Re/Max Canada’s decision to settle the Sunderland and McFall class-action lawsuits represents a major development in the Canadian real estate industry. The lawsuits challenged traditional commission structures, alleging that sellers were unfairly required to compensate buyer brokers, thus inflating costs and limiting competition. With Re/Max agreeing to a $7.8-million CAD settlement, the industry is left wondering what’s next and whether further settlements or legal challenges will follow.

Looking south of the border, the Sitzer/Burnett case in the U.S. offers a glimpse of what could be in store for Canada. That landmark antitrust case led to over $1-billion in settlements, policy shifts, and increased consumer awareness around agent commissions. 

Could Canada see a similar transformation?

The U.S. experience: A precedent for Canada?

A wave of lawsuits and settlements

After the Sitzer/Burnett verdict found the defendants guilty of conspiring to inflate commissions, dozens of similar lawsuits were filed across the U.S., leading to widespread settlements. This wave of litigation has also reached Canada, where copycat lawsuits have emerged, further intensifying scrutiny on commission structures and industry practices. 

The National Association of Realtors (NAR) alone paid $418-million and agreed to major practice changes, including eliminating the requirement for listing brokers to offer compensation to buyer brokers through the MLS, mandating written buyer representation agreements, and increasing transparency around agent compensation.

The verdict also triggered significant industry shake-ups, including leadership changes at NAR and heightened scrutiny on agent compensation. The mainstream media spotlight on commissions led to greater consumer awareness, with more sellers negotiating agent fees than ever before. Additionally, the wave of litigation prompted subsequent settlements by other brokerage defendants, further reshaping the industry landscape and reinforcing the momentum toward commission structure changes.

Policy changes and a shift in consumer behaviour

One of the most notable changes in the U.S. has been the introduction of mandatory buyer representation agreements. However, in Canada, these agreements are already required in most provinces before an offer can be submitted on behalf of a buyer. As a result, this shift in the U.S. is unlikely to have the same disruptive effect in Canada. 

While some sellers in the U.S. are opting out of offering compensation to buyer agents, Canadian regulations already support a structured approach to buyer representation, making such a transition less dramatic.

Early data suggests that commissions are beginning to decline in the U.S., though not as drastically as some predicted. Redfin has reported a slow but steady decrease in commission rates, while Zillow’s 2024 report found that over half of sellers are now negotiating fees, compared to just 19 per cent a year earlier. However, in Canada, commission structures have historically been more flexible, with tiered commissions, flat fees and other alternative payment models widely available. As a result, the impact of legal and policy changes on commission rates may be less pronounced in the Canadian market.

The role of MLSs and regulatory oversight

MLSs in the U.S. have had to make sweeping changes, including removing commission offers from listings. This shift has led to increased competition and new business models, as agents adapt to a marketplace where compensation is no longer standardized. 

Additionally, large national brokerages, such as Compass, have responded by creating their own private MLSs to control exclusive inventory and attract both agents and clients. This trend could be mirrored in Canada, where brokerages may look to establish their own listing platforms to provide unique value, justify commission rates, and maintain a competitive edge. Furthermore, regulatory bodies like the Department of Justice are closely monitoring these changes, ensuring compliance and further influencing industry practices.

What does this mean for Canada?

Will more defendants settle?

With RE/MAX Canada’s settlement, attention now turns to other defendants, including the Canadian Real Estate Association (CREA) and major brokerages. CREA has vowed to fight the allegations, but if more settlements follow, we could see industry-wide shifts similar to those in the U.S. Notably, in the U.S., brokerages that settled early often secured better deals than those that went to trial. While Canadian cases are not heard before a jury, Re/Max Canada may have looked to the U.S. and realized that a more predictable and controlled outcome through settlement could be preferable to prolonged litigation.

If litigation continues, brokerages and real estate boards may choose to settle to avoid the uncertainty and financial burden of prolonged court battles. This could lead to changes in commission structures and increased pressure on MLS organizations to adapt their policies. 

Additionally, increased litigation could draw media attention, amplifying consumer awareness of the claims in the Sunderland case and further eroding public perception of Realtors and their value in the marketplace. Even if the case does not ultimately succeed, the fact that it is proceeding signals a shift in consumer expectations around commission structures, potentially leading to greater scrutiny and negotiation of fees.

Consumer awareness and commission negotiation

The U.S. experience has shown that legal battles and media coverage can dramatically influence consumer behaviour. However, Canada already has a diverse range of commission structures, including tiered commissions and flat fees, which are widely available. As a result, the impact of legal scrutiny in Canada may differ, with less disruption to commission rates than in the U.S. Instead, the greater risk may lie in the erosion of public trust in real estate professionals, as increased media attention on litigation shapes consumer perceptions of agent value.

