A group of Canadians could soon claim part of a massive settlement proposed by the real estate company RE/MAX Canada.
The company said in an email that it has reached a “substantial agreement on monetary terms and business practice changes” to resolve two proposed class-action lawsuits that allege price-fixing through buyer brokerage commissions.
Buyer brokerage commissions are fees your broker charges you after your home sale closes. The fee is a percentage of the entire sale amount that is usually split evenly between representatives of the seller and buyer.
This is what Kevin McFall, the plaintiff in one of the class-action lawsuits, experienced after selling his home in Milton, Ontario.
In the court filings, McFall claims he paid a five per cent commission fee on the sale of his home last May, half of which went to the buyer brokerage.
While the practice of paying buyer brokerage commissions has become common, the two class actions (one filed in 2023 and McFall’s filed last year) claim this practice reduces the incentive for buyer brokerages to bring their clients to home sellers offering lower commission fee.
They add that the rules ordering home sellers to pay these fees, therefore, violate competition laws by inflating fees and limiting competition.
The first lawsuit was filed in federal court against the Toronto Regional Real Estate Board (TRREB) on behalf of home sellers in the Greater Toronto Area.
The latest lawsuit was initially filed against 72 regional real estate boards (including the Canadian Real Estate Association [CREA]), 10 real estate franchises (including RE/MAX), and eight real estate brokerages, making it a nationwide class action.
“A settlement would pave the way for a clear path forward for the RE/MAX brand, its franchisees and their sales associates, removing the uncertainty of ongoing litigation related to these cases,” reads a RE/MAX spokesperson’s statement.
The company still denies the allegations presented in the lawsuits and says the decision to settle was “made in the best interest of the REMAX brand in Canada, including its franchisees and their sales associates after carefully considering the significant risks and costs associated with continued litigation.”
In a statement last Friday, the CREA acknowledged RE/MAX’s settlement.
“This news doesn’t change CREA’s own ongoing position and defence against these claims. We continue to believe they are without merit and remain committed to standing in support of our Realtor members,” stated CREA CEO Janice Myers.
RE/MAX settlement eligibility and amount
According to McFall’s class-action lawsuit, any Canadian who sold residential real estate listed on a Multiple Listing Service (MLS) owned and operated by a Regional Real Estate Board after March 11, 2010 is a class member.
RE/MAX’s proposed settlement is still subject to court approval. If approved, Canadians could cash in on $5.5 million USD (around $7.8 million CAD), as proposed by the real estate company.
This number was announced in its Q4 earnings report published last Thursday.
“Fourth quarter 2024 settlement and impairment charges included an expense of approximately $5.5 million related to the proposed settlement of certain industry class-action lawsuits in Canada,” reads the report.
These Canadian class actions follow similar cases in the United States.
Last year, RE/MAX also settled antitrust class-action lawsuits for $55 million.
In 2023, a Missouri court found major real estate companies like RE/MAX and the National Association of Realtors guilty in a price-fixing lawsuit, ordering them to pay $1.8 billion in damages.
