By Susan Doran
A welcome wind of change is gusting through the real estate industry thanks to a bylaw amendment that rattled the windows at CREA’s annual general meeting in Ottawa.
On April 16, prompted by an impactful coalition of five of Canada’s largest boards (Vancouver, Calgary, Toronto, Edmonton and Montreal), 310 delegates voted to provide boards with the option of direct membership to CREA, subject to a rigorous application process and one year’s notice.
“This change establishes a process for local boards to become direct CREA members without also having to belong to their provincial association should they and their members vote to do so,” states a joint release from the five boards.
“The boards support this change because it provides members and their local boards with choice. Choice in turn enhances accountability at all levels of organized real estate and helps to ensure that members receive services that are of value to them and the clients they serve.”
In a nutshell, the new amendment provides a mechanism for provincial association accountability that didn’t exist previously, when boards had no way of bailing out of these associations under any circumstances.
Why the need for this change? Boards across the country cite concerns around such issues as the need to cut operating costs and dues; streamline operations; revamp governance procedures and strategic planning; improve communications and transparency; eliminate service overlap with other associations such as CREA; boost professionalism; and better manage member tensions around perceived imbalances of influence between large and small member boards.
The new amendment “translates into more efficiency for organized real estate, less duplication of services, and more opportunity for industry innovation,” says Calgary Real Estate Board president Tom Westcott. “We need this kind of thinking to keep pace with a rapidly changing real estate environment.”
It’s a big win for members, says Toronto Real Estate Board president Tim Syrianos, who is confident it will greatly enhance the transparency and communication of provincial associations.
“All levels of our industry should be held accountable, the same way that Realtors and brokers hold local boards accountable every day,” says Syrianos. “In a free market, choice fosters accountability. Without a choice to belong, there is no accountability for provincial associations within the Three-way Agreement.”
The Three-way Agreement is the long-standing framework of governance between the three levels of organized real estate (local boards, the provincial/territorial associations and CREA), that until this recent change called for interconnected membership in all three tiers.
While largely supportive of the new, more flexible directive, the three levels of governance all still strongly endorse the Three-way Agreement’s original vision of solidarity.
“To be clear, this is not a vote to separate. This is a vote for choice,” says David Reid, president of the Ontario Real Estate Association (OREA), which voted in favour of the motion for direct membership in order to show support for its 38 member boards, likely to the surprise of some.
“We are not afraid of being held accountable. We are working hard to show people what we are doing and where we are at,” says Reid. “We really want to communicate and we know we’re getting better at it…. Now there is the choice for boards to opt out but we certainly don’t want anyone to.”
In a Twitter post on the day the motion passed, Reid noted that the five boards that are on the amendment indicated they in fact have no intention of leaving their provincial associations.
“We’re stronger together and we’re moving forward,” says Reid.
OREA, struggling with member board dissatisfaction and having lost its bid to continue providing Ontario real estate education after 2020, has been facing some whopping changes in the past year but appears to be stepping up to the plate.
“We’ve been putting a lot in place over the past 12 months,” says Reid. “Last year OREA undertook a strong strategic plan and made it a public document…We want to do fewer things, better.”
To that end, OREA is trimming expenses and doing its best to make government relations and advocacy paramount. Regarding concerns around duplication of services, “we’re trying to stay in our lane,” Reid adds.
The association has also been “reaching out, meeting with individual boards face to face to look at their concerns,” he says.
The British Columbia Real Estate Association (BCREA) is also trying to be pro-active, having had its own share of issues and drama. Past-president Jim Stewart says the association has slashed member dues, is undergoing a restructuring of staff and office space, and has made changes to governance procedures.
It’s a concerted effort to avoid taking on too much (“mandate creep” as Stewart refers to the common problem). The association is “re-focused on providing the core services of advocacy, communication, economics, education and standard forms” to member boards while trying to build value and reduce cost, he says.
“We’re adapting to change,” says Stewart. “This has been building for a long time…We need to do a better job of collaborating with our member boards. It’s so critical that we rebuild trust, which is why we chose to support the motion. It shows that we are listening.”
Stewart says he found it encouraging to learn at the CREA meeting that in the U.S., a mechanism for boards to opt out of their state associations has been in place for years and has never once been utilized.
“We are so afraid about what would happen that we lost sight that the boards are not going anywhere – they just want the ability to,” says Stewart.
The shift to direct membership stimulated debate at the CREA meeting. Some real estate professionals felt that government legislation, regulators and third-party technology disrupters are more pressing threats to the industry. Others expressed concern over the economic impact if, despite current protestations to the contrary, large boards like Toronto or Vancouver vote in future to leave their provincial associations. And a few argued that a change to the Three-way Agreement, novel though it may be, is not an issue that really concerns the average salesperson, but rather directors.
But here’s the takeaway at present – whether it’s on your radar or not, the choice to opt out now exists, and that will make provincial associations more receptive than ever before to the concerns of their local boards.