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UPDATED: Cornerstone amalgamation: Dissent from past MREB board presidents and current members

Editor’s note:

On June 14, 2024, REM received the following information from Tehreem Kamal: “More than 10 per cent of MREB’s members have signed a petition for an SGM to be called to rescind the vote to amalgamate with WRAR, RAHB and SDREB. MREB is holding the SGM for its members on June 26.”

 

Over the past several months, members of the Mississauga Real Estate Board (MREB) have been expecting to amalgamate with several other Ontario boards on July 1, as the new Cornerstone Association of Realtors (Cornerstone).

What they likely weren’t expecting are some major concerns that have come up since January’s membership vote.

 

Background

 

In October 2023, the Realtors Association of Hamilton-Burlington (RAHB), the Waterloo Region Association of Realtors (WRAR), the Simcoe & District Real Estate Board (SDREB) and MREB announced that SDREB and MREB signed a letter of intent to join the amalgamation of the four organizations.

On January 31 of this year, MREB members voted to amalgamate with RAHB, WRAR and SDREB to become Cornerstone Association of Realtors on July 1, 2024.

Tehreem Kamal, broker with Royal LePage Real Estate Services Ltd., Brokerage, sat down with REM to explain the issues concerning many members and past presidents of MREB — with less than a month to go before the change takes place.

Kamal, a past president herself, has not served MREB or its committees (or any other board) since her term finished in 2019. She was alerted to the concerns in May at an event hosted by MREB, where conversation ensued about the landscape rapidly changing and what MREB is doing.

“I inquired further to find out the facts, what has changed, why there are concerns and who has them,” she explains. “A few questions were asked of the board of directors and president, and a meeting of past presidents was called on May 8 where (they) answered questions.” This included an inquiry about where the strategic plan could be found. Kamal says the group was told MREB is working under status quo and to “trust the process.”

 

Original vision for amalgamating

 

Initially, the two immediate past presidents of MREB were tasked to engage in conversations on behalf of MREB about an amalgamation, as per their leadership positions. They provided their consent for amalgamation, along with and based on the unanimous consent of MREB.

“All sides came together and started working on a plan and feasibility, and there was a lot of work done from all ends. MREB has spent a lot of money and staff resources,” Kamal notes.

The original vision of the proposed amalgamation was for MREB and other Ontario boards to be part of one board and one MLS system: Information Technology Systems Ontario (ITSO)’s Matrix. MREB, Oakville, Milton and District Real Estate Board (OMDREB), London and St.Thomas Association of Realtors (LSTAR), Niagara Association of Realtors (NAR) and WRAR all use this system.

Boards from Mississauga to London, Niagara and others in between were to become part of one amalgamated organization with better representation and collaboration among member boards. Members could access all they need to serve clients while not paying too many fees for it.

“The main thing is a member on the street is tired of paying too much for too many boards,” Kamal explains. “Agents are always struggling with the fact that to access one system or one MLS or a particular property, they must pay multiple fees throughout Ontario. With Matrix, a lot of boards were being served from one MLS system. It was very convenient and facilitating — agents can just go into that system and pull up the archives to serve their client better, to get all the information on hand.”

 

MLS system decision extension

 

The initial term of ITSO’s MLS services agreement was three years and ends on December 31, 2024. Any association/board that does not wish to renew the term is required to give ITSO six months’ notice, which would have made the deadline July 1, 2024.

However, ITSO confirmed that many of its member groups expressed a desire for more time to decide to continue with the services or switch to a different provider.

For this reason, in February, ITSO’s board of directors notified all its members that they would extend the deadline for giving notice of non-renewal until September 30, 2024.

Tom Lebour, broker at Royal LePage Real Estate Services Ltd., Brokerage, and past president of MREB and the Toronto Real Estate Board (now the Toronto Regional Real Estate Board), says this extension is a result of the changes taking place. “While MREB was given the amalgamation mandate four months ago by membership, since then the MLS landscape has changed quickly and several boards have switched systems.”

He believes that since ITSO has delayed the deadline for its MLS agreement renewal until September 30 — giving three additional months at status quo — this gives boards at least that much time to reassess, take a better look and decide later.

 

Missing pieces and a changed vision

 

While Kamal feels the vision was well intended and done in good faith, some key pieces seem to be missing. Early on, MREB’s two immediate past presidents sent concerns in a letter and email to MREB, asking things like what the organizational chart would look like, who would be CEO, what would happen to MREB’s membership money and if MREB was vetting all their contracts with a lawyer.

