Asif goes deep to help us understand what is truly at stake with the TREB and Competition Bureau battle. Enjoy this guest post from Asif Khan
It begins again. The Competition Bureau has once again attacked the Toronto Real Estate Board (TREB) in yet another attempt to hijack its prized Multiple Listing System (MLS) .
In an efforts to sway public opinion to their side, the Competiton Bureau continues to tug at the consumers’ heart strings by stating that TREB is preventing or impeding the entry of innovative business models and imposing restrictions on real estate brokers who wish to use the Internet to more efficiently serve home buyers and sellers. The Bureau goes farther in it’s attempt to garner public support by making promises of lower fee structures on the horizon. The allegations in the “Amended Notice Of Application” are comical at best. The Bureau has come out and demanded that TREB break Federal laws and allow the private information of their clients and customers to be available to anyone and everyone on-line. This would be a dream come true for fraudsters, who undoubtedly are looking on with anticipation of better days ahead for their “businesses”.
The Bureau alledges that TREB gives greater information to members that operate from “bricks and mortar” offices than it does those that operate from virtual office websites – “VOW”. How absurd is that statement alone? Each member has the same access to the same information regardless of the type of office structure they belong to. The key to receiving the benefits of membership, is to being a member. As for what is allowed to be published to the general public, Federal Privacy Laws dictate that, not TREB nor any other Board.
In discussing this issue with many consumers, the issues obviously have not been made clear. A smoke-screen of “lower fees” is being raised and the real allegations are lost. Let’s expose some of the allegations from the Bureau’s application. The following are some of TREB’s Rules and Policies that the Competition Bureau has a problem with as per their application to the Competition Tribunal. The statements from the Bureau’s Application are in blue, followed by my interpretation in red:
25. To become a member of TREB and have access to the TREB MLS system, a broker must agree :to be bound by TREB’s By-Laws and TREB’s MLS Rules and Policies and must execute an Authorized User Agreement (“AUA”). The terms of these rules, policies and agreements, as imposed and interpreted by TREB, are referred to in this Application as the “TREB MLS Restrictions”.
In essence, the Bureau is stating that the very rules and regulations that TREB members must adhere to are “Restrictions” for non-members. Members that go through the necessary educational courses, pay fees associated with membership, obtain insurance to work in the industry, take an oath to protect the integrity of the industry and the privacy of their clients as part of their fiduciary duites, and follow the rules and regulations imposed by the governing body are said to be “restricting” others that do not comply with the above from entering into this exclusive membership. If you’re a member at a golf club and refuse to follow the dress code alone, you will be refused membership. Why is this even a concern with TREB membership?
26. TREB members are bound by TREB’s MLS Rules and Policies, which include the following provisions:
RULES R-101
Use of the MLS® System is subject to the provisions of the Authorized User Agreement as amended, restated or replaced from time to time.
This is a standard rule for any progressive membership organization, corporation, club or even credit card issuer. Enough said!
RULE 400 – ADVERTISING
R-430
Members other than the Listing Brokerage may advertise an MLS® Listing only when an MLS® Listing Agreement so indicates and Members have received specific written permission from the Listing Brokerage prior to each occasion of advertising.
The Listing Agreement allows for a seller to authorize members to advertise their property. Often the property listing details upgraded features, makes and models of appliances, and contains pictures of the furnished home showing valuable decorations and electronics that may be in place. In order to maintain the sellers’ privacy and protect their belongings as best we can, the ability to control where and when the property is advertised should remain in the control of the seller/sellers’ agent.
R-431
Members shall not use any marketing materials prepared by or created for another Member, including but not limited to, photographs, floor plans, virtual tours, personal marketing materials or feature sheets without the written consent of that Member who created or purchased the material.
In any other industry, materials created by another individual/company remain the property of the company/individual and are protected by Copyright Laws. The Competition Bureau would like TREB to break Copyright Laws and allow the use of any materials created by a member to be made available to everyone without the consent of the Member that invested the money and effort to create the same.
POLICIES
RULE 500 – TREB COMPUTER SYSTEM
P-501
Any Member wishing to obtain access to any MLS® data (whether for office use or individual use by a Broker or Salesperson registered with a Brokerage) shall enter into an MLS® Access Agreement, or such other agreement as TREB may require from time to time.
The Competition Bureau has a problem with TREB having an Access Agreement to allow members to use their own MLS System.
P-508
TREB in its sole discretion, may terminate or suspend a Member’s user name and Password code in the event of any unauthorized or improper use of the MLS® Online system.
The Competition Bureau is questioning TREB’s right to terminate or suspend a Member from using the MLS System if they are found guilty of fraudulent or improper use of the system. Buyers and Sellers should be very afraid of their personal information getting in the wrong hands. The ability of TREB to monitor and control access to the classified information that our clients trust us with plays an integral part in the safety of our clients and their families.
