Canada's class-action lawsuits over real estate commissions echo the U.S. cases against NAR. We unpack the claims, the defences and what could change.
Written by Faiza Ahmed
Last updated on August 13, 2026
Canadian class actions are challenging the rules that govern how buyer brokerages are compensated when a home is sold through an MLS® System.
The lawsuits raise a legitimate competition question. If a seller must offer compensation to a buyer’s brokerage as a condition of listing through an MLS® System, does that structure limit meaningful price negotiation for the service the buyer receives?
That question deserves to be examined.
But it is not the same as saying that every seller is legally required to pay a 2.5% buyer-agent commission, or that the only alternative is to make buyers produce thousands of dollars in cash before closing. Neither description is accurate.
The real issue is more difficult:
Can Canada preserve the benefits of a cooperative listing system while giving buyers and sellers more control over how buyer representation is priced and paid for?
That is the question underneath the litigation, and it matters more than choosing a side based on what happened in the United States.
There are two related proceedings.
The Sunderland action concerns residential properties sold through the Toronto Regional Real Estate Board’s MLS® System. The McFall action extends similar allegations to other regions of Canada.
According to the plaintiffs’ public description of the McFall proceeding, the challenged arrangement requires a seller listing through an MLS® System to make an offer of compensation to the buyer’s brokerage. The plaintiffs allege that this arrangement limits competition among buyer brokerages and causes sellers to pay more than they would in a competitive market.
The allegation is not simply that commissions are expensive. It is that the structure may control who pays for buyer-brokerage services and weaken the buyer’s incentive or ability to negotiate the price of those services.
That distinction is important.
A court has not ruled that the defendants participated in an unlawful conspiracy or that the challenged rules caused commissions to be inflated.
In the 2023 Federal Court decision, the defendants asked the court to strike the Sunderland claim before trial. The court removed the allegations concerning an arrangement to fix, maintain or increase prices, as well as the claims against the franchisor defendants at that stage. It allowed a narrower theory concerning the alleged control of prices to continue against certain brokerage and association defendants.
That was a procedural ruling about whether the pleaded claim had a reasonable prospect of success. It was not a decision that the alleged conduct occurred, caused loss or violated the Competition Act.
There is no Ontario law requiring a seller to offer 2.5% to a buyer’s brokerage.
Commission rates are negotiable. A seller and listing brokerage can agree on the listing-side remuneration, and a buyer and buyer brokerage can agree on the remuneration for buyer representation.
At the same time, it would be inaccurate to say that rules have nothing to do with seller-paid buyer-brokerage compensation.
CREA stated after the RE/MAX settlement that its MLS® rule continued to require a listing REALTOR® to make an offer of cooperating compensation, although the offer could be any amount other than zero. The Competition Bureau has described the rule in similar terms.
Two things can therefore be true:
The existence of choice over the amount does not automatically answer whether the structure affects competition. A nominal offer may satisfy a rule, but the market’s response to that offer can still influence what sellers believe they must offer in practice.
When I speak with sellers about buyer-side compensation, they are rarely concerned with whether they can technically offer a token amount. They want to know what a lower contribution will do to the sale.
That is difficult to predict before the property is listed. The seller does not know which future buyers will face a fee shortfall, how large that shortfall might be or how those buyers will respond. Some may have additional cash available. Others may ask the seller to address the shortfall through the offer or adjust what they feel able to pay for the property.
In practice, that uncertainty can make a formally negotiable amount feel less negotiable. Sellers may choose the familiar structure not because a law requires it, but because they are being asked to price a transaction risk they cannot see in advance.
The seller usually receives the money from the transaction, so the listing brokerage has historically been able to distribute the agreed cooperating compensation from the sale proceeds after closing.
That structure also reduces the amount of cash a represented buyer may need beyond the down payment and other closing costs.
This is not a minor operational detail.
Seller-funded compensation can therefore serve a liquidity function. It can allow the cost of buyer representation to be addressed through the transaction rather than requiring the buyer to arrive with additional cash.
That is a legitimate benefit of the present structure.
It does not prove that a mandatory offer rule is necessary, that the customary amount is competitive or that the seller should have no alternative way to structure the transaction.