As a MREB member, Kamal has requested the board provide her with summaries or minutes of the meetings from October to date, so she can review them to see what’s changed and how.

The boards that were originally going to amalgamate have changed course, too. Since the start, she says that LSTAR and NAR joined another service provider. OMDREB is also possibly leaving Matrix for another system with 80,000 members in Ontario. “There’s power in numbers,” she notes. “If the strength of membership is with one MLS provider to the tune of 80,000 members, where we’d see most GTA listings, then how does it make sense to create a silo of possibly 8,000 members?”

Although this changing landscape alters the original vision, Kamal acknowledges these decisions were surely made with members’ best interests in mind. She knows the boards are autonomous non-profit organizations serving their membership, and she’s confident they’re listening to their membership and what’s best for them.

Nonetheless, with the original amalgamation plan being multiple boards and a few having since changed their MLS system plans, Cornerstone now comes down to four: MREB, RAHB, WRAR and SDREB.

 

Key concerns

 

Kamal and others wonder if MREB is truly listening to what’s going on in the industry as a whole and to what will be most beneficial for membership since the landscape and technology are changing so rapidly. There are a few key concerns about amalgamating.

For one, the original vision is fragmented because the new group of amalgamated boards is smaller and won’t have the same power and benefits as intended. Plus, some MREB members feel they will end up paying for multiple boards all over again instead of one where everyone would be under the same umbrella.  

“I have personally listed and sold properties in London, and so have colleagues in my office — we go all over the GTA, wherever the client takes us,” Kamal explains.

“Likewise, many in my office work and live in Niagara, and they work here (in Mississauga), Oakville and Milton, too. For them, it’s going to be the same problem. The solution that was created, unfortunately, is not relevant or realistic anymore.” Kamal stresses that this is why information and access to data and archives are extremely important.

She says another main concern is the premise being presented to Mississauga’s membership that with the amalgamation there will be a stronger voice in the industry at large, with the provincial and national assemblies.

“It’s actually the opposite. On their own right now, the boards left in the proposed amalgamation total (a certain number of) votes in the Ontario Real Estate Association (OREA) assembly. When they come together, the formula that allocates votes kicks in differently and cuts down the votes. How are we a stronger voice if we don’t have the same vote count? This was my question at that (May) president’s meeting with the board.”

The way it works with OREA is a member board’s vote allocation is calculated by a formula set out in the OREA bylaw and is based on the number of individual members of the member board.  A newly amalgamated member board’s vote allocation would be based on the total number of individual members of the newly amalgamated member board and calculated according to that formula.

As well, Kamal and others are wondering what happens to MREB’s money once July 1 comes. “More than $2 million of membership money will be folded over to (Cornerstone). How will accessing it be handled if we need to get something done in Mississauga in the coming months to, let’s say, do any advocacy work?”

Lebour echoes this sentiment and is concerned the funds will be much harder to access once they’re within the new organization. “The $2.5 million that will be thrown into the (Cornerstone) pot wasn’t hidden, but it wasn’t pointed out,” he notes.

These concerns were raised repeatedly and Kamal says there’s been no clear answer, “Which means that things are not clear. So why the rush to get into this amalgamation? All over the world, whether it’s real estate or a multinational company, organizations come together. However, they do years and years of feasibility reports, studies and what-if scenarios.

All of this is happening, to my knowledge, from October 2023. Within a span of less than 12 months, how can we fold an organization that has sustained itself for 70 years?”

 

Advocacy and MREB’s role

 

Right now, there’s a mayoral by-election in Mississauga. Kamal explains that during these times, MREB has historically reached out to city council and been engaged in government relations and advocacy efforts. But right now, she says MREB is nowhere to be seen.

“This is one of the most important key events in Mississauga. Everybody’s talking about housing and MREB is the pillar, the stakeholder that represents people directly connected with housing — yet, they’re hugely absent in this, which is a huge red flag.”

Lebour points out that in 2021, a rumour surfaced about implementing a land transfer tax and MREB worked with OREA to stop it. “It never materialized,” he recalls. “Now, I’m not sure Cornerstone will be effective at devoting time to local issues, which is very important.”

Wondering why MREB’s focus has shifted, Kamal emailed the board to ask how it’s positioning itself in terms of mayoral debate, reaching out to candidates — and a potential municipal land transfer tax being implemented, again.

