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Canada  + Pacific Canada  + Multi-residential Housing  | 

CREA Lawsuit Could Revolutionize Sector: Prof

The outcome of a class-action lawsuit filed against the Canadian Real Estate Association could revolutionize Canada’s real estate sector, a prominent scholar has suggested.

In mid-March, the U.S.-based National Association of Realtors agreed to settle a lawsuit for US$148 million after home sellers claimed that the industry conspired to keep agent commissions high.

“It’s going to revolutionize the practice of real estate,” said Tom Davidoff, an associate professor at UBC’s Sauder School of Business and the director of UBC’s Centre for Urban Economics and Real Estate, told CBC.

The CREA and several other real estate groups are facing similar legal action on the same grounds in Canada. Davidoff told CBC that the NAR lawsuit settlement bolsters the argument for similar changes to be introduced as a result of the deal

“It may become more competitive, but more importantly, cheaper for people to sell their homes,” Davidoff told CBC.

The NAR agreed to abandon longstanding industry rules requiring most home-sale listings to include an upfront offer telling buyers’ agents how much they will get paid. Sellers have typically set buyers’ agents fees in the U.S.

In Canada, commission rules vary by province and territory. The seller’s agent receives the commission and splits it with the buyer’s realtor. New commission rules would have a broad effect on the Canadian condominium sales market.

Many realtors across Canada are anxiously awaiting the outcome of the legal actin against CREA. But many groups and individuals have expressed differing views on the potential effects of the result, due to different commission guidelines in Canada.


Inside The Story

Tom DavidoffCREA

About Monte Stewart

Monte Stewart serves as Content Director - Canada for Connect Commercial Real Estate. Based in Vancouver, British Columbia, Monte provides daily news coverage of major Canadian commercial real estate markets, including Vancouver, Toronto, Montreal and Calgary. He has written about the real estate sector for various media outlets and Avison Young since the early 2000s. In addition, he has covered sports, general news and business for several leading wire services and publications, including The Canadian Press, The Associated Press, The Calgary Herald, The Globe and Mail, Research Money, The Daily Oil Bulletin, Natural Gas World and The Toronto Star. Monte is active in his community as a youth basketball coach and raises funds for such charitable causes as Movember.

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