TorontoRealtyBlog

So much to say, and yet I feel the need to be ever-so careful about how I express myself.

That’s one of the themes here, of course.  Let’s not forget that one of the reasons that the Competition Bureau dove into these waters was because they thought that Treb was using its power to bully its members.  The Competition Bureau has a mandate to ensure “businesses and consumers prosper in a competitive and innovative marketplace.”  My being afraid of ruffling feathers, and affecting my livelihood, runs contrary to this mandate.

I’ve always prided myself on being that outspoken voice in a sea of faceless and nameless agents; somebody who truly does empower the consumer with knowledge, information, and opinion that they can’t obtain anywhere else.

And at the same time, I will admit the following: seeing how TREB has responded to the recent Tribunal ruling, and how they’ve addressed their membership, I’m a little afraid of how they might react to a member expressing an opposing opinion.

That’s a theme here, folks.  Don’t think for a moment that it’s not.

So where do I truly begin this blog post?  I suppose it depends on where you believe the saga begins.

Some will suggest it was May 27th, 2011.  That was when the Competition Bureau announced that they had filed an application with the Competition Tribunal seeking to prohibit anti-competitive practices by the Toronto Real Estate Board.

But I believe that the “battle” began way before that application was ever filed.

To understand what TREB has been fighting against, you need to know the whole story.

In the past week since the news about the Competition Bureau’s “victory” was announced, I have yet to see the name “Lawrence Dale” in a single story.

Lawrence Dale is a lawyer by trade, and from what I can tell, a brilliant litigator, and an intelligent and savvy individual.

Mr. Dale has been at odds with the Toronto Real Estate Board for over fifteen years.  And despite many years passing, and many court cases being thrown out, Mr. Dale and TREB are still fighting.

Mr. Dale is a litigant with a successful track record.  He had launched a $50 Million lawsuit against his former employer, Skydome, and apparently settled for $3 Million in the year 2000.

In the early 2000’s, Mr. Dale started a new real estate company called Realtysellers, which was based on the discount model that had been launched in other markets.

In 2002, Mr. Dale and his partner, Stephen Moranis (think Sadie Moranis Real Estate) sued the Toronto Real Estate Board and the Canadian Real Estate Association (I don’t know the amount), and settled out of court in 2004 for $700,000.

Mr. Dale has filed multiple lawsuits against other boards, brokerages, and individuals, and the amounts are over one billion dollars.

When Realtysellers closed in 2006, Mr. Dale filed a $100 Million lawsuit against the Toronto Real Estate Board and the Canadian Real Estate Association.

Mr. Dale served a $750 Million lawsuit in April of 2010 against the Toronto Real Estate Board, as well as other individuals, and that case has since been dismissed.

But Mr. Dale also served a $540 Million lawsuit in 2012, which you can read all about here: Dale v. The Toronto Real Estate Board, 2012 ONSC 512 (CanLII)

You can also read the update here: Dale v. The Toronto Real Estate Board, 2018 ONSC 3445 (CanLII)

Mr. Dale’s litigation has been based on anti-competitive actions, at first surrounding the compensation provided to cooperating agents (ie. if Realtysellers wanted to offer $1 instead of 2.5%), and eventually focused on the rules against providing sold data to consumers.

It is my belief, and this is only my belief, that the Toronto Real Estate Board has dragged this saga on as long as they have, simply because they have to.

With all this litigation surrounding the accusation of anti-competitive acts, TREB would be admitting wrongdoing to change course, mid-battle.

If TREB were to poll its members (and this is another conversation entirely), and the members voted overwhelmingly to allow access to sold data (which I do believe they would), and TREB opened up access to the data without being ordered to by a court of law, I think that could give Mr. Dale’s claim of TREB demonstrating anti-competitive behaviour, more credibility.

So simply put: TREB couldn’t have “turned on the switch” to sold data.

In my opinion, of course.

I’m not a lawyer, nor do I sit on a board at TREB.

But what I know is based on the same newspaper articles that you all have access to through Google.  My knowledge of the industry, as a Realtor, gives me no more information than what you can find online yourselves.

It just seems to me that there is a very successful litigator, with a proven track record, who is embroiled in several lawsuits with those in organized real estate.  And to give him ammunition would not be a wise move, on the part of anyone, or any board, that is party to those legal battles.  One might argue that TREB was doing absolutely, positively, what it needed to do, to protect itself from a claim.

That is the part of the story, in my opinion, that isn’t being told.

