Competition Bureau sues real estate board

Canada's Competition Bureau is suing the country's largest real estate board for anti-competitive behaviour that the bureau says keeps the costs of buying and selling homes artificially high.

The bureau has launched an application with the Competition Tribunal against the Toronto Real Estate Board, or TREB, which represents 31,000 realtors in the Greater Toronto Area and controls access to the Multiple Listings Service system.

The bureau says TREB's anti-competitive practices "are denying consumer choice and the ability of real estate agents to introduce innovative real estate brokerage services through the internet," which could result in lower prices for consumers.

The tribunal is a quasi-judicial body that makes binding decisions on issues brought forth by the bureau.

"Consumers are demanding a greater selection of service and pricing options when buying or selling their homes, and many agents are eager to accommodate them," said Melanie Aitken, the commissioner of competition. "Yet TREB's leadership continues to impose anti-competitive restrictions on its members that deny consumer choice and stifle innovation."

Restricted access

The bureau says TREB restricts how its member agents can provide information from the MLS system to their customers, thereby denying member agents the ability to offer a wider range of services and prices. 

The system that realtors have access to is much more detailed than the one publicly viewable on realtor.ca.

The Toronto MLS system, for example, contains data about previous listing and sale prices, historical prices for comparable properties in the area, and the amount of time a property has been on the market.

It also sometimes contains demographic information on crime and traffic statistics, and even local hospitals and schools — detailed information agents already have access to and sometimes give out via fax or email, the bureau says.

Restricting access means realtors can't set up what are known as "virtual office websites," which would allow customers to search a full inventory of up-to-date listings before going to an open house or touring a home.

That, in turn, would allow customers to be more selective and focused, and agents to spend less time trying to find an appropriate property for a specific customer, the bureau said in a release.

That stifles competition which keeps prices higher, the bureau says.

"We think it could result in substantial rebates," an official with the bureau said.

"As general rule, more competition leads to greater choice and lower prices. We are hearing from realtors who would like to offer this service," the official said.

TREB disagrees with the bureau's view, and adds that their hands are somewhat tied when it comes to releasing information on homes for sale.

"There are consumers on both ends of a real estate transaction where contractual and private information are involved which TREB is legally and morally required to respect," the agency said in a release.

The agency has taken numerous steps to empower realtors in their use of the internet in assisting clients, TREB president Bill Johnson said. The board says it "unfortunate" that the bureau chose the tribunal route to settle the dispute — but they had no other choice, Aitken said.  

When the bureau identifies anti-competitive behaviour, our first preference is always to reach an agreement that fully resolves our concerns," Aitken said. "Consistent with the bureau's practice, we shared our concerns with TREB, as well as what would be necessary to address them."

Latest dispute

"Ultimately, it was necessary for us to seek a legally binding order from the tribunal to ensure greater competition and increased innovation in the market for real estate services in Toronto and the surrounding area," she said.

The dispute is the latest salvo in a long-running dispute between the competition watchdog and the real estate industry. Last year, the consumer watchdog complained that realtors were restricting access to the MLS system, the source of more than 90 per cent of all home sales.

Buyers and some realtors wanted the ability to opt out of certain realtor services, and simply pay to have their home listed on MLS. That dispute eventually ended before it reached the tribunal phase, the result of which was that sellers can now list on the proprietary MLS system for a flat rate fee.