Turf squabble fails to derail Florida association merger

Takeaways:

• A local association merger in Florida means lower dues and more referrals, according to backers — but loss of 51,000 agents’ access to certain listing data, too.
• A nearby association, Realtors Association of the Palm Beaches, attempted to prevent the merger, saying it “divides the marketplace.”
• Similar attempts to meet NAR’s new “core standards” for associations could have both pros and cons for Realtor members.
  

Editor’s note: The savings per year for JTHS members is $200 per year, not $211. Also, 186 members voted, not 136. 

A South Florida Realtor association with a combative relationship with its neighbors has chosen to merge with the largest local Realtor association in the country.

The move, achieved over the objections of a nearby association, will mean lower dues, better services and more referrals for real estate agents on the ground, backers say.

But 51,000 Realtors are set to lose access to each other’s listing data in the fallout.

The 1,500-member Jupiter-Tequesta-Hobe Sound Association of Realtors (JTHS) approached the 38,000-member Miami Association of Realtors (MIAMI) in early May. JTHS had recently completed a strategic plan, as mandated by the National Association of Realtors’ new “core standards.”

The plan recommended considering a merger in order to provide more services for members and avoid future financial issues, JTHS President Nancy Lubeck told Inman. JTHS lost 18 percent of its members between 2010 and 2015, according to National Association of Realtors data.

“It’s getting harder and harder for smaller organizations to provide services and be able to compete with the larger boards,” Lubeck said.

JTHS’ 12-member board of directors considered its options, including merging with the nearby 13,000-member Realtors Association of the Palm Beaches (RAPB). The directors decided that, although MIAMI’s borders are not contiguous with JTHS’, merging with MIAMI as a “council” of the association would be their best bet because JTHS would be able to keep its voice and continue to handle its own local affairs.

“There was nothing that could beat what this association offered us. With the merger with MIAMI, we get to keep our identity, [our] building, [and] everything remains the same for our members except better services at a reduced cost,” Lubeck said.

The Realtors Association of the Palm Beaches, JTHS’ nearest neighbor to the south, disagreed.

Attempt to thwart

RAPB reportedly urged those with membership in both associations to vote against the JTHS-MIAMI merger through office visits, phone calls, emails and a meeting for big brokers.

MIAMI CEO Teresa King Kinney said RAPB’s actions were “unfortunate” and “not normal.”

“We’ve done four mergers. The first one was 20 years ago with Miami Beach, the last one was five years ago … and it’s never happened to us before,” Kinney told Inman.

“They were upset because JTHS chose to merge with us instead of choosing to merge with them, and it was unfortunate that [RAPB] chose to do that.”

When asked, RAPB’s new CEO, Dionna Hall, did not deny that RAPB had tried to derail the JTHS-MIAMI merger.

“The Realtors Association of the Palm Beaches (RAPB) was disappointed that JTHS decided to become MIAMI,” she said in an email.

“RAPB believes it is best for JTHS and RAPB members to come together and unite our marketplace instead of divide it. We recognize there is a vast difference between Miami and how we do business in Palm Beach County. RAPB is doing everything possible to help keep real estate local.”

When asked what the “vast difference” was, Hall said, “Palm Beach County is more seaside versus Miami city-side.”

We would have loved to merge with JTHS! @finestPBhomes

— RAPB (@rapb) August 18, 2015

MIAMI’s ‘evil clutches’

This may not be the only instance in which RAPB tried to protect its turf from MIAMI. Hall’s predecessor, Carol Van Gorp, believes she was fired in June because someone had told the RAPB board of directors that she “had some secret deal with Teresa to deliver our board into her evil clutches.”

“But there was no secret deal,” Van Gorp said. She and Kinney are friends and Van Gorp at one point worked for Kinney, “but I wouldn’t have done something to give up my association. Ever,” she said.

Hall declined to comment on Van Gorp’s dismissal.

JTHS and its own former CEO, Wes Wiggins, also parted ways earlier this year, although Lubeck said his leaving “had nothing to do” with the JTHS-MIAMI merger. Wiggins declined to comment.

Van Gorp called RAPB’s behavior regarding the JTHS-MIAMI merger “inappropriate.”

“I never would have interfered like they tried to do,” she said. Once JTHS had decided to put the merger to a membership vote, at that point RAPB was interfering with the inner workings of another association, she said.

No more data share

RAPB has decided to no longer share listing data with MIAMI, cutting off their collective 51,000 members from each other’s listing information. Both Hall and Kinney declined to comment on that decision at this time, saying they would be distributing press releases about it in the near future.

