Are You Breaking Real Estate Advertising Law?

Breaking MA Real Estate Advertising Law

 

Advertising law for real estate agents is confusing.

Laws vary from state to state, so there’s no uniformity in regulations.

All the subtle nuances of how real estate is practiced in the field versus studied for in a licensing exam compounds the situation.

There are 3 pieces of content Mass.gov and the Massachusetts Board of Registration of Real Estate Brokers and Salespersons provide to help keep real estate agents in line with real estate agent advertising laws.

  1. Continuing education course RE41R20: Real Estate Advertising Compliance and the Law
  2. Board-published real estate teams FAQ
  3. Mass.gov regulation 254 CMR 3.00: Professional Standards of Practice

Regulation 254 CMR 3.00 is the basis for RE41R20 and the FAQ, yet RE41R20 and the FAQ seem to provide some practical clarity for agents who are in the field and beyond their pre-licensing education requirements.

Real Estate Continuing Education Course RE41R20: Real Estate Advertising Compliance and the Law

Mass.gov’s Real Estate Continuing Education Course Listings provide a set of classes for Brokers and Salespeople, under the Real Estate Board Regulations section, there’s a real estate continuing education course, RE41R20: Real Estate Advertising Compliance and the Law, which provides a great primer on advertising law for real estate agents.

The most prominent advertising rule discussed in RE41R20, and the one agents can innocently fall prey to, is the fact that blind advertising in real estate is Illegal.

Fundamentally, when it comes to blind advertising in real estate, agents should not advertise in any way that is false or misleading.

Related to blind advertising, real estate agents must keep 3 things in mind:

  1. You must affirmatively disclose you are a real estate broker
  2. You cannot solely advertise a phone number or email address, all advertisements must include the name of the real estate broker
  3. You can’t advertise under your own name

The nomenclature is confusing, the general public uses different names interchangeably for licensed professionals (broker, agent, salesperson, realtor, etc.), yet to be clear, when the Board says “broker”, that refers to the Broker of Record or in a Business Entity it means the brokerage.

The RE41R20 course topic list provided by the Board points to two other sources of helpful information about real estate agent advertising law, an FAQ and Mass.gov regulation 254 CMR 3.00: Professional standards of practice.

Board-published Real Estate Teams FAQ

There are thousands of “real estate teams” in existence, and there are perhaps even more individual agents who, being business-minded and entrepreneurial, start their own “real estate team” or “real estate group”, even if it’s just made up of a sole-member.

Agents who start a “real estate team” or a “real estate group” can easily overextend themselves and their “business” beyond the law. In the spirit of trying to grow and scale your business, it’s quite simple for a real estate agent entrepreneur to break advertising law, but oftentimes it’s an easy fix to come back into compliance once you know what Massachusetts real estate advertising law says.

In 2019, the Board published a real estate teams FAQ that answers 12 of the most commonly asked questions about real estate teams in Massachusetts, three of those questions provide clarity on how to legally advertise a real estate team in Massachusetts.

Real Estate Teams Advertising Law FAQ #1: In advertising, can the name of the team be bigger than that of the brokerage?
There is no regulatory or statutory size ratio, but brokerages may have internal policies dictating specific size requirements.

  • All advertising shall include the name of the brokerage or principal broker under which the licensee is licensed to do business
  • All advertising must be in a manner in which consumers would know that they are dealing with a team or group that is part of a licensed brokerage
  • Advertising includes, but is not limited to: business cards, yard signs, websites, social media, building signs, e-mail signatures, bumper stickers, pens, etc.

Real Estate Teams Advertising Law FAQ #2: Can a team have its own logo, emblem, trade name, insignia, or other form of identification in ads?

  • Yes, so long as the brokerage is properly identified

Real Estate Teams Advertising Law FAQ #3: Can a team use the words “realty” or “real estate” in its name?

    • No. Best practices for Team Names:
      • Include the word “Team” or “Group”
      • Team names should not include the words “realty” or “real estate”. or any similar derivation that would imply that the team is an independent brokerage.
      • Team names should not indicate in any way that the team is its own business entity,
      • Here is a list of words that should be avoided in Team Names:
        • Advisors
        • Agency
        • Associates
        • Brokerage
        • Brokers
        • Company
        • Consultants
        • Corporation, Corp. or Inc.
        • LLC, LP, LLP
        • Partners, Partnership
        • Properties
        • Property
        • Real Estate, Realty

At all times a consumer should be able to easily identify the brokerage the team is affiliated with.

Mass.gov Regulation 254 CMR 3.00: Professional Standards of Practice

Both RE41R20 and the real estate teams FAQ cite Massachusetts regulation 254 CMR 3.00. RE41R20 are built from the regulation 254 CMR 3.00. This regulation broadly outlines the professional standards of practice for a licensed real estate salesperson or broker in the state of Massachusetts, and more specifically, addresses advertising law in real estate.

Section 9 of the regulation states:

(9) Advertising. A broker shall not advertise in any way that is false or misleading.

(a) Broker Identification. No broker may advertise real property to purchase, sell, rent, mortgage or exchange through classified advertisement or otherwise unless he/she affirmatively discloses that he/she is a real estate broker. No broker shall insert advertisements in any advertising publication or other means where only a post office box number, telephone, facsimile, electronic mail number or street address appears. All advertisements shall include the name of the real estate broker.

(b) Salespersons Prohibited From Advertising. Salespeople are prohibited from advertising the purchase, sale, rental or exchange of any real property under their own name.

(c) Discriminatory Advertising Prohibited. No broker shall advertise to purchase, sell, rent, mortgage or exchange any real property in any manner that indicates directly or indirectly unlawful discrimination against any individual or group.

Do Not Republish Listings from Other Agents

As real estate professionals, it’s tempting to republish listings from other agents to expand your portfolio and attract more clients. However, it’s crucial to understand that this practice is against MLS PIN rules and regulations and puts you and your brokerage at high risk. Unauthorized republishing can lead to severe consequences, including fines, loss of MLS access, prosecution, and loss of your license to practice real estate. Stuart St James does not allow agents to republish listings of others, whether they are rentals or sales, to ensure compliance and uphold professional standards.

Republishing another agent’s listings without permission can create significant consumer confusion. When property details are duplicated or altered, buyers may encounter conflicting information, leading to frustration and mistrust. From a practical perspective, even a minor typo in an address could result in accusations of bait and switch, damaging your credibility and potentially leading to legal action. Clear, accurate, and original listings help maintain the integrity of the information provided to potential clients.

Moreover, respecting MLS PIN rules and not republishing others’ listings protects you from legal risks and upholds your professional reputation. Always generate original content or seek explicit permission if you need to share another agent’s listing. By adhering to these practices, you avoid consumer confusion, maintain trust within the industry, and ensure your business operations remain compliant with all relevant regulations.