Competition Bureau Vs CREA - How Does it Affect Realtors?

We all know it's happening: the Canadian Competitionadvice and counsel to the seller on all offers and
Bureau has launched proceedings against CREAcounteroffers unless otherwise directed by the seller
(Canadian Real Estate Association). The question noin writing.
one has answered yet is: how does it affect3. The mere posting of property information in an
Realtors?MLS system is contrary to CREA's Rules. A "mere
Time Lineposting" occurs when the listing agreement relieves
- October 24, 2008 - the Canadian Competitionthe listing member of any obligations under the Rules,
Bureau releases its draft Information Bulletin onincluding the obligation that the listing REALTOR
Trade Associations for public comment.remain the agent of the seller throughout the term
- January 9, 2009 - CREA submits comments on theof the listing contract.
Information bulletin.4. The listing REALTOR is responsible and accountable
- 2009 - 2010 - The Competition Bureau opensfor the accuracy of information submitted to a Board
discussions with CREA regarding anti-competitiveAssociation for inclusion in the Board's MLS system,
behavior.and the Board/Association is responsible for ensuring
- Late 2009 - early 2010 - Discussions between thethat the data submitted to it meets reasonable
Competition Bureau and CREA break down and nostandards of quality.
resolutions are reached.5. Only REALTORS are permitted to display the MLS
- February 2, 2010 - The Competition Bureau files atrademarks in signage, advertising, etc.
Notice of Application for proceedings with the6. Only the listing REALTOR name(s) and contact
Competition Tribunal.information may appear on REAL TOR.ca. The seller's
The Proceedingsname or contact information shall not appear on
Here's what the Competition Bureau is claiming (fromREALTOR.ca or in the public remarks section of the
Statement of Grounds and Material Facts in theMLS system.
Notice of Application):7. In cases where a Board permits listings in which
the seller has reserved the right to sell the property
1. CREA, through its members (i.e. Realtors) has toohimself/herself, that fact shall be specified in the
much control over the supply of residential realBoard's MLS database.
estate brokerage services in Canada."I thought you'd be sparing us from the legal
2. There are no existing adequate substitutes for themumbo-jumbo?"
MLS system.Yes, so let me get to the point...
3. CREA has used its control to exclude real estateThe Point
brokers seeking to provide discount brokerageThe Competition Bureau says that item 1 and 3 of
packages (or fee-for-service packages) andthe Three Pillars and item 6 of the Further MLS
"MLS-Only" options (ie. no compensation to sellingRestrictions "completely prohibit or severely impede
agent).the ability of alternatives to the full-service brokerage
4. When working with a broker using the MLSmodel to compete."
system, consumers are forced to buy a bundle ofThey have cited several examples of
services, including some they may not want tofee-for-services brokerages either leaving or not
receive or pay for.entering the market purely because of these
5. CREA controls boards/associations by imposingrestrictions, and that this represents anti-competitive
MLS restrictions (see below) on them, in exchangebehavior.
for them using the MLS (Multiple Listing Service)How it Affects Realtors
trademark.Removing "restriction" 3 from the Three Pillars isn't a
Here's exactly what they are asking for:big deal and, in fact, is already being done in many
An Order prohibiting CREA from imposing MLSboards/associations across the country. The reality is
restrictions (see below) on boards/associations whenthat if there is no compensation offered to selling
licensing the MLS trademark to those boardsagents then properties won't be shown.
associations.Now's where it gets interesting: removing "restriction"
The "MLS Restrictions"3 from the Three Pillars and "restriction" 6 from the
This is the important part - the Competition Bureau isFurther MLS Restrictions could create a flurry of
pushing to remove the following restrictions. We'llactivity from Realtors undercutting one another to
start with what CREA refers to as the "Three Pillars":offer the cheapest "listing only" services to sellers.
Three PillarsThe truth, however, is that sellers would quickly
realize that they're doing hundreds of showings to
1. Membership: Only REALTORS may place a listing onnosy-neighbors rather than qualified buyers. The
a Board/Association's MLS System;eventual outcome would still see most career
2. Agency: A listing REALTOR must act as agent forRealtors continuing to sell homes on behalf of
the seller to sell the property and to assist the sellerhome-owners.
throughout the entire time of the listing contract; andRemoving "restriction" 1 from the Three Pillars would
3. Compensation to Co-operating Broker: The listingallow casual and unqualified entry of data which would
REALTOR agrees to pay to the co-operating (i.e.destroy the integrity of the MLS System altogether.
selling) REALTOR compensation for the co-operativeI'd be extremely surprised if the tribunal ruled in favor
selling of the property. An offer of compensation ofof this.
zero is not acceptable.Ok, so guess what? The National Association of
With these in mind the Competition BureauRealtors (CREA's sister organization in the US) went
elaborates further on the CREA's MLS Restrictions:through all of this 3 years ago and guess how it
Further MLS Restrictionsresolved?
- Restriction 3 was removed
1. The listing REALTOR shall receive and present allYep, that's it; and that's what I think will happen in
offers and counteroffers to the seller.Canada.
2. The listing REALTOR shall provide professional