Potential regulatory changes

One key difference between Canada and the U.S. is regulatory oversight. Canadian real estate commissions are governed by provincial laws, which could play a crucial role in shaping how these cases unfold. Provincial regulators may step in to introduce new guidelines on transparency and fee negotiations, potentially mirroring some of the changes seen in the U.S.

A ‘generational shift’ for agents?

Legal and industry experts suggest that these changes won’t happen overnight. In the U.S., real estate professionals are still adapting to new norms, with some arguing that it will take a generational shift for the industry to fully embrace a more consumer-friendly commission model.

Similarly, in Canada, agents will need to adjust to a landscape where commission structures are more flexible and consumer-driven. Those who can clearly demonstrate their value to buyers and sellers will have a competitive edge, while those resistant to change may struggle.

A new normal for Canadian real estate?

Re/Max Canada’s settlement is likely just the beginning of a broader reckoning for the Canadian real estate industry. While Canada’s legal framework differs from the U.S., the trends south of the border suggest that greater transparency, increased consumer negotiation, and potential regulatory changes could be on the horizon.

It’s important to note that the Sunderland case is moving forward on a narrower basis than its U.S. counterparts, as the court has struck broader conspiracy claims and instead focused on whether existing brokerage and MLS rules exert control over pricing. Unlike the U.S. cases, which involved jury trials and sweeping allegations of collusion, the Canadian litigation hinges on a legal interpretation of industry rules rather than an outright conspiracy claim.

For now, buyers and sellers should stay informed and work with professionals who prioritize transparency and value. As the industry navigates this evolving landscape, adaptability will be key to thriving in a shifting market.

The recent Sitzer/Burnett v. National Association of Realtors (NAR) case in the U.S. has forced significant changes in how buyer agents receive commissions. NAR settled the case to avoid an “existential” financial threat (more than $5-billion), agreeing to remove compensation fields from MLS listings and make other adjustments. 

Months after the settlement, multiple studies—including recent data from Accountech—suggest that these changes have had no measurable impact on buyer-side commissions.

Despite media coverage portraying the lawsuit as a game-changer, commissions in the U.S. have followed the same gradual downward trend seen for years. The absence of an explicit commission field on MLS databases may slightly reduce “steering”—where agents avoid showing properties offering lower commissions—but it hasn’t fundamentally altered market dynamics. 

Given this, what does this mean for Canada’s Sunderland v. Toronto Regional Real Estate Board (TRREB) case?

Sunderland: The Canadian parallel

Sunderland v. TRREB is being closely watched as Canada’s version of the U.S. litigation. Though the case directly involves only TRREB and its associated brokerages, its outcome could have nationwide implications, as real estate boards across Canada follow similar rules regarding cooperating commissions.

Under current TRREB rules, listing brokerages must offer some form of commission to cooperating brokerages—even a nominal amount like $1. The lawsuit argues that these rules encourage “steering” and amount to price-fixing. In late 2023, Chief Justice Paul Crampton ruled that the case had enough merit to proceed to trial. Appeals were heard on Oct. 7 and 8 2024, but the court has yet to issue a decision, which is expected sometime in early 2025.

What did TRREB argue at the appeal?

For TRREB and the defendant brokerages, the best possible outcome would be outright dismissal. Among other things, the defence argued that:

• While individual brokerages may engage in anti-competitive behaviour, TRREB itself is not a competitor in the market and thus cannot be liable.
• The lawsuit effectively suggests that simply joining TRREB—or any real estate board—makes an agent a price-fixer, a claim the defence called a “vast, amorphous conspiracy.”

What did the plaintiffs argue?

The plaintiffs counter arguments included:

• If associations were exempt from competition laws simply because they don’t directly compete with their members, businesses could create associations to draft anti-competitive rules without consequence.
• TRREB’s rules keep buyer-agent commissions artificially high. They pointed to data suggesting that fewer than 1 per cent of commissions offered to buyer brokerages fall below the industry standard of 2.5 per cent.

What happens next?

The court could overturn Justice Crampton’s decision, effectively ending the case. Given Canada’s tendency to follow U.S. legal precedents, a dismissal seems unlikely. Even if Sunderland is halted, similar lawsuits—such as McFall v. Canadian Real Estate Association et al—could continue.

If Sunderland goes to trial, the case against TRREB appears to face significant challenges. While “steering” exists, it is unclear whether TRREB’s commission rules are responsible for it. Even Crampton acknowledged the case’s weaknesses, calling its reasoning “novel but arguable“—hardly a ringing endorsement. However, further legal discovery could bring new evidence to light.

Could TRREB settle?

If TRREB and its allied brokerages determine that the financial risk of losing at trial is too high, they may opt for a settlement similar to NAR’s. But what would that mean for Canadian real estate?

