- South Carolina has banned the use of 'real estate,' 'realty' and related terms in team names.
- The ban has floored some agent teams, who say it was added, along with other rules governing teams, to a state real estate bill at the last minute.
- Supporters of the advertising restrictions for teams say they're necessary to protect consumers from being mislead.
- The South Carolina team rules were reportedly added at the insistence of the state real estate commission.
Stephen Cooley says he’s sunk millions of dollars into marketing his team, the “Stephen Cooley Real Estate Group,” for 20 years. The name appears on his team’s moving truck, billboard and myriad paraphernalia.
But a bill recently passed by South Carolina is threatening to undermine the brand he’s worked so hard to build and, he says, could cost him tens of thousands of dollars.
It includes a ban on the use of “real estate,” “realty” and related terms in agent team names.
Like similar rules enacted by some other states in recent years, the ban is designed to protect consumers, who some in the industry say are increasingly duped into thinking that some teams are brokerages. But other stakeholders say the rule is draconian and underlines a nationwide push by traditional brokerages to curb the growth of teams — which some of the old guard allegedly perceives as a threat.
Some real estate interests “have lobbied to make it as difficult on teams to grow as possible,” said Cooley, whose 25-member team works at Fort Mill, South Carolina-based Keller Williams Baxter Village. The team purportedly closed $110 million in sales volume in 2015.
“And taking these names and phrases away from teams definitely hurts our growth and our ability to grow our businesses,” he said.
Nick Kremydas, the CEO of South Carolina Realtors, said growing complaints from consumers necessitated state rules for teams, and that the rules that were recently added to state law — which include the advertising restriction opposed by Cooley — represented a compromise.
Part of a larger real estate bill passed in May that’s set to go into effect on Jan. 1, 2017, the ban falls into the first set of rules ever enacted by South Carolina to directly address teams.
Other team-specific rules in the bill stipulate that:
- A “broker-in-charge” for a brokerage is responsible for supervising all members of a team.
- A team may only represent both the buyer and seller in a “dual agency” transaction if the team obtains written consent from both parties.
- The South Carolina Real Estate commission “may promulgate regulations regarding the creation and operation of real estate teams.”
The section of the bill on team advertising rules mandates that ads must feature a team’s name and real estate brokerage “in a conspicuous way,” and it prohibits teams from implying “they are a separate entity” from their brokerage.
Then comes the kicker: “Team names may not include the terms ‘realty,’ ‘real estate’, ‘realtors’, or similar terms suggesting a brokerage.”
Like all the team advertising rules, the ban on the use of certain terms in team names is purportedly designed to ensure that consumers don’t mistake teams for brokerages, and therefore are more likely to report complaints to the entity that’s supposed to hold a team accountable for poor service or misdeeds: the “broker-in-charge” of the team.
“I think the purpose of that is to not to mislead the consumer,” said Candace Pratt, a member of the South Carolina Real Estate Commission, which made recommendations for the bill. “We want the consumer to know what company is behind the licensed members.”
Pratt — who is the owner of Charleston, South Carolina-based Re/Max Pro Realty, a brokerage that has teams — declined to discuss the ban further, directing Inman to Rod Atkinson, the administrator of the commission.
Responding on behalf of Atkinson, a spokesman from the South Carolina Department of Labor, Licensing and Regulation said that the real estate commission would meet later this summer to discuss the law and “cannot offer comment on the bill until they have met and discussed it as a public body in open session.”
A nationwide effort
Reflecting a nationwide movement to regulate teams, restrictions on team advertising have been signed into law in a handful of other states in recent years, including:
- New York
Florida reportedly is in the process of considering advertising restrictions for teams as well.
NAR to teams: Never use ‘Realtor’ in your name
Although the use of terms like “real estate,” “realty,” “firm” and even “company” in team names is banned by some states, many agents might be surprised to learn that the use of “Realtor” in team names is never permitted anywhere.
“Members may not use the REALTOR® Marks in connection with a team name,” wrote NAR spokeswoman Sara Wiskerchen in an email. They can only use the trademark, she said, “in connection with their personal name and real estate brokerage name.”
A cursory search of teams on Zillow reveals that many Realtors either aren’t aware of this decree or have chosen to ignore it.
Team leaders who spoke with Inman don’t take issue with rules that require teams to clearly display their brokerage name alongside their team name.
But they say banning the use of real estate-related terms in team names is overkill. It handicaps their ability to promote their services and amounts to a fine for teams that already use real estate-related terms, they argue.
