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(John Woods/John Woods for The Globe And Mail)
(John Woods/John Woods for The Globe And Mail)

Toronto Real Estate Board fails to appease competition watchdog Add to ...

The Toronto Real Estate Board's attempts to appease the country's Competition Bureau have fallen flat, with the bureau filing updated complaints that lambaste the board's plan to allow agents to set up private websites for their clients.

The board's proposed policy falls short in two key areas, the Competition Bureau said, and does nothing to address its anti-competitive concerns. Under the new plan, real estate agents would not be allowed to post historical sales data on the websites, or information about commission fees.

Historical sales data are a key way for buyers to gauge a home's value, because they can see how often the property has changed hands and for how much. If consumers could obtain all of the data online and save their agent some work, the Competition Bureau argues, they could expect to pay less in commission fees.

"If the proposed rules are enacted, they will continue to prevent member brokers from operating a [website]" the revised statement of claim states. "TREB will continue to thwart the development of new, innovative, and efficient models of providing real estate brokerage services using the Internet. The proposed rules will discriminate against brokers seeking to innovate, and will constitute a further anti-competitive act by TREB."

The Toronto board already allows real estate agents to provide a great deal of information to buyers - such as the number of days a house has been on the market and previous selling prices - by hand, telephone or e-mail, but they are not allowed to create websites where customers can look up the information on their own.

The board was quick to react after the Competition Bureau filed its initial complaint, passing a policy that would allow agents to set up the sites as long as certain guidelines were followed - the sites must be password protected, available only to clients, TREB would be able to monitor who is using the site and how, sellers could opt out of having their home appear on the site and the seller's name and contact information couldn't appear in the listings.

But without sales data or commission information, the Competition Bureau said the board hasn't gone far enough. That's because the bureau wants brokers to be able to use all of the sales data generated by the board to create products that ultimately lower fees for consumers.

Any restriction on the flow of information is unacceptable, Competition Bureau Commissioner Melanie Aitken said. Real estate fees are artificially high in Toronto, she said, because brokers aren't allowing their clients to do some of the legwork themselves.

Some brokerages in the United States offer their clients as much as 50 per cent off their commission fees if they use a website to do their own research, she said.

The real estate board's executives have been working on a policy for its 30,000 members since last August, and met with the bureau several times prior to filing the allegations. Former TREB president Bill Johnston has spoken out strongly against Ms. Aitken's office, accusing her of using her pulpit to advance her career at the expense of the country's real estate industry.

Friday, the board said it stood by its new policy. If the two sides can't find a way to break the impasse, the case will go to the Competition Tribunal, which is allowed to issue fines and could issue binding resolutions to force the board to make changes if it felt the complaints were warranted.

TREB president Richard Silver said the board's main concern is that the bureau wants it to also publish sale prices for homes that have been sold, but haven't officially closed yet. That could compromise the seller's ability to get the same price if the deal falls through, he said.

"The Commissioner is pressuring TREB to make changes to its own property listing system that TREB believes would violate consumer privacy laws, reduce the quality of the system, and diminish protection for consumers who list their homes in the Greater Toronto real estate market," he said.

"TREB appreciates that the Commissioner has a job to do, but TREB is the wrong target. The Commissioner obviously has recognized that her initial application back in May was faulty. Instead of working with TREB to find a practical solution for consumers, the Commissioner has today decided to pursue an additional legal process that will further delay improvements and further disadvantage consumers."

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