If the U.S. experience is any indication, changes to MLS systems—such as removing the cooperating commission field—will not significantly impact commission rates. Structural market forces, not MLS data fields, are the real determinants of commission trends.

Ultimately, if Sunderland results in a settlement or verdict forcing changes similar to NAR’s, the most likely outcome is that TRREB and other boards pay a potentially substantial financial penalty—while commission rates continue evolving at their own pace, just as they always have.

In short, Sunderland will have been a lot of sound and fury over nothing.

As the real estate industry gets more competitive and the market more restrictive, some brokerages are offering clients reduced, flat-fee commissions or cash-back up front as financial assistance.

While not a new business model, amid the National Association of Realtors settlement in the United States concerning several commission lawsuits, and Canada’s Competition Bureau investigation into the Canadian Real Estate Association (CREA)’s commission rules, it’s one that’s changing the industry. 

Consumers are paying attention and demanding more, especially with affordability and higher interest rates impacting their buying power.

‘Opportunity to redefine value agents bring’ and help consumers retain equity

“The market (and) financial situations are changing. People are going through hardship. They want an alternative and innovation in the industry,” insists Ishtiaq Ahmed, broker of record for Zown. He feels that although the traditional commission model worked in the past, buyers and sellers today expect more flexibility and want to retain as much of their equity as possible.

Ahmed notes buyers are savvier than they used to be. This means less work for the agents involved, so their role has evolved with the shift. This is how Zown passes on savings to its clients.

The company charges a 2.5 per cent commission to the seller and retains a portion of it, with the rest going into the buyer’s pocket. Depending on the deal, for a $1 million property, this might be 1.0 to 2.0 per cent.

Ahmed says Zown sees the opportunity to redefine the value agents bring. “Our goal is to make homeownership more accessible, especially for first-time buyers, given current market conditions. It’s very hard to get into the market and every dollar counts,” he explains.

Traditional vs discount brokerages: ‘It’s a whole different world’

However, many agents oppose this newer business model. “Some (consumers) might think Realtors are all the same. The reality is we’re not—just like in any profession, there are different levels and you get what you pay for,” asserts Sean Miller, agent with Property.ca.

Miller argues the best agents aren’t cutting their commissions because they offer a lot of value, experience and resources with marketing, strategy and negotiation. “There’s no way we can compete (with each other) because we bring a whole different level of service—from marketing like video advertising to photography and staging.”

He says these services cost a lot of money that simply isn’t available when commissions are cut, and that full-service brokerages come with a more personalized approach and a team of people. “It’s a whole different world.”

But Miller states that it’s all about fit, and some people don’t see the value in what agents bring to the table. “There’s nothing wrong with that … Some people see short-term value more than long-term potential (and) not everybody has the budget or expectations a top-performing agent warrants.”

Clients doing more work means money saved and quicker closings

Miller believes that brokerages offering reduced fees are more volume-based and complete deals faster than traditional brokerages. Indeed, Ahmed says his team does more deals than it would under the traditional model.

Since January 2023, Zown has sold more than 200 homes. However, Ahmed also notes that Zown offers full service from skilled, experienced agents, which is possible because the agents do less work.

He credits online tools like Realtor.ca and buyers finding properties themselves for reducing the need for numerous property showings. Zown agents adjust their approach to reflect this, saving time and money for everyone: it used to take about eight weeks to close a deal, but that deal can now close in two weeks, sometimes with just one or two property showings, he explains.

However, the agents still perform typical tasks like reviewing the property’s history, guiding buyers through the home inspection and presenting comparables.

Resistance to change or concern over negotiation performance?

While Ahmed recognizes the industry is resistant to change, his team feels consumers’ pushback. He says many in the industry feel Zown and others like it aren’t helping but “are trying to destroy a model they’re in full control of. They don’t want to change the status quo.”

Miller instead thinks of it in terms of the negotiation process. “If they can’t negotiate their own commissions, how well are they negotiating their clients’ biggest asset? If they’re giving away their money, they’ll do the same with the property.”

He questions if buyers are getting the best deal or if the agent will want to move on quickly because they’re in a volume-based business. “What people don’t realize is how much they’re potentially leaving on the table.”

Miller offers this advice to his clients or those who ask him to lower his fees: “We’re talking about the most significant sale or purchase of your life, and it makes sense to use somebody with a great track record who can negotiate properly and will make you potentially tens or hundreds of thousands of dollars more.”

But he doesn’t blame people for asking. “As a seller, I’d ask that question too. It’s how we respond that makes them feel comfortable about why we don’t (discount).”

The industry’s take

CREA says that while it doesn’t provide guidance with commissions, Realtors are offering their services in new and interesting ways and consumers can shop for representation that works best for them.

