A real estate brokerage has recently undergone a routine compliance audit by RECO. The audit uncovered several instances of non-compliance with record-keeping requirements, including incomplete client transaction files and missing signed disclosure forms. What is the most likely initial action RECO will take given these findings?

Question: A real estate brokerage has recently undergone a routine compliance audit by RECO. The audit uncovered several instances of non-compliance with record-keeping requirements, including incomplete client transaction files and missing signed disclosure forms. What is the most likely initial action RECO will take given these findings?

Answer options: ✅ Issue a notice of warning or require the brokerage to submit a compliance plan.

• Immediately suspend the brokerage's registration.
• Impose a significant monetary penalty without prior notice.
• Initiate a public disciplinary hearing without further investigation.

Correct answer: Issue a notice of warning or require the brokerage to submit a compliance plan.

Explanation: RECO typically follows a graduated approach to compliance enforcement. For initial or less severe non-compliance findings, RECO is most likely to issue a warning or request a compliance plan, allowing the brokerage an opportunity to rectify the issues, in accordance with the Real Estate and Business Brokers Act, 2002 (REBBA 2002), and its regulations.