Canada’s largest real estate board confirmed it’s building a for-profit subsidiary. The Toronto Real Estate Board (TRREB) emailed members to announce its new for-profit plan. This comes after brokers began to rally support for an inquiry into the decision to pursue profits. Some allege the plan was done in secret, but the board says they just weren’t paying attention. The board has been planning to pursue for-profit revenue for over half a decade.
Some Toronto Real Estate Brokers Claim They Haven’t Been Consulted About For-Profit Activity
Last week we wrote about an anonymous letter making a stir amongst brokers. It alleges TRREB is creating a for-profit entity to monetize the board’s MLS listing data. Consequently, the author (and supporting brokers) want an inquiry into the decision. They want to know what consultations took place and if members were properly informed.
Toronto’s Real Estate Board Has Been Planning To Monetize Its Data Since 2014
Despite brokers claiming they hadn’t been informed, TRREB says they were notified. Earlier this year the board said it informed members of the plan at its 2021 Annual meeting in June. The email sent out yesterday was apparently the second time they were notified.
The for-profit company, called PropTx Innovations Inc., will be owned by TRREB. There will be no other shareholders and members will “benefit” from the revenue. Planning first began in 2014, when they began to look into earning income without losing its non-profit status. “This subsidiary of TRREB will effectively receive all non-dues revenue on which we will pay our fair share of taxes,” wrote the board’s president.
TRREB’s For-Profit Subsidiary Will Provide Agent Tools, That Likely Compete With PropTech Startups
Since TRREB is a non-profit, it’s prohibited from pursuing for-profit activities. The move would allow it to cash in on its data, as well as offer “value-added” services to members. Few details have been released on what exactly those activities would mean. It only registered its trademark in September, so it’s unlikely too much is official at this point.
The board said it will “empower” agents, as well as improve service and information for clients. This might sound vague to some, but this likely means a combination of back-office and consumer-facing tools. It sounds like they’ll be competing with PropTech and marketing companies.
There ya go. TRREB is pursuing a for-profit monetization of its data. Brokers (and members) that missed the original mention have been informed by email. Now, this brings up the original mob that was angry about the for-profit company. Were they mad they didn’t know the company was being formed or that it’s a for-profit?
Full letter:
PropTx Innovations Inc.
Dear TRREB Member,
As you know, TRREB is a not-for-profit membership organization, and our Board of Directors is entrusted to represent you by providing superior services and technology in a seamless and transparent manner.
We have grown substantially over the years, as have our service relationships with our surrounding Partner Boards. As we continue to grow, to ensure we remain compliant with all regulations while being a good corporate citizen, we explored the need to protect our not-for-profit status through an extensive consultation process with expert legal and audit advisors.
Recognizing the implications of non-dues revenue, our Board of Directors did their due diligence starting in 2014 which has resulted in the registration of PropTx Innovations Inc., a wholly-owned TRREB subsidiary in which TRREB is the only shareholder. This subsidiary of TRREB will effectively receive all non-dues revenue on which we will pay our fair share of taxes. After-tax dollars will be available to provide enhanced services to benefit you, our Members.
PropTx will also responsibly drive the modernization of TRREB’s MLS® System and related technologies. This is a directive of TRREB’s Board of Directors. Our goal, as ever, is to empower Members and improve on the quality of services and information your clients receive.
Originally announced at our June 2021 spring Annual Meeting, PropTx will be utilized to ensure we position the organization to be at the leading edge of data availability and protection, streamlining of processes and improving the transaction experience for all involved.
This initiative is an operational element that doesn’t change the fundamental structure of TRREB as a not-for-profit entity, not unlike similar initiatives in Montreal and Alberta. We are thankful to our CEO John DiMichele and our entire Board for their important work on this project. PropTx is an exciting initiative that will benefit all of us, and we look forward to sharing more details in the months to come. We will also be seeking more feedback from our Members as we continue this critical work.
All the best,
Kevin Crigger
TRREB President
I would be curious to know what ‘data’ (or more explicitly, ‘whose’ data) are they intending to monetize, exactly? To me, home data (location, size, features, price, property tax, etc.) is actually owned by the property owner, not the agent, brokerage or TREBB (or OREA for that matter). In my opinion, it’s like your medical information: it’s YOUR file, held in trust by a medical practitioner. The practitioner doesn’t own the information contained within it, and can’t do anything with it unless they have your express permission. And they certainly can’t monetize it either.
TREBB (or agents, brokerages, etc.) don’t actually add any value by holding property data in their databases, so why do they feel they can charge people for access? Again, and this is just my personal opinion, I don’t see agents / brokerages / TREBB providing much (if any) value for the fees charged, and certainly no accountability related to the results or consequences of services to provided to their clients. This idea of monetizing property information, that doesn’t belong to them, is just another example.
To me, if we really want to see ‘transparency’ in the real estate market, then property sales information (i.e. prices, dates of transaction, property tax, previous owners, etc.) should be made publicly available via municipal sources.
These people are crooked to the core!
announcing this once in June and once now, after a formal complaint, is hardly ‘not paying attention’.