How to avoid losing your California real estate license
Everyone knows there are a ton of rules “on the books” and that legal compliance with your real estate company is not always easy especially with new laws, rules, and regulations being passed all the time (most that you do not become aware of because you are not subscribing to the AttorneySteveVideos.com real estate youtube channel), not to mention new Court cases (“case law” as we call it) coming out all the time. This blog discusses one of the important and often overlooked compliance item that a broker of salesperson can become the subject of a “cite and fine” action, or even face an Accusation that seeks to discipline your real estate license. Class is in session, take 5 minutes to make sure you have your website in compliance with the Commissioners Rules and Regulations.
California Business & Professions Code Section 10140.6(b)
This is one code section that sometimes pops up during a real estate audit, or property management audit. This section is often overlooked, I think because many brokers don’t believe the DRE will review your website as part of an audit. This is clearly not the case and you need to make sure you online presence and marketing/advertising materials are in compliance with the rules of the commissioner and the California real estate law. This section states:
“(a) A real estate licensee shall not publish, circulate, distribute, or cause to be published, circulated, or distributed in any newspaper or periodical, or by mail, any matter pertaining to any activity for which a real estate license is required that does not contain a designation disclosing that he or she is performing acts for which a real estate license is required.
(b) (1) A real estate licensee shall disclose his or her license identification number and, if that licensee is a mortgage loan originator, the unique identifier assigned to that licensee by the Nationwide Mortgage Licensing System and Registry, on all solicitation materials intended to be the first point of contact with consumers and on real property purchase agreements when acting as an agent in those transactions.
(2) For purposes of this section, “solicitation materials intended to be the first point of contact with consumers” includes business cards, stationery, advertising fliers, and other materials designed to solicit the creation of a professional relationship between the licensee and a consumer, and excludes an advertisement in print or electronic media and “for sale” signs.
(3) Nothing in this section shall be construed to limit or change the requirement described in B & P Section 10236.4 as applicable to real estate brokers.
(c) The provisions of this section shall not apply to classified rental advertisements reciting the telephone number at the premises of the property offered for rent or the address of the property offered for rent.
(d) “Mortgage loan originator,” “unique identifier,” and “Nationwide Mortgage Licensing System and Registry” have the meanings set forth in B & P Section 10166.01.
California Commissioner’s Regulation 2773
“(a) A real estate broker or salesperson, when engaging in acts for which a license is required, shall disclose its, his or her eight (8) digit real estate license identification number on all solicitation materials intended to be the first point of contact with consumers.
If the name of more than one licensee appears in the solicitation, the license identification number of each licensee shall be disclosed. The license numbers of employing brokers or corporate brokers whose names or logos or trademarks appear on solicitation materials along with the names and license numbers of licensed employees or broker associates do not need to appear on those materials. Solicitation materials intended to be the first point of contact with consumers, and in which a licensee must disclose a license identification number, include the following:
(1) Business cards;
(3) Websites owned, controlled, and/or maintained by the soliciting real estate licensee;
(4) Promotional and advertising fliers, brochures, email and regular mail, leaflets, and any marketing or promotional materials designed to solicit the creation of a professional relationship between the licensee and a consumer, or which is intended to incentivize, induce or entice a consumer to contact the licensee about any service for which a license is required.
The type size of the license identification number shall be no smaller than the smallest size type used in the solicitation material.
(b) For the purposes of Cal. Business and Professions Code Section 10140.6, solicitation materials do not include the following: (1) Advertisements in electronic media (including, without limitation, radio, cinema and television ads, and the opening section of streaming video and audio); (2) Print advertising in any newspaper or periodical; and (3) “For Sale” signs placed on or around a property intended to alert the public the property is available for lease, purchase or trade. HISTORY
Social media advertising compliance take-aways!
Here are some Attorney Steve tips and rules to keep in mind when it comes to social media marketing for your real estate company:
1. PUT YOUR BROKER AND AGENT LICENSE NUMBERS ON YOUR WEBSITES, PODCASTS, BLOGS, TWITTER, FACEBOOK, AND YOUTUBE CHANNELS AND OTHER SOCIAL MEDIA WEBSITES IN A CLEAR AND CONSPICUOUS MANNER.
2. Do not represent that you are licensed by a particular agency when in fact you are not (for example saying “we a a California Finance Lender” or we are regulated by the Department of Business Oversight (DBO), when in fact you are not. Make sure you are 100% accurate
3. Do not post cheesy “false testimonials” from fake clients on your website to make you look good. The FTC has rules against false endorsements and this could lead to legal lawsuits, regulatory actions, fines, enforcement actions, and false advertising lawsuits. Be honest and accurate and do not try to fool or mislead potential buyers, sellers and borrowers.
5. Make sure you are not using any “unlicensed DBA’s” or unlicensed “fictitious business names” that the BRE is not aware of. In other words, if you have not notified the Department of Real Estate (now the Bureau of Real Estate) that you are using a DBA or FBN you cannot use it in your social media marketing and advertising.
6. Be able to substantiate any claims that you are making on your website. This is a FTC section 5 requirement and so when you say something online, make sure you can back up your claims with solid evidence. “Puffing” and “spinning” while perhaps permissible, needs to be closely watched so that it is not viewed as “deceptive” or “false” or “misleading.” This is a fine line that many companies try to balance.
BRE real estate advertising Compliance resources:
Contact a California real estate compliance law firm
We can help real estate companies with BRE compliance issues, advertising review, internet website privacy policies, real estate transactions, arbitration, commission disputes, contracts, investigation responses, licensing issues, property management trust fund audits and broker accusations and administrative hearings. We offer flexible legal fees and tenacious defense of your real estate license. Call us at (877) 276-5084 or leave your name and phone number on our contact form below to have one of our real estate lawyers contact you.
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