Competition watchdog fires new allegations against real estate association

The Canadian Press
April 12, 2010 5:41 a.m.

         TORONTO – The federal competition watchdog accused Canada’s real estate industry Friday of threatening to ban brokers who attempt to offer a range of services from using its popular Multiple Listing Service.

The Competition Bureau’s allegations came in its latest reply as part of its ongoing case against the Canadian Real Estate Association, the group that represents some 98,000 Canadian real estate brokers.

“In cases where small-scale entry by alternative business models has occurred, CREA and its members have disciplined such entrants, exploiting the barriers CREA has erected through its rule-making and rule-enforcing powers,” it said.

Unless CREA and its members are restrained by an order from the Competition Tribunal, the bureau says they “will continue to have the incentive, the opportunity and the ability to enact and enforce MLS restrictions that prevent or will likely prevent competition substantially.”

The bureau has said that loosening restrictions on the MLS, where 90 per cent of Canadian homes are sold, could allow homesellers to use a realtor to post their home for a flat fee and then conduct the rest of the sale themselves.

The Competition Bureau filed an application with the Competition Tribunal in February seeking to strike down CREA’s rules governing its MLS because they deter realtors from offering flexible services that would make it cheaper for Canadians to sell their homes.

CREA has repeatedly denied the bureau’s accusations that consumers must purchase a bundle of services from realtors in order to sell their house on the MLS.

The bureau says CREA has maintained unfair market dominance in requiring its 100 member boards and associations to comply with their rules and by disciplining members seeking to provide an alternative.

“CREA and its members deny choice to consumers in one of the most significant transactions they will undertake in their lifetime. Consumers cannot pursue an alternative because one is not generally available.”

A CREA spokesman said Friday they had just received the reply and had not yet had time to review it.

In an earlier response to the accusations, the association said the allegations levelled against it by the Competition Bureau were “fundamentally misconceived.”

The association said realtors already offer a wide range of business models, including discounted services, fee-for-service, and flat-fee arrangements that cost as little as $109 or less.

The Competition Bureau rejected changes made by CREA last month to clarify its rules, saying the changes don’t guarantee more choice for consumers.

The bureau said in its reply Friday that those amendments to the MLS rules extend CREA’s control over realtors and the rules are intended to maintain command over real estate services offered in Canada.