At CREA’s upcoming AGM, Boards will vote on new mechanism to become direct members of CREA

by John Barbisan, President

At the Canadian Real Estate Association’s (CREA) upcoming Annual General Meeting in mid-April, a special resolution will be presented to amend CREA’s bylaws and rules in order to allow an individual real estate board the option to belong to CREA directly, without having to also be a member of their provincial association.

As our board will be voting on this resolution, we want to provide you with an overview and an opportunity for you to provide input and comments. To share your comments, please email communications@fvreb.bc.ca before April 11.

Background

Since the 1970s, local boards, provincial associations and CREA have together belonged to what’s called the ‘3-Way Agreement.’ This agreement states that each of the three levels of organized real estate agree to work together to provide tools and services across Canada and that individual REALTORS® would be required to be a member of their local board, provincial association, and national association.

Several boards across the country have expressed frustration with their provincial associations and have been seeking a mechanism whereby boards could withdraw their membership from their provincial association while still maintaining their membership with CREA, and therefore continuing to have access to the REALTOR® and MLS® trademarks and related services.

Now, five of the largest boards in Canada – Montreal, Toronto, Calgary, Edmonton and Greater Vancouver – are bringing forth a resolution to change CREA’s bylaws and rules to accommodate direct membership. CREA has worked with these five boards to formulate a resolution which includes six conditions that must be met (and are detailed below).

Board of Director’s position

The Board of Directors is still gathering information on this complex topic and we are considering short and long term impacts. Member feedback is welcome.

Supporters for the resolution

The following are the reasons we hear from the five large boards that support the resolution to allow direct membership with CREA:

• Under the current 3-Way Agreement, we are all locked into a structure that may not serve the needs of members in every part of Canada.
• REALTOR® members pay for all the costs of membership with their local, provincial and national association.
• The fundamental choice of membership is prevented by the 3-Way Agreement.
• There are numerous examples across the country of duplication of services and disagreements about who should be doing what.
• An exit mechanism would be helpful in order to hold provincial associations accountable.
• As a last resort, an exit mechanism and fair process would allow a board to withdraw from a provincial association in an orderly manner.
• This option allows a board to be a direct member of CREA, thus preserving the REALTOR® and MLS® brands consistently across Canada.
• The NAR (National Association of REALTORS® in the United States) already has bylaws and rules to this effect in place.

Supporters for the current agreement

The following are the reasons we hear from other boards and associations who do not support the resolution:

• If mediation is required to deal with issues between organizations, mechanisms and processes can be developed that work within the 3-Way agreement.
• CREA has already begun a consultative process to address the issues boards and associations are experiencing while still upholding the 3-Way Agreement. That process should be allowed to continue.
• To ensure innovation, we must use our limited financial and human resources to focus outward on key initiatives that benefit REALTORS® (i.e. implementation of the new Rules from the Superintendent of Real Estate), rather than being distracted inwardly by internal matters between boards and associations.
• Having an exit mechanism in place may result in a board having less motivation to resolve issues through negotiation and collaboration.
• The proposed mechanism puts undue pressure on associations to comply with the demands of a board, under threat of withdrawal.
• If a board were to withdraw from their provincial association, other boards in that province will be impacted, even though they do not have direct influence in the matter. Potential impacts include: increased fees, reduced services and/or the ultimate demise of a provincial association.
• A weakening of the 3-way Agreement risks the fragmentation of organized real estate, possibly creating openings for external disruptors.

Exit Process

The exit process contains the following criteria:

1. The membership of the applicant board in CREA and the provincial association must be in good standing.
2. The applicant board must satisfy CREA that it has been in compliance with CREA’s Core Standards for at least three years prior to the application, and can continue to be in compliance if it were to withdraw from the provincial association.
3. The board must have provided its members with a business plan setting out all relevant information that the members would need to make an informed decision in terms of withdrawal from the provincial association.
4. The membership of the applicant board must vote to withdraw. That vote must pass by at least a 2/3 majority.
5. The board must satisfy CREA that it has made reasonable efforts to resolve any outstanding issues with the provincial association.
6. Once a decision has been approved by CREA’s board, the withdrawing board will provide one year’s notice to the provincial association and pay full dues for the following 12 months.

Once again, if you have any comments you would like to share with the Board of Directors leading up to the vote at CREA’s AGM, please forward them to communications@fvreb.bc.ca before April 11, 2018.

Several documents and letters submitted to CREA regarding this topic can be found on CREA’s Governance page by scrolling to the very bottom left side of that page.