BROKER RISK MANAGEMENT
WEEKLY PRACTICE TIP
Official BRE Position on Team Names
Team Names are becoming ever more popular but many real estate professionals do not understand precisely what the Bureau of Real Estate (“BRE”) requires and what technical irregularities can lead to serious, negative consequences for licensed brokers and salespersons as well as the brokerage operations that are charged with the legal responsibility to supervise those real estate licensees.
Broker Risk Management has previously provided various weekly tips on the topic of Team Names which should be reviewed again such as “CalBRE Advertising Requirements – Changes Coming” for information about the new law that goes into effect on January 1, 2018 and “Team Names and DBA’s” for general information about team names and fictitious business names.
Notwithstanding prior efforts by CAR and others to bring clarity to the ever-changing BRE requirements, there is still considerable confusion as to how to properly develop team names and how to advertise team names on advertising material. Fortunately, the BRE recently published its own set of answers to Frequently Asked Questions Regarding Team Names which is available on the BRE website; unfortunately that FAQ it is not prominently displayed and has not been widely distributed to real estate licensees.
Therefore, see below for the BRE FAQ on Team Names that was published in May, 2017. The 11 sets of questions and answers detailed provide an excellent guide for brokers and salespersons and can also be used during any BRE inquiries to defend Team Names that follow the BRE’s newly-stated positions.
This BRE FAQ can and should be distributed to all clients of Broker Risk Management and their agents. Please feel free to contact Broker Risk Management with any further questions or concerns.
WEEKLY PRACTICE TIP: DO NOT FORWARD TO CLIENTS. This Weekly Practice Tip is 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.
May 2017
Regarding “Team Names”
The purpose of these FAQs, and the answers to these questions, is to provide up-to-date information following the latest changes to the Real Estate Law concerning “team names”. The Bureau of Real Estate previously issued Advisories in 2014 and 2015 following the passage and signing of legislation related to “team names”. These FAQs collectively provide the latest information in response to some of the most commonly posed questions related to “team names” following the signing of SB 710 into law in August 2016.
Q. What is a team name?
A. A “team name,” is a statutorily created term that is described in Business and Professions Code Section 10159.7. It means a professional identity or brand name used by a salesperson, and one or more other real estate licensees, for the provision of real estate services.
Q. What must a team name include?
A. A team name must include the surname of at least one member of the team, in conjunction
with the words “group,” “team,” or “associates.”
Q. Am I allowed to use the word “brokerage” in my team name?
A. No. Use of the words “broker,” “real estate brokerage,” “real estate broker,” or any other term that would lead a member of the public to believe the team is offering real estate brokerage services or suggest the existence of a real estate entity independent of the responsible broker is not allowed.
Q. Is a team name considered a fictitious business name?
A. Under the Real Estate Law, the use of team name is not considered a fictitious business name. Therefore, no paperwork needs to be submitted to the Bureau to use a team name.
Q. Can I use the words “realty,” or “real estate” as part of my team name?
A. Because the law does not prohibit such words, the answer is yes, provided you include the
surname of at least one team member, and include the words “group,” “team,” or
“associates.” For example, the “Smith Real Estate Team” would be allowed as an acceptable
Q. I am a salesperson. Do I need to include my license number on my team name advertising?
A. Advertising and solicitation materials must include in a conspicuous and prominent manner, the team name, and the surname and license number of at least one member of the licensed members of the team.
Q. Do I need to include my responsible broker’s license number on my team name advertising?
A. *It depends. Current law requires that you must include your responsible broker’s name in
your advertising, OR you can include both your broker’s name and license identification number. In all instances, the responsible broker’s identity must be displayed as prominently and conspicuously as the team name in all advertising and solicitation materials.
Q. I know I have to display my responsible broker’s identity in my team name advertising prominently and conspicuously. Can you give me an example of what that means?
A. *Yes. As an example, if the font size on your team name advertising is in a 12-point font, then
your responsible broker’s name should be in an equal or greater font size.
Q. What do you mean by the term “responsible broker identity?”
A. The term “responsible broker identity” is defined in Business and Professions Code Section 10159.7 (a) (1). It 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. Responsible broker’s identity does not include a fictitious business name obtained pursuant to paragraph (2) of subdivision (a) of Section 10159.5 or the use of a team name pursuant to Section 10159.6.
Q. I am working as a broker associate for another broker. Can I advertise and operate on behalf of a “team name”?
A. Yes, if you are a broker working in the capacity of a salesperson for another broker or corporation, you can advertise and operate on behalf of a “team name” as long as all of the team name requirements have been met.
Q. Can real estate brokers who operate as brokers and not broker associates use a “team name?”
A. No. Brokers who operate as brokers and not broker associates are precluded from using a “team
name” as defined in Business and Professions Code Section 10159.7(a)(5). Instead, they would be required to file and obtain a fictitious business name pursuant to Business and Professions Code Section 10159.5.
*Please note that the disclosure requirements for mortgage loan advertising are more extensive, even if a team name is used. Please review the License Disclosure Requirements for Mortgage Loan Advertising, RE 858 for more information.