Advertising Compliance is Real

By Hank Lerner | Oct. 28, 2022 | 5 min. read

“It seems like nobody is following the rules!”

“Nothing happens when you file a complaint!”

“Why isn’t the commission doing more enforcement??”

One reason for these overbroad and overwrought comments is that members may not be aware of some of the enforcement activity that is actually occurring. That will be remedied somewhat with the 2022-24 mandatory CE course regarding broker responsibilities, which will include summaries of real disciplinary cases from recent years. Today’s article will focus on one specific area of enforcement: agent advertising.

[NOTE: All disciplinary cases referenced in this article are public information. Either final orders have already been published through PALS or the cases were presented at a public State Real Estate Commission meeting.]

So without further ado, and with apologies to Charles Dickens, I bring you A Tale of Three Cases.

The Cases

Case No. 1: It Was the Best of Times.

Basic facts:

Agent advertised with billboards where the brokerage name was not as large as the agent’s name. Agent’s website and postal mailers did not contain the broker’s name and phone number.

Broker admitted to driving past the agent’s billboards (and apparently not taking any steps to have them fixed), and “admitted that he does not monitor” agent advertising in the brokerage.


Broker – $2,200 (fine and costs)

Agent – $1,200 (fine and costs)

This is the lowest sanction of the three…

Case No. 2: It Was the Worst of Times.

Basic facts:

Agents advertising a fictitious team name (not using an agent name). No use of brokerage name and phone number in several types of cited advertising.

Proposed sanction:

Brokerage – $5,000 fine

Agents – Six hours of CE (advertising)

The proposed order was denied because the sanction was deemed too lenient. (This means that they will either negotiate a larger sanction and try again for commission approval or possibly forward to a full hearing and the possibility of a sanction that could max out in the mid-five figures.)

Case No. 3: It Was the Winter of Despair.

Basic facts:
Agents advertising a team as “<LastName> Group.” No use of brokerage name and phone number in several types of cited advertising.


Brokerage: $7,500 fine

Broker: Retake 30-hour broker law course

Agents: Retake seven-hour general module for new licensees; six hours CE (advertising)


Lessons to be Learned

While there are certainly some nuanced issues in advertising, none of them will be discussed here. Let’s look at the similarities between these three cases and draw three VERY simple, and very important, lessons for agents and brokers.

Lesson No. 1: For the love of all that is holy, include the brokerage name and phone number in all agent advertising. And make sure they’re as large or larger than the agent/team information.

Seriously folks, this is one of the most basic requirements in the regulations:

“An advertisement by an associate broker, salesperson, cemetery associate broker or cemetery salesperson shall contain the business name and telephone number of the employing broker. The names and telephone numbers shall be of equal size.”

(OK, the “of equal size” language is a little confusing, but it means the brokerage information has to be at least as large as the agent information.)

“Shall contain” and “shall be” mean “you have to do it.” More specifically, it means you have to do it no matter what your graphic designer thinks looks better for your postcard layout or what your snazzy business consultant tells you is better for brand building. Just do it.

Lesson No. 2: Don’t try to look like a broker if you’re not a broker.

One of the fastest ways to upgrade a fine is to not just leave out the brokerage information, but to do it in a way that could confuse consumers into thinking that the agents are actually holding themselves out as a brokerage.

For example, any agent advertising that uses words like “realty,” “real estate,” “group” or “associates” will be flagged as potentially misleading since those are words that usually designate brokerages. So… agent John Doe should not try to build a brand around something like “John Doe Realty,” even if the broker’s information is included on ads. Even worse, if agent John Doe advertises “John Doe Realty” without the brokerage information, the discipline is likely to be increased substantially (as in the second and third cases above).

Lesson No. 3a: Brokers need to have a plan for reviewing agent advertising.

Lesson No. 3b: Agents need to listen to their brokers/managers.

The broker in the first case admitted they had no systems to regularly monitor agent advertising. Though detailed findings for the other two cases are not yet available, I believe that those brokers also were in similar circumstances. All three immediately began implementing a review of agent advertising after prosecution began, but by then it was too late – the damage was done.

These are not optional rules or decisions that can be left to independent contractors to figure out on their own. Regulatory compliance is mandatory and brokers will bear the brunt of agent non-compliance since they have ultimate supervisory responsibilities. Brokers who actively monitor advertising but have something slip through on occasion will be far better positioned than those who don’t even really try.

Bonus Tip: Don’t even start with the “how could they start enforcing the rules so harshly with no warning” questions.

Advertising rules have always been enforced and they’ve been a persistent issue for the commission over the years. In fact, the mandatory CE courses for the 2016-18 cycle (reviewing commission regulations) included advertising regulations and two hours of the mandatory course for the 2018-20 cycle was focused solely on advertising. And of course, brokerage law/regulations and broker supervision are covered at-length in the broker pre-license coursework. It would be difficult for any broker to claim that they were not aware of the basic rules or that the commission has only recently been concerned with compliance.

In Closing

Everyone: (Re)Learn the rules.

Brokers: Develop and implement processes to enforce the rules. Start yesterday.

Agents: Listen to your broker and follow the rules.

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