And I do believe that in time, this story will come out.

Mr. Dale has yet to make a statement (from what I can tell), but I do believe that this recent ruling could provide him with some of the credibility he has sought for so long.

Change is often difficult to enact, and often to accept.

And that’s the second part of this story: the failure of the Toronto Real Estate Board to accept the changing times.

Let me say the following, mid-blog-post, to sum up how I feel about this story:

1) I do not agree with the Competition Bureau’s application, or the court’s ruling.
2) I wholeheartedly agree that Realtors should be able to provide sold data to clients and customers.

Those statements might seem to contradict one another, but trust me when I say that they don’t.  It only seems that way because of where we currently stand.

If, back in the early 2000’s, the Toronto Real Estate Board were to have told any discount brokerage that they can not offer $1.00 in cooperating brokerage commission, this would be absolutely, positively, anti-competitive.

I have always maintained that I welcome the discount model, because I relish the opportunity to demonstrate how I, and my services, differ.  If a buyer or seller sees more value in using a different agent, whether it’s full-service, or discount, more power to them.

Having just listed and sold a property for another licensed Realtor, I know that there are buyers and sellers who see my value, and buyers and sellers that don’t.

But the Toronto Real Estate Board does allow any licensed brokerage to offer any compensation of their choosing.

So is that the battle anymore?

And how does “sold data” play into this?

Well it would seem that the Competition Bureau also believes that TREB’s refusal to allow their members to use and/or release sold data is anti-competitive, and here’s where I might disagree.

Don’t get me wrong, I think for TREB to stifle innovation is completely misguided.  I think that TREB knows its members want to be able to provide the data to customers and clients, and members are pulling their hair out trying to figure out why TREB is taking the path they’ve chosen.

But does the government have the right to tell TREB what to do with their own data?

The problem that I have with the public’s argument, “They should give us access to the data” is that the public should have no say in it.  Don’t forget, MLS is owned, operated, and trademarked by the Canadian Real Estate Association.  They invented it.  They built it.  It’s theirs.

For the public to clamour, “We want access to MLS,” or back in the early 2000’s, “We want to be able to list our properties for sale on MLS without hiring a Realtor” (which was a previous point of contention), ignores the fact that MLS is not a public utility!  It’s owned by the people who created it.

Years ago, I used to muse that it’s not unlike the mother of a 12-year-old girl telling the New York Yankees, “We want our girls’ team to play against you guys.”  You can’t just get something because you want it, when that ‘something’ is of value, and belongs to somebody else.  Something they created, developed, and successfully grew into something much larger.

CREA brought MLS into existence, and with that comes the associated data.

I never bought the argument that the public should be able to use MLS without hiring a Realtor who is part of one of the boards under the CREA/MLS umbrella, however, the public should be able to hire a Realtor, and pay that Realtor $1, and offer the cooperating broker $1, if they want, and if there’s a brokerage with that business model.

That’s one argument, and it was the first one in the Realtysellers litigation.

The access to data is the other side of the argument, and I still don’t like the government telling a private entity what they can do, and how they can act.

However, and this is the biggest however, which essentially undermines my own argument: if the Toronto Real Estate Board is abusing their market power, then this might give the Competition Bureau a case.

As a very general outline, the Competition Bureau has essentially six methods of protecting and promoting competition in the marketplace:

1) Ensuring truth in advertising
2) Preventing abuse of market power
3) Advocating for greater competition
4) Investigating cartels
5) Reviewing mergers
6) International efforts

So working backwards from here, you can look at TREB actions, and decide if you think the Competition Bureau has a case.

“Advocating for greater competition” is exceptionally vague, and could result in extremely selective intervention, in my opinion.  If a hot-dog vendor has a street-corner to himself, will the Competition Bureau step in and put carts on the opposing corners?

I understand that competition is necessary in every industry, and as I’ve said many times (including above), I love being asked about the discount brokerage model in my listing presentations, because it allows me to show my value, which I do believe is highly quantifiable.  Not only that, I know that competition is necessary, and highly sought-after in other industries that affect us daily (think Bell/Rogers…), so I would be the last person to condone anti-competitive behaviour in the industry in which I work every day.

The problem I see, from the six criteria above, is with respect to “abuse of market power.”

And it’s not about TREB abusing their power, in terms of not giving the public what the public wants.  Because I think if TREB decides to not give the public, what the public wants, then TREB is just being short-sighted, and making a poor business decision.

