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Realtors argue system is already competitive Add to ...

REAL ESTATE REPORTER

The Canadian Real Estate Association will argue that its members already offer Canadian consumers "a wide range of business models" when it appears in court to defend itself against charges of anti-competitive behaviour.

CREA yesterday filed its response to Competition Bureau allegations that the association makes it impossible for competitors to offer innovative services to consumers, such as flat-fee listings or individual services based on minimal levels of service.

The 98,000-member CREA argues in its filing that agents are already allowed to set their own commission rates, and that new rules approved by CREA last Monday will allow consumers to post their homes on its Multiple Listing Service, where the majority of the country's residential sales take place.

"The unfounded allegations in the [Competition Bureau's]application mischaracterize the very competitive environment in which CREA's 98,000 members compete vigorously every day to help Canadians buy and sell their homes," the CREA filing said.

The charges were filed in February by Competition Commissioner Melanie Aitken, a vocal critic of the industry's practices. CREA had until yesterday to file its defence, and on Thursday sent an angry letter to Ms. Aitken's office asking her to stop criticizing the organization publicly.

The letter also said all of her concerns had been addressed, because the recent rules changes allow consumers to take advantage of MLS and not pay a real estate agent a commission for services when a home is sold. Before the changes, consumers had to pay an agent for services they may not have wanted - such as conducting open houses and handling negotiations - to gain access to the MLS system.

While both sides have said they are open to negotiations, the Competition Bureau said it was unswayed by the arguments put forth in the letter and the case is likely to go to court in the fall. Ms. Aitken said earlier in the week that the changes were "a blank cheque" intended to protect a monopoly on real estate services, and didn't change her opinion that CREA wants to keep competitors out of the market by restricting the activities on the MLS.

"Our position remains that only a legally binding consent agreement will ensure a lasting permanent solution," Ms. Aitken said yesterday. "In the absence of that, we look forward to making our case at the Competition Tribunal on behalf of consumers and the many people in the real estate industry seeking to provide more pricing and service options."

Yesterday, CREA said the entire case is now flawed because the organization's rules have been changed. "The application brought by the Commissioner against CREA is fundamentally misconceived," the organization said. "It is simply untrue that consumers only have one option if they want to sell their house using an MLS system operated by a local real estate board. The allegation that consumers who want their property listed on a board's MLS must hire a broker who will force them to purchase a bundle of services they may not want is simply false."

The Competition Tribunal will hear the case if a deal is not reached. It has the power to force changes to CREA's rules, and could levy a fine as high as $10-million. The real estate group wants the case to be dismissed, and is also seeking to have its costs covered by the Competition Bureau if the charges fall through.

"There is simply no legal, economic or factual basis upon which to order the remedy sought by the commissioner," CREA's defence filing concluded.

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