Realtor groups face competition questions

Yukon association the latest

Canadian real estate groups are coming under increased scrutiny over alleged anticompetitive behaviour, with the Yukon Real Estate Association being the latest to face repercussions.

Last week, the Competition Bureau announced that it had reached a consent agreement with the YREA that found it had engaged in anticompetitive conduct by imposing a requirement that certain prospective members reside in the Yukon for a year before joining.

The residency rule, considered “abuse of dominance” under the Competition Act, was found to hinder new competition, especially for services that provide consumers with alternative choices and fee structures compared to traditional full-service real estate brokers.

“We don’t know who brought the matter to the bureau’s attention,” YREA President Marc Perreault said in an interview. “The association never denied anyone’s application to the association. We assume it was from a review of our policies following a similar review of a complaint in another jurisdiction.”

In November, the Bureau signed a consent agreement with the Northwest Territories Association of Realtors addressing a similar requirement.

Perreault said that the YREA’S adoption of a residency requirement stemmed from the fundamental belief that consumers benefit from and are safeguarded by having access to local agents and brokers who are well-versed in Yukon’s unique characteristics.

As part of the April 25 consent agreement, the YREA has committed to refraining from adopting or enforcing residency requirements and ensuring non-discriminatory access to the market for future competitors.

“Competition in the real estate sector is of critical importance to Canadians,” Commissioner of Competition Matthew Boswell said in the press release announcing the agreement.

“It stimulates innovation, lowers prices, and improves the consumer experience. Protecting competition in the real estate sector remains a top priority for the Competition Bureau.” The consent agreements come as Canadian real estate boards have been facing more serious allegations of anticompetitive behaviour as well.

A class-action lawsuit alleging that home sellers in the Toronto area have been paying artificially inflated commissions was approved by a Federal Court judge on Sept. 25.

The lawsuit accuses major brokers and real estate organizations in Toronto of implementing rules that restricted competition for buyer brokerage services, resulting in higher prices.