Personally, I think the abuse of power is with respect to TREB bullying their own members.

And that is a story that’s been floating around for years.

Much of the Realtysellers lawsuit was based on the accusations of intimidation, discrimination, refusal to deal, fixing and maintaining fees, and interference with efforts.  Read the case in the link above, you’ll see the claims, whether they’re true or not.

February 11th, 2015, I wrote this: “Did TREB Threaten Toronto Realtors?”

This was after TREB sent letters to various members, and brokerages, threatening to remove MLS access to those that didn’t comply with their instructions.  Read the Toronto Star article by Sue Pigg HERE.

This certainly would not help TREB’s stance that they’re not “abusing power,” but at the time, the argument was still about sold data, and not about TREB interacting with its own members.

In fact, the concept of “TREB vs. Members” has really only gained momentum since the decision was handed down.  Because if you’ve been reading the newspapers, and/or if you’re a Realtor, you know that it seems TREB is acting rather………curiously.

First, there was the gap in communication.  Only a short email to members last Thursday, and nothing until this past Tuesday.  Realtors lacked direction and understanding, and efforts to contact TREB, from what I can tell, went unanswered.

Then, there was TREB’s “understanding” and/or “interpretation” of the Competition Tribunal’s ruling, which of course, (potentially) differed from the spirit of the ruling itself.  This is what we’ve been hearing from TREB for the last week, that they’re “investigating” and “discussing” the ruling.

Lastly, there were the threats.  Call them what you will, when you’re told “if you do A, B, or C, you will suffer the consequence of D,” but as a Realtor reading what was sent out to TREB members, I certainly felt threatened.

This is from the Canadian Press: “TREB Threatens Legal Action Against Realtors Who Post Sales Data On Open Websites”

Tell me if this is threatening:

A statement from TREB says members who don’t comply with the order will see legal action taken against them, their TREB membership revoked and their access to the Multiple Listing Service database, where sales data is compiled when deals closed, removed.

To hear about the potential for my “TREB membership revoked” and my “access to MLS removed,” feels threatening.

And the worst part about this is: we Realtors don’t know what we can and can’t do.

TREB said on Thursday:

TREB believes personal financial information of home buyers and sellers must continue to be safely used and disclosed in a manner that respects privacy interests and will be studying the required next steps to ensure such information will be protected in compliance with the Tribunal Order once that comes into effect.

However, although the Order of the Competition Tribunal provides 60 days, there are many ambiguities and uncertainties in the Order for which TREB is currently seeking further clarification.

They claim there are “ambiguities” and “uncertainties,” and perhaps there are.

But there’s also potential here for TREB to read the Competition Tribunal’s decision differently than how the Tribunal themselves intended.

We continue to get bulletins, notices, and even videos, from TREB, telling us that they are talking to lawyers, and investigating.

Here’s a video that the President of TREB released on Thursday to try and clear up any confusion among members as to the steps TREB is taking to comply with the Tribunal ruling:

TREB President, Garry Bhuara, says that TREB “takes the matter very seriously,” and that they have been working with their lawyers to ensure they are “correct in their understanding of this complex matter, so they can provide the necessary guidance and instructions to their members to ensure full compliance with the order, while maintaining respect for consumer privacy rights.”

I get all that.

TREB needs clarification, and that’s what the 60 days are for.

But here’s the part I don’t get: “We will continue to listen to the feedback from members.”

In my humble opinion, TREB is not listening to members.

I haven’t been asked how I feel.

Nobody I know has been asked.

Let’s face it: a handful of people at TREB are making decisions on behalf of its members.  But I suppose that’s how all politics works, is it not?

I appreciate that TREB represents my best interests, and works to put together the framework of our industry that must be present so I can do my job, day-in, day-out.

I have the utmost respect for the very people who I am about to call out, because I know how hard they work, how passionate they are, and for many of them – how many decades of experience they possess.

But on the subject of “sold data,” I say this: TREB is wrong.  They are dead wrong.

The members want more tools to serve their clients, plain and simple.

If this battle is about the Realtysellers lawsuit, or “adhering to privacy laws,” then fine.

But when it comes to the real estate industry, and the ability of a Realtor working under the Toronto Real Estate Board to do his or her job to the fullest capacity, being able to work with “sold data” is crucial in today’s market.

And do you want to know the worst part about this?

The data is already out there.

