Legal News

FREC Team-Ad Rule Raises Questions

Real estate licensees have been governed by 61J2-10.025 regulating advertising for many years. However, the new team ad rule (61J2-10.026) issued by the Florida Real Estate Commission (FREC) has generated questions from members, notably for its impact on business aspects not directly addressed in the rule. Although you’re not required to comply with the new team advertising rule until July 1, 2019, it’s not too early to prepare.

The complete Florida Real Estate Commission (FREC) regulation is posted on Florida Realtors’ website.

An important note: A number of members’ Legal Hotline inquiries are “What if …” questions. Many callers ask about practices that the regulations cover only indirectly. As a result, we contacted FREC for clarification.

Keep in mind that this is a new regulation, and FREC could continue to fine-tune how it applies in specific cases. If teams must spend money to change their current names and marketing ads, it would be wise to make decisions that FREC is unlikely to oppose at a future date.

Here are some Q&As for your consideration. The answers are based on recent FREC guidance:

Question: What about website domain names? Can my team or team members have a domain name that includes any of the words set out in in 61J2-10.026(4), such as “realty” or “properties,” which are not permitted in a team name?

Answer: Yes. FREC agreed that a domain name may contain a word prohibited by 61J2-10.026. However, this answer applies to the domain name only.

Question: Can my team or team members have an email address that includes any of the words set out in 61J2-10.026(4), such as “realty” or “properties” which are not permitted as part of a team name?

Answer: Yes. FREC agreed that an email address (for both a team and team members) may contain a word prohibited under rule 61J2-10.026. However, this answer again applies to the email address alone.

Question: Are you saying my email address and domain name can include a word prohibited for use in a team name under rule 61J2-10.026?

Answer: Yes. Email addresses and domain names may contain words banned in the rule. However, your team name can no longer match your domain name or email address if it contains one of the newly prohibited words.

Question: I’m an agent who occasionally co-lists property with another agent in my office. We do not work as a team, however. If the two of us advertise a listing together and include both of our names and photos along with the name of our brokerage company, must we also comply with the new team advertising rule?

Answer: Not necessarily. If you are not working as a team, FREC will not assume that your ad falls within 61J2-10.026. However, the answer to this question depends a bit on the ad – particular details might cause it to fall under the team advertising rule.

Anytime you add branding to an ad, for example, the team advertising rule needs to be reviewed to determine if it applies because team or group advertising means “a name or logo, used by one or more real estate licensees who represent themselves to the public as a team.” If branding is included in the ad that says “We’re your home specialists” under the two co-listing agents names, the ad could fall within the team ad rule. This could be true even if it was not the intention of the agents who placed the ad.

Question: We use small gifts for marketing, including pens with our name. Depending on the pen, we can only use a maximum of 50-60 characters, however. Do the new rules apply even when they can’t logistically be done?

Answer: The Commission agreed that all marketing advertisements relating to teams – including small trinkets and gifts – must comply with Rule 61J2-10.026, regardless of the printer criteria. All advertising materials that advertise a real estate team or show a team logo – no matter the size of the ad – must comply with the team advertising rule. There are no exemptions for items like pens, pencils, etc.

Question: I know compliance isn’t required yet so we have time to prepare for the changes – but should I begin keeping a monthly list of all the teams in my office now along with the team members?

Answer: There is currently not a requirement to do so. The Commission agreed that enforcement of any portion of the rule will not commence until July 1, 2019, including the requirement to have a written records of the teams currently in a brokerage company.

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