What Not To Do When Soliciting for Real Estate Services

What Not To Do When Soliciting for Real Estate Services

By: D. Keith Dunnagan, Esq.

September 21, 2021

Occasionally, life presents us with perfect examples that can be better than anything we try to come up with on our own. When my family and I returned from vacation, there was one such perfect example awaiting us on our front door. Unfortunately, this was a perfect example of what NOT to do!

We had just returned from vacation so an urgent sticky note from a neighbor placed on the front door required immediate attention. There was no context here, so I called the number provided. I quickly discovered that the intent of the sticky note was a first point of contact solicitation for real estate services. Most readers will recognize the frustration with this type of marketing, but keen readers will also notice that there are several legal problems with the note itself!

The California Business and Professions Code has very specific rules for advertising that real estate salespersons and their brokers must follow.

Issue #1: Disclosing that the solicitation is for real estate activity. “A real estate licensee shall not publish, circulate, [or] distribute… 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.” (Cal. Bus. & Prof. Code §10140.6(a).) The ad or solicitation should say its for real estate activity… if it’s for real estate activity. Here, the note placed on the door is a distribution, and it does not indicate that it was for real estate activity (which was discovered only after making the call). Why is the note considered an ad? The same statute defines what constitutes an ad in this section as “… [any] materials designed to solicit the creation of a Business and Professions Code 37 professional relationship between the licensee and a consumer.” (Cal. Bus. & Prof. Code §10140.6(2).)

Issue #2: Lack of required elements on any real estate advertisement. “A real estate licensee shall disclose his or her name, license identification, [NMLS if applicable] … and responsible broker’s identity, as defined in Section 10015.4, on all solicitation materials intended to be the first point of contact with consumers.” (Cal. Bus. & Prof. Code § 10140.6(b)(1).) The agent gets half-a-point for placing their name on the note here, but they are missing a license number and the identity of their broker (typically the company logo is used). Keep in mind that the “broker’s identity” can’t be a fictitious business name or a team name; the ad must include the legitimate identity of the broker. Section 2773 gets specific with these requirements:

“(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 and responsible broker’s name as currently licensed, and may, but is not required to, also include the responsible broker’s license identification number, on all solicitation materials intended to be the first point of contact with consumers… If the advertising is in written form, the type size of the license identification number shall be no smaller than the smallest size type used in the solicitation material.” (Cal. Bus. & Prof. Code §2773.)

It is important to remember that whatever form of advertising you engage in to market your real estate services, that you must conform your advertisements to the law. Stepping outside the legal requirements can unintentionally subject one to legal action or more likely a DRE investigation.

The information presented in this Article is not to be taken as legal advice. Every person’s situation is different. If you are facing a legal issue of any kind, get competent legal advice in your State immediately so that you can determine your best options.

Recent and Popular Articles From Our Blog:

2020 Blogs:

2021 Blogs: