Gary Morse (Photos by Lori Weir)
Interview by Kathy Bevan
CREA President Gary Morse and his leadership team are directing a number of key initiatives for 2011/2012, three of which likely will define his term in office. The first is the association’s upcoming launch of its new Data Distribution Facility (DDF) – a national, permission-based facility that will, at no charge, enable individual Realtors and brokers to post property listings information from Realtor.ca on third-party sites and to have private IDX sites.
The second is CREA’s Futures Project, which is trying to determine what the real estate landscape may look like five to 10 years from now, to ensure the right tools and processes are in place to help Realtors to succeed. The third is CREA’s latest interaction with the Competition Bureau, in the bureau’s action against the Toronto Real Estate Board and its policies regarding Virtual Office Websites (VOWs). Morse spoke with REM senior editor Kathy Bevan about these three initiatives ahead of CREA’s fall general assembly – here is an edited version of their conversation.
REM: I understand one of your key objectives during your term as CREA president is to improve communications with Realtors, rather than relying – as CREA has in the past – on your member boards and associations to do this communications for you.
GARY MORSE: Over the last couple of years, we’ve heard lots of comments from Realtors that they don’t hear from the national association. That may have centred around the Competition Bureau issue – it’s also come up in discussions about the Data Distribution Facility (DDF).
We’ve asked boards and associations this year to allow us to communicate directly to their members. In other words, to put the communication protocol aside and allow CREA to communicate directly to Realtors on the street. We now have over 50 per cent of the boards who have agreed we can do that.
That’s a huge change from what has taken place in the past, to get better than 50 per cent to agree. We’re also hopeful that all of the boards will come onside at some point, because I can’t think of any good reason why Realtors shouldn’t hear from their national association. I think we have to be careful how we do that – I don’t think we can inundate them with messages on a very frequent basis. We haven’t implemented the communications process with those boards that have agreed yet because we want to develop a tool that gets it right before we just start sending stuff out there.
REM: Do you think talking directly to Realtors will help resolve some of the dissatisfaction we’ve been hearing lately – specifically from some brokers and real estate agents in Quebec – about lack of communication from CREA and questioning what value CREA provides?
MORSE: We’ve had issues and we’ve had discussions with pretty much all of the boards in Quebec over the last two to three months in order to satisfy questions and concerns. We could ignore them – or we could carry on discussions and that’s what we’ve been doing. Have we satisfied all of their concerns? Not necessarily. Have we satisfied some of their concerns? I’m sure we have. Communication always improves that kind of thing.
I really believe the fact that we’ve initiated our discussion about the future and that we’re taking that across the country, having discussions in all regions – will address the concerns that you’ve mentioned come up in various parts of the country. I think it’s very timely that we’re doing this Futures Project. Through this, it will give everybody the opportunity to have input on the kinds of decisions that are made in the future.
I can understand if there are people out there who maybe question the value they are getting from CREA, because CREA has never been in a position to be able to communicate its value proposition directly to the members on the street. And if I never heard from my national association, I might wonder what they do and what I’m paying for. It’s a fair complaint when people say, “What does my national association do?” That’s something we need to address and we are addressing it.
REM: Tell me more about your Futures Project.
MORSE: We are essentially looking at what the future is for Realtors and organized real estate, given anticipated future consumer expectations. The question that we’ve been asking in our discussions is, “Given future consumer expectations, what is the role of Realtors in five to 10 years and what will be the implications for organized real estate?”
We struck a process called scenario-planning – in that process we develop scenarios of how the future might unfold. It could mean – at one extreme – doing nothing different that we do today. At another extreme, it could mean completely unzipping how we look, feel and work – reinventing organized real estate, perhaps even reinventing what Realtors do in terms of the provision of service. We don’t know where that might all take us.
It’s a very big project. We started it last fall and then really started discussions with people across the country in April. It’s our most significant project for this year.
We don’t have all the answers yet – the sessions so far have been to talk about the issues, the challenges and some possible scenarios. The answers, hopefully, will come later. But we can’t come up with answers to issues and challenges without having a good dialogue and good understanding of what the issues and challenges are in the first place. That’s really what the Futures Project has been about so far.
REM: As much as you and your leadership team want to focus on determining the future of organized real estate, the Competition Bureau’s constant focus on this industry continues to impact CREA’s agenda – a case in point was CREA’s recent request for intervener status in the bureau’s action against the Toronto Real Estate Board (TREB) and its Virtual Office Website (VOW) policies. Does CREA feel it’s necessary to step in only when a board the size of TREB comes under the bureau’s microscope, or is CREA’s potential involvement weighed on a case-by-case basis?
MORSE: I think one of the primary considerations would be – for any area of the country – if there was potential impact that would be felt by other boards and associations in the country. That’s one of the roles CREA plays – to analyze that situation and if there is something happening in one area with regard to any kind of regulation that has potential impact across the country, we would at least look at it to see if we should be involved.