In Ontario, the buyer representation agreement should establish the remuneration the buyer owes the brokerage and explain what happens when a seller offers more or less than that amount.
RECO’s guidance on remuneration clauses says the buyer client is responsible for the fees associated with the representation received from the buyer’s brokerage. It also recognizes that buyers may want or need the seller to compensate them for some or all of those fees.
That can be addressed through a clause in the agreement of purchase and sale. In that arrangement, the seller agrees to compensate the buyer for the buyer’s brokerage obligation as part of the transaction.
This matters because changing an MLS® compensation rule would not necessarily prohibit sellers from helping with buyer-brokerage fees.
It could instead change when the amount is negotiated, how it is disclosed and whether compensation is offered to every cooperating brokerage in advance or negotiated as part of a particular offer.
The possible alternatives are wider than a simple choice between “the seller pays” and “the buyer pays cash.”
In my experience with buyers, the brokerage fee can remain theoretical until they become interested in a property where the seller’s contribution is less than the amount in their representation agreement.
That is when an abstract contractual obligation becomes a real purchasing decision. The buyer may need to preserve additional cash, reconsider the price they can comfortably offer, ask the seller to contribute toward the fee or discuss whether their brokerage will accept a different amount.
The compensation structure can therefore affect more than who receives an invoice. It can influence the price, terms and conditions a buyer feels able to put forward. That practical effect is easily missed when the debate is reduced to a simple choice between “seller pays” and “buyer pays.”
The lawsuits challenge commission rules connected to MLS® Systems. They do not change the fact that cooperation between brokerages creates substantial value for buyers and sellers.
An MLS® System gives participating real estate professionals a structured way to share listings, property information and transaction instructions. Listing information can then be displayed through REALTOR.ca and other authorized websites.
If the distinction between the professional system and the public websites is unfamiliar, it helps to understand what the MLS® is in Canadian real estate before assessing the commission debate.
The value of this network does not depend entirely on one compensation rule. Brokerages have reasons to participate because that is where a large amount of professional listing activity occurs and where cooperation can be organized efficiently.
That gives the existing system a strong network effect.
But network value and rule design are separate questions. A system can be useful while still containing a rule that deserves reconsideration. Likewise, changing one rule does not necessarily require dismantling the system that carries the listings.
The strongest criticism of the current structure is not that sellers have no choice whatsoever.
It is that the buyer receives the service while the customary payment is arranged through the seller and listing brokerage. If the buyer does not expect to pay the fee directly, the buyer may have less reason to compare buyer-brokerage prices or negotiate a lower fee.
The seller can negotiate the amount offered, but the seller is not the client receiving the buyer brokerage’s advice, investigation or negotiation services.
That separation between the person receiving the service and the person funding it is unusual enough to justify scrutiny.
The Competition Bureau began investigating CREA’s commission rules in 2024 and expanded the investigation in February 2026. The Bureau is examining whether the rules discourage lower rates or alternative pricing models, encourage steering or otherwise reduce competition. It has also been clear that the investigation has not reached a conclusion of wrongdoing.
That is the correct level of caution. The structure creates questions worth investigating, but the existence of a question is not proof of an unlawful arrangement.
One concern raised in commission debates is steering: a buyer representative may be tempted to favour properties offering more compensation or avoid properties offering less.
In Ontario, that is not merely frowned upon. RECO says remuneration-based steering breaches TRESA. A registrant representing a buyer must inform the buyer about properties meeting the buyer’s criteria without regard to the remuneration the brokerage might receive. RECO’s guidance on commission-based steering describes possible fines and other disciplinary consequences.
A seller may still worry that offering little or no compensation could create uncertainty for buyers who have agreed to pay their own brokerage. That is a different concern.
The buyer may need to understand the shortfall, determine whether the brokerage will accept less, ask the seller to contribute through the offer or reconsider the transaction. Those steps can create friction even if the buyer’s agent acts properly and presents the property.
The distinction matters:
An agent disregarding the buyer’s criteria because of compensation. RECO says this breaches TRESA and should not be defended as market reality.
The buyer and brokerage must resolve a genuine payment obligation when the seller’s offer falls short. This deserves practical consideration when rules are redesigned.
Removing a mandatory offer of cooperating compensation would not produce one uniform buyer-pays model.