27. Further, each member of TREB must agree to the following material terms of AUA:
(a) In section 2, TREB grants a broker member a non-exclusive, non-transferable licence to access and use the TREB MLS system;
(b) In section 2, the broker must unconditionally agree to access and use the MLS system “for the exclusive and internal use” by the broker;
(c) In section 3, the broker may make “Copies” of the information in the MLS system but such Copies are limited to paper printouts and electronic copies of reports “generated from” the MLS system;
(d) In section 4, brokers acknowledge that the MLS Database (as defined in the AUA) has special value “due to access only by TREB members and users authorized by TREB”;
(e) In section 4(c), the MLS Database is considered to be confidential property of TREB and requires that the user “not circulate or copy … the MLS database … in any manner except to authorized users… and except to persons or entities who desire or may desire to acquire or dispose of certain of their rights respecting real estate”;
(f) Section 4(d) prohibits members from using, copying, reproducing, or exploiting the database for the purposes of “creating, maintaining or marketing, or aiding in the creation, maintenance or marketing, of any MLS database … which is competitive with the MLS database … or which is contrary to the By-Laws, the MLS Rules and the MLS Policies …”
By wanting to see a change in this rule, the Competition Bureau is asking TREB to break Federal Privacy Laws set out by the Privacy Commission. This battle should be between the Privacy Commision and the Competiton Bureau. TREB seems to be caught in the crossfire as two arms of the government can’t seem to decide on what is considered to be private information vs. public information.
28. TREB’s MLS Rules and Policies (as outlined in paragraphs 25-27), on their face, and as interpreted, applied, and enforced by TREB, prevent brokers from offering innovative, Internet based services such as VOWs to their customers.
Arguably, this could be the most absurd statement in their allegations. However, this is the focus of their attack on TREB. Members have the same access and availability of information, what is released to the general public has to conform with Privacy Laws regardless whether the member is operating from “bricks and mortar” or “vow”s.
29. For example, TREB considers the display of a listed property on a VOW to be “advertising” that property for sale. TREB Rule 430 requires “specific written permission from the Listing Brokerage prior to each occasion of advertising”. According to TREB’s interpretation of Rule 430, to operate a VOW with the necessary full inventory of current properties for sale, a VOW broker would have to obtain specific written permission from each brokerage in the GTA, for each occasion of advertising, potentially for the up to 25,000 new listings that are added to the TREB MLS system each month. This creates a practical barrier to entry that makes it virtually impossible to operate a VOW.
The Competition Bureau is requesting that TREB break Federal Laws – Privacy and Copyright Laws – and allow its membership to violate their fiduciary duties to their clients.
The Bureau would like to see pending sold data available to everyone and disagrees with TREB’s reasoning to withhold the same.
The Competition Bureau is requesting that TREB release pending sold data to be available to everyone. This is absolutely ridiculous and should never happen as it will jeapordize a seller’s ability to maximize return on their largest asset – their home. If your home is sold conditionally, the Bureau would like the details made public. What if the conditions are not met and the deal falls through? Now the price that you’ve accepted has become public knowledge? How does that affect your negotiating ability for the next deal? This is just absurd, and has nothing to do with competition, commission rates, “bricks and mortar” or “vow”s.
The Bureau is masking this discriminatory attack on Realtors by continued claims of trying to bring down the cost of buying/selling real estate. Has any seller NOT been able to negotiate a rate to their satisfaction by interviewing a handful of the 30,000 plus Realtors on the Toronto Real Estate Board along with the numerous low-fee/minimum-service alternatives currently available to them? Don’t be fooled by this smoke screen. This feels like an attempt to injure the livelihood of a certain percentage of the population by limiting, reducing or regulating their ability to earn a living. Is this constitutional? Should Realtors stand by and appease the Bureau by breaking Federal laws, Copyright laws, and exposing their clients to fraud and misrepresentation? Maybe it is time for TREB, its members, CREA, all other real estate boards and their memberships to put an end to this discriminatory bullying and file a class action suit against the Competiton Bureau.
This is not about saving the consumer a dollar. It is an ego driven, manipulative attack on an industry that has been in the spotlight over the past few years for fueling our economy and leading our nation away from the economic turmoil that is devastating many countries today. If you had to make a name for yourself, you’d want to be associated with the hottest industry at that time, wouldn’t you?
I’d like to reiterate that this is not about fees, nor is this about competition. With the thought process that went into this from the start, the Competiton Bureau may as well have singled out Mercedes Benz owners as being non-competitive. Why should “Anita” be able to drive a Mercedes, and not her neighbours. Regardless of if Anita furthered her education, worked hard, saved and purchased the vehicle on her own and for her family, all her neighbours should have equal access and should be able to use the vehicle without Anita’s consent. The Bureau would gain public support by stating that if they “car-jack” Anita’s Benz and force her to share her car with everyone in the neighbourhood then all luxury car manufacturers would be forced to lower prices on their vehicles down the road.
As I drove home tonight, I passed gas station after gas station serving up a litre of unleaded gasoline for $1.29. Be it Petro Canada, Shell, Esso, or even the independents, 95%, if not all, are at $1.29/L tonight. If the Competiton Bureau is concerned about price fixing and non-competetive behaviour, maybe they need to focus their efforts and put tax-payers’ money to better use. It is time that they investigate a real anti-competitive and fixed price industry. However, they won’t. The government gets a cut on every litre.
Lost in the shuffle is the fact that they also get a cut on every Real Estate transactions through Land Transfer Taxes. Oddly enough, Land Transfer taxes are a percentage of price as well. Should we lower the rates for Land Transfer taxes now that property values have increased so much over the last 20 years? Is the focus really to save the consumer some money? Stay tuned. We’ve only just begun.
Asif Khan, Sales Representative
Re/Max All-Stars Realty Inc.
asif@asifkhan.ca
Comments on this entry are closed.