fully protected.
