TORONTO - Changes to rules governing real estate services do not create more choice for home buyers and sellers, and instead give realtors a "blank cheque" to impose new anti-competitive rules, Canada's federal competition watchdog says.
The Canadian Real Estate Association loosened its rules Monday to lift restrictions on realtors' minimum service requirements and allow consumers to use an agent to simply list their property and handle details on their own, including negotiations with potential buyers.
However the Competition Bureau said the amendments protect CREA's ability to pass rules that could further restrict consumer choice, leading to reduced competition and higher fees.
Commissioner of competition Melanie Aitken said in a statement the amendments do not remove existing roadblocks faced by realtors who want to offer a more flexible range of "a la carte" services.
"They are a step in the wrong direction. These amendments amount to a blank cheque allowing CREA and its members to create rules that could have even greater anti-competitive consequences."
About 87 per cent of the 300 representatives from real estate boards and associations across Canada who met in Ottawa on Monday approved the CREA's clarifications to rules governing the Multiple Listing Service, where the vast majority of Canadian home sales take place.
CREA, which represents more than 98,000 real estate brokers, agents and salespeople, allows only its members to post homes for sale on its MLS database, which is operated by regional real estate boards.
Bill McMullin of Halifax's ViewPoint Realty who makes some MLS data available to customers on his website, said the wording of the changes Monday adds more flexibility in the rules, but doesn't much change the actions of realtors "on the ground" who were already offering "a la carte" services.
"The updated rules and interpretations make it crystal clear that the realtor, after they post the listing, need only be available to the homeowner. They do not need to be the interface between the homeowner and the purchaser."
"Whatever the homeowner and realtor decide will be the level of service required, that's what its going to be," he said.
McMullin doubts that many consumers will actually want to navigate the complicated sales process on their own.
"Most homeowners do not want to pay on a fee-for-service basis...they choose to pay nothing up front and only pay fees if the house sells."
He said the option has been available for years, but consumers have largely avoided it because they don't like unpredictable pricing.
The Competition Bureau filed an application with the Competition Tribunal in February seeking to strike down CREA's rules on the use of its MLS, which it has said restrict consumers' ability to conduct real estate transactions without an agent.
The bureau said Monday it will continue to challenge what it calls anti-competitive rules imposed by CREA arguing that it wants CREA to ensure its members cannot pass rules that restrict consumer choice.
"We have repeatedly advised CREA's leadership that these amendments do not solve our ongoing competition concerns and I reiterated this directly to CREA as recently as last week in a letter to the president," Aitken said.
Aitken has said if the bureau's challenge is successful it will drive down real estate transaction fees because it will allow consumers to choose which services they want.
While the bureau can withdraw an application to the tribunal, it has told CREA it will not do so until it is confident the association is not imposing anti-competitive rules on agents who use its services.
CREA spokeswoman Alyson Fair said the rules will be implemented as soon as possible, but added the association plans to fight the accusations and will issue a response in time for a Thursday deadline.