I am writing in regards to an article by Erik Pisor of Inman News that appeared in the June 2009 edition of REM: Competition Bureau visits flat-fee U.S. brokers. The article contains inaccurate statements about the Canadian Real Estate Association’s rules.
Quoting Chris Ballard, the article states: “MLS rules and bylaws in Canada appear to place restrictions on real estate companies that charge a flat fee”. CREA’s bylaws and rules do not prescribe, require, limit or restrict the nature of the services performed by Realtors or the prices charged for any such services. Decisions about what services to provide or what price to charge are business decisions that each real estate firm or Realtor makes independently. For a real estate firm or Realtor to charge a flat fee would not be a violation of CREA’s rules.
The article goes on to say: “One (CREA) rule requires listing agents to receive offers from potential buyers and negotiate on behalf of the seller in order to list the property within the MLS”. This statement is incorrect. CREA’s rules require listing agents to be available to provide professional advice and counsel to the seller on all offers and counteroffers. CREA’s rules do not require listing agents to negotiate on behalf of the seller if the seller advises the listing member in writing that he or she does not want professional advice and counsel.
The next sentence in the article states that “the seller does not have the legal right to opt out and negotiate the offer without the aid of the listing agent”. CREA’s rules do not establish or affect legal rights. Real estate agents and brokers must comply with CREA’s rules in order to maintain their CREA membership, but any restrictions on a seller to negotiate the purchase of a property on their own would be a matter of provincial law in the province where the property is located. It bears noting that members of organized real estate must comply with all legislative, regulatory and common law requirements applicable to real estate professionals in jurisdictions across Canada, quite apart from any of CREA’s rules.
Further, I would like to take this opportunity to clarify some differences between MLS systems in Canada and in the U.S. In Canada, MLS is a registered trademark owned by CREA whereas MLS is not a trademark in the U.S. In Canada, real estate boards and associations are licensed to use the MLS trademark in association with the operation of an MLS system. CREA has rules that protect the MLS trademark from misuse and infringement, which all boards and associations must comply with in order to use the mark.
As MLS is not a trademark in the U.S., one would expect the rules of NAR and American MLS providers to differ from those in Canada.
Finally, as stated in the article, there are numerous MLS systems that operate throughout
Canada, but the MLS mark is a national trademark. There is also a national website, Realtor.ca, which is a public website that consolidates and displays a subset of the information contained in MLS listings on individual boards’ MLS systems. This website should not be confused with an MLS system, which is a co-operative selling system operated by a board or association that includes an inventory of listings of participating Realtors.
Pierre Beauchamp
Chief Executive Officer
Canadian Real Estate Association
Ottawa
