Competition tribunal's ruling a blow for home sales by owners

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Canada's Competition Tribunal struck a blow to Canadians looking to sell their homes without using an agent, ruling that the real estate industry's restrictions on how private sellers advertise their contact information through the popular realtor.ca website were fair.

The decision, issued Thursday and posted to the Tribunal's website on Friday, is the latest in an ongoing spat between the federal Commissioner of Competition and the Canadian Real Estate Association, which oversees the country's 100,000 real estate agents, over how much access the public can have to information and tools that would allow them to buy and sell homes without using a realtor.

Commissioner John Pecman inherited the fight from his predecessor, Melanie Aitken, who signed a landmark deal with CREA in 2010 that allowed private sellers to post their listings on realtor.ca, the public face of the industry's Multiple Listings Service, where the vast majority of the country's homes are sold. Until then, only professional real estate brokers and their agents could post listings there.

But the deal also threw up some roadblocks to public access. Sellers weren't allowed to post listings to realtor.ca themselves. Instead, they had to pay a fee to a licensed brokerage, who would post the listing on the seller's behalf, but otherwise permit clients to sell their homes on their own. Sellers were also still required to pay a commission to a buyer's real estate agent and the deal banned private sellers from including their contact information in their realtor.ca listing, although the posts could link to a broker's site that published the seller's contact details.

Still, the agreement was a watershed for the country's housing market, inspiring a rush of new real estate agencies offering do-it-yourself packages to sellers for a fraction of the 4 to 5 per cent commission that a full-service realtor would charge to sell a home.

Nearly a year after signing the agreement, CREA issued a revised set of rules banning low-fee DIY brokerages from including seller's contact information on any website that linked directly to the realtor.ca listing. Instead of clicking on a link that went straight to a website listing a seller's details, brokerages had to create a "buffer" web page between the real estate industry's website and the seller's contact information. Essentially, interested buyers are required to click through at least two web pages in order to find a seller's information.

Low-fee brokers complained that the new rules to create a "buffer page" were expensive, time-consuming and confusing for prospective buyers. Months of back-and-forth negotiations between the Commission and CREA went nowhere, and last April Mr. Pecman launched a complaint with the Tribunal alleging that the restrictions violated its agreement with CREA.

The Tribunal is an administrative court that rules on competition matters. The Competition Bureau is an arm of the federal government. As its head, the commissioner can investigate organizations for anti-competitive behaviour and ask the Tribunal to rule on a case, but doesn't have authority to issue rulings himself.

In dismissing Mr. Pecman's complaint, the Tribunal ruled that the agreement had never intended to allow unfettered public access to the realtor.ca website, which is paid for through fees collected from its realtor members. "[The agreement] did not intend to eliminate completely, the barrier between realtor.ca and private sellers," tribunal chairman Donald Rennie wrote. He added that the requirement to create a buffer page wasn't likely to deter too many motivated buyers, noting that "even a novice user of realtor.ca would have little difficulty in finding the information under the existing rules and design of the website."

The ruling is a setback for Ottawa's competition watchdog, which has been pushing hard to break the real estate industry's control over the housing market. A battle between the commissioner and the Toronto Real Estate Board, the country's largest local association, over public access to sales price data, made it all the way to the Supreme Court of Canada. The court sent it back to the Competition Tribunal, which is set to hear the case in September.