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Photograph of Georges Pahud president of CREA, in Ottawa, Tuesday March 23 2010, as requested by Dave Lucaas Photo Fred Chartrand
Photograph of Georges Pahud president of CREA, in Ottawa, Tuesday March 23 2010, as requested by Dave Lucaas Photo Fred Chartrand

Realtors hit back in fight with competition watchdog Add to ...

The bitter feud between Canada's real estate agents and the competition watchdog over how people buy and sell their homes is now a bare-knuckle fight.

Largely on the defensive so far, the Canadian Real Estate Association is accusing Competition Commissioner Melanie Aitken of making "disingenuous" comments about an industry it says has been tarnished in the three-year fight.

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In a letter to Ms. Aitken obtained by The Globe and Mail, CREA president Georges Pahud says the association is ready to defend itself in court to put an end to allegations of uncompetitive behaviour.

The letter comes as CREA puts the finishing touches on its legal response to the commissioner's allegations that the organization makes it impossible for competitors to offer innovative services to consumers, such as flat-fee listings or à la carte services based on minimal levels of service.

"The unfounded allegations made by you tarnish the reputation not only of CREA and its member boards, but of all members [who]compete vigorously every day to help Canadians buy and sell their homes," Mr. Pahud says in the letter to Ms. Aitken, who is taking the group before the Competition Tribunal on the allegations of uncompetitive behaviour.

Mr. Pahud says the association has always been willing to meet with the watchdog, and still is, but warns that CREA "is fully prepared to and would welcome the opportunity to deal with the case before the Competition Tribunal."

Due on Thursday, CREA's response to the Competition Bureau's accusations will highlight recent actions taken by the association to try to satisfy the commissioner. Until March 22, anyone who wanted to list their home on the Realtor.ca site - the public face of MLS, where about 90 per cent the country's homes are sold - had to use an agent through the entire process and pay a commission when the home sold.

The Multiple Listing Service system meant a consumer had to pay an agent for services they may not have wanted - such as conducting open houses and handling negotiations - in order to gain the valuable MLS listing.

Minutes after the changes were passed Monday, Ms. Aitken issued a press release that said they were a "step backwards" because local boards would be able to set their own rules or flat-out reject the changes, potentially causing even more restrictive rules to be passed in the future.

"What we're seeing is CREA preserving and protecting the ability to pass any anti-competitive rules - indeed potentially even more anti-competitive rules - that we're seeking to dismantle," she said the next day in Calgary.

Mr. Pahud's letter says the organization had "no intention" of passing any new rules that could be seen as anti-completive, adding that each of the country's 101 local real estate boards has been ordered to adopt the changes passed on Monday.

"CREA has made it very clear to its member boards that they are not only required to amend their rules as soon as practically possible to reflect the amendments, they also cannot have any rules or pass new rules that violate the principles in the amended interpretations," he said.

Mr. Pahud, who was voted president of the 98,000-member organization on Tuesday, said his priority is to deal with the charges and focus on rebuilding the industry's image.

Both sides agree they were close to a settlement earlier in the year, but talks suddenly fell apart when Ms. Aitken decided CREA was intent on giving itself an escape clause at the board level.

"In CREA's view, it is extraordinary that you would suggest the amendments that directly respond to the stated concerns of the Competition Bureau are a 'step in the wrong direction' and amount to giving CREA and its members an 'absolutely blank cheque opportunity to pass any rules that they wanted including highly anti-competitive rules," Mr. Pahud stated. "This statement is particularly disingenuous given that you and your officials had previously reacted favourably to the thrust of these amendments in our numerous meetings over the last several months."

While CREA's response is due on Thursday, it may take until the fall for a hearing before the Tribunal. Until then, real estate agents will be working under the new rules as soon as they are adopted at each local board.

"Perhaps in the past CREA hasn't handled this as well at the political level as it might have," said Phil Soper, president of Royal LePage. "I think that's changed recently."

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