The Toronto Regional Real Estate Board (TRREB) takes a similar stance, having no involvement or engagement in discussions around Realtors’ fees for service.

“There are diverse business models and service levels available to consumers from Realtors and conversations around service levels and fees are a discussion to be had between the consumer and their Realtor,” says TRREB Immediate Past President Jennifer Pearce. “Consumers have choice in how they engage in real estate transactions, and TRREB supports an environment of free and open competition.”

Editor’s note: REM reached out to MREB for more information on the SGM and outcome. We’ll update this article as we hear back and learn more.

On January 31 this year, Mississauga Real Estate Board (MREB) members voted to amalgamate with the Realtors Association of Hamilton-Burlington (RAHB), the Waterloo Region Association of Realtors (WRAR) and the Simcoe & District Real Estate Board (SDREB) to become Cornerstone Association of Realtors on July 1, 2024.

However, due to large concerns, last month, some MREB members, with the support of several past presidents of MREB, requested the board call a members-only special general meeting (SGM) to rescind the vote to amalgamate.

The request was granted, and a meeting was held on June 26.

‘Consensus was unanimous … It’s all about MLS data and access. That’s what we need as working realtors’

“An overwhelming majority of the membership was in the room, and the membership’s consensus was unanimous,” Tehreem Kamal, broker with Royal LePage Real Estate Services Ltd., Brokerage, reports about rescinding the vote to amalgamate.

Kamal notes there were more members present than at the earlier SGM in January, where the amalgamation was voted in favour. “However,” she points out, “As cited before, the landscape was different and things have changed rapidly.”

Kamal also highlights that a key factor swaying the vote transpired over the past two weeks: “The Oakville, Milton and District Real Estate Board (OMDREB) decided they would be leaving ITSO (Information Technology Systems Ontario) once their contract comes to an end, and joining Cornerstone wouldn’t be an option.

Basically, it’s all about MLS data and access to data, because that’s what we need as working realtors.”

OMDREB’s decision

Initially, the proposed amalgamation had MREB and other Ontario boards being part of one board and one MLS system: ITSO’s Matrix. MREB, OMDREB, London and St. Thomas Association of Realtors (LSTAR), Niagara Association of Realtors (NAR) and WRAR all use this system.

Kamal explains that OMDREB’s decision plays a key role as there’s a lot of business crossover from Mississauga to Oakville and vice versa, and that Canadian Real Estate Association (CREA) statistics support this.

About the upcoming change for OMDREB, Anthony Danko, OMDREB president, says:

“Realtors can see for themselves how fast things are changing in organized real estate. Local boards are amalgamating, how we access and receive our MLS data is changing and, perhaps most importantly, the push for province-wide data is becoming stronger than ever.

OMDREB’s goal has always been to ensure our members have access to the most comprehensive data set possible, culminating in one province-wide MLS. Additionally, reviewing and considering your options when contracts approach renewal is good business practice. Knowing that the ITSO contract was approaching renewal, OMDREB’s board of directors did its due diligence by exploring all avenues to provide our members with the best data set possible.

Based on our extensive consultations and the feedback we received from members, along with the fact that it holds nearly all of the data within our jurisdiction, OMDREB decided to move forward with using PropTx as our MLS services provider, which will happen later this year.”

The MREB membership directed its board of directors to immediately stop the process, terminate the amalgamation and, if there’s any need, seek an injunction.

Editor’s note:

On June 14, 2024, REM received the following information from Tehreem Kamal: “More than 10 per cent of MREB’s members have signed a petition for an SGM to be called to rescind the vote to amalgamate with WRAR, RAHB and SDREB. MREB is holding the SGM for its members on June 26.”

Over the past several months, members of the Mississauga Real Estate Board (MREB) have been expecting to amalgamate with several other Ontario boards on July 1, as the new Cornerstone Association of Realtors (Cornerstone).

What they likely weren’t expecting are some major concerns that have come up since January’s membership vote.

Background

In October 2023, the Realtors Association of Hamilton-Burlington (RAHB), the Waterloo Region Association of Realtors (WRAR), the Simcoe & District Real Estate Board (SDREB) and MREB announced that SDREB and MREB signed a letter of intent to join the amalgamation of the four organizations.

On January 31 of this year, MREB members voted to amalgamate with RAHB, WRAR and SDREB to become Cornerstone Association of Realtors on July 1, 2024.

Tehreem Kamal, broker with Royal LePage Real Estate Services Ltd., Brokerage, sat down with REM to explain the issues concerning many members and past presidents of MREB — with less than a month to go before the change takes place.

Kamal, a past president herself, has not served MREB or its committees (or any other board) since her term finished in 2019. She was alerted to the concerns in May at an event hosted by MREB, where conversation ensued about the landscape rapidly changing and what MREB is doing.

