Competition Bureau warns Canadian landlords and property managers about illegal discussions on rents

A for rent sign is displayed on a house in Ottawa on Oct. 14, 2022. Photo by THE CANADIAN PRESS/Sean Kilpatrick

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The Competition Bureau issued a warning to Canadian property managers and landlords on Wednesday about engaging in illegal agreements with competitors.

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The Bureau said it is aware that some landlords and property managers may be engaging with competitors, and while some of these discussions may be justified, others could be illegal.

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“Agreements between landlords to ‘make the most of the booming rental housing market’ or ‘find ways to ensure that all players benefit from the strong demand equally’ raise concerns under the law and could be illegal,” the Bureau said in a press release.

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Illegal agreements could involve rental prices, lease terms (including amenities and services) and artificially reducing the availability of rental units to restrict housing supply, the Bureau said.

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The Bureau warned that engaging in illegal agreements with competitors, “such as price-fixing, market allocation, restricting supply, or wage-fixing and no-poaching agreements,” is a criminal offence under the Competition Act, with potential prison sentences of up to 14 years and hefty fines.

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It also noted that some landlords and property managers may be engaging with competitors through discussion groups on social media.

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Geneviève Chassé, a Bureau spokesperson, told Financial Post in an email that the Bureau would not speculate on the prevalence of the social media groups but added that it wanted to send “a clear message to the industry” that certain topics cannot be discussed between competitors.

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Dania Majid, a staff lawyer at the Advocacy Centre for Tenants Ontario (ACTO), said ACTO first became aware of such groups on platforms such as Reddit and Facebook during the COVID-19 pandemic when tenants raised concerns about potential discussions concerning bad faith evictions amid eviction moratoriums.

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Majid said ACTO had come across chatter among landlords regarding lease terms and how to evict tenants during that time but added that she had not been active on these forums in a couple of years.

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She said these discussions on social media can help “normalize and encourage” these types of activities.

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“If you’re on a forum, and everyone’s saying they’re pushing out their sitting tenants and this is how they do it … then that illegal activity … seems like standard business practice.”

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Chassé told Financial Post the Bureau’s recent statement was unrelated to its investigation into algorithmic pricing in the rental housing market, which she said is still ongoing.

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YieldStar, owned by Texas-based RealPage Inc., is one such example of algorithmic software that generates apartment pricing recommendations for landlords. It was the subject of a lawsuit filed by the U.S. Department of Justice (DOJ) last year, which alleged landlords were using the software to artificially inflate rents and reduce competition.

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RealPage spokeswoman, Jennifer Bowcock, told Financial Post in an earlier email that the company has a history of working with the DOJ to ensure its revenue management software is legally compliant and that the department’s claims are “devoid of merit.”