MARKETING/ADVERTSING-BMC #3 – Supervision

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22 Brokerage Disclosure in All Advertising:

One very important provision is contained in R4-28-502(E) which requires that the full brokerage legal name or DBA name must be included in all advertising and must be in a clear and prominent manner.  The rule does not say that the salesperson’s name cannot be larger than the brokerage name.  It simply says that the brokerage name must be clear and prominent.  However, the brokerage can impose policies stipulating that the salesperson’s name cannot be larger than the brokerage name, but that is an office policy issue; not a Commissioner’s Rules issue.

Social Media, Online & Website Advertising:

R4-28-502(L) does provide that all advertising rules apply to any advertising done online.  This would also include the incorporation of social media in the marketing and advertising programs.  The Commissioner has made it very clear that any brokerage website must provide information that is current and up to date as a substantive policy.  For example, a website that has out-of-date information on facilitating a short sale transaction using information on an old federal program that no longer applies could be cited as a violation.  Another example would be a brokerage, that has changed its legal name, uses the older name.  Still another example would include exhibiting properties that are no longer on the market.

With regard to the requirement that the brokerage name is prominently exhibited, the name must be prominent on any online advertising.  In the past, this has been interpreted to mean that this name is exhibited prominently on every page of a website and not just the homepage.  The ADRE has not necessarily enforced this and many brokers feature the brokerage name on the home page and have an icon on the other pages where a click will exhibit the brokerage name, contact information, name of broker and a link to the ADRE where the consumer can obtain information on the brokerage and licensees of the company.

Quick Quiz

Fill in the Blank:
With regard to the that the brokerage name is prominently exhibited, the name must be prominent on any online .

With the emergence of social marketing as a prominent medium of advertising, a broker should take steps to ensure that the licensees in their employ be aware of copyright and/or trademark issues.  The broker needs to be sure to minimize or eliminate the risk committing copyright infringement.  A good example might include using photographs of a former listing on the website to illustrate the services offered by the broker.  The use of that photograph may be considered the infringement on copyrights or even a violation of the Federal Privacy Act.  It is also important to note that if a broker wishes to promote other broker’s listings on their website or any other medium, they must obtain written permission from that other broker.

One very important consideration is the risk of copyright infringement committed by the salespersons and brokers in the use of printed material that may be proprietary material that is copyrighted or trademarked by other entities.  The Federal Lanham Act (Trademark Act) imposes severe penalties for anyone who is convicted of such infringement.  Even using photographs that may be assumed to “stock footage in the public domain” can be very risky if a party can show they have a copyright or trademark on the item.  Offering a posting or reprint of an article and citing the source such as “a reprint of an article from the Wall Street Journal” may not be a sufficient defense in an accusation of infringement.  A broker should consult his or her legal adviser on the use of such items as photographs, articles, slogans, virtual tours, products and other proprietary items and make sure this is also addressed with their E & O provider.

Lotteries, Contests, and Drawings:

R4-28-503 addresses that a licensee shall not describe a premium offered at no cost to promote sales or leasing as an “award” or “prize” or similar term.  The words are considered deceptive and misleading.  If a licensee wants to offer a premium the licensee must clearly disclose in writing the terms, costs, conditions, restrictions and expiration date of the offer of a premium before the person participates in the offer.  This rule also states that unless otherwise provided by law, a person shall not solicit, sell, or offer to sell an interest in a development by conducting a lottery contest, drawing or game of chance.  However, the rule also states that a subdivider or developer may apply for approval to conduct a lottery, contest, drawing, game of chance, or award a premium under A.R.S. 32-2197.17(J) by submitting the required information provided in the statute.

Quick Quiz

Fill in the Blank:
R4-28-503 that a licensee shall not describe a premium offered at no cost to promote sales or leasing as an “award” or “prize” or similar.

To summarize, Commissioner’s Rule R4-28-502 is extremely important for designated and delegated associate brokers to know.  Here is the rule in its entirety:

R4-28-502. Advertising by a Licensee

A. A salesperson or broker acting as an agent shall not advertise property in a manner that implies that no salesperson or broker is taking part in the offer for sale, lease, or exchange.

B. Any salesperson or broker advertising the salesperson’s or broker’s own property for sale, lease, or exchange shall disclose the salesperson’s or broker’s status as a salesperson or broker, and as the property owner by placing the words “owner/agent” in the advertisement.

C. A salesperson or broker shall ensure that all advertising contains accurate claims and representations, and fully states factual material relating to the information advertised. A salesperson or broker shall not misrepresent the facts or create misleading impressions.

D. A school shall include its name, address and telephone number in all advertising of Department-approved courses. The school owner, director, or administrator shall supervise all advertising. The school owner shall ensure that the school’s advertising is accurate.

E. A salesperson or broker shall ensure that all advertising identifies in a clear and prominent manner the employing broker’s legal name or the dba name contained on the employing broker’s license certificate.

F. A licensee who advertises a property that is the subject of another person’s real estate employment agreement shall display the name of the listing broker in a clear and prominent manner.

G. The designated broker shall supervise all advertising, for real estate, cemetery, or membership camping brokerage services.

H. A licensee shall not use the term “acre,” either alone or modified unless referring to an area of land representing 43,560 square feet.

I. Before placing or erecting a sign giving notice that specific property is being offered for sale, lease, rent, or exchange, a salesperson or broker shall secure the written consent of the property owner, and the sign shall be promptly removed upon request of the property owner.

J. The provisions of subsections (E) and (G) do not apply to advertising that does not refer to the specific property.

K. Trade Names.

1. Any broker using a trade name owned by another person on signs displayed at the place of business shall place the broker’s name, as licensed by the Department on the signs;

2. The broker shall include the following legend, “Each (TRADE NAME or FRANCHISE) office is independently owned and operated,” or a similar legend approved by the Commissioner, in a manner to attract the attention of the public.

L. The use of an electronic medium, such as the Internet or website technology, that targets residents of this state with the offering of a property interest or real estate brokerage services pertaining to property located in this state constitutes the dissemination of advertising as defined in A.R.S. § 32-2101(2).

Quick Quiz

Fill in the Blank:
Any using a trade name owned by another person on signs displayed at the place of business shall place the broker’s name, as licensed by the Department on the .

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