The Best of the Legal Hotline: Sales and Marketing Issues


 Debbi Conrad and Tracy Rucka  |    August 14, 2006
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Websites

What rules govern advertising on websites? 

All REALTOR¬ģ advertising ‚ÄĒ on and off of websites ‚ÄĒ must comply with Wis. Admin. Code ¬ß RL 24.04, Article 12 of the Code of Ethics, and company advertising policy. A licensee may not advertise in a manner that is false, deceptive or misleading, and advertising must portray a true picture. Brokers and supervising managers may evaluate an agent‚Äôs advertisements, signs and websites to assure compliance with company policy, license law and the code of Ethics. ¬ß RL 24.04(2)(a) requires disclosure of the broker‚Äôs name or a trade name on file with the Department of Regulation and Licensing in all advertising.

Can a broker’s website include other companies’ listings? 

A broker cannot advertise another company‚Äôs listings on the broker‚Äôs site without the consent of the owner and listing broker, unless the display is pursuant to the National Association of REALTORS¬ģ‚Äô Internet Data Exchange (IDX) or Internet Listing Display (ILD) rules. See www.realtor.org/realtorae.nsf/pages/IDX and
www.realtor.org/mempolweb.nsf/pages/ILDPolicy for general information regarding these policies. The broker should check with the local MLS to see what policies and rules have been adopted governing how and when MLS listings may be advertised.

Can a broker advertise FSBO properties on her website? 

§ RL 24.04(3) requires a broker to have authority to advertise property for sale and § RL 24.08 requires agreements to be in writing. Thus, properties cannot be displayed on a broker website in the absence of a listing contract.
A broker may create a separate, non-brokerage website to advertise FSBO properties. This is permissible under Wis. Stat. § 452.01(2)(h), which provides that a person who only publishes or disseminates verbatim information furnished by another is not considered a broker.

Mass mailings

REALTORS¬ģ like to send out a mailer to the surrounding neighbors when they get a new listing. Can a generic mailing be sent out advertising the new listing without worrying about inadvertantly sending the mailer to a seller with a listed property? Must a disclaimer like, ‚ÄúThis communication is not intended to solicit currently listed properties,‚ÄĚ or ‚ÄúPlease disregard this letter if your property is already listed with another real estate company‚ÄĚ required?¬†

Standard of Practice 16-2 provides, ‚ÄúArticle 16 does not preclude REALTORS¬ģ from making general announcements to prospective clients describing their services and the terms of their availability even though some recipients may have entered into agency agreements or other exclusive relationships with another REALTOR¬ģ. A general telephone canvass, general mailing or distribution addressed to all prospective clients in a given geographical area or in a given profession, business, club, or organization, or other classification or group is deemed ‚Äúgeneral‚ÄĚ for purposes of this standard.
(Amended 1/98)

‚ÄúArticle 16 is intended to recognize as unethical two basic types of solicitations: First, telephone or personal solicitations of property owners who have been identified by a real estate sign, multiple listing compilation, or other information service as having exclusively listed their property with another REALTOR¬ģ; and Second, mail or other forms of written solicitations of prospective clients whose properties are exclusively listed with another REALTOR¬ģ when such solicitations are not part of a general mailing but are directed specifically to property owners identified through compilations of current listings, ‚Äúfor sale‚ÄĚ or ‚Äúfor rent‚ÄĚ signs, or other sources of information required by Article 3 and Multiple Listing Service rules to be made available to other REALTORS¬ģ under offers of subagency or cooperation. (Amended 1/93)‚ÄĚ

Disclaimers are not legally required, but are customary and may provide additional protection against another REALTOR¬ģ filing an ethics complaint.

Sold signs

When can a sold sign be placed on a property and who can claim to have sold the property? 

Standard of Practice 12-7 provides that ‚ÄúREALTORS¬ģ who participated in the transaction as the listing broker or cooperating broker (selling broker) may claim to have ‚Äėsold‚Äô the property. Prior to closing, a cooperating broker may post a ‚Äėsold‚Äô sign only with the consent of the listing broker.‚ÄĚ The references to cooperating brokers in this standard include selling brokers (subagents) and buyer‚Äôs brokers. Accordingly, there may now be two different brokers claiming to have sold the same property: the listing broker and the cooperating broker.

After closing, the seller’s permission to advertise by posting a lawn sign is no longer effective because the property is now owned by the buyer. DRL policy permits brokers to have a sold sign on a property for a reasonable number of days following the closing if the broker obtains the permission of the buyer (the new owner).

Prior to closing, a sold or similar sign may be posted only when all contingencies have been met or removed and the seller has given approval knowing that it means the property effectively will be off the market and sales activity will likely stop.

MLS data use

Can a broker put competitors’ names on a graph comparing their sales volume to the sales volume of the broker’s company? 

Use of MLS statistical data in advertising is subject to Wis. Admin. Code § RL 24.04, Article 12 of the Code of Ethics, company advertising policy and MLS rules. The broker should first check the local MLS rules to confirm that this use of MLS information is permitted, and to get the required disclaimer notice that must be used with MLS data. He may also wish to include a footnote explaining the data source and parameters, and the methodology employed in arriving at the graph data. Competitors will closely analyze the ad, so the broker must be sure that it is 100 percent accurate and not deceptive or misleading.

Basement bedrooms

Can an agent advertise a basement room as a bedroom? What are the criteria? 

The Department of Commerce has the following requirements for habitable bedrooms located below grade.
Exits

  • Basements and ground floors must have at least one exit, and if there is a bedroom in the basement or ground floor, there must be at least two exits located as far apart as practical.
  • An exit can be a door to the exterior of the dwelling, a stairway or ramp that leads to the floor above, a stairway that leads to a garage that has an exit door other than the overhead door, or an egress window.

Windows

  • All habitable rooms must have natural light by means of glazed openings equal to at least 8 percent of the net floor area.
  • An egress window used for exit purposes must be openable from the inside without the use of tools or the removal of a sash. The net opening of an egress window must be at least 20 inches by 24 inches. The lowest point of an egress window opening must not be more than 60 inches above the floor. If the lowest point of an egress window opening is more than 46 inches above the floor, a permanent platform at least 20 inches wide by 9 inches deep must be installed so that the top of the platform is no more than 46 inches below the opening. The top of the platform cannot be more than 24 inches above the floor and must be capable of supporting at least 200 pounds.

Ceiling height

  • Bedroom ceilings must be at least 7 feet. However, a bedroom may have ceiling heights less than 7 feet if at least 50 percent of the bedroom‚Äôs floor area has a 7-foot ceiling.

Other factors that should be considered include local building code requirements, the size of the room, heating, electric service (outlets, switches, etc), proper ventilation and interior circulation in the room, and whether the waste disposal system for the property has sufficient capacity for another bedroom.

Fax building code questions to 608-283-7428, or email udctech@commerce.state.wi.us

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