Cornerstone merger: Disagreements from former MREB board members and current members

Editor’s note:

Tehreem K. Kamal gave REM the following information on June 14,2024. “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.”

Members of the Mississauga Real Estate Board have been anticipating a merger with other Ontario boards as Cornerstone Association of Realtors on July 1.

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, this year, MREB Members Voted to amalgamateCornerstone Association of Realtors, a new organization formed by RAHB WRAR and SDREB on July 1, 2020.

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 is a past president who has not served MREB (or its committees) or any other board, since her tenure ended in 2019. She was made aware of the concerns at an event hosted in May by MREB. Discussions were held about the rapidly changing landscape and what MREB does.

“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 asking where the strategic plan can be found. Kamal says that MREB was told to keep the status quo. “trust the process.”

Original vision for amalgamating

Initially, as a result of their leadership positions, the two immediate former presidents of MREB had to initiate discussions on behalf MREB regarding an amalgamation. They gave their consent to the amalgamation based on MREB’s unanimous consent.

“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 and other Ontario boards, including Oakville, Milton and District Real Estate Board and London and St.Thomas Association of Realtors use this system.

Boards from Mississauga and London to Niagara and others between were to be merged into one organization, with better representation and cooperation among member boards. Members could have all the tools they need to serve their clients and not pay excessive fees.

“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.

ITSO confirmed, however, that many of its members wanted more time to decide whether to continue using the services or switch providers.

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 of Royal LePage Real Estate Services Ltd. Brokerage, a former president of MREB (now Toronto Regional Real Estate Board) and the Toronto Real Estate Board says that the extension is a direct result of the current changes. “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, a new vision

Kamal believes the vision was well-intentioned and done with good faith, but some key pieces appear 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 originally planned to merge have also changed their course. She claims that LSTAR and NAR have been working with a different service provider from the beginning. OMDREB could also be leaving Matrix in favour of another system with 80,000 Ontario members. “There’s power in numbers,”She makes a note. “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.

Cornerstone has now been reduced to four options, despite the original plan of multiple boards. Some have changed their MLS systems plans since then. MREB, RAHB 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. A few key concerns exist about combining.

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. Some MREB members believe they will have to pay for multiple boards instead of one that would cover everyone.  

“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 emphasizes that information, access to data, and archives are of great importance.

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. Why are we so eager to move forward with this merger? All over the world, whether it’s real estate or a multinational company, organizations come together. But they spend years on feasibility studies, reports and what-if scenario.

All of this, as far as I am aware, will begin in 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 how MREB has always reached out to the city council during these times and engaged in government relations. She says that MREB has been largely absent in recent months.

“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 explains that a rumour about a land tax was spread in 2021 and MREB collaborated with OREA to stop the rumour. “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 that one of the leading Mississauga mayor candidates in the by-election hinted at revisiting the tax, and that MREB’s government relations committee is strong for local advocacy. “Mississauga has historically defended imposing a municipal land transfer tax over the years, and I have been part of that,” Kamal affirms.

The response to her email was the board is too busy with events like golf tournaments 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 emphasizes. “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 is needed for 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 believes that MREB needs to be transparent with all of their partners, not just those who represent the task force for amalgamation. 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 says.

In May, industry members and past MREB Presidents collected signatures for a letter requesting MREB to hold a Special General Meeting (SGM). An email (obtained from REM), signed John Cassan, Michael Mills, and mentions the petition that was signed with the SGM Request, asks MREB for clarification. “pause the amalgamation and call for a meeting of the membership”There are a number of states that have enacted legislation to protect the rights and freedoms of their citizens. “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.”

On May 28, ten past presidents of MREB including Cassan, Mills and Cassan signed a request to MREB to call a SGM for members only within the next 10 business days. The letter advised board members 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 dramatically.

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 writing of this article, MREB still hasn’t responded to Cassan & Mills email or accepted their request. REM did receive the following statement, however, from Rita Asadorian.

“We have respected the clear and decisive mandate from our members. A small group of people has tried to disrupt this process despite this. A petition for a special meeting was submitted by 10 past presidents on May 28, 2024. However, it did not reach the 10% threshold required by the Ontario Not-for-Profit Corporations Act.

Nevertheless, we’ve been proactive in addressing any concerns. The MREB Board of Directors hosted delegates from partner boards for a board meeting in order to discuss and resolve issues. All attendees found this session to be productive and satisfying. 

In a similar way, we also held a meeting with our past Presidents, providing them with comprehensive information and answering their questions. Both meetings concluded with a positive consensus supporting the amalgamation.”

Asadorian explains that MREB is aware that some decisions can cause discontent, but that they are not the only ones. “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 all four associations are “eager to demonstrate the benefits of our united efforts,”Confirming that the documents for amalgamation have been filed with the Ontario Government and the process will continue.