Class action lawsuit against Toronto real estate industry proceeds

A class action lawsuit filed at Toronto's Federal Court of Canada which alleges price-fixing realtor commission rates in the GTA real estate industry has been permitted to proceed. 

The lawsuit, which was filed in 2021 on behalf of Mark Sunderland, came after the Toronto resident paid a five per cent commission rate following the sale of his home in August 2020. 

In the class action lawsuit, Sunderland alleges that buyer brokerages fix their commission rates at 2.5 per cent or higher, with sellers who offer low commission rates seeing fewer potential buyers. 

Many of the nation's largest brokerages are named in the lawsuit, including Royal LePage, Century 21, Sutton Group Realty, IproRealty Ltd., as well as the Canadian Real Estate Association (CREA) and the Toronto Regional Real Estate Board (TRREB). 

The class-action lawsuit also covers anyone who sold a home listed on the Toronto Regional Real Estate Board's Multiple Listing Service (MLS) after March 11, 2010, and claims that the defendants conspired to control commission rates, violating Section 45(1) of the Competition Act. 

While commission structures and rates can vary dramatically depending on real estate agents and brokerages, sellers in Ontario typically pay a five per cent commission on the final price of a property.

The case was officially permitted to proceed on Sept. 25, although the Canadian Real Estate Association has maintained that the claims against the defendants are "without merit."