The Competition Bureau is picking a fresh fight with the real estate industry, this time over how crucial market data is being kept away from consumers by the country’s largest real estate board.
The federal watchdog has launched a lawsuit against the Toronto Real Estate Board, arguing that it prevents brokers from sharing information with their customers over the Internet. The challenge is the latest salvo in the bureau’s battle with the nation’s real estate agents, who have come under increasing scrutiny as their commission-based payouts have grown along with the price of homes.
The Toronto board allows agents to provide their customers with all sorts of important data about a home that are not available on the public website Realtor.ca, such as the number of days a property has been on the market and previous selling prices. The information is essential for any home buyer, because it tells a deeper story about the local market and the home’s history than a simple listing.
While some of the country’s real estate boards have no problem with this, the Toronto board has resisted making the material available online, citing privacy concerns. Toronto agents are allowed to send the information via fax, hand it to the customer in person or zip off an e-mail.
Some brokerages want to go further and set password-protected websites that would allow customers to access the data from their living rooms. But TREB won’t allow the brokerages to pull the data from the Multiple Listing Service that they need in order to fill the sites with information. In a court filing, the Competition Bureau argued that the policy stifles competition.
“The restrictions are a practice of anti-competitive acts, the purpose and effect of which is to discipline and exclude member brokers who use non-traditional methods,” the Competition Bureau’s court filing states. “If a broker does not abide by the restrictions, TREB can terminate the broker’s access to the TREB MLS system – and has done so.”
The filing refers to a 2007 decision by the board to deny access to a brokerage after it downloaded listings from the MLS server to provide to its customers on a password-protected site.
Competition Commissioner Melanie Aitken said that decision has scared other brokers away from attempting to set up similar services. If those services were allowed, it would mean “their customers could conduct their own searches for information relevant to the purchase and sale of homes in the GTA without the personal assistance or direct intervention of a broker.” This could lead to “significant savings” for consumers, she said.
“This is simply about allowing consumers to gain access to information in innovative ways rather than the traditional way,” Ms. Aitken said. “We told them about our concerns and have talked to them since February, but we can’t let them continue to violate the act so we had to move.”
TREB sees it differently, arguing that having that information on a website that could be accessed by anyone with a password is an invasion of privacy. The association, which represents about 31,000 agents, has been working on a system that would allow such sites to operate, yet address privacy concerns, said Bill Johnston, the board’s president.
Mr. Johnston said he had met with Ms. Aitken’s “underlings” earlier this year and felt blindsided by the decision to go ahead with a case to the Competition Tribunal.
“We thought we were on the right track and then she threw us a curveball,” he said. “This smacks of career building on her part, and is a waste of taxpayers dollars. It’s a low blow that shouldn’t have happened, and I can see no other legitimate reason for doing this other than to grab headlines.”
The two sides can either come to an agreement, or meet at the Competition Tribunal – which has the power to impose a solution and issue fines.
The country’s real estate industry is made up of 101 individual boards, which are organized geographically. Each runs its own Multiple Listings Service, which all feed into the Realtor.ca site that is run by the Canadian Real Estate Association. They can set their own rules on how their data is used.
Other boards have allowed brokers to offer the information that TREB is denying its members.
Bill McMullin has invested “several million dollars” into Viewpoint.ca, a site that legally pulls data from the Nova Scotia boards and repackages it for its clients. He has taken it a step further, adding additional data sets that allow users to see information on things such as lot sizes and recent assessments.
“Everything you see on our site is made possible because we have access to that MLS data,” said Mr. McMullin, who wants to expand into Toronto but can’t get the data from the Toronto board.
This is the second time Ms. Aitken has taken aim at the real estate industry. Last year, she accused the real estate association of blocking its members from posting flat-fee listings, instead requiring consumers to hire an agent for the entire sales process if they wanted their house listed on MLS. That case led to a settlement that opened the door for flat-fee brokerages to list houses on the system.