“I inquired further to find out the facts, what has changed, why there are concerns and who has them,” she explains. “A few questions were asked of the board of directors and president, and a meeting of past presidents was called on May 8 where (they) answered questions.” This included an inquiry about where the strategic plan could be found. Kamal says the group was told MREB is working under status quo and to “trust the process.”

Original vision for amalgamating

Initially, the two immediate past presidents of MREB were tasked to engage in conversations on behalf of MREB about an amalgamation, as per their leadership positions. They provided their consent for amalgamation, along with and based on the unanimous consent of MREB.

“All sides came together and started working on a plan and feasibility, and there was a lot of work done from all ends. MREB has spent a lot of money and staff resources,” Kamal notes.

The original vision of the proposed amalgamation was for MREB and other Ontario boards to be part of one board and one MLS system: Information Technology Systems Ontario (ITSO)’s Matrix. MREB, Oakville, Milton and District Real Estate Board (OMDREB), London and St.Thomas Association of Realtors (LSTAR), Niagara Association of Realtors (NAR) and WRAR all use this system.

Boards from Mississauga to London, Niagara and others in between were to become part of one amalgamated organization with better representation and collaboration among member boards. Members could access all they need to serve clients while not paying too many fees for it.

“The main thing is a member on the street is tired of paying too much for too many boards,” Kamal explains. “Agents are always struggling with the fact that to access one system or one MLS or a particular property, they must pay multiple fees throughout Ontario. With Matrix, a lot of boards were being served from one MLS system. It was very convenient and facilitating — agents can just go into that system and pull up the archives to serve their client better, to get all the information on hand.”

MLS system decision extension

The initial term of ITSO’s MLS services agreement was three years and ends on December 31, 2024. Any association/board that does not wish to renew the term is required to give ITSO six months’ notice, which would have made the deadline July 1, 2024.

However, ITSO confirmed that many of its member groups expressed a desire for more time to decide to continue with the services or switch to a different provider.

For this reason, in February, ITSO’s board of directors notified all its members that they would extend the deadline for giving notice of non-renewal until September 30, 2024.

Tom Lebour, broker at Royal LePage Real Estate Services Ltd., Brokerage, and past president of MREB and the Toronto Real Estate Board (now the Toronto Regional Real Estate Board), says this extension is a result of the changes taking place. “While MREB was given the amalgamation mandate four months ago by membership, since then the MLS landscape has changed quickly and several boards have switched systems.”

He believes that since ITSO has delayed the deadline for its MLS agreement renewal until September 30 — giving three additional months at status quo — this gives boards at least that much time to reassess, take a better look and decide later.

Missing pieces and a changed vision

While Kamal feels the vision was well intended and done in good faith, some key pieces seem to be missing. Early on, MREB’s two immediate past presidents sent concerns in a letter and email to MREB, asking things like what the organizational chart would look like, who would be CEO, what would happen to MREB’s membership money and if MREB was vetting all their contracts with a lawyer.

As a MREB member, Kamal has requested the board provide her with summaries or minutes of the meetings from October to date, so she can review them to see what’s changed and how.

The boards that were originally going to amalgamate have changed course, too. Since the start, she says that LSTAR and NAR joined another service provider. OMDREB is also possibly leaving Matrix for another system with 80,000 members in Ontario. “There’s power in numbers,” she notes. “If the strength of membership is with one MLS provider to the tune of 80,000 members, where we’d see most GTA listings, then how does it make sense to create a silo of possibly 8,000 members?”

Although this changing landscape alters the original vision, Kamal acknowledges these decisions were surely made with members’ best interests in mind. She knows the boards are autonomous non-profit organizations serving their membership, and she’s confident they’re listening to their membership and what’s best for them.

Nonetheless, with the original amalgamation plan being multiple boards and a few having since changed their MLS system plans, Cornerstone now comes down to four: MREB, RAHB, WRAR and SDREB.

Key concerns

Kamal and others wonder if MREB is truly listening to what’s going on in the industry as a whole and to what will be most beneficial for membership since the landscape and technology are changing so rapidly. There are a few key concerns about amalgamating.

For one, the original vision is fragmented because the new group of amalgamated boards is smaller and won’t have the same power and benefits as intended. Plus, some MREB members feel they will end up paying for multiple boards all over again instead of one where everyone would be under the same umbrella.  

“I have personally listed and sold properties in London, and so have colleagues in my office — we go all over the GTA, wherever the client takes us,” Kamal explains.

“Likewise, many in my office work and live in Niagara, and they work here (in Mississauga), Oakville and Milton, too. For them, it’s going to be the same problem. The solution that was created, unfortunately, is not relevant or realistic anymore.” Kamal stresses that this is why information and access to data and archives are extremely important.

