A power struggle is quietly building at Canada’s largest real estate board. Brokers at the Toronto Regional Real Estate Board (TRREB) received an anonymous letter calling for an inquiry into its management. The letter claims the non-profit board is creating a for-profit entity without member approval. This lit up broker chats, which are rallying support to find out what level of consultation was done. The letter also demands to know if management is profiting from any of its agreements.
Toronto’s Non-Profit Real Estate Board Is Quietly Planning A For-Profit Entity
TRREB isn’t just fighting the public’s access to data, it’s also in a bit of a dispute with its own members. The letter alleges there was inadequate discussion about a “for-profit” entity being created. It doesn’t seem like much discussion was public — we couldn’t find a broker that knew it was happening prior. This brings up some interesting questions about who wrote the letter, but let’s just move on. We did get confirmation from some board members though that a for-profit entity is planned.
TRREB is a non-profit, which limits its options for building revenue. By building a “for-profit” it can pursue other forms of income generation. The biggest asset they have is the data they control, owned by its members. That would make it an obvious path for creating profits.
The concern with data monetization appears to be the point riling up brokers. For example, let’s say the board wholesale purchases data from its own venture. Brokers might end up being double-billed for using their own data. Once through board membership fees, and by the service they want.
Since TRREB is a non-profit, establishing a for-profit entity requires membership approval. Odds are pretty good this is the first time a member is reading about the for-profit company, so they have yet to be sold on the idea. The author of the letter is demanding to know who approved the planning of a for-profit entity and the project risks. It sounds like they’re an executive with real training.
Spanish Toronto Data Inquisition
Here’s what the members are hoping to get out of the inquiry.
- TRREB CEO John Di Michele and internal legal counsel to present the history and answer the questions that would provide insights as to the purpose and how and why this “For Profit” decision moved forward without member consultation and approval.
- To interview all the external legal firms that have at any time been consulted, all past board members since this decision, past presidents that assisted in coming to this decision should also be brought forward to disclose the knowledge they have.
The minimum questions they would like answered were also included:
At a minimum the following questions seek answers:
- Is the decision to become a for profit not a membership decision?
- Which legal firms provided an opinion on this and included the advice of not informing the membership? Did any legal firms not raise a flag of the conflict for not bringing this to membership? Did any legal firm state that this did not require member approval?
- Do the board of directors not believe that a decision that alters the future of the board and its MLS does not require membership approval?
- What if the membership voted against a for profit entity?
- Why and what is the purpose of this new entity?
- Are the board of directors and the CEO representing themselves or the membership?
- Are there partners and if so who are the partners of this new entity?
- Who are the directors of this new entity?
- Is it the same directors of the Toronto regional real estate board? If so is this not a conflict of interest?
- Who is the new CEO of this for profit entity?
- Is it the same CEO of the Toronto Regional Real Estate board and if so, is this not a conflict of interest?
- If it is the same CEO and staff, should this not have been a new application and decision of the board and its members? Should there not have been an employment application for these positions and not assumed it should be the same CEO and staff?
- If it is the new CEO, does this mean there is multiple compensation? Why? It is in essence the same position and duties just separated.
- Are the directors compensated? Did the directors arbitrarily approve their own compensation?
- What benefit does TRREB’s membership have from this entity?
- What risks exist? What safeguards are there to protect the membership from losing the MIS?
- Broker Bay is to be used by TRREB and yet there is an announcement that it had been acquired by an entity that owns Supra. How does this affect TRREB’s membership? Will the membership be forced into a Supra agreement?
- Do or did the TRREB CEO have prior knowledge of this acquisition?
- Does TREB have an investment in broker Bay and if so, should the membership not know this?
- Do or did any TRREB staff or directors have any investment in Broker Bay or Supra?
- Are there financial statements of this new entity?
- As a not for profit, the membership has access and there is a responsibility of TRREB to provide financial statements. Will the new entity provide financials to its members?
The fact the letter is anonymous may seem odd to people outside of Toronto’s real estate industry. However, it doesn’t strike me as odd, since the board appears to foster a culture of fear amongst its members. Popular brokerages like House Sigma have had run-ins with the board over the use of real estate data.
High-profile agents have even outright said they fear having access to their listing service terminated for criticizing management. Even if it’s just a perceived fear, if high-profile members feel this way — imagine how less-prominent members feel. A real estate agent without access to listing information is most likely to see their business essentially vaporized. It’s a big risk to associate yourself with criticism in the industry.