Skip to main content

Mark Blinch

The Competition Bureau slammed efforts by Canada's real estate agents to open up their listings service to the public, calling the changes a "step in the wrong direction" that fail to ease the association's grip on the industry.

In a last-ditch effort to avoid a legal showdown with the Competition Tribunal, the Canadian Real Estate Association approved changes at its annual general meeting Monday that will allow agents to post a house-sale listing on its proprietary and popular Multiple Listing Service for a flat fee charged to sellers. Before the change, sellers using the system had to employ an agent through the entire sale, and then pay a percentage of the final price as a commission.

Competition Commissioner Melanie Aitken immediately dismissed the real estate association's moves, saying she repeatedly warned the trade association that they didn't go far enough to allow new entrants to compete for listings.

"There is nothing in these proposals that we haven't seen before and they do not solve the problem. They are a step in the wrong direction. These amendments amount to a blank cheque allowing CREA and its members to create rules that could have even greater anti-competitive consequences."

Before the changes approved Monday, someone who wanted a listing on the MLS was required to employ an agent from listing to final sale. Now, a consumer will be able to pay a flat fee to list on the MLS.

The MLS is where about 90 per cent of all home sales are done. Though costs haven't been determined, a flat-fee service might cost a few hundred dollars, compared with commissions that typically amount to thousands of dollars.

Agents must also pass along a home phone number, if the seller chooses, directly to an interested buyer if asked so that the buyer and seller can negotiate directly.

The changes will be made "as soon as possible" at each of the country's 101 real estate boards, which must individually approve the new rules. The fact that the enforcement of the changes remains in the hands of local boards has been a sticking point for the bureau.

Share your experiences with other readers at The Globe's discussion forums

After saying the vote was intended to satisfy the bureau and demonstrate how open the system is to both consumers and agents, outgoing CREA president Dale Ripplinger refused to answer questions about how the changes would affect his 100,000 members or the hundreds of thousands of Canadians who buy and sell houses each year.

He said the rules were largely procedural and "too complicated for anyone but a real estate agent to understand" as he walked out on a press conference after the first question was asked.

The association's lawyer said any further comment would have to wait until after tribunal proceedings end.

"There's no point in me trying to explain, when in actual fact they make no difference in the way realtors operate their business and no difference to consumers," Mr. Ripplinger said.

It's not what Ms. Aitken wanted to hear. She said the changes "do not remove the existing roadblocks to real estate agents who list properties on the MLS from offering innovative services and pricing options to consumers."

She believes the current system keeps prices artificially high and makes it difficult for agents to offer new services. She escalated the case to the Competition Tribunal in February, a legal entity that can force changes on the association and levy fines of up to $10-million if it agrees the trade association operates anti-competitively.

Lawrence Dale, a Toronto lawyer who has been fighting the real estate establishment for years on this issue, said a ruling from the Competition Tribunal is essential, because large innovative operators won't open until they know CREA can't change the rules by a simple members' vote in the future to put them out of business.

"Until the industry is prevented from implementing any new rules that affect what an agent has to do, the cloud remains," he said.

CREA must file its official response to the Competition Tribunal by March 25. No trial date is set.

Interact with The Globe