If you’ve been living in a cave for the last three years (specifically one on the moon……..with your eyes closed and your hands over your ears), then perhaps you don’t know what today’s blog topic refers to.
But for everybody else out there in Pleasantville, you’ve been following this story with great interest.
The case basically boils down to “sold data,” which is not made publicly available by the Toronto Real Estate Board, and the Competition Bureau believes it should be.
This case has been going on for years, through multiple courts and appeals, but finally ended last Thursday.
This is from the Government of Canada website:
“Today’s ruling is a decisive victory for competition, innovation and for consumers. By removing TREB’s anti-competitive restrictions, home buyers and sellers in the GTA will now have greater access to information and innovative real estate services when making one of the most significant financial decisions of their lives.”
Matthew Boswell
Interim Commissioner of Competition
- The Bureau’s case against TREB had been ongoing since 2011, when the Commissioner filed an application with the Competition Tribunal challenging the restrictions that TREB imposed on its members’ use and display of data in the Toronto Multiple Listing Service (MLS) system.
- Toronto is one of Canada’s most expensive and least affordable housing markets. The average selling price of a home in Toronto has gone up from $485,520 to $782,129 since the Bureau began its litigation against TREB. The average sale price of a detached home sold through the TREB MLS is now more than a million dollars.
- This case highlights the importance of innovation and dynamic competition, both of which benefit not only individual Canadians but the economy as a whole.
- Anti-competitive activity that hinders innovation in the Canadian economy will continue to be a top priority for the Bureau.
I know what you’re thinking.
And trust me, I’m thinking the exact same thing!
The Supreme Court of Canada waited until I was on vacation to make their announcement! Damn government…
Anyways, I’ve spoken to three media members about the case since the news broke last week, and I have a feeling that there’s a lot more news on the way.
But so far, some of the biggest news (and some of this has yet to be reported) is TREB’s response. Or to be more specific, lack of a timely and detailed one.
The news came down on Thursday, and there was no shortage of coverage:
National Post: “Decisive Victory For Competition”
Huffington Post: “Canadian Home Buyers Will FinallY Get To See Homes’ Previous Sold Prices”
Canadian Press: “Toronto REaltors Can Now Publish Home Sales Data”
And so on. The coverage continued into Friday as well.
Where things get interesting, or at least they did for me, while I was on vacation, and trying to make sense of all this, is from an organized real estate perspective. What are TREB and RECO saying? And how are they guiding us?
Here’s what we got on Thursday from TREB:
TREB respects the Supreme Court of Canada’s decision to not grant leave to hear TREB’s appeal. The Order of the Tribunal provides 60 days for compliance, unless it is modified.
As noted by the Supreme Court of Canada, of the approximately 600 leave applications submitted to the Court each year, only about 80 are granted. The possibility of succeeding in getting an appeal heard is in general remote. The Court’s role is not to correct errors that may have been made in the courts below. Rather it grants leave only where its decision is likely to have an impact on society as a whole.
TREB believes personal financial information of home buyers and sellers must continue to be safely used and disclosed in a manner that respects privacy interests and will be studying the required next steps to ensure such information will be protected in compliance with the Tribunal Order once that comes into effect.
However, although the Order of the Competition Tribunal provides 60 days, there are many ambiguities and uncertainties in the Order for which TREB is currently seeking further clarification.
TREB will continue to provide guidance to its Members as this matter continues to unfold.
As you would assume, I have a lot to say on this, but I want to put my thoughts together when I can be more eloquent, and when I’m not glassy-eyed and weary from a travel day. So as promised, I will provide my thoughts on this battle that Realtors did not want, come Friday.
But since that email went out last Thursday, Realtors were left scrambling to try and figure out what they were and weren’t allowed to do.
Many Realtors were freaking out, seeing other sites and other agents getting the “jump” on them with the data, and these people were not impressed with the lack of a response from TREB.
Thankfully, TREB sent out a second email on Tuesday (five days is a long time, given the stakes here), which said the following:
Competition Tribunal Order June 3, 2016
re: Commissioner of Competition vs. Toronto Real Estate Board
FREQUENTLY ASKED QUESTIONS
*Please note that this is not an exhaustive list. As the situation continues to evolve, more questions and answers will be added as appropriate.
As a TREB Member, you remain bound by and required to comply with all applicable laws, rules and regulations, including all TREB By-Laws, Rules, and Regulations, PIPEDA, REBBA as well as all RECO Rules and Regulations.
