The suit names CREA along with several board, association and corporate defendants (including specific brokerages and franchisors).
A ‘Canada-wide version of the Sunderland claim’
CREA goes on to describe the claim as “essentially a Canada-wide version of the ongoing class action in Sunderland v. CREA et. al. and was filed by the same legal counsel. The only association defendants named in the Sunderland claim are CREA and the Toronto Regional Real Estate Board (TRREB), while the new McFall claim names a number of boards and associations across Canada but does not include TRREB.”
Like Sunderland, the McFall claim was filed on behalf of anyone who sold property on any of the named defendant board and association’s MLS systems since March 11, 2010.
Allegation: Cooperating commission rules & defendants’ actions result in anti-competitive, price-fixing conspiracy
The communication states both claims allege that “rules requiring home sellers to offer a cooperating commission to prospective buyer brokerages when listing a property on an MLS system are anti-competitive and have harmed home sellers in the form of higher commissions, even though the cooperating commission is the subject of negotiation and the amount offered can be any amount except zero.
The allegation is that these rules, together with actions by the corporate defendants to implement and enforce those rules, amount to a conspiracy to fix and control buyer brokerage commissions and insulate them from competition, contrary to the Competition Act.”
“We consider the allegations to be without merit and will continue to vigorously defend against them”
CREA explains that “MLS systems, including the Cooperation Pillar, are efficient and effective cooperative marketplaces that bring together realtors acting on behalf of Canadian home sellers and buyers, and are both pro-competitive and pro-consumer.”
In a statement provided to REM, CREA spokesperson, Pierre Leduc, says this article “covered a number of important points in these lawsuits. Given that the courts haven’t heard any arguments, there isn’t much more we can add at this time.
That said, we consider the rules that frame cooperation between members as well as MLS systems result in efficient and effective cooperative marketplaces that are both pro-competitive and pro-consumer. We consider the allegations to be without merit and will continue to vigorously defend against them.”
Defendants: CREA, several Canadian boards and associations, but not TRREB
Aside from CREA, the defendants listed in the McFall suit are:
Regional real estate board defendants
- Newfoundland and Labrador Association of REALTORS®
- Prince Edward Island Real Estate Association
- Nova Scotia Association of REALTORS®
- Greater Moncton REALTORS®
- Real Estate Board of the Fredericton Area, Inc.
- Saint John Real Estate Board
- Québec Professional Association of Real Estate Brokers
- Bancroft and Area Association of REALTORS®
- Barrie and District Association of REALTORS®
- Brampton Real Estate Board
- Brantford Regional Real Estate Association
- Cambridge Association of REALTORS®
- Central Lakes Association of REALTORS®
- Chatham-Kent Association of REALTORS®
- Cornwall and District Real Estate Board
- Durham Region Association of REALTORS®
- Guelph and District Association of REALTORS®
- Huron Perth Association of REALTORS®
- Kawartha Lakes Real Estate Association
- Kingston and Area Real Estate Association
- Kitchener-Waterloo Association of REALTORS®
- Lakelands Association of REALTORS®
- London and St. Thomas Association of REALTORS®
- Mississauga Real Estate Board
- Niagara Association of REALTORS®
- North Bay Real Estate Board
- The Northumberland Hills Association of REALTORS®
- Oakville, Milton and District Real Estate Board
- Ottawa Real Estate Board
- Parry Sound and Area Association of Realtors®
- Peterborough and the Kawarthas Association of REALTORS®
- Quinte & District Association of REALTORS® Inc.
- REALTORS® Association of Grey Bruce Owen Sound
- REALTORS® Association of Hamilton-Burlington
- Renfrew County Real Estate Board
- Rideau-St. Lawrence Real Estate Board
- Sarnia-Lambton Real Estate Board
- Sault Ste. Marie Real Estate Board
- Simcoe and District Real Estate Board
- Southern Georgian Bay Association of REALTORS®
- Sudbury Real Estate Board
- Thunder Bay Real Estate Board
- Tillsonburg District Real Estate Board
- Timmins, Cochrane & Timiskaming Districts Association of REALTORS®
- Waterloo Regional Association of REALTORS®
- Windsor-Essex County Association of REALTORS®
- Woodstock-Ingersoll & District Real Estate Board
- Brandon Area REALTORS®
- Winnipeg Regional Real Estate Board
- Saskatchewan REALTORS® Association
- Alberta West REALTORS® Association
- Calgary Real Estate Board
- Central Alberta REALTORS® Association
- Fort McMurray REALTORS®
- Grande Prairie & Area Association of REALTORS®
- Lethbridge & District Association of REALTORS®
- Medicine Hat Real Estate Board Co-operative Ltd.