We haven’t spent a lot of time trying to decide if we’re going to be under the microscope of the Competition Bureau for months and years into the future. A part of our futures planning process is to identify needs of Realtors and needs of consumers of the future and work toward making that happen. Hopefully, that will position us well, relative to all regulatory issues.
Regulation comes in many forms – it’s not just the Competition Bureau, each province has a regulator, the federal government has requirements relative to FINTRAC and the new anti-spam legislation that is coming out. There are all kinds of regulatory issues that we need to be on the watch for, to take the most appropriate steps that are going to serve the needs of our members and serve the consumer.
REM: Can you explain how you think CREA’s Data Distribution Facility will help serve the needs of your members and consumers?
MORSE: The primary reason for developing this facility is that we already know the majority of Realtors out there are putting their listings on third-party sites, any number of them. The problem with that is, they’re doing it all individually and it can take time. Sometimes they forget where they put them, they don’t update them when prices change, they forget to take them off systems when they sell or they expire. Having inaccurate information on sites – regardless of what sites they are – doesn’t do anything for the professional image of Realtors.
One of the things DDF will do is – provided we have agreements with those third-party sites – Realtors can determine which sites they’d like their listings to go to and the facility will automatically put them there. When those listings are updated on Realtor.ca, they would automatically be updated on the third-party sites. When they’re sold or expire, they will automatically be removed, so that Realtors won’t have to remember to do that.
The other thing that it will do is help strengthen our trademarks, because there will be requirements in the agreements that we would have with these third parties on how the data can be used, trademark usage – all that kind of thing. So we see this as a benefit for our industry. We also see it as a significant benefit for Realtors.
We know through a survey we’ve done that over 68 per cent of Realtors are manually distributing listing information to any number of sites. The majority of those are spending anywhere from one to three hours a week doing that. Many of them are spending as much as six or more hours a week doing it. So from a time standpoint, from an accuracy standpoint, from a trademark protection standpoint, we see this facility as being a very significant improvement and a great service that’s going to be provided to Realtors.
There are three modules involved. Module One involves a national IDX facility – part of that facility would be to distribute it to large franchisors. The second provides for private or member-only IDX sites and the third module is the facility to distribute to third parties.
Modules One and Two will be either rolled out first, or One, Two and Three will be all rolled out at the same time. We haven’t finalized the dates yet – obviously not all the material has been developed yet, but right now that appears to be the game plan.
REM: You’re just over halfway through your term as CREA president – do you have anything in mind that you hope your name is associated with when your term ends, perhaps a perspective you’ve brought to your presidency from your Nova Scotia home base?
MORSE: I’ve seen our industry be in a reactionary mode for some time now on all kinds of fronts. I believe that we need to make a change in that regard. I believe we need to be more proactive, we have to get ahead of the curve on anything that affects our industry. In order to do that, we need change and so, again, I’m coming back to one of our primary focuses, which is the Futures Project.
I would like to be part of making sure we have a competitive and vibrant industry, that we’re able to meet the needs of consumers. And that we’re also able to meet the needs of Realtors, which most of us believe is one of the best careers in the world. We have to make sure they have the right tools so that they can be efficient in their business of helping buyers and sellers. But in order to do that, we need an efficient and effective structure within organized real estate, where decisions can be made on a timely basis.
If I can play some small part in helping to achieve that, then I’ll be happy.
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CREA, Realtysellers both get standing at TREB competition case
Front PageNov 3, 2011
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CREA and Realtysellers Real Estate have both been granted leave to intervene in the Competition Tribunal proceedings between the Competition Bureau and the Toronto Real Estate Board (TREB).
Earlier this year, Commissioner of Competition Melanie Aitken filed an application alleging that TREB’s MLS restrictions and its proposed virtual office website (VOW) policies are anti-competitive.
Madam Justice Sandra J. Simpson ruled that both CREA and Realtysellers bring unique perspectives to the case, but both will be limited to addressing specific topics.
Lawrence Dale, president of Realtysellers, told REM: “The tribunal recognized that Realtysellers is the leading brokerage in this area and has a distinct perspective in these matters. We were granted intervention on essentially the terms we requested. This issue affects us and the tribunal acknowledged we were entitled to a seat at the table.”
Justice Simpson wrote in her ruling: “In my view, although it is a new company which, for the moment, operates on the ‘sell’ side of the business of operating a real estate brokerage, RS (Realtysellers) has a distinct perspective and is directly affected by TREB’s MLS Restrictions, including the Proposed VOW Rules…RS is the only broker which has indicated to the Tribunal that is has such plans.
TREB had opposed the Realtysellers application for leave to intervene.
The court ruled that “the Tribunal will hear evidence about RS’s view of how it will operate a virtual office over the current Internet and of the difficulties caused by the MLS Restrictions.”
