Legal Blog - Standards and Ethics


Company Name in Advertising

Sep 5, 2016

Standards and Ethics

By Jesse Dennehy, Director of Professional Services

A broker recently called me with a complaint about an advertisement by a competitor that appeared in a local community newspaper. The ad featured a detailed description of the other agent's services and two listings the agent currently had available for sale. Unfortunately, the advertisement failed to identify the agent's brokerage firm. The broker wanted to know if this was a violation or if there had been a change in the rules.

This advertisement has probably broken several rules. First, Standard of Practice 12-5 of the states "REALTORS® shall not advertise nor permit any person employed by or affiliated with them to advertise listed property without disclosing the name of the firm." If a listing is advertised without indicating the name of the agent's firm, the agent and their broker may both be in violation of the Code of Ethics.

Unfortunately, this advertisement is also in violation of the state licensing regulations. This is one of those few cases where the VREB regulation is broader in scope than the Code of Ethics. The Department of Professional and Occupation Regulation (DPOR) current rules state [18 VAC 135-20-190 Advertising by licensees (B)] "ÉThe firm's licensed name must be clearly and legibly displayed on all display signs and other types of advertising and marketing." So even if the advertisement had not included any listings, the agent would still have been in violation of DPOR's rules.

DPOR is currently revising their existing regulations. However, in this area of the rules the requirement will only become stricter and cover more forms of advertising than in the past. The proposed revisions, if adopted, would delete the references to display signs and marketing and expand the scope of the regulation quoted above to "all advertising".

These rules would also expand the definition of advertising to include "all forms of representation, promotion and solicitation disseminated in any manner and by any means of communication to consumers for any purpose related to licensed real estate activity." So now those email messages, Web sites, chat room discussions, etc. will also be covered by the requirement to disclose the name of your firm.

In my experience, most advertising-related complaints are a result of agents who did not know the rules and committed an unintentional violation as opposed to flagrant violations of ethical responsibilities. Therefore, I want to ask all of our Principal Brokers to take a closer look at the advertising of your agents to help catch these mistakes before they become an official complaint with NVAR and/or DPOR.

After all, no one wants to appear in a hearing to explain why the firm's name is missing from an advertisement with his or her name on it.
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