A major player in Canadian real estate, RE/MAX, has settled a significant class-action lawsuit related to how real estate agent commissions are handled. This development could signal future changes for the real estate industry, affecting how you buy or sell a home right here in Saint John.
What Was the Lawsuit About?
The lawsuits, known as the Sunderland and McFall cases, challenged the long-standing practice where the seller’s agent is required to offer compensation to the buyer’s agent. The plaintiffs argued this system unfairly inflates commission costs for sellers. Essentially, when you list your home for sale, part of the commission you agree to pay goes to the agent who brings the buyer.
The lawsuits alleged that this structure is an anti-competitive practice. However, it’s important to note that RE/MAX Canada, while settling, continues to deny these allegations, calling the move a “business decision.”
What Does the Settlement Change?
The Canadian Real Estate Association (CREA) released a statement explaining the outcome. According to the statement, the most direct change is that RE/MAX Canada will no longer require its affiliated brokerages to be members of CREA. This gives local RE/MAX agents and offices the choice to continue their CREA membership or not.
However, CREA clarifies a crucial point: the core rule at the heart of the lawsuit remains unchanged for now. Any REALTORĀ® who uses the Multiple Listing Service (MLSĀ®) must still offer compensation to a cooperating (buyer’s) agent. This means that for any Saint John property you see on REALTOR.ca, an offer of compensation to the buyer’s agent is still in place.
So, what’s the bottom line for you? The immediate impact on your next real estate transaction in Saint John is minimal. But this settlement is a major event in a larger, ongoing legal battle that could reshape how real estate commissions are structured across Canada in the future.
CREA’s Response
CREA, which represents over 160,000 REALTORSĀ® across the country, stands firm in its position. The association stated that it believes the lawsuits are “without merit” and plans to “continue to defend these actions alongside our co-defendants.” The legal proceedings against CREA and other real estate entities involved are still ongoing.
Frequently Asked Questions
Does this settlement mean I no longer have to pay a buyer’s agent commission when I sell my house?
No. The settlement does not change the current MLSĀ® rule. If your agent is a REALTORĀ® using the MLSĀ® system, they are still required to offer compensation to the agent who brings the buyer. This lawsuit and settlement are part of a larger conversation that could change this in the future, but the system remains the same for now.
Will this make homes in Saint John cheaper?
It is unlikely this settlement will have any direct or immediate impact on home prices. The lawsuits argue that the current commission structure inflates costs for sellers, but the settlement itself did not change that structure. The broader legal cases are still proceeding.
Is my RE/MAX agent in Saint John still a member of CREA and a REALTORĀ®?
Most likely, yes. The settlement gives RE/MAX brokerages the option to not be members of CREA, but does not force them to leave. RE/MAX Canada stated it supports the free choice of its agents to decide whether to remain members. A REALTORĀ® is a real estate professional who is a member of CREA and adheres to its code of ethics.
What happens next?
While RE/MAX Canada has settled, the class-action lawsuits against CREA and numerous other real estate boards and brokerages are still moving through the courts. The industry will be watching these cases closely, as their outcome could lead to more significant changes in how real estate transactions are conducted in Canada.
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