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Lawyers cashing in on MLS challenge

|Written By Daryl-Lynn Carlson

Following a challenge by the federal Competition Bureau of the Canadian Real Estate Association’s Multiple Listing Service, real estate lawyers are perhaps in a more advantageous position when representing a client in a transaction.

Primarily, they now have the opportunity to earn more fees per transaction than they did prior to the bureau’s MLS challenge now that real estate agents will make less in commission.

This is due to the fact that as a result of the challenge, lawyers will be responsible for completing the purchase-of-sale document rather than a real estate agent.

But it will mean that lawyers will have to spend more time on a file, says Brian Madigan, a lawyer and real estate broker for Royal LePage.

“The information on MLS has to be accurate, and there’s an obligation on behalf of lawyers to verify the facts. And the negotiations in real estate deals will now be more complex.”

Madigan, who practised real estate law for years before joining Royal LePage, says lawyers will have to become reacquainted with listings and related agreements, negotiations, and their responsibilities as a result.

“My fear is that many lawyers are not going to be aware of the fact that there are now two different contracts, one for the buyer and one for the seller, that they have to review. In terms of the negotiation process, lawyers have more due diligence in lieu of real estate agents who dealt with the contract, which was a simple model with just one negotiator.”

But Madigan notes lawyers will indeed earn more money, upwards of $2,500 on a transaction worth $250,000, for example. Still, with the added work, they’ll earn it given the time involved in research and negotiations.

“These transactions will certainly be more complex for lawyers, but it’s much better for the consumer,” Madigan says.

Michael Forcier, a sole practitioner in Owen Sound, Ont., agrees the changes will put more onus on lawyers while also enabling them to assist clients more thoroughly and bill more for their services. But there may be other benefits, he adds, noting a lack of opportunities to earn a good living has deterred young lawyers from focusing on real estate at smaller firms in rural areas.

But with CREA’s compliance with the bureau’s challenge, things look much brighter for the real estate law bar, he says. “When lawyers finish school, they have not been looking at real estate because they can’t make any money. But I think that has all changed with this development.”

Forcier is also one of the founders of, a web site on which people can sell properties with a lawyer providing the legal work and advice. It now has hundreds of member lawyers throughout Ontario and is one of the benefactors of the bureau’s challenge.

It includes a web site with MLS listings, contact information for lawyers, a long list of services practitioners can provide to clients, tips, and a checklist for sellers and buyers to use in completing a sale.

“For the consumer, they can save huge amounts of money using this service,” says Forcier. “And [with] the fact that it’s opened up the MLS, it’s giving consumers an opportunity to market across the country with the help of a lawyer.

So this is all about trying to be proactive and looking forward as a real estate lawyer and it gives everyone an opportunity to build our brand and market it.”

He elaborates on the benefits of such web sites and lawyers’ involvement in real estate transactions in an article on the electronic real estate era: “We, as lawyers, are at crossroads. We can simply maintain the present course with our skeptical manner and continue rationalizing our declining profession.

Or we can embrace the business case and, with our distinctive advantages as lawyers, we can capitalize on them. We can change an industry for the betterment of our clients by giving them better advice and saving them money while making our practice more profitable. This is a win-win situation for both our clients and us.”

He adds that “with the introduction of the two-lawyer rule, we have been given an incredible competitive advantage because a transfer of land cannot be effected unless two lawyers are involved.”

As a result, the real estate bar has much to look forward to in terms of involvement, client services, and fees, he says.

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