Somewhat eclipsed by the recent Competition Bureau case commenced against Canada’s largest real estate board, the Toronto Real Estate Board, are signs that the Bureau may also intervene to stem complaints that provincial boards and associations are thwarting flat-fee listing agents from posting Canada-wide listings.
The Globe and Mail has reported that:
“A fresh fight is brewing in the home sales industry, as the associations that represent real estate agents try to enforce restrictions on new, lower-cost competitors in an effort to prevent them from doing business across provincial boundaries.
The competitors offer low-cost, flat-fee listings on Realtor.ca, and were under the impression they would be able to accept clients from across the country after the real estate industry settled a case with the Competition Bureau last year that allowed them entry to the market.”
According to the Globe, some Canadian real estate firms are saying that they are being forced out of business by local real estate boards interpreting provincial legislation “in a way that prevents them from competing with commission-based agents” and that they have asked the Competition Bureau to intervene in this fresh fight.
The key issue is whether, as a result of the recent CREA settlement with the Bureau, real estate agents operating and licensed in one province should be permitted to post listings from other provinces on Realtor.ca (and the extent to which the voluntary trade associations to which they belong – i.e., the various local real estate boards and associations – should have the power to restrict such Canada-wide listings).
Some boards and provincial regulators have taken the position that the agents posting Canada-wide listings are trading in real estate and, as such, must be licensed in each province from which they are posting listings (i.e., an agent licensed in Ontario should not, for example, be permitted to post listings on Realtor.ca from Manitoba).
While the issue may seem straightforward enough when it comes to dealing with the local boards and associations, which do not have any legislative power to regulate broker and agent activities (local real estate boards and associations are non-statutory voluntary trade associations), it may prove to be a very different matter when the agents face the provincial regulators.
This is because the “regulated conduct defence” (“RCD”) may operate to preclude Bureau enforcement action where a legislatively authorized provincial regulator limits or restricts the ability of agents licensed in one province to post listings on Realtor.ca from another province in which they are not licensed to operate. In particular, the RCD can operate to exempt conduct that would otherwise be subject to the Competition Act where it is either mandated or authorized by valid provincial or federal legislation.
As such, while the Bureau may decide to take steps against local boards for restricting members from offering Canada-wide listings on Realtor.ca, or take the position that the terms of the recent settlement between CREA and the Commissioner are not being complied with, it may have no power to proceed against provincial regulators that discipline or sanction agents for not complying with provincial rules regulating real estate agents (e.g., for unlicensed trading in real estate).
For more see:
Competition Bureau Asked to Settle New Fight Over MLS Listings
Competition Bureau “Regulated” Conduct Bulletin
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