Several arrangements could develop — each with its own trade-offs:
The current litigation cannot be evaluated honestly without considering both the competitive opportunity and the transaction friction that reform may create.
On a $1 million Ontario sale, a total commission of 5% would equal $50,000 before HST. At 4%, it would equal $40,000 before HST.
Those are material amounts. A seller should understand what is being charged, how it is divided and what services are being provided in return.
But transaction costs and housing affordability should not be treated as interchangeable.
Reducing commission can preserve more of a seller’s equity. It does not follow automatically that the home will sell for less or become more affordable to the buyer. The sale price is influenced by supply, demand, financing conditions, property characteristics and competition among buyers.
Lower transaction costs are valuable on their own. They do not need to be presented as a complete solution to the cost of housing.
A large commission bill is easy to calculate. Its effect on the final market price is much harder to isolate.
In October 2025, the Federal Court approved a $7.8 million settlement involving RE/MAX Ontario-Atlantic Canada Inc. in the Sunderland and McFall proceedings.
The settlement agreement states that RE/MAX continues to deny the allegations and that the settlement is not an admission of liability. The proceedings were certified against RE/MAX for settlement purposes, which is not the same as certifying or deciding the contested claims against all remaining defendants.
The agreement contains more than a payment.
RE/MAX agreed not to require its affiliates to belong to CREA or TRREB, subject to the terms of the agreement. It also agreed to cooperation provisions concerning the continuing litigation against non-settling defendants.
Sellers can already negotiate listing fees and compare flat-fee, lower-percentage and other service models. Buyers can negotiate the remuneration terms in their representation agreements.
That existing choice matters.
It is not a complete answer to the lawsuits.
The existence of a lower-cost option does not prove that the market around it is fully competitive. If a rule, default practice or fear of reduced exposure discourages consumers from using an alternative, the alternative may exist without exerting as much competitive pressure as expected.
The reverse is also true. Evidence that commissions remain high does not, by itself, prove an illegal agreement. Consumers may choose more expensive services for reasons that include scope, experience, convenience, brand familiarity or risk tolerance.
Operating a lower-fee listing model has made one distinction particularly clear to me. A seller can save substantially because the listing-side fee is lower while the amount offered toward the buyer’s brokerage fees remains unchanged.
That is genuine competition and genuine savings, but it is competition on only one part of the transaction. It does not tell us whether the buyer compared brokerage fees, negotiated the price of their own representation or even understood what that service would cost if the seller’s contribution fell short.
The existence of discount listing models proves that sellers have alternatives on the listing side. It does not, by itself, answer whether buyer-brokerage pricing is exposed to the same competitive pressure.
The litigation may take time, and consumers still need to understand the agreements they are signing today.
budget;
location;
property type;
bedrooms;
bathrooms;
parking;
approximate size.
But those criteria rarely tell the whole story.
These questions are useful regardless of how the lawsuits end.
Canada’s commission structure is neither an obvious conspiracy nor a system that should be immune from examination.
The cooperative listing network has real value. Seller-funded buyer compensation can reduce cash friction and help buyers access representation. Those benefits deserve to be considered before any rule is removed.
The plaintiffs are also raising a legitimate structural concern. When the recipient of a service is separated from the negotiation and funding of its price, competition may not operate in the usual way. A mandatory non-zero compensation rule can matter even when the amount remains negotiable.
Compare flat-fee, lower-percentage and traditional listing models — and see what buyer representation actually costs — before you sign an agreement.
About the author:
Faiza Ahmed
As the founder of PropertyMesh, Faiza Ahmed is dedicated to making real estate more transparent and cost-effective. While she advocates for more transparent, flexible fee structures so sellers can keep more of their equity, her core focus is empowering buyers and sellers to make informed decisions. Faiza is a licensed real estate broker registered with the Real Estate Council of Ontario (RECO Registration #4791581) and an active member of the Toronto Regional Real Estate Board (TRREB).
| Total commission rate | Cost on a $1M sale (before HST) | Equity kept vs 5% |
|---|---|---|
| 5% | $50,000 | — |
| 4% | $40,000 | +$10,000 |
| 3.5% | $35,000 | +$15,000 |
