Law Times

PAGE 12 FOCUS January 18, 2010 • Law Times Cases put future of property marketing into question Web sites challenge the way real estate agents advertise properties online BY ROBERT TODD Law Times L egal battles over the use of online property list- ings have put into ques- tion just how agents — chal- lenged by upstart web sites hoping to make their mark — will be showcasing real estate in the years to come. Late last year, word spread that the Competition Bureau had wrapped up a two-year investigation into the Multiple Listing Service. Th e online sys- tem, owned by the Canadian Real Estate Association (CREA), facilitates the vast majority of sales in the country, something that could soon change. Th e Competition Bureau has yet to make its fi ndings public, but in a leaked memo published in Th e Globe and Mail, CREA president Dale Ripplinger told association members: "Th e bu- reau is concerned that CREA's rules have restricted consumer choice and limited the scope of alternative business models." He later stated, "Unfortunately, the bureau seems to believe that CREA's rules . . . create restric- tions and barriers." Th ere is speculation the bu- reau is concerned with the re- quirement for sellers to consult a real estate agent before post- ing a listing on the service. CREA publicist Alyson Fair says the association is still in talks with the bureau about a possible settlement on the issue and is not commenting on the content of the investigation. While the outcome of the probe remains unclear, the stakes are high. CREA recently reported that in November 2009 alone, the MLS handled the sale of more than 36,000 residential properties across the country. A liberalization of the system may prove disastrous to real estate agents as competition increases from discount brokers. Th e Competition Bureau in- vestigation is not the only bat- tle in the war over the MLS. A recent Ontario Superior Court case highlighted the struggle by the Toronto Real Estate Board (TREB) to control the use of the service among members on behalf of larger entities. In Beach v. Toronto Real Estate Board, a real estate broker with a TREB membership pushed the limits on the use of the ser- vice in his work on behalf of an upstart online brokerage owned by BNV Real Estate Inc. Ac- cording to the decision of Jus- tice David Brown, the company used Fraser Beach's MLS access password in the spring of 2007 to acquire residential property listing data to store on its own site. TREB then took the un- precedented move of blocking Beach and BNV's access to the MLS database when it caught wind of the activity. 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Perfectbound with CD-ROM • 336 pp. • 2009 • $90 P/C 0860010002 • ISBN 978-0-88804-489-1 TREB said it was justifi ed in its response because Beach's use of the account served as "a signifi cant change" in the way members did business, accord- ing to Brown. He ruled BNV had breached a user agreement by failing to "confi ne its access and use of the services and MLS database to its exclusive and internal use. It ac- cessed and used the services and MLS database for external use by members of the public." Sutts Strosberg LLP partner William Sasso, who represent- ed TREB in the case, says it's key for member-run organiza- tions to ensure information is "shared on a fair and equitable basis" using agreed-upon rules. "When one is scraping infor- mation from other brokers and using it in a way that was not in- tended, then what one is doing is using somebody else's propri- etary information in order to ad- vance your business," says Sasso. "All of the information that would ever appear on the Beach-[BNV] database was in- formation that was taken from listings of other brokers who had agreed to share that in- formation for the purposes of the MLS system in a particu- lar way. [BNV] didn't want to play, and Beach didn't want to play, by those rules." A lawyer for Beach tells Law Times a notice of appeal has been served and would be fi led in court in early January. Th e lawyer wouldn't comment on the Superior Court decision. Meanwhile, the battle over online property listings isn't confi ned to the MLS. Last year, real estate company Century 21 Canada launched a lawsuit against Zoocasa Inc., owned by Rogers Communications Inc. Th at spat involved accusations that Zoocasa, a new online property listing service, had "scraped" data from web sites controlled by the real estate company's brokers. Sasso suggests the battle over control of real estate listings ex- emplifi es the eff ect technology is having throughout society. "Th e law is in a constant state of fl ux and it must neces- sarily be if law is to accurately refl ect our ever-changing social standards," he says. "Taking that kind of thought and bringing it over to an orga- nization like TREB and any organization today that is so dependent upon access to in- formation with the constantly changing technology that we have, it is a constant challenge I believe for every organization to continue to work diligently to make sure its rules and regula- tions are not only updated but fairly refl ect the current usage of this new technology by all of the interested parties." LT Appeal considered Continued from page 9 Th en if the unit owner creates problems and breaches the rules, you get rid of the whirlpool." Erik Savas, a lawyer with Simp- son Wigle Law LLP in Hamilton who represented Wentworth Condominium, suggested the ruling could prompt an increase in litigation. "Th is might mean that judges, as opposed to boards of direc- tors, will increasingly become the arbiters of what changes are acceptable in any given condo- minium community and what are not," said Savas in a prepared statement. Th at's unfortunate, For a 30-day, no-risk evaluation call: 1.800.565.6967 Canada Law Book is a Division of The Cartwright Group Ltd. Prices subject to change without notice, to applicable taxes and shipping & handling. CA084 (LT 1-2x4).indd 1 www.lawtimesnews.com CA084 1/12/10 3:19:58 PM he said, because the appeal court had previously stated that condo boards should have deference in these circumstances. Wentworth Condominium is considering whether to seek leave to appeal from the Supreme Court, said Savas. LT Rose Ann MacGillivray Ian D. Scott, Editor- in- Chief: Maria Morellato, Q.C. Delgamuukw Director of the S R eview Act, 2007 pecial Investigations Unit Independent Police John D. H onsberger Q.C. and Vern W . DaRe with contributions from leading practitioners Editors: Bryan Finlay, Marie- Andrée Vermette and Michael Statham Robert J. Frater Aird & Berlis LLP; Edited by Lisa E. Moreau

• Cover
• Feeling The Pain
• Bargaining Legal Aid
• Focus On Real Estate Law