Failure to comply could result in legal proceedings and /or revocation of your MLS® System Access
Q 1. How can consumers access the data?
A. Consumers can only access data through a password-protected virtual office website (VOW) operated by a TREB Member for informational purposes in the context of residential real estate transactions.
Q 2. What do I have to do to my website to be compliant?
A. You and your service provider (if applicable) must sign and agree to be bound by a Virtual Office Website (VOW) Agreement with TREB as well as ensure your compliance with the Authorized User Agreement (AUA). If you plan to make sold, withdrawn, expired, suspended or terminated listing information available, you must do so in compliance with the VOW Agreement. Members providing access are responsible for how their actual or potential clients and customers use the information. The information can only be used to provide residential real estate brokerage services between a Member and a client or customer, and cannot be monetized in any way. Members and/or their service providers will be legally liable for any misuse of the information by themselves, their clients or customers.
Additionally, all Members are still bound by applicable legislation and rules, including Personal Information, Protection and Electronic Documents Act (PIPEDA) and Real Estate and Business Broker’s Act, 2002 (REBBA, 2002) Code of Ethics and Regulations as well as provisions under Canada’s Anti-Spam Legislation (CASL) and the Do Not Call List.
Q 3. Am I allowed to scrape the data from the VOW feed? Can I use the data for any non-real estate brokerage business between a Realtor and client or customer?
A. No. The data cannot be scraped, mined, sold, resold, licensed, reorganized or monetized in any way, including through the sale of derivative products or marketing reports. The data cannot be used for commercial purposes other than to provide residential real estate brokerage services between a Realtor and a client or customer. Breach of this by either a Member or the member’s clients or customers may result in legal action (including damages) against the Member and the cancellation of TREB Membership and TREB MLS System access.
Q 4. Can I advertise sold prices now?
A. No. However, you can provide sold information so long as it is in accordance with the TREB Authorized User Agreement, VOW Agreement, the TREB By-Law, and all applicable laws and regulations. Please note that Members remain subject to REBBA with regards to advertising.
Q 5. When can we start posting the information online?
A. TREB will make this information available to be posted online by October 22, 2018. If TREB is able to make this information available sooner, it will provide notice to members. However, the information can only be used for the purpose of engaging in residential real estate brokerage services. Any other purpose is not permitted under the VOW agreement.
Q 6. Can non-members post sold information?
A. The information cannot be used or posted by non-members without specific authorization from TREB.
Q 7. My client or customer doesn’t want the purchase price of its house disclosed online. Will that information be confidential?
A. That information could be made available on a VOW as of October 22, 2018, possibly sooner – in which case TREB will provide notice to its members. We will continue to listen to the feedback from Members, buyers and sellers regarding their personal information and take necessary steps to make sure that privacy laws are followed.
Q 8. What if a new client or customer doesn’t want the information posted on a go-forward basis?
A. We are reviewing the consent language in the buyer representation and listing agreements to consider this.
Q 9. What about historical sold price information where consents were given before websites were in existence?
A. TREB is reviewing the consent language; however, at this time we are required to make this information available.
Q 10. Do you anticipate other changes to the VOW agreement, buyer representation or listing agreement?
A. We are reviewing these agreements in light of our obligations under the order and privacy laws and will provide updates in due course.
We are also considering whether changes are needed regarding how long listing photos should remain active on a broker’s VOW website after the sale of a property has been completed.
Q 11. Does the order only affect the Toronto Real Estate Board?
A. At this time the order only applies to TREB and includes all listings that appear on the Stratus system (including listings from our partner boards, Durham Region Association of REALTORS® (DRAR) and Brampton Real Estate Board (BREB) and also inter-boarded listings. However, we expect that other boards will change their practices as well.
Q 12. Is the litigation with the Competition Bureau over?
A. There is no outstanding litigation with the Competition Bureau.
Q 13. Will my fees increase as a result of the decision?
A. Fees will not be impacted by this decision.
So there’s a sneak-peak into the going’s on behind the scenes in organized real estate.
And as I’ll explain on Friday, this whole thing is just ludicrous, since an overwhelming majority of the full-time, active, experienced, trustworthy agents out there actually want this data to be released.
But what does the Real Estate Council of Ontario (RECO) have to say about this? RECO, who is actually responsible for licensing, as well as disputes and discipline?
Well, in my opinion, they completely passed the buck.
They sent out an email saying that nothing has really changed, as far as they are concerned.