She says another main concern is the premise being presented to Mississauga’s membership that with the amalgamation there will be a stronger voice in the industry at large, with the provincial and national assemblies.

“It’s actually the opposite. On their own right now, the boards left in the proposed amalgamation total (a certain number of) votes in the Ontario Real Estate Association (OREA) assembly. When they come together, the formula that allocates votes kicks in differently and cuts down the votes. How are we a stronger voice if we don’t have the same vote count? This was my question at that (May) president’s meeting with the board.”

The way it works with OREA is a member board’s vote allocation is calculated by a formula set out in the OREA bylaw and is based on the number of individual members of the member board.  A newly amalgamated member board’s vote allocation would be based on the total number of individual members of the newly amalgamated member board and calculated according to that formula.

As well, Kamal and others are wondering what happens to MREB’s money once July 1 comes. “More than $2 million of membership money will be folded over to (Cornerstone). How will accessing it be handled if we need to get something done in Mississauga in the coming months to, let’s say, do any advocacy work?”

Lebour echoes this sentiment and is concerned the funds will be much harder to access once they’re within the new organization. “The $2.5 million that will be thrown into the (Cornerstone) pot wasn’t hidden, but it wasn’t pointed out,” he notes.

These concerns were raised repeatedly and Kamal says there’s been no clear answer, “Which means that things are not clear. So why the rush to get into this amalgamation? All over the world, whether it’s real estate or a multinational company, organizations come together. However, they do years and years of feasibility reports, studies and what-if scenarios.

All of this is happening, to my knowledge, from October 2023. Within a span of less than 12 months, how can we fold an organization that has sustained itself for 70 years?”

Advocacy and MREB’s role

Right now, there’s a mayoral by-election in Mississauga. Kamal explains that during these times, MREB has historically reached out to city council and been engaged in government relations and advocacy efforts. But right now, she says MREB is nowhere to be seen.

“This is one of the most important key events in Mississauga. Everybody’s talking about housing and MREB is the pillar, the stakeholder that represents people directly connected with housing — yet, they’re hugely absent in this, which is a huge red flag.”

Lebour points out that in 2021, a rumour surfaced about implementing a land transfer tax and MREB worked with OREA to stop it. “It never materialized,” he recalls. “Now, I’m not sure Cornerstone will be effective at devoting time to local issues, which is very important.”

Wondering why MREB’s focus has shifted, Kamal emailed the board to ask how it’s positioning itself in terms of mayoral debate, reaching out to candidates — and a potential municipal land transfer tax being implemented, again.

Lebour notes one of the leading Mississauga mayoral candidates in the by-election hinted about revisiting the tax and that MREB has a strong government relations committee for local advocacy work. “Mississauga has historically defended imposing a municipal land transfer tax over the years, and I have been part of that,” Kamal affirms.

The response she received to her email was that the board is too busy hosting events like a golf tournament and receptions. Kamal acknowledges the importance of running well-intended charity events like these but stresses that MREB’s job, first and foremost, is “to protect the interest of the consumer on the street pertaining to housing.”

“We cannot take our eyes off the ball,” she stresses. “If this amalgamation or anything else is detracting from what MREB has actually stood for in the past and should still be standing for, there is something seriously wrong.”

Transparency needed with partner boards

Kamal points out that other amalgamating boards should know about what’s happening. “Do they understand that MREB’s membership is not on the same page as they were in January and that they’re probably moving towards an amalgamation with potential turbulence? They have a duty of care to their membership, so who’s keeping them in the loop?”

Kamal feels that MREB should be very transparent with their partners and not just the people representing the amalgamation task force. They shouldn’t be led into something that MREB isn’t 100 per cent ready for. “Even if a director is not on the task force, they should know they need to go back to their brokerages and say, ‘We’re heading into an amalgamation where one of the key partners coming in with possibly 2,200 members and resources of more than $2.5 million is probably having second thoughts.’”

The SGM request

“Every member that I’ve spoken to, every past president that has discussed, exchanged ideas and brainstormed — we are all for collaboration, but not for creating silos of the Mississauga board and others. This is the challenge and why membership has requested MREB to call an SGM,” Kamal states.

In May, past MREB presidents and industry members collected signatures that would go on a letter petitioning MREB for a special general meeting (SGM). An email (obtained by REM), signed by past presidents John Cassan and Michael Mills, reiterates concerns regarding the proposed amalgamation, mentions the petition being signed with the SGM request, asks MREB to “pause the amalgamation and call for a meeting of the membership” and states, “It is foolhardy, risky and downright reckless to proceed with the amalgamation.”

