Competition Bureau calls out real estate rules
February 8, 2010
Tony Wong
BUSINESS REPORTER
The federal Competition Bureau is challenging the Canadian Real Estate Association over rules they say limit consumer choices.
The bureau announced Monday that talks between the two organizations were not resolved amicably. The government regulator has taken the next step by filing an application with the Competition Tribunal to decide whether organized real estate’s rules are anti-competitive.
“Selling a home is one of the largest financial transactions that most Canadians make in their lifetime,” said Melanie Aitken, Commissioner of Competition. “Consumers should be able to choose which services they want to buy... including lower cost options.”
The Bureau says it is challenging rules imposed by CREA, which controls the Multiple Listing Service in Canada. Most real estate transactions are conducted through the MLS.
Under the current rules, agents are prohibited from offering consumers the option of paying a fee for an agent to list a home on the MLS. Instead, consumers looking to list a property must purchase a “predetermined” set of additional services, says the Competition Bureau.
“The Bureau is focused on striking down these anti-competitive rules so that real estate agents wishing to offer innovative services can do so and consumers can benefit from greater choice,” said Aitken. “We expect that if the tribunal strikes down the anti-competitive restrictions, there will be downward pressure on real estate fees in Canada.”
While the Competition Bureau investigates anti-competitive behaviour, the Tribunal is a quasi-judicial body which will make the ultimate ruling.
CREA has denied that their rules are anti-competitive, saying that they did not agree with the bureau’s earlier findings.
“We believe that the bureau’s concerns are based on a fundamental misunderstanding of the way in which the MLS system operates,” CREA said in an earlier statement.