Reay: The MLS board is falling behind the markets it serves

For decades, the MLS served as the neutral basis for collaboration among competitors, providing unparalleled transparency and consistency. Its success was rooted in its simplicity: it was infrastructure, not a market participant. But the environment surrounding the MLS has changed and that neutrality can no longer be taken for granted.

Across Canada, brokers now operate in multiple regions that are subject to inconsistent regulations and data practices. Consumers expect instant accuracy. Technology companies are building alternative data ecosystems.

US compensation rulings are reshaping long-standing assumptions about how real estate information is managed. And as AGM season unfolds, board campaigns are once again focusing on promises of “greater transparency,” even if the structures in which these boards operate are not designed to provide that.

The system has become more complex, critical and consistent than ever, but the foundations of governance remain rooted in a different era.

Neutrality under pressure within MLS systems

These pressures have exposed tensions in the MLS’s ability to remain a neutral infrastructure. The recent conflict between ITSO and BDAR illustrated how easily MLS access, essential for any broker, can become mired in institutional disagreements.

The dispute arose from the fact that ITSO amended its bylaws after BDAR announced an integration with TRREB, a move that ITSO said allowed a major competitor to gain indirect influence in its governance structure. A court ultimately upheld ITSO’s right to change its membership criteria under Ontario’s non-profit laws, reinforcing that organizations can lawfully protect their governance models, even if those protections affect existing members.

Regardless of which organization followed the correct procedural path, the structural message was unmistakable: If MLS access can be affected, even indirectly, by political or organizational disputes, neutrality is not protected by design but is vulnerable to circumstance.

A similar dynamic occurred at the national level during the CREA special review vote. Earlier this year, CREA members rejected a $75 assessment intended to replenish the national legal defense fund despite rapidly rising costs. Many recognized that the vote reflected broader expectations of the organization’s value and responsibility, rather than an evaluation of the strategic imperative itself. When decisions affecting the industry’s ability to legally defend itself depend in part on political expression, this reinforces the same coordination problem revealed in the MLS context: governance processes driven by institutional incentives do not always reflect the needs of the market.

These patterns become more urgent in the AGM season, when board candidates once again emphasize transparency as a campaign promise. Yet transparency cannot be meaningfully improved within governance frameworks that limit what can be disclosed, how decisions are made, and who participates in those decisions.

Drivers do not fail due to negligence; they are limited by structures that make true transparency virtually impossible. This is why transparency efforts feel cyclical: the structure never changes, only the slogans change.

Mandate drift raises competition problems

Meanwhile, the mandate shift within MLS organizations is becoming increasingly apparent. Using their reserves and internal technology capacity, some MLSs have begun developing or acquiring tools that increasingly resemble brokerage systems: CRMs, consumer portals, marketing platforms and even lead generation technology. As well-intentioned as it is, this puts the MLS in direct competition with the real estate agents it supports.

Neutral infrastructure cannot become a market player without endangering its neutrality. When infrastructure develops products that shape competition, it no longer supports the market; it affects it.

Operational pressure tells the same story. MLS datasets have become much more complex and time-sensitive. Several boards have reported significant error rates in recent listing audits, sometimes affecting the majority of listings reviewed.

These are not operational failures; they are signals of a system that extends beyond the processes, resources and governance structures designed decades ago. Inconsistent rules across regions create even more friction, reducing efficiency for teams working across multiple MLS boundaries and decreasing confidence in the reliability of data.

Brokers strive for coordination and clarity

Some brokers, who fund and depend on MLS operations every day, are becoming increasingly assertive. Their concerns center on alignment: how reserves are used, how technology partners are chosen, how contracts are negotiated, how innovation is prioritized, and how policy inconsistencies create operational challenges for teams.

They want clarity that MLS innovation will continue to focus on infrastructure, accuracy, reliability and interoperability, rather than entering competitive spaces. And they want confidence that the MLS’s neutrality is structurally protected, and not merely culturally assumed.

Above all, they want to serve the interests of customers without the systems they fund creating friction, ambiguity, or barriers to doing their jobs well.

This is what requires tuning. The MLS should function as an infrastructure, not as a market participant. Its governance must reflect the contribution and responsibility of the market, and not institutional politics. Its mandate must be clear and defined and ensure that innovation supports collaboration rather than influences competition. And access to MLS must be protected from institutional disputes, regardless of context.

A path forward for modernizing MLS governance

Canada is well positioned to meet this challenge. Our industry has the capacity and leadership to modernize governance structures, clarify mandates and create consistent transparency expectations. This does not require a national MLS or major structural consolidation. But it does require clarity: clarity of purpose, clarity of authority, and clarity of boundaries.

A modern MLS framework should articulate what MLSs are responsible for, what they are not responsible for, and what principles should guide their governance as pressure increases.

The next phase of this conversation should focus on defining the MLS mandate, aligning governance structures with market realities, and establishing a framework for consistency where practitioners need it most. These steps do not prescribe specific reforms; they lay the foundation for a system that is able to develop responsibly without endangering neutrality.

The MLS remains one of the industry’s greatest successes, but that achievement is no longer self-sustaining. The pressures on the system – from technology companies, regulatory expectations, legal exposure and market expansion – are increasing. A system this essential cannot rely on old assumptions or goodwill. It requires governance as important as its importance.

The industry has a clear choice: modernize now, while the MLS remains strong, trusted and under our control, or wait for outside forces to reshape it for us. One path reflects leadership and stewardship; the other reflects the relinquishment of agency. The MLS will continue to support Canadian real estate. The question is whether we will strengthen that foundation before modern pressures force a reckoning.