So far in 2023, one of the PAR Legal Hotline’s top question-makers is the topic of advertising and marketing. Given the few written regulations and the fact that they haven’t been updated in ages to address things like online advertising and social media, it’s no wonder. Here is a little refresher on the basics of real estate advertising in Pennsylvania and some real questions that we have actually received.
In general, any public communication made to promote your product, service or brand can be considered an advertisement. It does not matter whether that communication is made in print, on social media or on the side of a beachball – if it promotes you as a real estate licensee, then it is advertising.
Regulations pertaining to real estate advertising can be found in Sections 301 through 308, and they cover topics from harassment in advertising to disclosing one’s private interest in an educational institution. While there are a number of specific rules, the common thread running through all these regulations – which is what you have to measure your advertising against if it’s not covered by one of the specific rules is that the advertisement cannot be misleading or untruthful.
We understand that it’s not much to go on so it’s no surprise that this topic generates the most questions. Here are some common questions or scenarios we hear on the legal hotline.
Caller: Can my team advertise as the Rainbow Sunshine Team?
Hotline: Is your name Rainbow Sunshine? The regulations say that you should be advertising under your licensed name, but the State Real Estate Commission also has set out advertising guidelines for teams that are quite specific: the team must be named after a licensee on the team (using the name on their license or approved nickname), all team members must be named in all advertisements and unlicensed individuals may not appear in advertising to be members of the team. Yes, we know that this may be hard to do on all advertisements and that there are teams out there that do not follow this guidance. We also know that there have been a number of licensees who have recently been fined for their non-compliant individual and team ads, so agents and brokers should give some serious thought to what they try (agents) and what you allow (brokers) to avoid being added to that list.
Caller: Can I advertise a contest or raffle?
Hotline: Sure. Holding a contest or raffle could be a perfectly acceptable method of advertising your business. However, it’s not as simple as plucking a ticket from a box. There are several details that must be contained in the advertisement for the raffle and records that you need to keep as the contest-holder. The particulars can be found in Section 306 of the regulations. In addition, keep in mind that depending on how you set it up a contest or raffle might end up being considered as illegal gambling under Pennsylvania’s Small Games of Chance law.
Caller: What are the rules for advertising on social media?
Hotline: The same as they are for the newspaper. This one seems to trip people up the most, but the requirement to advertise yourself using the name on your license and have the broker’s name and phone number included applies no matter where you are advertising. The commission recently fined an associate broker and his broker of record $5,000 for this very violation. The licensee advertised on Facebook using a different name and did not include his employing broker’s information. Not only do they have to pay a hefty fine, but the associate broker has to take seven hours of general coursework and six hours of education related to advertising, marketing, and social media compliance.
Caller: But what about the one-click rule? My broker’s name and phone number can be one click away, right?
Hotline: No, this “rule” does not apply to advertising your real estate services or business in Pennsylvania – but you may have come across something similar in other contexts. For example, Standard of Practice 12-5 of the NAR Code of Ethics says that Realtors® must include their firm name “in electronic advertising via a link to a display with all required disclosures.” Or you might be thinking of the Truth in Lending Act (Regulation Z), which requires certain disclosures to be made when advertising open-end credit. The CFPB allows certain disclosures to be made to consumers via a link, thereby taking the individual to the necessary disclosures with one click.
Caller: What should the MLS status be? Or what can I write in agent remarks in the MLS?
Hotline: With over 20 Multiple Listing Services in operation in Pennsylvania, we suggest that you call the MLS directly with these questions. While many of them might be the same, we are not in a position to speak for the MLS. Knowing what you know about avoiding misleading and untruthful advertising, and which words to use or avoid, any follow-up calls should go to the MLS itself.
Caller: Can I say…
Hotline: Let me be perfectly clear that the attorneys on PAR’s Legal Hotline are not going to approve your advertisement for you. We can tell you which regulations apply, but we are not going to tell you exactly what to say. This often comes up in terms of avoiding federal and state fair housing implications. The Fair Housing Institute maintains a list of words and phrases that you should avoid when creating your advertisements. If you think these particular words fall into a grey area, our recommendation is to just avoid them. And if you have any questions about other advertisements that might “push the envelope” you’d want to be talking with your broker about them because the two of you might be mailing your fines to the commission in the same envelope if you are sanctioned.