22 TAC §535.154
The Texas Real Estate Commission (TREC) adopts an amendment
to §535.154, concerning misleading advertising by real estate licensees,
with changes to the proposed text as published in the December 25, 1998, issue
of the
Texas Register
(23 TexReg 13000). The
amendment clarifies that advertising which uses electronic media such as E-mail
and the Internet is subject to disclosure requirements for licensees imposed
by The Real Estate License Act, Article 6573a, Texas Civil Statutes, §15(a)(6)(P).
The amendment also provides a specific time for reporting use of an assumed
name and makes non-substantive language changes for consistency of style with
other TREC rules.
A number of changes were made in the final text based on questions raised
by the members of the commission and oral comments from the public which concerned
whether informal communications might be construed as advertisements. A general
definition of the term "advertisement" was added to clarify that the section
was intended to apply to statements by a licensee which induced or sought
to induce a member of the public to use the services of the licensee. The
text was revised to exclude from the section those communications from the
licensee to a member of the public taking place after an agreement has been
reached for the licensee to provide services. Language also was added to clarify
that a broker would be obligated to notify the commission within 30 days if
the broker, or a salesperson sponsored by the broker, started or stopped use
of an assumed name. The text also was revised to require the commission to
respond to a filing which indicated a licensee was using only the name or
assumed name of a salesperson in violation of the section. With regard to
advertising by e-mail or similar electronic media, commission staff suggested
that the proposed text be modified to require the disclosure of licensed status
and name of sponsoring broker, if applicable, within the electronic advertisement
and in any attachment which is also an advertisement, rather than on the first
and last page of the communication. The commission concurred and made the
suggested change. Language was added to treat licensed limited liability companies
in the same manner as licensed corporations as regards use of the names in
which the entities are registered or chartered by the Texas Secretary of State,
and non-substantive changes also were made to delete repetitive provisions.
One written comment was received which generally supported the adoption
of the amendment and urged the commission also to address old or dead web
sites. The commission declined to modify the as desired by the commentor,
because that issue had not been presented in the original proposal, and the
commission has current statutory authority to discipline a licensee whose
advertisements are misleading or which tend to create a false impression.
The amendment is adopted under Texas Civil Statutes, Article
6573a, §5(h), which authorize the Texas Real Estate Commission to make
and enforce all rules and regulations necessary for the performance of its
duties.
The statute which is affected by this proposal is Texas Civil Statutes,
Article 6573a.
§535.154.Misleading Advertising.
(a)
For the purposes of this section, an "advertisement" is
a written or oral statement which induces or attempts to induce a member of
the public to use the services of a real estate licensee. The term "advertisement"
includes, but is not limited to all publications, radio or television broadcasts,
all electronic media including E-mail and the Internet, business stationary,
business cards, signs and billboards. The provisions of this section apply
to all advertisements by a real estate licensee unless the context of a particular
provision indicates that it is intended to apply to a specific form of advertisement.
Provided, however, a communication from a licensee to a member of the public
after the member of the public has agreed for the licensee to provide services
is not an advertisement for the purposes of this section.
(b)
A licensee may not utilize a copyrighted trade name unless
the licensee has legal authority to use the name.
(c)
A broker shall notify the commission in writing within
30 days after the broker, or a salesperson sponsored by the broker, starts
or stops using a name in business other than the name in which the person
is licensed. Licensees may not use the name of a salesperson, including an
assumed name, in advertisements unless the sponsoring broker's name or assumed
name also appears. If the commission is notified of a licensee's use of an
assumed name which contains only the name of a salesperson, including an assumed
name, the commission shall notify the licensee, and the licensee's sponsoring
broker, if any, that use of the name alone in advertising is grounds for disciplinary
action under this section.
(d)
If a broker advertises under an assumed name, and that
assumed name does not readily identify the broker as a real estate agent,
the broker's advertisement must include an additional designation such as
"agent," "broker" or a trade association name which serves clearly to identify
the advertiser as a real estate agent.
(e)
Because salespersons may lawfully engage in brokerage activity
only when they are associated with, and acting for, a broker, a listing may
be solicited and accepted only in a broker's name. Advertisements concerning
a broker's listings must include information identifying the advertiser as
a real estate broker or agent. The name of a salesperson sponsored by the
broker may also be included in the advertisement, but in no case shall a broker
or salesperson place an advertisement which in any way implies that the salesperson
is the person responsible for the operation of a real estate brokerage.
(f)
Where a business name includes the name of a licensed salesperson
as well as a licensed broker, the broker's name should appear first to avoid
the possibility that the public would be misled to believe that the salesperson
is a broker; provided, however, that a corporation or limited liability company
licensed as a real estate broker may do business in the name in which it was
chartered or registered by the Secretary of State.
(g)
A licensee's advertising must not cause a member of the
public to believe that a person not authorized to conduct real estate brokerage
is personally engaged in real estate brokerage, provided that an advertisement
of a trade, business, or assumed name does not constitute a holding out that
a specific person is engaged in real estate brokerage.
(h)
An advertisement placed where it is likely to attract the
attention of passing motorists or pedestrians must contain language that clearly
and conspicuously identifies as a real estate broker or agent the person publishing
the advertisement. Advertisements in which the required language is not clear
and conspicuous shall be deemed by the commission to be deceptive and likely
to mislead the public for the purposes of Texas Civil Statutes, Article 6573a
(the Act), §15(a)(6)(P). The commission shall consider language as clear
and conspicuous if it is in at least the same size of type or print as the
largest telephone number in the advertisement, or it otherwise clearly and
conspicuously identifies as a real estate broker or agent the person who published
it. The commission shall consider advertisements not to be in compliance with
this subsection if the required language is in print or type so small that
it cannot be easily read from the street or sidewalk. This subsection does
not apply to signs placed on real property listed for sale, rental or lease
with the broker who has placed the sign, provided the signs otherwise comply
with this section and the provisions of the Act regarding advertising.
(i)
A real estate licensee placing an advertisement on the
Internet, electronic bulletin board, or similar mechanism must include on
each page on which the licensee's advertisement appears any information required
by this section and the disclosure relating to the advertiser's status as
a broker or agent required by §15(a)(6)(P) of the Act.
(j)
A real estate licensee placing an advertisement by using
any electronic communication, including but not limited to E-mail and E-mail
discussion groups, must include in the communication and in any attachment
which is an advertisement the information required by this section and the
disclosure relating to the advertiser's status as a broker or agent required
by §15(a)(6)(P) of the Act.
This agency hereby certifies that the adoption has been reviewed
by legal counsel and found to be a valid exercise of the agency's legal authority.
Filed with the Office of the Secretary of State on February
23, 1999.
TRD-9901135
Mark A. Moseley
General Counsel
Texas Real Estate Commission
Effective date: March 15, 1999
Proposal publication date: December 25, 1998
For further information, please call: (512) 465-3900