The Canadian Real Estate Association (CREA)’s Realtor Cooperation Policy has been in effect for nearly six months now. During that time, questions have arisen regarding CREA’s ability to direct or control realtor communications. The answer to this question varies depending on who you ask.
CREA asserts its authority to direct or control realtors’ communication and has the power to enforce this through its control over the MLS mark and other controlled marks. Failure to comply with CREA’s Realtor Cooperation Policy can result in disciplinary action by CREA and/or the local board.
It’s important to distinguish the restrictions in the policy from CREA Rules that mandate realtors using CREA’s marks to ensure accuracy, clarity, and understanding in real estate advertising.
A heavy-handed policy
The details of CREA’s policy and the restrictions it imposes on realtors and their clients have raised concerns. The policy, including the three-day rule, requires realtors to obtain written confirmation from clients who wish to sell their property through a pocket listing without appearing on MLS.
Clients must provide specific instructions to their realtor not to engage in public marketing of their property and acknowledge the potential consequences of not listing on MLS. This places realtors in an uncomfortable position with clients and can lead to disciplinary action if not followed.
The policy and ‘abuse of dominance’ under the Competition Act
The Competition Act prohibits anti-competitive behavior by dominant market players, including abuse of dominance. CREA’s policy may raise concerns under this provision due to its control over the real estate market through the MLS mark and other marks.
The policy may be considered a practice of anti-competitive acts as it targets specific market participants. This could hinder competition in the market for pocket listing services for realtors.
CREA says pocket listings make MLS systems less useful
CREA’s rationale for the policy is based on a study suggesting that pocket listings diminish the value of MLS systems by decreasing the percentage of listings on MLS. This argument, although valid, raises concerns about anti-competitive practices.
Competition thrives when consumers have the freedom to choose products and services based on their preferences. CREA’s policy may conflict with the principles of free and open competition outlined in the Competition Act of Canada.
It’s important to question whether CREA’s Realtor Cooperation Policy aligns with its commitment to support free and open competition as stated in its Pledge of Competition.
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