from Real Estate Monthly, January 31st, 2011

For more than a decade, Re/Max of Western Canada has been led by Elton Ash. A 30-year industry veteran, Ash began his Re/Max career as a sales associate in Saskatoon and then as a franchisee in Penticton. Ash now leads a network of 246 offices across western Canada from his regional headquarters in Kelowna, B.C. Recently, Ash spoke with REM senior editor Kathy Bevan about the view from the west of the agreement reached by CREA and the Competition Bureau and its impact on the industry. An edited version of their conversation follows below.

REM: Industry discussion about the impact of the recent agreement reached between CREA and the Competition Bureau appears to have been more focused on central Canada than out west – why?

Elton Ash: When you look at what the Toronto Real Estate Board’s policies are compared to the Greater Vancouver Real Estate Board’s policies in the postings of listings, Vancouver in essence has allowed mere postings for years.

I was called by a Vancouver Sun reporter a day or two after the announcement of an accord being reached, and the reporter asked, “How is this going to change the industry?” I told him that in Vancouver it wouldn’t change it whatsoever. And he asked me what I meant and I explained that there had been fee for service brokerages in Vancouver for a number of years and mere postings have been allowed. They weren’t called that, but no-commission listings have been allowed in Vancouver. There would be no change to the way business would be done. And he said, “You’ve got to be kidding me – then what’s this all about?”

REM: There is also confusion about jurisdictions – how does the Competition Bureau’s push for national rules fit in with provincial regulators and real estate acts?

Ash: That’s where the great misunderstanding by the Competition Bureau is – they don’t understand where the lines are drawn within our business. They don’t understand how the regulators operate within each province and what that relationship is with the provincial association and the brokerages.

The Competition Bureau doesn’t really understand that the provincial regulators trump whatever the Competition Bureau comes out with. It’s fine for the Competition Bureau to say what they want to say, but in the end it’s the provincial legislation that dictates how agency relationships and common law are to be dealt with in the courts and the judicial system. So there’s a bit of a disconnect with how the Competition Bureau views that.

I know the question was raised by CREA with the Competition Bureau as to brokerage policy. From the communication I received last week, the Competition Bureau said it wasn’t on their radar. So what does that mean? It means the Competition Bureau doesn’t understand where provincial regulation and the real estate acts really determine how a brokerage operates under common law.

Listings are taken in the name of the brokerage, not in the name of the individual. Thrown into that mix is the independent contractor’s relationship with the brokerage and the taxation issues that are a result of that. You’ve got regulatory issues, you’ve got taxation issues and you’ve got what the Competition Bureau feels are the daily practice issues. And they’re not always related – they’re quite divergent from each other. So there’s a disconnect there and I think that’s where we get frustrated as an industry, looking at this and shaking our heads and asking, “Where does this all leave us?”

REM: And have you determined just where this does leave you?

Ash: There is confusion and that’s why there’s fear within the general membership and among individual licensees themselves – from those who have been involved for one year up to those with 30 years of experience such as myself. There’s not a black and white response to these issues. Eventually, through practice and through court proceedings, a lot of these questions will get answered, but that will create other questions. There will always be gray areas, as new business models come out.

REM: Is one of those gray areas how a local broker can advertise a property that is located in another province on MLS?

Ash: In order to place a listing on a real estate board, you have to have membership in that board. This is where regulation and common law agency representation all comes in. I know real estate boards are looking at the forms that are used and wanting to make it very clear that when a consumer is requesting that their home-for-sale be posted on a real estate board site, that there’s a true understanding by the seller as to what their representation actually is and what they’re agreeing to.

This makes more paperwork, but the consumer has to understand what their agency relationship is and what that affords them, for overall protection and responsibilities and consultation and what that individual Realtor can provide. Again, it goes back to the disconnect the Competition Bureau has in understanding all of this.

REM: In Re/Max’s efforts to communicate with consumers, all three Re/Max regions in Canada appear to be trying to speak more with one voice, rather than three, on certain topics. What is the strategy behind this?

Ash: About four years ago the three regions made the conscious decision to try to come out with four to five – at that time, now six to seven – national-related press initiatives to discuss a segment of the real estate market. This can be luxury homes or recreational properties or first-time homebuyers or market updates – it’s a national snapshot of that particular topic.

I think it’s much more beneficial for all involved from a Re/Max perspective, because what is a great strength is also a great weakness. By having three separate regions in Canada, the strength has been that we have three regional offices that know their regions intimately and work with the brokers/owners and franchisees in each of those regions with a strong fundamental sound local knowledge.

The weakness of that is our image and brand can get fractured from a national perspective. So the three of us got together and it does present a much stronger national brand.

REM: Does this mean that all three regional leaders agree with a public stance taken by any one of you? For example, Michael Polzler’s comments criticizing part-timers in the industry and, more recently, Realtor.ca – do these comments represent your views?

Ash: I think it’s important that issues get raised. I may not personally ever agree with an issue that Michael may bring up, or one that other industry leaders such as Phil Soper or Don Lawby may bring up – it depends.

But discussion of that issue will result in a better understanding and communication among the industry players, whether they are franchisees or organized real estate boards or provincial or national associations.

Discussion is always good. And Canadians are famous for that – we’re famous for having open discussion. Everyone may not like a particular position – my goal with anything is to understand that position. I may not like it, but as long as I understand where that individual or group is coming from, okay.

REM: Where is the direction coming from within Re/Max of Western Canada to meet consumer needs and demands – is it coming from your salespeople and your broker/owners agents, or is the expectation that you as a franchisor will provide that direction?

Ash: The most successful way is from the grassroots – that’s the way we’ve always operated. It’s the feet on the ground, the people who are dealing with the consumer daily who really direct us as to what’s required. And that’s always been the way for the Re/Max organization – we’re not top driven, we’re bottom driven. We get pushed by our franchisees, by our brokers/owners, and by the sales associates about where we need to be and what we need to be doing.

As a franchisor, we’re expected to be leading some of these ideas and suggestion. But really, we’re not in the daily business of selling real estate – we’re in the daily business of selling franchises. So then it comes down to communications.

This goes back to what I said earlier about having open discussion. We need to always keep an open mind, with a respect and understanding both ways as to what we can do as a franchisor, given budgets and ability.

What I hear from our membership is that they really respect the openness and our desire to try to take some of their ideas and run with them and be a leader at the same time."