What the TRREB Class Action Decision Means for Buyers and Sellers in Ontario​

In March 2024, a proposed class action lawsuit was certified against the Toronto Regional Real Estate Board (TRREB) and several large brokerages. This case could change the way real estate commissions are handled in Canada—especially in the Greater Toronto Area. If you’re a buyer, seller, or real estate professional, here’s what you need to know about the lawsuit and how it might affect your rights and obligations in a real estate transaction.

Background: What is the TRREB Lawsuit About?

The class action, certified by the Federal Court, is similar to a lawsuit recently settled in the United States against the National Association of Realtors (NAR). In both cases, plaintiffs allege that real estate boards and brokerages engaged in anti-competitive conduct by enforcing rules that require sellers to pay commissions to buyer agents—even though the buyer is not their client.

In the Canadian case, the claim centers around TRREB’s rules and policies related to the Multiple Listing Service (MLS). According to the plaintiffs, TRREB’s practices have artificially inflated commission rates and limited consumer choice, in potential violation of the Competition Act, RSC 1985, c C-34. The lawsuit claims that sellers are unfairly forced to offer compensation to buyer agents as a condition of listing their property on the MLS, which restricts competition and results in higher prices for both sellers and buyers.

Key Allegations

• • Price-fixing & anti-competitive conduct: The lawsuit alleges that TRREB and the brokerages conspired to maintain a standard commission structure, which limits market competition.
  • Tied selling: Plaintiffs argue that requiring sellers to pay buyer agent commissions as a condition of listing constitutes an illegal “tie-in” arrangement under section 77 of the Competition Act.
  • Class members: The proposed class includes sellers of residential real estate in the GTA who listed properties on the MLS through a member brokerage between 2010 and 2024.

Legal Significance of the Certification Decision

It’s important to understand that certification does not mean the court has decided the case on its merits. Certification simply means that the lawsuit meets the legal criteria under Rule 334.16 of the Federal Courts Rules, SOR/98-106, to proceed as a class action.

The court determined that the plaintiffs raised common issues suitable for class-wide resolution, such as:

• • Whether TRREB’s rules unduly restrain competition;
  • Whether sellers suffered economic loss as a result;
  • Whether the alleged conduct breached the Competition Act.

This decision is significant because it allows the plaintiffs to move forward and potentially seek damages on behalf of a large class of home sellers. A trial (or settlement) will follow unless the parties reach a resolution earlier.

What This Means for Sellers

If you sold a home through a TRREB-affiliated brokerage between 2010 and 2024, you might be part of the class. You don’t need to take any action now, but you should stay informed as the case progresses. If successful, the class action could result in compensation for sellers who paid buyer agent commissions under the challenged rules.

Going forward, we may also see changes to commission structures, giving sellers more flexibility in deciding whether or how to compensate a buyer’s agent. This could lower total transaction costs.

What This Means for Buyers

Buyers may soon have to negotiate and pay for their own agent’s commission, depending on how the market adjusts. While this could increase out-of-pocket costs for some buyers, it also opens the door for greater transparency and competition in buyer representation.

Currently, most buyers are unaware of how much their agent is being paid because the commission is typically baked into the listing price. If this model changes, buyers may be more selective in choosing agents and more aware of the value they’re getting.

The Bigger Picture: Industry-Wide Impacts

This lawsuit reflects a broader push for reform in the real estate industry, particularly around transparency, affordability, and competition. Whether through legislation, litigation, or regulatory action, there’s growing momentum to challenge long-standing practices that may disadvantage consumers.

In the U.S., similar lawsuits have already resulted in significant settlements and changes to commission policies. If this Canadian case is successful, we could see major shifts in how brokerages operate, how agents are compensated, and how consumers navigate the real estate process.

Final Thoughts

At Simply Legal, we’re watching this case closely because it touches on many core legal and practical issues affecting buyers, sellers, and real estate professionals in Ontario. Whether you’re considering a transaction or just want to understand your rights in a changing legal landscape, our team is here to help you make sense of it—simply.

If you have questions about how this lawsuit might impact your past or future real estate dealings, don’t hesitate to reach out.

Sources:

• Competition Act, RSC 1985, c C-34
• Federal Courts Rules, SOR/98-106
• TRREB v. Bauder (Federal Court, 2024 Certification Decision)
• National Association of Realtors Settlement (U.S. District Court, 2023)

Published October 17, 2024.