The court rejected Realtysellers’ request to address privacy issues, stating that “this is the one topic proposed by RS on which it does not bring a unique perspective.”
“There is a further caveat,” wrote Justice Simpson. “Because of the lengthy litigation history and the current lawsuits between RS’ senior executives and TREB in which damages totaling more than half a billion dollars are claimed, counsel for RS undertook not to call Lawrence Dale as a witness on the RS topics. In my view, testimony from Fraser Beach should also be excluded and I have decided that he is also prohibited from testifying on the RS topics.”
Beach was at the centre of a previous court battle between TREB and Realtysellers, when the broker was denied access to the MLS system for making MLS information available to a third party.
Although Dale and Fraser will not testify as part of the Realtysellers topics, the Competition Bureau may call both of them to testify at the hearing.
CREA may address the development, use and competitive impact of Internet data-sharing vehicles in Canada other than VOWs. It can discuss the appropriate terms of use, policies and rules that would be in place for these vehicles; and it may talk about the impact of the proposed remedies on CREA and its members, including on the MLS and Realtor trademarks.
The court ruled that CREA will not be allowed to discuss VOWs because the case is specifically about TREB’s proposed VOW policy. CREA was also turned down in its request to address the “appropriate definition of the market and geographic markets”.
CREA had also asked that it be allowed to intervene on the basis that it will not be liable for costs and will not seek costs, but that request was refused. Justice Simpson wrote, “While I have no doubt that CREA will behave responsibly and abide by the terms on which its intervention has been allowed, I do not want to fetter the discretion of the panel hearing this matter to make an adverse cost award should unforeseen circumstances develop.”
The hearing is not expected to start for several months. It will take place in Toronto.
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CREA, TREB lose Realtysellers appeal
Front Page Mar 12, 2012
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The Toronto Real Estate Board (TREB), CREA and 49 individuals named in a $540-million lawsuit launched by Realtysellers have lost an appeal to have the action dismissed. They now have 30 days to file statements of defence with the court.
“CREA spent years trying to avoid filing a defence because they don’t have one,” says Lawrence Dale, president and CEO of Realtysellers. “CREA got TREB and the individuals into this mess. I wonder if TREB will finally do the right thing and expose CREA for what they did.”
The court ruling was handed down on Friday by Justice J. Swinton of the Ontario Superior Court of Justice.
Dale and his cousin Stephen Moranis, a former TREB president, have filed several claims against TREB and CREA over the years relating to Realtysellers, the real estate company they formed in November 2000. The company offered discounted flat fee services. In 2002, TREB enacted new rules that required listing brokers to be involved in the offer negotiation process. Realtysellers sued TREB and filed a complaint with the federal Competition Bureau.
In January 2004, TREB and Realtysellers reached a settlement in which Realtysellers received $700,000 in compensation. TREB changed its rules to allow the flat fee program access to the MLS, and Realtysellers withdrew its complaints to the Competition Bureau, which closed its investigation into the matter.
But Dale and Moranis allege that in 2006, TREB and CREA conspired to force them to close down Realtysellers. CREA implemented new offer negotiation rules in 2007. The Competition Bureau subsequently filed a complaint, which CREA and the bureau settled in 2010 with a 10-year binding consent agreement.
The current $540-million statement of claim names CREA, TREB, and 49 individuals who were TREB or CREA directors or officers at the time, a former CREA president and Treb-Ren ventures, the entity that ran Real Estate News, the board’s now-defunct newspaper. None of the allegations have been proven in court.
In their appeals,
TREB and CREA argued that because the lawsuit named the directors and officers personally, it “raises important issues relating to limited liability protection for corporate representatives.” But Justice Swinton says in the ruling: “I disagree, as the claim against these defendants is with respect to their individual actions, rather than their role as officers and directors.”
Dale says: “CREA leaders came up with a plan in 2006 to prevent me from operating. Now almost 50 people who let that happen must answer for letting that happen. They can’t plead ignorance anymore and they are now personally financially responsible.
“The consent agreement was the first step. Winning these motions was the second step. Now no more delays,” says Dale. “As is my right, I have chosen that a jury of common Canadians will decide this action. I am confident such a jury will see how unlawful they have acted and award a huge amount of damages that will teach the industry a lesson that they will never forget. Canadians know how protective this industry has been.”
In a statement, TREB said it is “pleased by comments from the court pointing to the lack of evidence in the case against them.”
TREB says: “The decision of the court was on a procedural matter and no decision has yet been rendered on the merits of the claim. TREB will continue to vigorously defend the proceeding. We are confident that when the court ultimately addresses the merits of the plaintiffs’ claim, it will be rejected by the court.”
CREA said in a statement: “The ruling was procedural and does not affect the fact that CREA still believes that the plaintiff’s claims are without merit and will be rejected by the court at trial.”
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