Here’s the email:
On August 23, 2018, the Supreme Court of Canada declined the Toronto Real Estate Board’s (TREB’s) request to appeal a lower court ruling. That order required TREB to drop certain restrictions on the display and use of “sold” prices by TREB members who share the information through Virtual Office Websites (VOWs).
RECO has received questions about what this means for compliance with advertising requirements under the Real Estate and Business Brokers Act, 2002 (REBBA). The short answer is that there is no impact because the ruling applies to information that is not considered advertising.
To understand the issue, it’s important to define what a VOW is as defined in the Competition Tribunal decision: “a password-protected area of a brokerage’s website where consumers can access and search a database containing MLS information.”
Some have asked how this could comply with REBBA, which prohibits the advertising of the “sold” price without the parties having provided written consent to do so. However, the Competition Tribunal’s decision determined that sold information provided on a password-protected VOW does not constitute advertising, since providing that same information in other formats (such as a Comparative Market Analysis), or providing other MLS information, does not constitute advertising, either.
The order was upheld on appeal to the Federal Court of Appeal. The Supreme Court of Canada, by denying leave to appeal, has affirmed the order.
While the decision enables the posting of a property’s sold price on a VOW, the price of a conditional offer should not be shared.
Advertising sales prices without required consent still violates REBBA
To summarize: the Competition Tribunal’s decision applies specifically to data published on a password-protected VOW, and not to advertising. As such, the existing REBBA rules regarding advertising continue to apply. Without the written consent of the parties to the agreement, registrants must not include in any advertisement, details of an agreement of purchase and sale, such as:
- the parties to the agreement;
- the location of the property; or
- any provision of the agreement relating to the price.
Advertising such information without written consent is a breach of REBBA, and RECO will deal with it accordingly.
So that’s a lot of information to digest, and a healthy read if you’re interested.
Part of the story here is going to be how organized real estate reacts to the Supreme Court’s ruling, and not only how – but when.
I understand that there are grey areas, and TREB needs to act in a professional, and diligent matter.
But I also know that TREB’s stance on this has been influenced by factors outside of the day-to-day operations in organized real estate, and whether that story comes out in the next few days, or whether I explain on Friday, should be an interesting little battle against time…
Condodweller
at 7:53 am
I think this is the biggest news that has the least effect on consumers given the fact that a few brokers have been making this data available al along.
BTW David, the timing of your website update and this decision haven’t escaped me. Great job there.
What I find interesting about all this is that TREB keeps dragging its heels to try to delay the inevitable. They want to wait until the last day of the 60 days and even then they are seeking clarifications which presumably will reset the 60 days.
Over all, this is good news for consumers.
Marko
at 9:17 am
Why doesnt TREB have a plan in place already? They are essentially telling everyone to sit tight until they figure things out. This has been going on for years, they knew the appeal was a long shot. TREB needs better leadership, and strategic foresight here.
Ralph Cramdown
at 2:14 pm
Foot dragging and delay IS the plan.
Carl
at 9:34 am
There are different types of sales data, so the public is easily confused. TREB and RECO are not exactly eager to clear up the confusion.
To begin with, buyers and sellers want to know which homes sold when at what price. That information is in the land registry, in principle available to anybody but in practice not easy to find. The provincial government can easily make this information available online in a searchable form, so anybody anywhere can access it and do any kind of processing on it they want to. No reason to even talk to TREB about it, it is not their data. No reason to involve lawyers and courts and references to the Supreme Court.
Then there is data about the sales process: How long has a home been listed or relisted in MLS, who represented buyers and sellers, how many buy offers were there, etc. For that, I can see that TREB has some say in who where how can use that information. But they still have some obligations to the public. For example, if an agent advertises “top 1% sales agent in 2017” then we should be able to verify the claim.
But for most people the data from the land registry would be enough. If the provincial government wants to show they are on the side of consumers, this is their opportunity.
Whaaa?
at 11:29 am
“On the side of consumers.” Doug Ford. My chuckle for the day.
Appraiser
at 11:28 am
What a gigantic nothing-burger. Seven years of legal wrangling that amounts to little more than a colossal waste of money and time, except for the lawyers of course.
Shame on TREB (and yes I’m a member).
There was a time many years ago when some (many?) realtors use to give their passwords to their clients so they could search the MLS on their own (egads!). TREB cracked down on that practice with dire warnings of severe consequences to members and then introduced additional password security protocols (random number generator) to access the system.
