As REALTORS®, you’re constantly searching for innovative ways to distinguish yourself from your competition. Your quest for the proverbial “leg up”, however, must be balanced against your obligations under the Competition Act.

The Competition Act is federal legislation designed to promote fair competition in the marketplace. It applies to virtually all sectors of business –  including real estate boards, firms, Brokers, independent contractors and salespeople. Violations can result in severe penalties, including significant fines and jail terms. 

The relevant provisions of the Competition Act can be simplified to three basic rules:

• Don’t collude. Make independent business decisions without discussion or consultation with competitors.
• Don’t discriminate against or refuse to do business with competitors or other persons because of their pricing policies.
• Don’t mislead the public in your advertising.

If you’re not familiar with the basic rules of the Competition Act, you could find yourself in hot water. Failure to recognize and avoid anti-competitive conduct can result in criminal prosecution, Competition Tribunal proceedings and civil court actions for damages. 

Comments made in casual conversation may seem harmless, but could contravene the legislation. Be wary about what's called “loose language,” defined as any conversation or phrase that can be interpreted as anticompetitive by nature.

Investigations can be time consuming and extremely expensive. For this reason alone, compliance with the Competition Act involves avoiding conduct that creates the appearance of illegal activity as much as conduct that actually constitutes illegal activity.

Here are a few examples of statements that can suggest or imply involvement in anticompetitive activity:

• “This is the rate that everyone charges.”
• “I’d like to lower the commission, but no Board member will show your house unless the commission is X per cent.”
• “Before you list with ABC Realty, you should know that no one will work on their listings.”

We strongly encourage you to visit the Canadian Real Estate Association’s (CREA’s) Competition Compliance Centre and review their Real Estate Competition Guide.

CREA’s legal department has created a series of four animated videos covering key competition issues for Realtors. The videos are titled:

• ‘Collusion & Conspiracy’
• ‘Don’t Mislead’
• ‘Setting Your Prices’; and
• ‘Doing Business with Competitors’.

Remember, in relations with clients, Brokers and Realtors should explain and justify their pricing and other business policies in terms of the value their office provides. Promote your firm’s track record, detail your marketing or negotiating expertise, explain the functions and the value of the services performed by a real estate professional, and defend your qualifications. Use the language of competition, not conspiracy.

A copy of the Competition Act is available here.