|  Publications
Phillip C. Querin, Partner
Partner - Portland, Oregon Office
philquerin@dwt.com
(503) 241-2300
Realtor® Advertising
[November 2005]
The issue of Realtor® advertising has long been a source of confusion for many licensees, broker and principal broker alike. While this has largely been due to a failure to actually read the applicable regulation,1 it can also be attributed to misinformation that has continued to circulate throughout the industry.
The applicable advertising law is not in the Oregon Revised Statutes.2 Rather, it is found in the administrative regulations that are promulgated by the Oregon Real Estate Agency (“the Agency”) in furtherance of the real estate licensing statutes. There are significant differences between Oregon statutes and administrative regulations. Statutes, which are passed by the Oregon Legislature, are usually broader and less specific in scope, while administrative regulations, which are adopted by individual agencies, are more specific, and intended to implement the licensing statutes. When it comes to how these laws are interpreted by the Oregon courts, judges give much greater deference to the Agency’s interpretation of administrative rules than statutes.3 For this reason, the Agency’s view of what the current advertising regulations mean is extremely important.
What follows is a brief summary of Oregon Administrative Rule 863-015-0125 (“the Rule”) dealing the advertising by real estate licensees.4
| 1. |
What Constitutes “Advertising”? The terms "advertising" and "advertisement" under the Rule include all forms of representation, promotion and solicitationdisseminated in any manner and by any means of communication for any purpose related to professional real estate activity. This very broad definition includes the following means of advertising if done as a part of the licensee’s professional real estate activity (as opposed to an unrelated non-real estate activity): (a) Mail; (b) Telephone; (c) Internet or the World Wide Web; (d) Electronic mail, electronic bulletin boards or similar electronic systems; (d) Business cards, signs, and billboards; (e) Telephonic greetings or answering machine messages.
This list should not be viewed as a complete itemization. From a risk management perspective, Realtors® should apply the Rule in the broadest sense possible to cover any method used by a licensee to promote his or her real estate business.5 |
| 2. |
In Whose Name Must Advertising Be Conducted? All advertising must be done in the principal real estate broker's, sole practitioner’s, real estate broker's or property manager's licensed or registered business name. This means that if you or your company’s licensed or registered business name is “John Doe” or “ABC Realty – the Professionals”, you should advertise in those names – not “Doe Realty” “ABC”, “the Professionals” or some other shorthand abbreviation.6 Although there is no specific prohibition against using additional names in your advertising, such as “Team Professionals,” licensees should be careful about doing so in such a manner that could cause confusion about the identity of the principal owner/company.7 If in doubt, ask yourself if a “reasonable person,” (unfamiliar with the real estate industry) could be confused. If the answer is “yes” you should consider changing the advertisement. |
| 3. |
Who Is Ultimately Responsible For Overseeing Licensee Advertising? If a real estate broker or property manager is associated with a principal real estate broker,8 the principal real estate broker is responsible for all of their advertising. However, if there is written company policy permitting them to do so, a principal real estate broker may delegate direct supervisory authority over advertising originating in a branch office to the branch office manager. However, the Rule goes on to provide that “…the principal real estate broker shall remain responsible for all advertising done under the broker's real estate license.” |
| 4. |
The Use Of Cell Phone Numbers. It is important to note that nowhere in the Rule is there any requirement that advertising must include the phone number of the licensee’s principal broker. In fact, there is no requirement that any phone number or address be included in agent advertising. An agent would be within their rights under the Rule to publish a generic advertisement, simply giving their name, license status, and company affiliation – nothing more, nothing less.
Since the Rule does not prohibit doing so, agents may use their own cell phone numbers in their advertising. Principal broker phone numbers are not required under the Rule to be included in an ad. However, company policy may certainly be more restrictive, such as requiring its agents to include the principal broker’s phone number in all ads. The only guiding principal regarding the use of phone numbers and addresses in advertising is that it cannot be deceptive or misleading.9 |
| 5. |
What Is Deceptive Or Misleading Advertising? The Rule requires that all advertising shall “…be truthful and not deceptive or misleading….” Here are some guidelines:
a. All advertising must identify the agent’s licensing status as a real estate broker or property manager.10 This is even more important today, with the influx of people and companies who advertise over the Internet from out of state, and who may disguise themselves as Oregon real estate brokers. While agents may, in addition, also identify their professional designations such as “Realtor®” “CRS,” GRI,” there is no exception to the requirement that one’s licensing status must appear in all advertising.
b. The advertising may not incorrectly imply that the real estate broker or property manager is the person responsible for the operation of the real estate brokerage. This guideline refers to the requirement (discussed above) that the licensee’s advertising cannot create the false appearance that he or she is the company. Again, the reasonable person standard applies – is there a likelihood that a consumer could become confused?
c. The advertising should not use any words that state - or imply - that the licensee is qualified or has a level of expertise other than as currently maintained by the licensee. This prohibition includes a range of improper activities from the use of false professional designations in one’s advertising, to promoting “specialties” that one does not actually have. There is no bright line in determining whether the advertisement is just “puffing” (such as “ Oregon’s best agent”) or is actually a false and material mischaracterization of one’s expertise. Those reviewing and approving broker ads should remember, however, that the law will generally hold an agent to the standard they advertise. If a broker advertises that he or she is a “short-sale specialist,” for example, they had better know far more than the average agent about this complicated and risky area.
