Real Estate Marketing Compliance Refresher

 

With so much always changing within the real estate realm, it’s important to stay vigilant in learning and practicing the latest in real estate compliance. This blog aims to help keep  our real estate agent friends up to date on the national regulations surrounding marketing or managing a residential listing, including the latest changes due to the NAR suit. Let’s start by refreshing our minds with the basics. As a reminder, we will only be covering national compliance issues and agents should always make sure to become familiar with their state’s regulations as well.  

 

Fair Housing Compliance 

The Fair Housing Act prohibits discriminatory practices in almost all types of housing, including private, public, and federally funded housing. Specifically, it is illegal to create, print, or publish advertisements that express a preference, limitation, or discrimination based on race, color, religion, sex (including gender identity and sexual orientation), disability, familial status, or national origin. This extends to all publishers, including newspapers, directories, and online platforms, as well as individuals and entities placing real estate advertisements. 

  

Even if a property is exempt from the Fair Housing Act, the advertisement itself must still comply with the Act’s requirements. Violating these provisions can result in serious legal consequences, including fines, penalties, and potential lawsuits under federal civil rights laws. 

   

Affirmative Fair Housing Marketing Requirements 

  

Federal law mandates that participants in HUD’s subsidized and unsubsidized housing programs implement affirmative fair housing marketing strategies. The goal is to ensure that individuals with similar income levels in the same housing market have access to a similar range of housing options, regardless of their race, color, religion, sex (including gender identity and sexual orientation), disability, familial status, or national origin. 

  

Prohibited Actions in the Sale and Rental of Housing 

  

Discrimination in housing based on the protected characteristics mentioned above is illegal. Here are some actions that are prohibited under the Fair Housing Act: 

  

• Refusal to Rent or Sell: Denying someone the opportunity to rent or purchase housing.

• Refusal to Negotiate : Declining to negotiate terms for housing.

• Making Housing Unavailable: Any action that effectively makes housing unavailable to someone based on a protected characteristic.

• Setting Different Terms: Imposing different terms, conditions, or privileges for the sale or rental of a dwelling.

• Providing Different Services: Offering different housing services or facilities to individuals based on their protected status.

• False Denials: Falsely stating that housing is not available for inspection, sale, or rental.

• Discriminatory Advertising: Publishing any notice, statement, or advertisement that indicates a preference, limitation, or discrimination.

• Imposing Different Prices or Charges: Charging different prices or rental fees for a dwelling.

• Using Different Qualification Criteria: Applying different standards or procedures for sale or rental, such as income standards, application fees, credit analyses, or approval processes.

• Evicting or Harassing Tenants: Evicting a tenant or their guest, or harassing an individual based on a protected characteristic.

• Failing to Maintain Property: Delaying or failing to perform maintenance or repairs based on the tenant’s protected status.

• Limiting Access to Services: Restricting privileges, services, or facilities related to a dwelling.

• Discouraging Purchase or Rental: Discouraging someone from purchasing or renting a dwelling.

• Assigning to Specific Areas: Assigning someone to a particular building, neighborhood, or section based on their protected status.

• Blockbusting: Persuading homeowners to sell their homes by suggesting that people of a particular protected characteristic are moving into the neighborhood for profit.

• Discriminatory Insurance Practices: Refusing or discriminating in the terms or conditions of homeowners insurance based on the protected status of the owner or occupants.

• Denying Access to MLS or Brokers’ Organizations: Denying access to or membership in any multiple listing service or real estate brokers’ organization based on a protected characteristic.

  

Consequences of Violating the Fair Housing Act 

  

Breaking the Fair Housing Act can lead to significant legal repercussions, including fines, penalties, and civil lawsuits. Real estate professionals and companies that engage in discriminatory practices can face severe damage to their reputation and business operations. It is crucial for all involved in real estate to fully understand and comply with the Fair Housing Act to avoid these consequences. We recommend keeping Equal Opportunity Act collateral on your advertising materials and in your brokerage whenever possible to better protect yourself and your clients.  

