Advertising Including Information Based on Other Brokers’ Transactions

Article 12, Part 4

The Complaint:

Shortly after mailing his “Homeowner's Neighborhood Newsletter” to local residents, a complaint was filed against REALTOR® B alleging he had engaged in deceptive advertising in violation of Article 12’s “true picture” mandate. The complaint was reviewed by the Grievance Committee which determined that a hearing should be held. Appropriate notices were sent and a hearing was convened.


The Hearing:

REALTOR® A, the complainant, provided panel members with copies of REALTOR® B’s “Homeowners Neighborhood Newsletter” noting that REALTOR® B had compiled a list of 20 homes in an exclusive area of town, titling the list “Recently Sold.” REALTOR® A, the listing broker for two of those properties, stated that he believed that readers could conclude that REALTOR® B, in advertising this way, had constructively claimed to have listed and sold all of the properties on the list and that such claims violated Article 12.
In his defense, REALTOR® B acknowledged that his “Homeowners Neighborhood Newsletter” was, in fact, primarily an advertising vehicle and that it did not have a regular publication schedule. While it included news and information, including tips on how to make residential property more readily saleable and information regarding products and services offered by REALTOR® B’s firm, its primary purpose was to generate business for REALTOR® B’s firm.
REALTOR® B defended inclusion of the “Recently Sold” list, pointing out that all of the properties on the list were the subject of recent sales transactions; that the period of time during which the transactions had closed was clearly stated; that the fact that the information was taken from the local MLS compilation of historical data had been duly noted; that a footnote at the bottom of the page clearly indicated that the properties on the list had been listed and sold by various Participants in the MLS; and that such use was consistent with the local MLS rules and regulations.


The Conclusion:

The Hearing Panel accepted REALTOR® B’s defense, holding that reasonable readers would conclude that most newsletters were, in reality, promotional advertising pieces and, in any case, that REALTOR B’s newsletter had included some items of “news”. Moreover, they noted that if REALTOR® B had simply listed the 20 transactions, titling them as “recently sold” and had done nothing more, then a reasonable reader might have concluded that he was claiming to have listed and sold those properties. However, since REALTOR® B had included a footnote pointing out that the properties on the list had been listed and sold by various Participants in the MLS, the fact that REALTOR® B had not included the names of each listing broker could not be construed as REALTOR® B claiming to have been the listing broker in each instance or to have “sold” each of the properties.