Lebour notes one of the leading Mississauga mayoral candidates in the by-election hinted about revisiting the tax and that MREB has a strong government relations committee for local advocacy work. “Mississauga has historically defended imposing a municipal land transfer tax over the years, and I have been part of that,” Kamal affirms.

The response she received to her email was that the board is too busy hosting events like a golf tournament and receptions. Kamal acknowledges the importance of running well-intended charity events like these but stresses that MREB’s job, first and foremost, is “to protect the interest of the consumer on the street pertaining to housing.”

“We cannot take our eyes off the ball,” she stresses. “If this amalgamation or anything else is detracting from what MREB has actually stood for in the past and should still be standing for, there is something seriously wrong.”

 

Transparency needed with partner boards

 

Kamal points out that other amalgamating boards should know about what’s happening. “Do they understand that MREB’s membership is not on the same page as they were in January and that they’re probably moving towards an amalgamation with potential turbulence? They have a duty of care to their membership, so who’s keeping them in the loop?”

Kamal feels that MREB should be very transparent with their partners and not just the people representing the amalgamation task force. They shouldn’t be led into something that MREB isn’t 100 per cent ready for. “Even if a director is not on the task force, they should know they need to go back to their brokerages and say, ‘We’re heading into an amalgamation where one of the key partners coming in with possibly 2,200 members and resources of more than $2.5 million is probably having second thoughts.’”

 

The SGM request

 

“Every member that I’ve spoken to, every past president that has discussed, exchanged ideas and brainstormed — we are all for collaboration, but not for creating silos of the Mississauga board and others. This is the challenge and why membership has requested MREB to call an SGM,” Kamal states.

In May, past MREB presidents and industry members collected signatures that would go on a letter petitioning MREB for a special general meeting (SGM). An email (obtained by REM), signed by past presidents John Cassan and Michael Mills, reiterates concerns regarding the proposed amalgamation, mentions the petition being signed with the SGM request, asks MREB to “pause the amalgamation and call for a meeting of the membership” and states, “It is foolhardy, risky and downright reckless to proceed with the amalgamation.”

The pair recount a past error when MREB’s MLS system was sold to the Toronto board in the 1980s, despite membership concerns: “This short-sighted decision cost us dearly. It took us almost four decades to recover from this mistake, making our board a successful enterprise and here we are again.” They warn MREB it’s about to make a “terrible mistake which will cost us dearly.”

Following this, on May 28, 10 past presidents of MREB, including Cassan and Mills, signed a letter to MREB that requested it call a members-only SGM within the next 10 days. The letter advised the board to “not be hasty in signing any contracts without satisfying members’ concerns at the proposed SGM.”

While Kamal acknowledges that MREB’s repeated response, “the membership voted yes in January to amalgamate,” is indeed true, at the same time she points out, “The information the membership was provided in January is not completely relevant anymore. It has changed drastically.

The membership, in view of today’s reality, would like to rescind the vote from January 31, have the board put a hard stop on anything (relating) to this proposed amalgamation and genuinely take stock of what’s happening in the real estate industry at large that will benefit our members.”

From there, she points out there’s always time to look into future options.

 

MREB’s response

 

As of the time of writing, MREB had not accepted the SGM request, nor had it responded to the email from Cassan and Mills. However, REM received the following statement from Rita Asadorian, chair of MREB:

“We have respected the clear and decisive mandate from our members. Despite this, a small group of individuals has attempted to disrupt the process. While a petition for a special general meeting was submitted on May 28, 2024, signed by 10 past presidents, it did not meet the 10 per cent member threshold required by the Ontario Not-for-Profit Corporations Act.

Nevertheless, we have been proactive in addressing concerns. The MREB board of directors hosted delegates from our partner boards at a board meeting to discuss and resolve any issues. This session was productive and satisfying for all attendees. 

Similarly, we held a session with our past presidents, providing comprehensive information and addressing their questions. Both meetings concluded with a positive consensus supporting the amalgamation.”

Asadorian points out that MREB understands significant decisions can generate some discontent but that, “We have consistently addressed the same concerns and must now proceed with the mandate provided by our members’ unanimous vote. We remain open to all questions and concerns, which can be directed to me at any time.”

She says that all four associations are “eager to demonstrate the benefits of our united efforts,” confirming that the amalgamation documents have been formally filed with the Ontario government and the process will move forward.

 

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