- REALTORS® Association of Edmonton
- REALTORS® Association of Lloydminster & District
- REALTORS® Association of South-Central Alberta
- Association of Interior Realtors
- BC Northern Real Estate Board
- Chilliwack and District Real Estate Board
- Fraser Valley Real Estate Board
- Kamloops & District Real Estate Association
- Kootenay Association of REALTORS®
- Powell River Sunshine Coast Real Estate Board
- Real Estate Board of Greater Vancouver
- Vancouver Island Real Estate Board
- Victoria Real Estate Board
- Yellowknife Real Estate Board
- Yukon Real Estate Association
Brokerage defendants
73. CIR Realty
74. eXp Realty
75. MacDonald Real Estate Group Inc.
76. Maxwell Capital Realty
77. Oakwyn Realty Ltd.
78. Real Estate Professionals Inc.
79. Royal Pacific Realty Corp.
80. Team 3000 Realty Ltd.
Franchisor defendants
81. Century 21 Canada Limited Partnership
82. Coldwell Banker Canada
83. Exit Realty Corp. International (Canada)
84. HomeLife Realty Services Inc.
85. Keller Williams Realty Canada
86. MacDonald Real Estate Group Inc.
87. Max Wright Real Estate Corporation (Sotheby’s)
88. RE/MAX Ontario-Atlantic Canada, Inc. o/a RE/MAX Integra
89. Residential Income Fund L.P.
90. Sutton Group Realty Services Ltd.
Emma Caplan-Fisher is an editor and writer for REM. She has over a decade of experience in various content types and topics, including real estate, housing, business, tech, and home & design. Emma’s work has also been featured in Cottage Life, the Vancouver Real Estate Podcast, the Chicago Tribune, Narcity Media, Healthline, and others. She holds a Certificate in Editing from Simon Fraser University.
Currently, the listing fee’s policy of the boards is given effect by CREA’s by-laws as a result of the 2010 Consent Agreement with the Competition Bureau which in part read:
III.3. “CREA shall not adopt, maintain, or enforce any Rules that deny the ability of Members to provide Mere Postings for Sellers, or that discriminate against Members because they offer, or wish to offer, to provide Mere Postings for Sellers, including, but not limited to, any Rule that:
…f) prevents Members from negotiating and contracting, with a Seller, in respect of the terms of payment for compensation to the co-operating Members for the cooperative selling of the property, as long as the offered compensation is not zero:…”
CREA is probably going to hang its hat on that Consent Agreement because it required the listing brokerage to offer to pay a co-operating fee that is at last $.01.
They will lose this one.
Why? Because that was just an agreement, and not law, that actually expired on September then along came Ontario’s TRESA, where, by law, it is the seller who determines what amount if any a co-operating brokerage will be paid thereby paving the way for a lawsuit like this to prevail. Under TRESA, if a seller says zero, it is zero or, $X is only payable if the buyer is represented by either a co-operating brokerage or designated representative and thus a conflict between Ontario law regulating agents and association rules is formed. CREA’s misguided exclusive listings rule doesn’t help the cause with sellers.
I predict too it’s going to be a particularly more litigious year for organized real estate with all three pillars likely to see increased legal activity in the coming months for other anti-competitive behaviour challenging CREA’s Rule 4 and the other two pillars for other claims including oppressive behaviour.
All of this together is the gift of a new disruption for non-board brokerages to offer exclusive listings.
PED, I encourage you to read the pleadings one more time. The plaintiffs allege that it is a rule (not a law) that leads to, perhaps is, the conspiracy to inflate commissions. The rule is CREA Rule 11.2.1.3. But I do agree with you that we’re only seeing the tip of the iceberg with respect to upcoming legal challenges.
@Michael Walsh – Correct me if I am wrong, but I think, if you read PED’s comment again, that is what he is saying. It seems to me he is just referring to the process that brought about the current rule.
Given the number of defendants and the legal complexity (read legal fees) this creates, once again the only winners will be the solicitors.
CREAs exclusive rule is next. The people at the top who came up with these rules should be held accountable.
I anticipate the forcing of agents to place all property listings into the mls system and not allowing agents to offer exclusive listing opportunity to sellers is going to end up in a giant law suit also –
The belief this is best for all clients is unfounded and it flys in the face of property ownership rights which give a property owner the right to decide what marketing program they want.
Whether mls makes them more money or it doesn’t is not the issue — the issue is the right to respect a clients right to options.
Then also is the New TRESA rules of self represented vs customer.
The value added I provide to my clients is my market knowledge and ability to source buyers for unique properties and unique properties for buyers. Now we are not allowed to provide any professional service, or even information about other broker mls listings to buyer prospects without an agency signed up front – well we will be needing to double our insurance fees soon to cover the massive number of errors and omissions claims we have just opened the door to –
Marketplace October 15, 2021 sums it up very clearly. CREA and the REALTOR Co Operaion Policy The New TRESA and OREA hiking our yearly fee from $110.00 to $770.00, it was time to take a step back. I agree with some of these comments, this is the tip of the iceberg with more litigations are on the horizon.