Anne Bucher  |  May 20, 2022

Category: Legal News

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The Canadian Real Estate Association (CREA) sign at headquarters in Ottawa.
(Photo Credit: JHVEPhoto/Shutterstock)

Realty Class Action Lawsuit Overview:

  • Who: Plaintiff Mark Sunderland filed a realty class action lawsuit against some of Canada’s largest brokerages.
  • Why: Sunderland alleges the brokerages engaged in a price-fixing conspiracy.
  • Where: The realty class action lawsuit was filed in Canada federal court.

Some of Canada’s largest brokerages, along with the Canadian Real Estate Association and the Toronto Real Estate Board, have engaged in a price-fixing conspiracy, according to an amended realty class action lawsuit filed in February.

Plaintiff Mark Sunderland of Toronto initially filed the realty class action lawsuit in April 2021 against major brokerages, including ReMax, Century 21 and IproRealty Ltd.

In the suit, Sunderland says he sold his residential real estate property in August 2020. Bosley Real Estate Ltd. represented Sunderland, and Bosley – Toronto Realty Group Inc. represented the buyer. Sunderland says he paid a total commission of 5%, which included 2.5% commission paid to the buyer brokerage. His property was listed on the Toronto MLS.

The Toronto MLS is a database that lists residential real estate listings. It is used by real estate brokerages and those they employ to help their clients buy and sell real estate in the Greater Toronto Area, the realty class action lawsuit notes. 

Brokerage Commission Rule Stifles Competition, Realty Class Action Alleges

Sunderland argues that the buyer brokerage commission rule, which was created by the Toronto Real Estate Board and Canadian Real Estate Association, requires sellers of residential real estate listed on the Multiple Listing Service (MLS) to pay the buyer’s real estate brokerage commission.

As a result, competition in the real estate market has allegedly been stifled because sellers are required to pay a commission they would not have paid without the commission rule. The rule also affects sellers’ ability to negotiate the price, Sunderland alleges in the class action lawsuit.

Without the commission rule, residential real estate buyers would have paid the brokerage commissions instead of the residential real estate sellers, the lawsuit states.

Economist Dr. Panle Jia Barwick says in the class action that a brokerage representing a home buyer in Toronto in 2005 would have earned about $8,795 on the sale of an average single family home. If that same home were sold in December 2021, the buyer’s brokerage would reportedly earn more than $36,000 in commissions.

Sunderland seeks to represent a class of individuals who sold residential real estate listed on the MLS owned and operated by the Toronto Regional Real Estate Board since March 11, 2010.

Have you sold residential real estate in Toronto? Tell us your thoughts about the realty class action lawsuit in the comments below!

Sunderalnd is represented by Garth Myers, Serge Kalloghlian, Paul Bates and John Syme of Kalloghlian Myers LLP.

The Realty Price-Fixing Class Action Lawsuit is Mark Sunderland v. Toronto Regional Real Estate Board, et al., Case No. T-595-21, in Canada federal court.


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3 thoughts onRealty Class Action Alleges Toronto Brokerages ‘Conspired’ On Price-Fixing Scheme

  1. Patrick says:

    I have bought and sold 6 houses, and have been forced to pay the sellers agent 2.5% every time. This is not something anyone will even negotiate, as my agents have told me. I currently have mu house for sale, and again, have been told by my newest agent that while he will go down to 1%, I have to pay a fixed 2.5% commission to the sellers agent. When I receive an offer, I will be trying to negotiate 1% to the sellers agent, and if this is not accepted I will definitely join this class action.

  2. Ryan Jerome says:

    I have similar beliefs about the industry in BC. I sold my home with the help of a discount broker with a fixed price agreement for him. I was “forced” to pay the buyers agent the going rate even though I had no dealings with this individual. I also had to push my agent to list at a price his expertise said was too high. He showed me printed off examples of the price he wanted to list at. (The faster they sell a house the faster they get paid, which is not in the sellers’ best interest). When we listed at my price, the home sold for 25K over asking the same day, thus showing that my local knowledge was more valuable than his expertise. I was still made to pay the other agent which is nonsense in my opinion. This was in Tsawwassen BC in 2014.

    The home was a 60s 2 story with a major addition put on by me. On a typical 7000 sq ft lot. The final price was $1,025,000.00.

    Ryan Jerome

    Rrjerome@gmail.com

  3. Michele Carruthers says:

    I recently purchased a property in April 2022. I used a realtor from Remax and I believe that she and the sellers agent were working together to increase the commission for both of them. I was also not given the option for a home inspection and there are now some major problems with the house I have way overpaid for. I do not feel that my agent gave me due diligence whatsoever. I might be interested in joining the class action lawsuit filed by Mark Sutherland. These real estate agents need to be stopped.

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