The pair recount a past error when MREB’s MLS system was sold to the Toronto board in the 1980s, despite membership concerns: “This short-sighted decision cost us dearly. It took us almost four decades to recover from this mistake, making our board a successful enterprise and here we are again.” They warn MREB it’s about to make a “terrible mistake which will cost us dearly.”

Following this, on May 28, 10 past presidents of MREB, including Cassan and Mills, signed a letter to MREB that requested it call a members-only SGM within the next 10 days. The letter advised the board to “not be hasty in signing any contracts without satisfying members’ concerns at the proposed SGM.”

While Kamal acknowledges that MREB’s repeated response, “the membership voted yes in January to amalgamate,” is indeed true, at the same time she points out, “The information the membership was provided in January is not completely relevant anymore. It has changed drastically.

The membership, in view of today’s reality, would like to rescind the vote from January 31, have the board put a hard stop on anything (relating) to this proposed amalgamation and genuinely take stock of what’s happening in the real estate industry at large that will benefit our members.”

From there, she points out there’s always time to look into future options.

MREB’s response

As of the time of writing, MREB had not accepted the SGM request, nor had it responded to the email from Cassan and Mills. However, REM received the following statement from Rita Asadorian, chair of MREB:

“We have respected the clear and decisive mandate from our members. Despite this, a small group of individuals has attempted to disrupt the process. While a petition for a special general meeting was submitted on May 28, 2024, signed by 10 past presidents, it did not meet the 10 per cent member threshold required by the Ontario Not-for-Profit Corporations Act.

Nevertheless, we have been proactive in addressing concerns. The MREB board of directors hosted delegates from our partner boards at a board meeting to discuss and resolve any issues. This session was productive and satisfying for all attendees. 

Similarly, we held a session with our past presidents, providing comprehensive information and addressing their questions. Both meetings concluded with a positive consensus supporting the amalgamation.”

Asadorian points out that MREB understands significant decisions can generate some discontent but that, “We have consistently addressed the same concerns and must now proceed with the mandate provided by our members’ unanimous vote. We remain open to all questions and concerns, which can be directed to me at any time.”

She says that all four associations are “eager to demonstrate the benefits of our united efforts,” confirming that the amalgamation documents have been formally filed with the Ontario government and the process will move forward.

In a landmark development, the National Association of Realtors (NAR) recently settled a series of commission lawsuits, agreeing to pay $418 million USD in damages and pledging to overhaul its rules regarding real estate agent commissions.

This settlement, prompted by legal claims alleging artificially inflated commissions, has sparked widespread speculation about its potential impact on housing affordability and market dynamics.

While proponents hail it as a game-changer that could lead to substantial cost savings for homebuyers and sellers, skeptics remain cautious, questioning whether it will truly translate into lower housing prices. As the real estate industry braces for change, examining the nuances of the settlement and its implications becomes paramount.

High-profile endorsers

The settlement has drawn enthusiastic endorsements from high-profile figures like President Joe Biden and former Treasury Secretary Larry Summers, who suggest it could lead to significant savings for homebuyers and sellers, potentially up to $10,000 per transaction.

We’ve seen similarly themed claims made even in Canadian media. Advocates in the United States and Canada argue that the elimination of standard commission structures could result in more competitive pricing among real estate agents, leading to lower transaction costs for consumers. Summers even suggests that breaking the “realtor cartel” could save U.S. households $100 billion over time, implying substantial long-term benefits for affordability.

Gradual commission reductions “unlikely to happen”

Getting rid of the decades-old commission system, which is criticized for inflating costs, by eliminating compensation details on MLS platforms could lead to more negotiation power for sellers, potentially driving down commissions.

Economists predict gradual reductions in commissions, potentially down to 4-5 per cent over time, with the majority of savings captured by sellers. This, however, is unlikely to happen according to NAR and those with years of experience understanding how sellers and buyers determine the value of a home.

Lower housing prices not certain — here’s why

Despite the optimism, experts caution that the settlement may not immediately translate into lower housing prices. Critics argue that sellers are unlikely to lower prices simply because transaction costs decrease. NAR’s response suggests that commissions were already negotiable, indicating that lower commissions may not necessarily lead to reduced housing prices.

In Canada, for instance, buyer agents and seller agents already offer a range of commission and compensation structures and, notwithstanding this reality, prices continue to rise across the country. Additionally, uncertainty remains about how the changes will ripple through the market and who will ultimately benefit from lower commissions.

NAR’s assertion that commissions are driven by the market and not the cause of the affordability crisis raises doubts about the direct impact on housing prices. Economists highlight the complexity of determining who benefits from lower commissions, particularly in different market conditions such as seller’s markets. For example, as many real estate agents can attest to, a seller wants their home to sell for a specified amount not because of a cold rational calculation, but because their house is the best house in the neighbourhood!  

