A real estate sign is displayed in front of a house in Toronto on Sept. 29, 2021.Evan Buhler/The Canadian Press
A controversial attempt to rewrite the governing rules of Canada’s largest real estate board was defeated in a membership vote last week amid claims of “misinformation” and alleged power grabs.
On May 14, the Toronto Regional Real Estate Board held its spring semi-annual general meeting where its 73,012 members were asked to approve a package of reforms to the non-profit corporation’s by-laws that were said to be about modernizing the organization.
The issue that appeared to rally voters was a proposal that would have stripped members of the ability to set their own professional fees, handing that power to the elected board of directors instead. However, behind the scenes, some TRREB realtors also raised concerns about vague new definitions relating to “Professional Standards” and disciplinary matters, an area where TRREB is already facing civil suits claiming its system for enforcing such standards can be “arbitrary, oppressive, and high-handed.”
The acrimonious tone of the debate was reflected in a sharply worded e-mail TRREB sent on May 9 and signed on behalf of its board of directors. The e-mail accused an unnamed former director of “spreading misinformation about TRREB” by circulating e-mails criticizing its bylaw plans that TRREB alleged had “a focus on advancing false narratives.”
A copy of an unsigned letter obtained by The Globe that was allegedly circulated among TRREB members did outline a number of issues with the proposed bylaw change, among them a warning that language around the enforcement of rules and regulations was changed to include the phrase “in accordance with TRREB Policy or affiliate Policy.” This change would have allowed TRREB to impose fines or other disciplinary decisions for violations of policies set by the for-profit arm of TRREB known as PropTX that runs the organization’s digital multiple listing services.
TRREB’s May 9 letter was categorical in its denials: “There are NO proposals in the new By-Law to change anything related to Arbitration and Professional Standards.” Despite that claim, there were changes. Currently, the board is only able to pass policies that are also “not inconsistent with this bylaw”; the new bylaw would have removed that definition and replaced it with language defining a policy as “rules and regulations, duly established in writing by the Board of Directors that do not require ratification of the Members.”
TRREB declined to comment on the e-mail and didn’t confirm which former director it was referring to. Reports from the member vote meeting say the new bylaw was ultimately defeated by a tally of 635 to 393.
However, even the current disciplinary hearings have serious issues according to those who have been caught up in them. Decisions from TRREB’s professional standards panels can come with hefty fines and, if members fail to pay, it can result in them losing their access to the Multiple Listings Service system, a critical business tool for residential realtors.
One example comes from a civil claim filed in late March by AimHome Realty Inc., which alleges TRREB broke its contract with its members by conducting flawed disciplinary hearings and appeals that resulted in more than $100,000 in fines. The case revolves around the refusal to hear an appeal to a decision from August, 2024, that alleged AimHome agent Grace Zhou broke TRREB rules relating to the backdating of some buyer-representation paperwork for the sale of a Toronto house. It resulted in a fine of $40,000 being levied against her and another $50,000 fine against AimHome.
“We feel that something’s wrong with the original decision,” said Li He, lawyer with Hodder, Wang LLP that filed the suit for AimHome. More troubling to Mr. He was what he called a confusing process to apply for an appeal, which was then rejected. “Basically they ended up saying you didn’t follow our precise instructions and they just rejected our appeal on those grounds. It seems to us it’s quite high-handed.”
Other advocates who have worked for realtors on TRREB disciplinary hearings are less diplomatic.
“The way they conduct their hearings makes no sense,” said Aram Simovonian, a lawyer and partner with law firm Lima Lee and Simovonian. “It’s far from a regular court process. I had a case where I was defending a realtor and the report they purported to rely on at the hearing, prepared by a different lawyer, was 80 per cent redacted. To this date, we don’t have a copy of the full unredacted report. They say their position is, the rules of evidence don’t apply to us. … It’s totally wild. It was honestly unbelievable. I’ve never seen anything like it.”
Mr. Simovonian’s firm is preparing its own applications challenging TRREB’s hearings for failing to act in good faith, and even acting outside the scope of its own powers.
With the bylaw plans defeated, Mr. He said that TRREB still needs to reform its process for professional standards panels, but clarifies he‘s not suggesting the whole system should be swept away.
“We‘re not trying to do a revolution here,” he said. “We‘re trying to work within the confines of TRREB rules.”