There was also a time when some (many?) realtors were convinced that the creation of MLS.ca (now Realtor.ca) would spell the demise of the industry. After all, who needs a realtor when you can find a home on your own?
Such irrational fears have proved groundless and just as in the U.S., where such data has been available for years, organized real estate has continued to thrive.
Plus ça change, plus c’est la même chose.
Jennifer
at 1:38 pm
1) Why is TREB so interested in guarding this information (on the supposed grounds of privacy)? There has to be another reason. they need to come clean and tell us what they are really interested in.
1a) Has the “public” filed a complaint about sales information on their houses? Again, this information is readily available (can call up an agent, say you are interested in a house, and ask to receive sold reports).
1b) Have they done a polling of TREB members? Were realtors overwhelmingly opposed to releasing the sales data? From what I am reading, most realtors can’t wait to release the sales data or don’t see this as an issue. So even if their own members do not see this as an issue, why is TREB so caught up on (e.g. archaic thinking)?
2) They are “respecting the decision of the Supreme Court”? Gee, that’s nice. They have NO OTHER CHOICE.
Ralph Cramdown
at 1:58 pm
” TREB’s stance on this has been influenced by factors outside of the day-to-day operations in organized real estate […]”
Oh, goody, a ghost story!
TREB enjoys neither a natural nor a legal monopoly on real estate trade in the GTA. Everybody goes there because that’s where everybody goes. It elects its own board, annually, so there’s been a few turnovers since this case (and various other irritants) got started. If brokers doing the majority of business on TREB were really unhappy about the ship being steered off course by the votes of members who sell little or nothing, they could just get together and start alterna-TREB, and old TREB would fold within months. I think that TREB is being run to the satisfaction of its members, or at least the complaints are minor enough that the brokers who bring most of its business can’t be bothered to change it.
David Fleming
at 2:26 pm
@ Ralph Cramdown
Ghost story? Come on, Ralph! You don’t trust me after all this time?
I’m going to let the cat out of the bag on Friday. Stay tuned!
Ralph Cramdown
at 4:43 pm
It isn’t about trust, but about power.
In the last year, OREA went rogue, and TREB said (if I may paraphrase) “Our members don’t technically have to pay dues to you, and we’re big enough to destroy you if we don’t, so fix your PR line, or else.”
I’m hella curious about your story come Friday, but I understand how power works. TREB may have 50k mostly unproductive members, but a very few brokerages hold the power to destroy it, as Frank Herbert would point out. If it stands, it is because they are OK with it.
Ralph Cramdown
at 10:06 pm
Friday.. ?? I don’t have time for that !
Bubba Gump
at 7:35 am
The only information that treb controls that currently compells the hiring of a broker is sold data. Free up sold data and we could be free of treb forever. I’m a real estate broker, by the way, and I would love to replace treb and orea and crea with a simple MLS alternative without the beaurocrats.
Appraiser
at 10:46 am
It is important to remember how all of this works. To be clear, if no real estate brokers decide to make the data available – then there is no public access .
The ruling from the competition bureau does not “compel” TREB or any of its members to operate a VOW, or to otherwise provide non-member access to MLS data.
The ruling permits it.
Chris
at 11:12 am
Yep. But here are three sources that are providing data:
http://www.housesigma.com
http://www.mongohouse.com
http://www.bungol.ca
Housesigma is back to reporting sold data, after a brief hiatus when TREB petitioned the SCC. Mongohouse never stopped.
Kyle
at 11:07 am
Wow TREB totally blew it, and continues to blow. The Realtors who TREB was trying to protect by keeping the data hidden are the very ones who are now disadvantaged. While the Realtors they were fighting to prevent from posting data just need to flip a switch and are way out ahead of the pack.
Now by allowing only Realtors with a VOW to post sales prices, they’re continuing to hurt the Realtors they were supposedly protecting. At this point TREB should just accept that they’ve lost and start making the sales data public, so that those Realtors they were trying to protect don’t now have to try to build their own VOWs from scratch.
Alan Blair
at 3:46 pm
The real storey here is: how a branch of our Federal Government (The Competition Bureau of Canada) abused its authority in a effort to win a milestone decision regarding a section of the Act that pertained to: Abuse of a Dominant Position. The initial decision of the first Competition Tribunal was that the Competition Act did not pertain to the circumstances of this matter — the disputed data! The fact that the federal Government refused to accept said initial decision, raises the question of: to what extent was the Government of Canada able to influence the composition of the next Tribunal, in order to achieve the outcome they wanted? The aforesaid question is one of the biggest and key points to this story, but our media walked on by it, in favour of parroting the narrative of the Competition Bureau.