Gradual adjustment to settlement ramifications, not quick seismic shifts

While the settlement sparks discussions about potential changes in Canada, it’s crucial to manage expectations. Real estate professionals have long since offered reduced commissions or flat fee services, with little impact on housing prices, suggesting a gradual adjustment process to ramifications of the NAR settlement (if any at all in the near term) rather than immediate seismic shifts.

The settlement may encourage broader adoption of innovative pricing models and increased transparency in services provided by real estate agents. However, overblown expectations about the immediate impact on housing prices should be tempered, as broader challenges such as housing supply shortages and regulatory barriers remain significant factors in housing affordability.

Fear and uncertainty drive varying interpretations of the settlement’s implications, highlighting the complexity of its effects on the real estate market. It’s this very complexity that makes me believe that those claiming significant changes or no changes at all will both be wrong; rather, we’ll see a slow evolution in how we do business with likely little impact on housing prices. 

Nonetheless, the prudent real estate agent won’t wait around for these changes. Exploring alternative pricing models and emphasizing the value they provide to clients is the best way to be part of the future. 

In response to a flurry of commission-related lawsuits causing upheaval, the National Association of Realtors (NAR) recently brokered a groundbreaking settlement, pledging reforms and financial restitution.

Valued at $418 million over four years, the agreement promises “sweeping” changes to the process of buying and selling homes in the United States. At the heart of this settlement lies NAR’s decision to no longer mandate listing agents to determine compensation for buyer brokers on MLS, aiming to enhance transparency and fairness in real estate transactions. 

This shift means that compensation for buyer agents will no longer be publicly displayed in multiple listing services (but can be available on brokerage websites or non-MLS sites). While many non-industry journalists claim this settlement will herald a dramatic new era of negotiation dynamics between agents and clients, this remains to be seen as we unpack the details of the settlement. 

Delving deeper: Understanding the impact of the settlement on the industry

Despite the appearance of resolution, the settlement has left a sour taste for many industry insiders, according to commentator Rob Hahn. Critics argue that the terms of the settlement, particularly NAR’s perceived concession, fall short of providing a clear victory.

Hahn suggests that NAR’s agreement, while seemingly substantial, exposes the organization to disproportionate liability compared to other defendants. With NAR bearing a significant portion of the damages and instituting extensive reforms, concerns linger regarding the long-term ramifications for the industry.

Furthermore, the settlement has notable exclusions.

First, it only covers over one million NAR members, state and local realtor organizations — the settlement specifically leaves out certain brokerages that continue to engage in litigation or have reached their own settlements, and it excludes non-NAR member MLSs as well as brokerages with transaction volumes exceeding $2 billion in 2022.

Second, the agreement doesn’t prohibit buyer agents from collecting fees and it doesn’t restrict where selling agents can advertise buyer agent fees. In other words, buyer agents can still receive compensation, and real estate agents can continue to advertise buyer agent compensation on various platforms, including non-NAR member websites like Zillow, OJO and Realtor.com. This aspect raises questions about whether the lawsuit will truly instigate significant changes.

Brokerage responses to the settlement

In the aftermath of the settlement, the real estate industry faces divergent responses to the ongoing legal saga. Some brokerages view the settlement as a means to mitigate legal risks and establish stability. Companies like Anywhere Real Estate and Re/Max have opted for compromise, settling lawsuits and agreeing to adapt business practices.

Conversely, a faction led by HomeServices of America remains steadfast in resisting the settlement, advocating for continued litigation and defending existing norms. Amid these opposing viewpoints, a group of reformers champion proactive measures to tackle industry challenges, aligning with the reforms outlined in the settlement.

The reforms advocated, however, would not be viewed as revolutionary to real estate agents in Canada. Rather, reforms such as requiring that buyer representation agreements (BRAs) are signed and that real estate agents no longer claim that “buyers don’t pay” for the agents’  services is standard practice in Canada. 

Anticipated changes in practice

Considering the settlement terms and existing practices in Canada, it remains uncertain what substantive changes might occur if a similar settlement were to arise in Canada. Agents in this country are already required to discuss compensation with clients, typically through BRAs. 

However, should sellers cease offering compensation to buyer agents en masse, agents would need to articulate their value to buyers, a requirement already present in Canadian BRAs. So, unless significant new brokerage models emerge in the U.S. that influence Canadian consumer habits and demand, the impact of such a settlement on Canadian real estate practices may be minimal.

As the dust settles on the NAR settlement, many claim that we’ll see profound changes. It’s my opinion that Canadian real estate agents and brokerages should take this claim with a truckload of salt, let alone a grain. Nonetheless, it’s prudent that brokerages and real estate agents adapt to evolving commission structures and negotiation norms, while also sharpening their ability to articulate their value to the consumer — something that we should already be doing.