I know that “two wrong’s don’t make a right,” but if websites like House Sigma and Mongohouse are providing sales data, then TREB is handcuffing its members by not allowing them to use the same tools.

TREB shut down Fraser Beach, and they shut down TOsolds.

But Mongohouse, apparently, has a server in China!  So ends that battle.

I was 18-years-old in 1998 when I downloaded my very first song on Napster.  It was “Ghetto Superstar” by Pras, Maya, and the now-deceased, and ironically-named, Old Dirty Bastard.

I watched heavy-metal gods, Metallica, walk into a courtroom in suits with well-put-togteher haircuts, to testify in the litigation against Napster.  It was pathetic.  The writing was on the wall, and the only people who didn’t know it were those looking at tomorrow, instead of a decade from now.

Shut down Napster, and up pops Limewire.  And Kazaa.  And Frostwire.

And eventually, we have iTunes, and Spotify.

The creation of digital music, via the MP3, and file-sharing, was something that would not go away.

The fight, in hindsight, was fruitless.  It was like ancient Rome, and the Recording Industry Association of America was a man, but the MP3 was a tiger.  The result was determined before the battle ever began.

And here we sit, in 2018, with TREB digging in its heels.

I want you all to read an article today in the National Post by Murtaza Haider, who is a professor at Ryerson University, and Stephen Moranis, of Realtysellers fame.

“Let the real estate industry innovate: TREB’s lack of imagination on home sales data restricts consumer choice”

I could not have said it better myself.

The most important section of the article:

However, TREB, even after the Supreme Court order, refuses to let its members derive or share any insights from the real estate transaction data. It cautioned the members that the “data cannot be scraped, mined, sold, resold, licensed, reorganized or monetized in any way, including through the sale of derivative products or marketing reports.”

There you have it. In a world awash with data and analytics, TREB has decided to join the ranks of digital-age Luddites. For decades the real estate boards in Canada have been data rich and insight poor. The wealth of information TREB holds cannot be subject to data mining for the benefit of Board members or the consumers.

–

“The wealth of information TREB holds cannot be subject to data mining for the benefit of Board members, or the consumers.”

Exactly.

We can’t do our jobs as effectively as possible, for the very consumers that hire us, because of the restrictions put in place.

And those restrictions were put in place by the very people that we, apparently, hired, nominated, designated, and voted to represent our interests.

I want, so badly, to believe that the people making these decisions really, truly know whats best for us.  My naive, and trusting side needs to feel this is all for our benefit.

But then my rational, logical, analytical side takes over, and realizes: it’s not.  It can’t be.  Because our job is to work for our clients, and that means using whatever tools we have at our disposal, or could have at our disposal.

This argument about sold data is tantamount, in my opinion, to telling us we can’t email our clients; we need to call them on the phone.  And we can’t send them listings; we need to print out “hot sheets” and bring them to our clients’ homes, sit down on their living room couches, and show them Polaroids of properties for sale.

As the National Post piece continues:

TREB and other boards generate data and content that drive millions to their websites — they are content and data rich. The natural next step in TREB’s evolution is to embrace analytics and become not just a data vendor but a purveyor of property market insight.

But instead of encouraging and facilitating that transition, TREB is trying to restrict it. It is imposing unproductive constraints on the use of data by limiting its use to providing “residential real estate brokerage services between a Realtor and a client or customer.”

TREB’s lack of imagination and initiative are preventing innovation and restricting consumer choices.

Ignorance is not bliss. And it’s not folly to be wise. Why TREB believes so remains a puzzle.

–

This isn’t the end of the battle, folks.

And my prediction is this: TREB will comply with the order within the next 60 days, but will re-write the language pertaining to VOW’s, making them highly restrictive.  They will advise members that use of the data as a “tool for profit” cannot be permitted.  And eventually, they will take the argument away from privacy into copyright territory.

Then the battle will start anew.

Thank you for reading this lengthy post, if you’ve made it this far.

Please share your thoughts on the subject below, as its possible that industry participants are reading.  Just remember that a well-thought-out argument has a greater effect than an incendiary and inflammatory one.

I’ll see you all back here on Tuesday of next week with what has become an annual tradition: “Predictions for the Fall Market.”

The TREB battle will rage, but folks like myself need to get back to work.  Buyers need to buy.  Sellers need to sell.

I plan on leaving this TREB nonsense in the rearview mirror.

Have a great long weekend, everybody!

The post My Thoughts On The Competition Bureau & TREB appeared first on Toronto Realty Blog.