A power struggle quietly ensues at Canada’s largest real estate council. Brokers at the Toronto Regional Real Estate Board (TRREB) received an anonymous letter calling for an investigation into its management. The letter alleges that the non-profit board is creating a for-profit entity without member approval. This eased chats with brokers, who gather support to find out what level of consultation has been done. The letter also demands to know if management benefits from any of its agreements.

Toronto’s Nonprofit Real Estate Board is Quietly Planning a Profitable Entity

Not only is TRREB fighting public access to data, it has a bit of a dispute with its own members. The letter alleges that there was insufficient discussion of the creation of a for-profit entity. Seems like there wasn’t much discussion public – we couldn’t find a broker who knew it was happening before. This raises some interesting questions about who wrote the letter, but let’s move on. We did receive confirmation from some board members that a profit-making venture is planned.

TRREB is a non-profit, which limits its revenue-building opportunities. By building a “for-profit” it can pursue other forms of income generation. The greatest asset they have is the data they manage and which is owned by their members. That would make it an obvious path to making a profit.

The concern about monetization with data seems to be the point that is shaking up brokers. For example, let’s say the board of directors buys data from its own company. Brokers can end up being billed twice for using their own data. Once by the membership fees of the board, and by the service they want.

Since TRREB is a non-profit organization, establishing a for-profit entity requires membership approval. Odds are pretty good, this is a member’s first time reading about the for-profit business, so they’ve yet to sell on the idea. The letter’s author demands to know who approved a for-profit venture’s schedule and project risks. It sounds like they are a leader with real training.

The Spanish Toronto Data Inquisition

This is what members hope to gain from the survey.

Membership Application

  1. TRREB CEO John Di Michele and internal legal counsel to present the history and answer the questions that would provide insight into the purpose and how and why this “For Profit” decision proceeded without consultation and approval from members.
  2. To interview all outside law firms that have been consulted at any time, all former board members since this decision, and former presidents who have helped make this decision must also be put forward to make their knowledge known.

The minimal questions they were eager to get answered were also included:

In any case, the following questions seek an answer:

  1. Is the decision to become a for-profit not a membership decision?
  2. Which law firms have given an opinion on this and have included the advice not to inform the members? Are there any law firms that didn’t announce the conflict because they didn’t bring it up with the membership? Has a law firm stated that this did not require member approval?
  3. Does the board of directors not believe that a decision that changes the future of the board and its MLS does not require approval of membership?
  4. What if the membership voted against a for-profit corporation?
  5. Why and what is the purpose of this new entity?
  6. Do the board of directors and the CEO represent themselves or the members?
  7. Are there any partners and if so, who are the partners of this new entity?
  8. Who are the directors of this new entity?
  9. Are they the same directors of the Toronto Regional Real Estate Board? If so, is there no conflict of interest?
  10. Who is the new CEO of this for profit entity?
  11. Is it the same CEO of the Toronto Regional Real Estate Board and if so is this not a conflict of interest?
  12. If it’s the same CEO and the same staff, shouldn’t this have been a new request and decision by the board and its members? Shouldn’t there have been an application for these positions and assumed it should be the same CEO and staff?
  13. If it’s the new CEO, does that mean there are multiple fees? Why? It is essentially the same function and tasks only separated.
  14. Are the drivers compensated? Did the directors arbitrarily approve their own compensation?
  15. What is the benefit of TRREB membership of this entity?
  16. What risks are there? What safeguards are there to protect the membership against loss of the MID?
  17. Broker Bay will be used by TRREB and yet there is an announcement that it has been acquired by an entity that owns Supra. How does this affect TRREB membership? Is membership forced into a supra agreement?
  18. Does or did the CEO of TRREB have inside information about this acquisition?
  19. Does TREB have an investment in broker Bay and if so, are members not allowed to know this?
  20. Have TRREB employees or directors made any investment in Broker Bay or Supra?
  21. Are there any financial statements for this new entity?
  22. As a non-profit organization, membership has access and it is TRREB’s responsibility to provide financial statements. Will the new entity provide financial information to its members?

The fact that the letter is anonymous may seem strange to people outside of the Toronto real estate industry. I do not find it strange, however, as the board seems to have a culture of fear among its members. Popular brokers like House Sigma has argued with the board over the use of real estate data.

High-profile agents have even said outright: they are concerned that access to their listing service will be terminated due to criticism of management. Even if it’s just a perceived fear, if high profile members feel this way – imagine how less prominent members feel. A broker who does not have access to information on the listing will likely essentially vaporize their business. It is a big risk to associate yourself with criticism in the industry.

Full letter:

Source