d. Advertising must be done only with the written permission of the owner or their authorized agent. Although this issue is addressed in most listing agreements, and is rarely an issue from a licensing standpoint, there is a broader implication here: Who is to be held civilly liable (broker, owner, or both?) for an agent’s advertising if it is later deemed to have been deceptive? For this reason, brokers and companies may wish to make sure that their clients review and approve, in advance, advertising that contains material information about the property. Statements of fact – as opposed to opinion11 - should always be verified and signed off by the property owner before a broker runs the ad the first time. Whenever an agent learns that the advertised information is either incorrect or misleading, it should be corrected immediately. |
| 6. |
Do These Rules Apply To A Licensee’s Own Advertised Property? These guidelines do not apply if the property is not listed for sale or lease with the licensee's principal real estate broker. Accordingly, brokerage companies must make a policy decision whether they want to require their agents to list their own real property through the company – or allow them to sell it individually under their own name. The answer to this question requires that company owners and managers check their liability insurance coverage. Many E&O policies will not provide coverage should a claim be filed against an agent who sells their own property. For this reason, if a company’s office policy requires their agents to list their own property through the company in order to supervise the advertising and other aspects of the transaction, consideration must be given to also requiring that the written listing be in the name of anotheragent with that company. |
| 7. |
Noncompliance. With the exception of intentionally deceptive or misleading advertising, the Real Estate Agency has not indicated a present intention to immediately enforce technical violations of the Rule. Minor violations which cannot be easily and quickly changed – such as a few unused business cards that say “Realtor ©” but not “Broker” are not the Agency’s primary concern. Education is. Going forward, licensees should strive to become familiar with the Rule and if in doubt, check with a qualified person at the Agency or with legal counsel. |
FOOTNOTES
1 Oregon Administrative Rule 863-015-0125.
2 ORS 696 is the primary chapter that deals with the rights, duties and responsibilities of real estate licensees.
3 For a good discussion on the rules of interpretation followed by the Oregon Supreme Court, see, PGE v. BOLI, 317 Or 606 (1993).
4 This is the latest version of the law regarding licensee advertising. Realtors® should check with the Agency, from time-to-time, to make sure that it has not been amended, changed or updated.
5 It is my opinion that out of an abundance of caution this should include materials or information disseminated ostensibly for real estate educational or training purposes to members of the general public (as opposed to in-house or Realtor® association activities), since that too, is a common form of promotion. Obviously, the Rule would not apply to social or business activities of a non-real estate nature.
6 Technically, this applies to telephone greetings, as well, but is frequently overlooked. See, OAR 863-015-0125(1). Certainly, the main thing to avoid in telephone greetings would be the use of a name which causes confusion as to the real identity of the company or person answering.
7 Especially by using a font design or size that eclipses the company name to the point that a consumer could be misled into believing that “Team Professionals” is the actual name of the company or that the company is a subsidiary of the team. Although the Rule does not speak directly to this specific issue, if a reasonable person could draw such an inference, it could be deemed to be misleading and therefore a violation.
8 The term “principal broker” refers to an Oregon broker who is (a) licensed as a principal real estate broker and (b) who employs, engages or supervises another real estate broker. ORS 696.010(12).
9 Such as an ad containing the agent’s own address instead of their company’s address, or containing another person’s phone number, such as an unlicensed person out of state.
10 The use of the word “principal” is not required under the Rule, as it is regarded as more of an internal designation that simply informs the Agency of the licensee’s supervisory responsibility. However, from an advertising standpoint, most agents who are principal real estate brokers include this in their advertising, as another way to identify their skill and expertise.
11 Representations of square footage, air conditioning, gas heat, etc., are statements of fact. Representations concerning view, for example, are generally considered to be statements of opinion. Where agents get into trouble is when they (1) add extra words which could later invite a dispute, e.g. “air conditioning throughout” or “completely remodeled” only to later learn that this is not actually the case; (2) use loose characterizations of products or age without independent verification, such as “tile roof” or “new roof;” and (3) make representations regarding off-site amenities without independent verification, e.g. “abuts BLM land,” or “greenway in back.” Relying exclusively upon owners can be perilous, since they can later deny they were the source, or explain that they assumed the agent would independently verify the information given them.
Phil Querin is a partner in the Portland office of Davis Wright Tremaine, where he chaired their Real Estate Law Practice Group for 15 years. He is a litigator and transactional attorney specializing in all aspects of real estate and brokerage law. He represents the Portland Metropolitan Association of Realtors®, and Oregon Real Estate Forms LLC, the statewide residential real estate forms provider for Realtors®. Phil has been in practice for over 30 years, representing Realtors®, builders, property owners and developers in residential and commercial real estate matters. He is a frequent guest speaker, writer and expert witness on real estate issues affecting the industry today. He can be reached at: (503) 778-5231 (direct dial) or philquerin@dwt.com.
© Copyright 2005. Phillip C. Querin,
Davis Wright Tremaine. No part may be reproduced without the author’s
express written consent.
|
