When working with a registered real estate agent or brokerage, consumer deposit insurance helps protect your deposit in a real estate transaction.

The coverage is available at no cost to you. All brokers and salespersons are required by law to participate in an insurance program that includes consumer deposit insurance.

The coverage responds to events such as brokerage theft, fraud, insolvency, or misappropriation of funds, subject to the terms and conditions of the policy. While the vast majority of consumer deposits end up being used exactly as intended, problems do arise from time to time. Those occasional problems are the reason for this insurance.

What are the limits available?

The consumer deposit coverage provides up to a maximum of $200,000 per claim and up to a maximum of $4 million for all claims related to a single event (for example, insolvency of a brokerage). For events that exceed the maximum of $4 million, claims are paid out on a pro-rated basis, meaning all claimants share in the total limit of $4 million. However, the insurance policy contains clauses, which may limit the amount payable if there is a loss. There is no deductible under this coverage.

Does this coverage respond to a dispute over who the deposit should be paid to?

No. In cases of a failed transaction where the parties simply cannot agree on the disbursement of a deposit held in a real estate statutory trust account this coverage does not respond. In the case of a dispute over ownership of a deposit, a brokerage can only disburse the deposit in accordance with the terms of a mutual consent and or release form signed by both the buyer and seller or by following instructions in a court order.

Your lawyer will be able to advise you on the steps to take if there is a dispute about who is entitled to a deposit.

When should I make a Consumer Deposit claim?

If you are aware of a situation where you believe that a real estate agent or brokerage may be engaged in an insolvency, theft, fraud, or misappropriation of funds, which may put your transaction in jeopardy, please report this situation to the RECO Insurance Department immediately at 416-207-4800 or insurance@reco.on.ca.

Information related to making a claim is provided below. Before making a claim, you may want to contact RECO’s Insurance Department for more information.

Complete the Consumer Deposit Notice of Claim Form, attach all relevant documentation and forward it to:

Attention: Insurance Department
Real Estate Council of Ontario
3300 Bloor Street West, West Tower, Suite 1400
Toronto, ON Canada M8X 2X2

Phone: 416-207-4800
Toll-free: 1-866-245-6910
Fax: 416-207-9020
Email: insurance@reco.on.ca

What’s not covered?

Claims arising as a result of a registered real estate agent acting as an executor, administrator, trustee, guardian, conservator, or in any other fiduciary capacity other than as a real estate agent (real estate broker or salesperson) are not covered under the policy.

For more information, read the Consumer Protection Insurance FAQs.