Dale Ripplinger
CREA president Dale Ripplinger spoke to REM’s senior editor Kathy Bevan late last week about what happens next.
REM: When negotiations with the Competition Bureau were still underway, you used a real estate analogy to explain how things might go wrong, referring to real estate transactions that have broken down over the appliances. What exactly caused CREA’s negotiations with the bureau to fall apart?
RIPPLINGER: That’s actually a question better asked of the commissioner. We are surprised and disappointed that this has happened, because we thought we were close. With the clarification of the rule changes that we’d offered to the commissioner, effectively we had answered all of her questions.
REM: In the dispatch you issued to CREA members the same day the commissioner made her application to the tribunal, you attached a number of proposed changes to CREA’s MLS rules and Interpretations for members to vote on at CREA’s upcoming AGM in March. Are you still planning to bring those changes forward for a vote at that AGM, regardless of any tribunal hearing?
RIPPLINGER: Yes, the rule changes that are attached to our dispatch are what we’ll be proposing at the AGM, because any rule change has to be approved by the membership. Our lawyers may tweak a word or two here or there, but primarily those were the rule changes or clarifications to the rules and Interpretations that we had presented to the commissioner. It was always our intention, as we told her, that we were going to recommend to our membership that we make those rule changes.
REM: Had the commissioner seen those changes before the announcement came from her office that she was taking this to the tribunal?
RIPPLINGER: Yes. We met with her the week before she made her announcement.
REM: With your proposed changes in place, do you think that makes your case stronger before the tribunal?
RIPPLINGER: I can’t imagine that there’s a case to be brought before the tribunal with or without the changes, because we remain a highly competitive business with lots of consumer choice. So if making the changes didn’t satisfy the commissioner, that’s surprising but I do think it probably strengthens our case, because we have given her pretty much everything she’d asked for.
REM: One of the MLS rule changes included in the dispatch is the removal of the stipulation that the listing Realtor has to work with the seller all the way through the length of the listing contract – that’s a position you have defended strongly in the past, but you’re stepping back from that position now?
RIPPLINGER: We understand that – notwithstanding our rules – if a client wants to opt out of certain services, they’re allowed to do that. We can’t interfere – and these rules were never meant to interfere – with the relationship between a client and their agent. So the clarification to these rules perhaps better reflects the reality of the marketplace.
REM: Some of the comments that have come into REM’s online Forum have voiced the opinion that, if CREA makes any changes to its rules and regulations, it will look like there was something wrong with those rules and regulations in the first place?
RIPPLINGER: No, it’s as I said before, this just really clarifies what already exists in the market now. The rule changes perhaps add some clarity and to that degree we agree with the commissioner that we have a common value. The commissioner, the Competition Bureau and CREA have a common value of providing competitive choice within the marketplace. We think we’ve always been doing that – and we have – but if the bureau has a greater level of comfort if we make clarifications to those rules, that’s fine. It’s that simple. We’ve always been competitive and we will remain competitive – we’re just making these rule clarifications to satisfy the commissioner, because quite frankly they’re not going to make a difference in the marketplace.
REM: Our online REM Forum also includes comments that CREA should not negotiate at all, but instead should take this issue in front of an impartial judicial body and get a decision on this once and for all?
RIPPLINGER: We’ve heard that from some of our members and I understand that sentiment, because they know that we haven’t done anything wrong. I don’t disagree with members who thought we should just fight. We thought it was a good business decision to try to come to some sort of an agreement with the bureau, because we realize that the changes the commissioner was pointing to as being anti-competitive weren’t, so it wouldn’t have the impact that she thought it would on the market. I see both sides and I understand the anger that some of our members feel in wanting to fight because they’re right – they’ve done nothing wrong.
REM: The bureau has positioned this as a consumer choice issue; some within the real estate industry have said it’s about brokers and Realtors having a wider choice of business models. How do you respond to those positions?
RIPPLINGER: I would agree that the consumer has a great amount of choice within the real estate market, both within and outside of the MLS system. In the MLS system there are various business models – everything from a limited brokerage to a full service brokerage, everything from flat fee to negotiated commission rates. It’s a highly competitive industry and even outside the MLS system there are a lot of options for people to sell their house without a Realtor.
I don’t know of another business that’s as competitive as ours, so I really don’t get it. Making these rule changes – because our rules aren’t anti-competitive – won’t a make a great deal of difference. There’s lots of choice now and there will continue to be lots of choice.
REM: How has your membership in general been responding since the news broke that this was heading toward a hearing before the tribunal?
RIPPLINGER: I think – rightly so – that our members are offended. They know how competitive our industry is, they know that consumer choice exists in the marketplace and they’re as puzzled as the rest of us that this is even happening. So yes, they’re really frustrated and I don’t blame them.
REM: The commissioner has stated publicly that, if CREA is willing to bring forward the changes that she wanted to see, she’d talk to you again and this might not have to go in front of the tribunal at all. Would you still be interested in trying to negotiate this and not going before the tribunal?
RIPPLINGER: Yes, I would. Going to court is never pleasant, so you try to avoid it. That’s why we were negotiating and were hopeful that we would reach an agreement. So, if the commissioner is still willing to talk, yes we’d definitely have to take a look at that.
REM: Do you see things in the commissioner’s Notice of Application to the tribunal that CREA can’t live with?
RIPPLINGER: I don’t want to speculate on any of that, because I don’t know what specifically she would approach us with in terms of a settlement at this point.
REM: Would you be approaching her?
RIPPLINGER: It’s really up to her. She’s the only one who can withdraw the application. She knows now – as she knew before the application was presented – that we’re prepared to change our rules. She has to decide whether or not she’d be satisfied with that.
REM: Is it your hope that, if the tribunal rules in CREA’s favour, this will send a clear “hand’s off” message to the Competition Bureau?
RIPPLINGER: The Competition Bureau could lose at the tribunal and still decide that there was something else that they want to address. Rightly so – they’re charged with making sure there’s no anti-competitive behaviour, so if they were to happen to find something that they weren’t happy with, they could still come back. But, like I said, nothing in our rules is anti-competitive – yet we’re still potentially coming in front of the tribunal.
We have to protect our members’ interests. We own the trademark to the MLS system and there are certain requirements to effectively running the MLS system that are necessary. We can be reasonable with our approach to the commissioner – as we have been – but at some point we can’t allow changes that will destroy or undermine the MLS system, because that is not in the best interests of Canadian consumers.