 

NAR Code of Ethics 2024 

When advertising a real estate listing, it is crucial to adhere to best practices outlined in the 2024 NAR Code of Ethics, particularly Article 12, to ensure compliance and maintain professionalism. REALTORS® must present a true and accurate picture in all marketing and advertising efforts, ensuring that their status as real estate professionals is clear to all recipients. This includes accurately representing property details, avoiding misleading or deceptive practices, and disclosing any ownership interest when applicable. REALTORS® must also disclose their firm’s name and state of licensure in a readily apparent manner in all advertisements, including online platforms. Furthermore, when offering incentives or inducements, it is essential to clearly communicate all terms and conditions to avoid any misunderstandings. You can read more about this subject on the NAR website.  

NAR’s Internet Advertising Policy mandates that a Realtor® authorized to advertise or market real properties and real estate brokerage services online must include specific information in their advertisements. This includes the Realtor®’s name, the legally registered name of the brokerage with which they are affiliated, the city and state/province of their office, and the regulatory jurisdiction(s) where the Realtor® holds a brokerage or salesperson license. 

Truth in Advertising 

Real estate agents must also be mindful of Truth in Advertising laws, which, while more detailed for lenders, still hold significant implications for real estate professionals. It is essential for real estate agents to adhere to these laws by ensuring that their property advertisements are truthful and accurate. This includes only advertising properties for which they have a signed listing agreement with the seller or landlord. Additionally, agents should use genuine, unaltered photos and provide accurate property descriptions without embellishments. Misleading or exaggerated claims can lead to legal repercussions and damage professional credibility, making adherence to these advertising standards crucial for maintaining trust and compliance in the real estate industry. Readers can check out the FTC’s website for more information.  

New MLS Regulations 

You may have already heard about the latest updates to the MLS policies and model governing documents, but here is the most current information from the NAR. According to the proposed Settlement Agreement, several key changes have been implemented: 

1. Elimination of Compensation Requirements: Offers of compensation in the MLS between listing brokers or sellers and buyer brokers or other buyer representatives are now prohibited.
2. Definition of Cooperation: The term “cooperation” for MLS participation has been retained and clearly defined.
3. Restriction on Offers of Compensation: MLS Participants, Subscribers, and sellers are prohibited from making offers of compensation in the MLS to buyer brokers or other buyer representatives.
4. Removal of Compensation Fields: All broker compensation fields and compensation information will be removed from the MLS.
5. Non-MLS Compensation Mechanisms The MLS must not create, facilitate, or support any non-MLS mechanisms for making offers of compensation to buyer brokers or other buyer representatives, including providing listing information to internet aggregators for this purpose.
6. Prohibition on Data Usage: MLS data or data feeds cannot be used to establish or maintain a platform of compensation offers. Violations will result in the termination of the Participant’s access to MLS data and feeds.
7. No Filtering Based on Compensation: MLS Participants and Subscribers must not filter or restrict MLS listings based on the compensation offered to cooperating brokers or the name of a brokerage or agent. MLSs must also not enable such filtering.
8. Compensation Disclosures: There are new requirements for disclosing compensation to sellers, prospective sellers, and buyers.
9. Written Buyer Agreement: MLS Participants working with buyers must enter into a written agreement with the buyer prior to showing a home.

 

As the real estate landscape continues to evolve, it’s crucial for industry professionals to stay informed and compliant with the latest regulations and best practices. While many core principles remain consistent, significant updates, including recent changes from the NAR and MLS policies, have introduced new requirements that impact how listings are marketed and managed. Our blog is dedicated to keeping you updated on these national regulations, ensuring that you are well-versed in both longstanding and new compliance measures. Remember, staying current not only protects your business but also upholds the integrity of the real estate profession. As always, ensure you are also familiar with your state’s specific regulations to fully navigate the complex world of real estate compliance.