Federal Court Greenlights Price-Fixing Class Action Against GTA Real Estate Brokerages and Associations

TORONTO, Sept. 26, 2023 /CNW/ - Yesterday, Chief Justice Paul Crampton of the Federal Court allowed a proposed class action to go ahead against seven major Canadian real estate brokerages, the Canadian Real Estate Association (CREA) and the Toronto Regional Real Estate Board (TRREB).

The case alleges that the brokerages into an illegal arrangement to inflate buyer brokerage commissions paid by home sellers in the Greater Toronto Area, and that CREA and TRREB aided and abetted the arrangement.

The proposed class action is seeking to represent every person who sold residential real estate through to the Toronto MLS since March 11, 2010.

The case stems from rules agreed to between brokerages when they join CREA and TRREB, including that a home seller on the Toronto MLS must pay a commission to its own brokerage as well as the brokerage of the person who buys the home. The claim pleads that the rules "severely limit and impair the negotiation or alteration of the price for the supply of Buyer Brokerage services (i.e., the commission) which has been offered by a seller to Buyer Brokerages."

The defendants asked the court to strike out the claim because it lacked merit. In response, Chief Justice Crampton allowed the case to go forward, holding that it was at least arguable that the rules improperly imposed illegal controls on the price of buyer brokerage services. A copy of the decision is available here.

"Housing in the GTA has become unaffordable. Part of the reason is the real estate industry itself, whose rules impose additional cost on real estate sellers" says Garth Myers, one of the lawyers for the plaintiff. "This industry needs to change to get onside Canada's laws. Sellers should not be paying for buyers' realty services. If this case is successful, if will have industry-wide ramifications, decreasing the cost of housing for everyone."

Kalloghlian Myers LLP, Bates Barristers and John Syme are counsel to the plaintiff.

SOURCE Kalloghlian Myers LLP