Shareholders for the Multiple Listing Service of Northern Illinois are planning an informal meeting within the next couple of weeks in response to a controversial vote last week to approve a consolidation with a rival, the broker-owned MAP MLS.
A group of dissenting shareholders — representing five of 10 shareholders of MLSNI, did not participate in last week’s meeting. Those shareholders who were present voted 3-1 to approve the consolidation plan, which will change the operating structure of MLSNI and lead to greater broker control of the joined MLS. One shareholder abstained from the vote.
The MAP MLS board has already approved the consolidation, and MAP brokers will consider the deal at a meeting later this month. The MLSNI board had voted 14-4 in October to approve the consolidation with MAP MLS.
The shareholders who opposed the proposed consolidation plan have said that the deal is unnecessary and lacks compelling financial benefits for the MLS participants they represent, while proponents have said that a single MLS serving the Chicago market area would improve efficiency and eliminate dual membership fees for some agents and brokers.
In other markets, too, brokers are pushing MLSs to consolidate, restructure and provide brokers with more control — the brokers driving these changes say that it’s time for MLSs to be more responsive to members’ needs and wants.
Still to be resolved in the Chicago-area consolidation is whether the dissenting shareholders of Realtor association-owned MLSNI will take legal action to protest the consolidation plan, as there is a dispute over whether the absence of five shareholders from the meeting last week prevented a quorum among shareholders.
Terry Penza, president and chief operating officer for the North Shore-Barrington Association of Realtors — one of the shareholder-represented associations that approved the consolidation, said today that the association’s lawyer and other lawyers for proponents of the consolidation have examined state business law and the MLSNI shareholder agreement. “It is our understanding that the meeting was legal,” she said.
The vote to approve the consolidation will hopefully put to rest years of deliberation, Penza said. “Let’s save our members money and get going. We have to consider what our members want. If the association doesn’t want to do what its members want them to do … there is no association. I’m hoping where it will go from here is one MLS.”
Unless there is a lawsuit filed, the consolidated MLS could be active in January 2007, she said. MLSNI is one of the largest MLSs in the country, with about 51,000 members, while MAP MLS has about 14,000 members, and most of MAP’s members are also members of MLSNI.
The Chicago Association of Realtors, North Shore-Barrington Association of Realtors and the Realtor Association of West-South Suburban Chicagoland voted to approve the MLS deal.
Ginger Downs, CEO for the Chicago Association of Realtors, said, “At this juncture I think everyone wants to see the transaction moving forward — find ways to solve differences that are left and move forward. Certainly we would prefer to see that rather than litigation.”
The approval of the consolidation, she said, “has been a long time coming. It was a good process and a deliberative process.”
The current MLSNI board has 22 members, including the 10 shareholder representatives and 12 brokerage company members. The consolidated MLS will have 15 directors, including 13 brokers and two additional members representing the 10 MLSNI shareholders.
Absent from the MLS meeting last week were five shareholders representing the Realtor Association of the Fox Valley, McHenry County Association of Realtors, West Towns Board of Realtors Aurora Tri-County Association of Realtors and Oak Park Board of Realtors.
Al Rossell, who represents the Oak Park Board of Realtors on the MLSNI board, said he believes that there are “rather weak” arguments for combining MLSNI and MAP MLS.
“I still think there are more negatives against the deal than there are positives. From our perspective we’re not getting any extra (members). We’re not getting any extra listings, per se. We’re not really getting any kind of economy of scale,” he said, adding, “I don’t think brokers were apprised of the pros and cons.”
Rossell also said, “It’s a shame fighting over stuff like this instead of trying to fine-tune our system. I would think sooner or later this would get resolved.” He said he is uncertain whether any legal action will be taken over the board vote last week.
Brokers already have substantial control over the MLSNI board under the current operating structure, he said. “To me, having real estate boards control (the MLS) is a great leveling field. In having brokers involved there is more of a chance of personal interest than anything else.” Individual brokers in Chicago may not understand the needs of brokers in smaller markets, for example, Rossell said, while boards represent a broad group of brokers.