Keeping up with commission regulations

by Jason Porterfield

Enforcement of recent changes to naming and branding regulations is now in effect for real estate agents and teams across Florida. Miami agents who have put off complying with new naming and branding regulations face the possibility of being cited by the Florida Real Estate Commission.

What’s in a name?

The new rules, put in place by the Florida Real Estate Commission last year, forbid real estate groups or teams from using the following terms in their names or branding:

  • Agency
  • Associates
  • Brokerage
  • Brokers
  • Company
  • Corporation
  • Corp.
  • Inc.
  • LLC
  • LP, LLP or Partnership
  • Properties
  • Property
  • Real Estate
  • Realty

In addition, the FREC now forbids teams and groups from using “similar words suggesting the team or group is a separate real estate brokerage or company.”

In their print advertising and marketing materials, teams and groups must ensure that their names or logos do not appear in larger print than those of their registered brokerages. The brokerage name has to be at least as large as the team or group name in everything from postcards to billboards.

Juana Watkins, vice president of law and policy and general counsel at Florida Realtors, said that the changes are intended to protect consumers who may be confused by branding that doesn’t clearly identify the broker.

“[The commission] wanted to make sure that the consumer understood who the actual broker is in the transaction or the brokerage as opposed to the team,” Watkins said. “So what they were seeing is advertisements for teams, which are great advertisements in terms of marketing the property, but the consumer couldn’t tell whether the creative team name was the brokerage or whether there was a separate brokerage.”

Delaying the change

Watkins said the language of the new rules has actually been in effect since July 2018, but that the real estate commission delayed enforcement to give groups and teams time to make necessary changes to their branding. Part of the delay was due to natural business cycles and the tendency of many agents and brokers to refresh their advertising and marketing materials every year. It also gave agents an opportunity to closely scrutinize their branding and advertising for anything that might be a violation.

“They needed every day of the year, because they had to first assess where they were after the rule was finalized,” Watkins said. “And once they determined that their name was proper, they had to look at all forms of advertisement to make sure that the brokerage name was prominently displayed was with equal to our larger than the name of it into what the legal standard is.”

Meaningful penalties

The new regulations impose penalties for teams and groups that fail to comply. They’ll first receive a citation from the commission that notifies them of the violation. The notice of non-compliance isn’t a public disciplinary action. It functions to inform the team that a complaint has been filed and gives the agents a specified number of days to become compliant.

For example, if an agent who is part of a team is cited for having business cards that feature the team name in larger print than the name of the brokerage, the agent has to print out new business cards that show the brokerage name as prominently as the team name.

“It obviously had a major impact, because they had to take a really hard look at their name and how they have branded themselves to ensure that they did not contain one or have one of the prohibited words in their team name,” Watkins said. “They had to look at the layout of the ads to ensure that the public understood that the team was not the brokerage.”

The cost of remedying a violation can add up when factoring in expensive forms of advertising such as car wraps and billboards. An agent who gives the commission proof that they have complied with the rule escapes additional penalties. Agents who are cited a second time for the same violation face a $500 penalty.

“Compliance costs are a reality in any business, and we’re independent contractors who have considerable costs associated with investment,” Watkins said.

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