Class action against Toronto real estate industry over commissions gets green light

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Federal Court grants approval for a class\u002Daction lawsuit alleging price\u002Dfixing to proceed against the GTA real estate industry. Read on.

On Sept. 25, Chief Justice Paul Crampton permitted the case to proceed, positing that there exists a plausible argument that rules put illicit restrictions on the pricing of buyer brokerage services. The respondents had petitioned the court to dismiss the claim, citing a lack of merit.

Commission structures for real estate agents and their brokerages differ nationwide, usually involving a percentage-based commission derived from a home’s sale price. In Alberta and British Columbia, the commission structure is typically seven per cent on the initial $100,000 and three per cent on the remaining balance. Conversely, in Toronto, commission is five per cent on the entire amount of the sale.

“What we’re hoping to achieve in this case, is to eliminate these rules, which will result in cost savings to real estate sellers and buyers in the Toronto market,” Myers said. “We think there’s massive public benefit if we are successful. And so far, the court has agreed with us.”

 

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