Another fundament truth is that anyone in Canada had/ has free and easy access to the “disputed data” simply by asking for it, from a REALTOR — as with an overpopulated real estate industry most of them are desperately in need of a new potential customer, and would be hard pressed to say: no!
The third key point is the vexatious suggestion that the manner in which the disputed data is to be made available (VOW’s) is an innovative bonus to Competition. Virtual Office Websites (VOW’s) are essentially a big business concept, because they are very expensive to operate. Consequently the concept may threaten the boutique style brokerages, or smaller operations, that may have been seen as being more selective in their REALTOR sales professional selection — with a view to raising industry standards.
It’s great to live in a democracy, but when the media just parrot the Goverments talking points, it’s a problem!
The Government of Canada, all along, had the ability to make the disputed data available through CMHC, but chose not to, and no one in the media seemed to ask the question: why. It would be patently hypocritical for the feds to push Canada’ organized real estate industry to release information that they weren’t prepared to realease themselves and yet! In my opinion, the aforesaid is the most obvious smoking gun that demonstrates that the matter of the “disputed data” was more about helping the status of the Competition Bureau of Canada than it was about helping Canadians!
Alan Blair
at 10:21 pm
Perhaps the most significant aspect of a REALTOR’s benefit to a consumer, is when they are able to treat the consumer as a: Client, as opposed to a Customer. Within a Full Agency (Client) Relationship the obligations under law are much greater on the REALTOR than is the case when a consumer only has a Customer status, — in part, because you don’t have a Fiduciary relationship with a customer.
In the Competition Bureau’s original filings to the Tribunal, the subject of Agency Law was avoided and continued to be avoided throughout the entire process and debate, as it might pertain to the use of the: disputed, sold, data. The Competition Commissioner who authored the original filings to the Competition Tribunal, even went as far to suggest, in her filings, that the public’s access to the disputed data should reduce the time it would take for a REALTOR to service such a consumers needs — ergo facilitating an environment for lower commissions. The inherent implication in the Competition Bureau Commission’s assertion was, that simply by having access to the “disputed data” a consumer could educate themselves sufficiently that they really wouldn’t need to be treated as a Client and have Agency representation — just by virtue of having unobstructed internet access to the disputed, sold, data! And it had to be provided by organized real estate, of course.
Consumer’s who have already had access to sold data through VOW’s are typically treated as but a Customer — so as to limit a brokerages liability. A consumer who might actually fit the Competition Bureau’s Commissioner’s vision of someone who has gained sufficient real estate knowledge, just by virtue of gaining unobstructed internet access to the sold data, should be treated as a Customer for liability reasons. This same consumer should also know that should it turn out that they weren’t as much of an expert in the end as they thought they were, they have probably forfeited their right to seek the kind of worthwhile legal redress typically afforded a REALTOR’s Client. But, that they did so in the name of: innovation and competition!
Alan Blair
at 9:34 pm
The following depicts an argument that was attributed to the lead council for the Competition Bureau of Canada at the second attempt at the Competition Tribunal to prevail in the subject matter (the disputed data) against TREB:
He (legal council for the Competition Bureau) argued that by omitting MLS information such as historical sold data VOWs are at a competitive disadvantage and will not be able to break into the red-hot, yet cutthroat, GTA (greater Toronto area) market. TREB has market power and its rules discriminate against VOW (Virtual Office Websites) operators.
Now, to paraphrase the preceding paragraph I think it could be interpreted like this: the legal council for the Competition Bureau of Canada argued that VOW’s could not compete on the current level playing field, in what was already an exceedingling competitive markplace [of course the GTA real estate marketplace was already exceedingly competitive, a fact that could only pertain to REALTOR’s commissions etcetera — because home prices were the opposite of competitive] so it was necessary for the Competition Bureau to intervene to tilt the playing field, in a way that would give an uncompetitive business model (VOW’s) the edge that they needed to viably enter the GTA marketplace. Wow!
Essentially, throughout the course of this entire matter the statements of the Competition Bureau and the Bureau’s outside hired guns (legal council), were largely not scruntinized and ergo
not challenged by the broader Canadian media.
Our media is a critical component of a truly viable democracy. When the media is about as effective as a “state run media” in a country that most Canadians would never want to call home, we run the risk of of some individuals in high places taking liberties against our democracy.