- January 20, 2018
- Posted by: Umar Zulqarnain
- Category: Administrative Law, Antitrust Law, Competition Law, Real Estate Law
A Recent Federal Court Decision Drives Innovation and Gives Canadian Real Estate Buyers and Sellers More Power
A recent Federal Court of Appeal decision ordered the Toronto Real Estate Board to allow for greater access to online sales data. Real estate agents will be allowed to publish details about home sales prices. The decision is the latest and hopefully final development in a 6-year courtroom battle between the Federal Competition Bureau and the Toronto Real Estate Board. The decision will have a significant impact across Canadian real estate markets.
Background – Original 2011 Case Against the Toronto Real Estate Board
The Toronto Real Estate Board (“TREB”) was founded in 1920 and is Canada’s largest real estate board. The TREB has over 49,000 licensed real estate brokers and agents in the Greater Toronto Area. In 2011, the Federal Competition Bureau, an independent law enforcement agency, sued the TREB over its policy of restricting access to MLS data. The lawsuit claimed that the TREB’s anti-competitive behaviour denies consumer choice and stifles innovation. It provides the TREB with significant power. The TREB also restricts the information agents can provide to customers through MLS. The Competition Bureau ultimately lost the case at the Competition Tribunal. The decision was overturned by the Federal Court of Appeals however, the Supreme Court of Canada refused to hear an appeal of the Federal Court’s decision. The case was returned to the Competition Tribunal for an additional hearing in 2014.
2015 – The TREB Threatens Realtors to Remove Online Data
In 2015, the TREB threatened to revoke MLS access to realtors who publicly offered data for prices of sold homes. The following year, TREB sent a cease and desist letter to a major website that provided data for sold homes. The website, Just Sold on MLS, suspended its service shortly thereafter.
2016 – The First Victory for the Competition Bureau and Consumers
In April of 2016, the Competition Tribunal released its’ decision against the TREB. The Tribunal’s decision said that the TREB stifled competition and prevented digital innovation by prohibiting realtor members from posting sold data on their websites. This decision will have an impact throughout Canada. The Tribunal claimed that the TREB acted with “malice and forethought” because of its fear that new online competitors could reduce commissions for member agents. This decision was later appealed by the TREB.
2017 – Failed Appeal by the TREB.
On December 1, 2017, a Federal Court of Appeal upheld the April 2016 decision against the Toronto Real Estate Board. This decision allows TREB members to share sales histories of listed properties online. The TREB claims it will appeal the decision and request the Supreme Court to stay the tribunal order that the new rules are effective immediately.
The Impact of This Decision for Consumers and Competition
The decision means that realtors have greater freedom to publish sales data online. This provides buyers with increased information and facilitates informed decision-making. Access to MLS data was previously one of the greatest value-add provided by realtors. Providing this information to consumers encourages innovation and may even increase the number of self-represented brokerage deals. Online real estate data companies like Zillow have already expressed their desire to enter the Canadian market. Zolo.ca has begun offering real estate data for the Greater Toronto Area. Increased competition and access to data can make the market more efficient, drive down broker fees for consumers and drive innovation.
Interested in more Treadstone Insights from our experienced real estate lawyers? Click here to read our Quick and Easy Guide about the new mortgage rules that came into effect on January 1, 2018.