Legal guidelines of the real estate industry
Laws governing the real estate industry provide a framework within which professionals must work, and that framework assures their clients that legal standards are being upheld during a real estate transaction.
Laws governing the real estate industry provide a framework within which professionals must work, and that framework assures their clients that legal standards are being upheld during a real estate transaction.
Guidelines for documentation, communication, transparency in listing agreements and other areas benefit both agents and the public. The memorably named CAN-SPAM Act is one such standard.
CAN-SPAM — no, not a tin of meat product — is described by the Federal Trade Commission as “a law that sets the rules for commercial email, establishes requirements for commercial messages, gives recipients the right to have you stop emailing them and spells out tough penalties for violations. The FTC enforces the CAN-SPAM Act and the accompanying CAN-SPAM Rule.”
For Realtors familiar with handling intimate transactions for their clients, the act states that all emails used as promotion for listings must comply with the law or face penalties. The act urges Realtors and other professionals to always consider what it calls the primary purpose of any materials to honestly reflect their skill set and inform their clients with proficiency.
Here’s a summary of CAN-SPAM’s main requirements:
• Don’t use false or misleading header information.
• Don’t use deceptive subject lines.
• Identify the message as an ad.
• Tell recipients where you’re located.
• Tell recipients how to opt out of receiving future marketing email from you.
• Remember that subscribers and members can opt out of marketing emails, too.
• Honor opt-out requests promptly.
• Monitor what others are doing on your behalf.
Since real estate transactions are often a collaborative process, another legal guideline ensures that all interactions maintain the legal standards; the Sherman Antitrust Law prohibits price fixing, group boycotting and other illicit behavior. Especially of interest to real estate professionals is the clause stating: The potential for antitrust liability arises any time two or more competitors discuss their business practices. REALTORS must always be alert to discussions that focus on commission rates, pricing structures, listing policies or marketing practices of other brokerages.
Just as the CAN-SPAM Act frames the use of promotional materials and emails, the Sherman Antitrust Law also mentions the importance of advertising within the bounds of the law. It states: REALTORS must also be cautious in placing advertisements that may result in antitrust violations. Advertisements that directly compare or criticize a competing business model may not only implicate antitrust laws but may also lead to a Code of Ethics violation. Article 15 prohibits REALTORS from making false or misleading statements about other real estate professionals or their business practices.
The National Association of Realtors (NAR), the governing body of the industry in the United States, also emphasizes the importance of these legal guidelines. It states, “Realtors who use email to find and work with clients can take steps to ensure that their own electronic communications are compliant with the CAN-SPAM Act. Passed in 2023, this law sets rules for commercial email. NAR strongly supports efforts to control fraudulent, misleading and abusive unsolicited emails and emailing practices.”
So, while a can of spam might not sound too appetizing, the public can rest assured that the Naples real estate industry is bound by the rules that allow their transactions to proceed in a professional manner.