MIAMI and JTHS have been sharing data for years and will continue to do so, Kinney said. JTHS will keep its own MLS system after the merger “for as long as they want,” she said.

“One of the things you don’t want to do with members is mess with their MLS,” she added.

Merger benefits

Despite RAPB’s attempts, on Aug. 14, JTHS’ members overwhelmingly voted to merge with MIAMI with an 88 percent approval rating. Voter turnout was low: About 186 members voted out of 1,500. The merger is set to close in September.

Because MIAMI’s local dues are lower than JTHS’, the merger will save JTHS agents $110 in local dues annually ($250 to $140). JTHS brokers will save $95 annually ($250 to $155). Members who previously belonged to both JTHS and MIAMI will also save money.

MIAMI also provides its members with lockbox service Supra eKey at no additional cost, resulting in $200 in savings per year for JTHS members using the service.

MIAMI’s bulk buying power “opens up a whole new world for our members,” Lubeck said. The association offers more than 100 services at no additional cost to members.

[Tweet “MIAMI’s bulk buying power ‘opens up a whole new world’ for JTHS members.”]

MIAMI also offers 3,500 educational seminars annually, 3,000 of which are free. “[JTHS members’] seminar content and number of courses will certainly increase and will be custom to their market,” Kinney said.

JTHS’ four staff members will remain and keep running the JTHS office, though MIAMI will take over most administrative functions.

“Their current association executive becomes the vice president for JTHS,” Kinney said.

“Their current board of directors would become the board of governors for JTHS. Their current officers will be the officers of that board. That board will continue to make the decisions for their market on all of the local issues, concerns and needs of their members, just as our Broward Council makes those decisions for its market.”

Referrals at home and abroad

MIAMI has more than 125 agreements with partner organizations worldwide that “generate substantial referral business,” the association said.

Both Lubeck and Kinney saw a mutual opportunity to refer business between markets in the merger.

“When a Miami Realtor needs to refer someone up to our area, they will think of our members first. And certainly we’re going to network with them so that they do,” Lubeck said.

When asked what’s in the merger for MIAMI, Kinney said, “Our members have another market that they can refer to.

“Although Realtors can make referrals anywhere in the U.S. or around the world, what we’ve found is that our members are very, very comfortable in referring within their companies and referring within their family, if you will, and that is our association.

“Internationally, when they are members of partner associations it creates an additional level of comfort and confidence that exists. And our members will over time get to know more about their beautiful market and help refer more business to our members within that market. That’s going to be a very good thing.”

The biggest gets bigger

With the addition of JTHS’ members, the biggest local association in the country will be even bigger at nearly 40,000 members. Even without the merger, MIAMI has gained the equivalent of JTHS’ membership — 1,500 members — in just the last two months because the market is so strong, Kinney said.

“We’re larger than 43 state associations,” she said.

[Tweet “MIAMI CEO: ‘We’re larger than 43 state associations.”]

The next-largest local associations in the nation are: the Houston Association of Realtors (28,134 members), the Long Island Board of Realtors (22,482) and the Mainstreet Organization of Realtors in the Chicago area (15,548).

‘South Florida politics’

Relations between RAPB, JTHS and MIAMI were typical of “South Florida politics,” according to Van Gorp.

“I think that South Florida has been known to be squabbling throughout the years. We’ve had associations mad at each other. [There have been] lawsuits against one and the other,” she said.

“RAPB had five CEOs in three years before I got there. We’re just an unsettled place,” she added. She is now a consultant for NAR’s RAMCO association management system.

JTHS and RAPB actually appeared to have good relations for a while. They, along with the Realtors Association of St. Lucie, were shareholders of the Jupiter, Florida-based Regional Multiple Listing Service Inc., which was formed in 1987.

But in April 2013, JTHS filed a complaint against Regional MLS and its other two shareholder associations, alleging false and deceptive advertising, unfair competition and interference with business relationships. This was after a change in Regional MLS’ billing structure made the associations competitors for MLS subscribers, according to the complaint.

Regional MLS officially dissolved in June 2013 and a couple of months later, RAPB merged with the Realtors Association of St. Lucie to the north, skipping over JTHS’ territory and creating the second-largest local Realtor association in Florida, after MIAMI.

Less than two years later, in February 2015, JTHS and RAPB were once again battling, this time over JTHS’ direct feed to Zillow. That skirmish was eventually resolved when RAPB’s MLS, BeachesMLS, signed its own direct feed agreement with Zillow.

The associations will have no choice but to deal with each other for a while longer. As a result of the lawsuit settlement, JTHS and RAPB will continue to share a listing database until June 2017, regardless of the merger with MIAMI.

Email Andrea V. Brambila.