BOTTOM LINE: As of January 1, 2018, a new law changes when and where “first contact materials,” including flyers, advertising and property marketing signs, must display the agent’s DRE license identification number and the agent’s broker’s name.
Brokers and agents should review these new requirements prior to designing and/or printing “For Sale,” “Open House, “For Rent,” “For Lease,” directional signs, or riders to those signs, if any such signs or riders will be used after January 1, 2018.
CURRENT LAW (Business & Professions Code §10140.6):
The basic rule, which does not change in 2018, is that:
“A real estate licensee shall not publish, circulate, distribute, or cause to be published, circulated, or distributed in any newspaper or periodical, or by mail, 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. A real estate licensee shall not publish, circulate, distribute, or cause to be published, circulated, or distributed in any newspaper or periodical, or by mail, 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.”
Currently, all California real estate agents and brokers must disclose their DRE license identification numbers:
- On all solicitation materials that are intended to be the point of “first contact” with prospective clients, and
- On all real property purchase agreements, when that licensee is acting as an agent in those transactions.
INCLUDED: For this purpose, “solicitation materials” that are intended to be the first point of contact with the consumer include:
1. Business cards
2. Stationery
3. Advertising flyers, and
4. Other materials designed to solicit the creation of a professional relationship between the licensee and a consumer.
EXCLUDED: The law currently excludes from this requirement:
1. Advertisements in print and electronic media,
2. “For Sale” signs, and
3. Classified rental advertisements reciting the telephone number at the premises of the property offered for rent, or the address of the property offered for sale.
SIZE OF TYPE OF THE LICENSE NUMBER: The DRE Commissioner’s Regulation 2773 states that: “The type size of the license identification number shall be no smaller than the smallest size type used in the solicitation material.”
Note: For all advertising of team names, “the responsible broker’s identity shall be displayed as prominently and conspicuously as the team name in all advertising.” B&P§ 10159.6
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NEW LAW:
EFFECTIVE AS OF JANUARY 1, 2018 (AB 1650, Revising B&P Code §10140.6)
LICENSE NUMBERS AND BROKER’S NAME: Under this new law:
“A real estate licensee shall disclose his or her name, license identification number…and responsible broker’s identity, as defined in Section 10159.7, on all solicitation materials intended to be the first point of contact with consumers and on real property purchase agreements when acting as an agent in those transactions.”
The “responsible broker’s identity” is defined in B&P §10159.7 as:
“Responsible broker’s identity” means the name under which the responsible broker is currently licensed by the bureau and conducts business in general or is a substantial division of the real estate firm, or both the name and the associated license identification number.”
NOTE: Until August, 29, 2016 this section also defined “responsible broker’s identity” to include the broker’s DRE license identification number as well. That change was made in SB 710, deleting the requirement of the broker’s license number effective as of the above date.
SOLICITATION MATERIALS DEFINITION IS EXPANDED: Under this new law, there is a broader definition of “solicitation materials,” and a carve-out for special rules related to signs and riders.
For purposes of this new law, “solicitation materials” include:
“business cards, stationery, advertising flyers, advertisements on television, in print, or electronic media, “for sale,” rent, lease, “open house,” and directional signs, and other materials designed to solicit the creation of a professional relationship between the licensee and a consumer.” (Underlined text is new in this revised law.)
SPECIAL RULES FOR SIGNS: This new law goes on to state that the requirement to have the agent’s license number and the responsible broker’s identity/name does NOT apply to “for sale,” rent, lease, “open house,” and directional signs that do EITHER of the following:
- Displays the responsible broker’s identity without reference to an associate broker or licensee; or,
- Displays no licensee identification information.
WHAT DOES THIS MEAN?
- Any sign that does not identify an agent on the sign or rider (either salesperson or broker-associate) does not need any DRE license identification number. This is true whether the sign has the responsible broker’s name (e.g., “Acme Real Estate” as on a “For Sale” sign”); or no name at all (e.g., a directional sign).
- But if a sign or rider does reference an agent’s name, then that sign must also have the agent’s DRE license identification number and the responsible broker’s name (e.g., “Acme Real Estate”), but the broker’s license number is not required.
- If an agent’s name is printed on a sign or rider, then that agent’s DRE license identification number must be included and can be no smaller than the smallest size type used on the sign.
- The end result is that no signs will require a responsible broker’s DRE license identification number.
PRACTICE TIPS:
- If a brokerage or agent plan to design and/or print marketing signs of any type which may still be in use as of 1/1/18, it is wise to review these new requirements and plan accordingly.
- The Weekly Practice Tip “Team Names and DBA’s,” which identifies specific current rules which apply to advertising of Team Names and DBA’s, has been modified to reflect these new laws.
DO NOT FORWARD THIS DOCUMENT TO CLIENTS. This Weekly Practice Tip is attorney-client privileged and for the exclusive use of clients of Broker Risk Management and their agents. It may not be reproduced or distributed without the express written consent of Broker Risk Management. The advice and recommendations contained herein are not necessarily indicative of standards of care in the industry, but rather are intended to suggest good risk management practices.
© Copyright Broker Risk Management 2016 12/21/17