‘It is thousands of dollars’
Marti Bedell, a team leader with Columbia, South Carolina-based Keller Williams Realty Columbia, finds herself under pressure to change the name of a team she already changed just a couple years ago, a process that she says cost her more than $10,000.
“I know how much money this cost because I just did this two years ago,” she said, when she switched her five-member team’s name from the “Marti Bedell Real Estate Team” to the “Carolina Girls of Real Estate.”
“It is thousands of dollars, and they’re protecting the public against me, who is trying to do it right,” added Bedell, who said she founded her team in 1993.
Cooley said he was advised by commissioners in the last year to display his brokerage’s name more prominently on ads alongside his team name. He said he’s following the recommendation, shelling out $7,500 to redo ads on his team’s moving truck and billboard.
But he said the commission neglected to mention any potential ban on the use of “real estate” or related terms in team names, so the expense may have been for naught. He anticipates that changing his team’s name will cost around $50,000, and he said he may be forced to form his own independent brokerage to avoid that expense. “That could be a last resort,” he said.
He said he kept a close eye on how South Carolina lawmakers and regulators were drafting rules and attended relevant meetings. Never, he said, was a ban on the use of “real estate” and related terms ever part of the conversation.
He and other stakeholders who would have aggressively lobbied against such a ban — along with some other team-specific rules recently enacted — only learned of the ban after the rule had already been voted into law, Cooley and Bedell say.
‘One or two real estate commissioners’ behind ban?
Dan Hamilton, a South Carolina House representative who sat on the committee that added the ban to the bill, said team rules containing the ban were slipped in just before the legislation was up for a house vote due to the insistence of “one or two real estate commissioners.”
Hamilton found himself in an awkward position when the team rules came before the committee: he leads an agent team whose name includes the term “real estate”: the Hamilton and Co. Real Estate Services at Greenville, South Carolina-based Keller Williams Realty Greenville-Upstate.
He said he was able to “negotiate a couple of different things” out of the team rules, but at the end of the day, the rules mostly stuck.
Speaking of the rules that included the restriction on team names, the chief counsel of the House Labor, Commerce and Industry Committee — the committee that added the ban and other team rules to the bill — said both the real estate commission and South Carolina Realtors “brought that language to the Legislature.” (Contacted again, the spokesman who previously responded to Inman on behalf of the real estate commission reiterated that the commission couldn’t comment on the bill.)
Hamilton said SCR didn’t “lobby for the specific language on teams,” (he’s been told that only members of the commission insisted on its addition), but he thinks that “SCR lobbyists did not take into consideration the potential impact of the team language.”
Hamilton plans to urge SCR to petition the real estate commission to delay enforcement of the ban by three months, and to write an amendment to the bill that would clear up “ambiguity” in its team rules.
A ‘coordinated effort around the country’
The ban and other team rules part of the bill reflect a push by some powerful real estate interests in the state to curb the growth of teams, which are seen as a threat by some brokerages, Cooley and Marty say.
Hamilton said there “may or may not be a competitive situation” where the commissioners who introduced the team rules “don’t like teams necessarily because they’re growing.”
He noted that South Carolina’s real estate commissioners are primarily from traditional firms. Of the eight commissioners who work in the real estate business (only one of the nine commissioners does not), Inman could only identify one, Pratt, who appears to be affiliated with a firm that uses teams.
Do teams ‘give the agent too much power?’
Some traditional firms look on teams with a wary eye because they can develop into tight-knit business units that can easily transfer from one brokerage to another or set up their own brokerage, industry observers say.
These companies fear the team business model because it “gives the agent too much power to succeed without them,” Bedell said.
Some agents also say that part of why some companies are leery of teams is that teams tend to like to operate under the auspices of giant real estate firms, whose massive support infrastructure and networks they say tend to be particularly attractive to teams.
Those companies include the real estate franchisor Keller Williams Realty, which has hoovered up agents at a break-neck pace in recent years, in part, by supporting and promoting the team model.
Florida mulling rules on team advertising
The passage of team rules in South Carolina appears to be part of a “coordinated effort around the country” that has midwifed similar legislation in other states, according to Hamilton.
Florida could be the next state to rein in teams. The Florida Real Estate Commission announced plans in June to propose legislation that would mandate that team names and logos not appear in larger font size than the team’s brokerage name in advertising, wrote Sean Frank, broker-owner of Orlando, Florida-based Mainframe Real Estate, in a blog post.
The “surprisingly small” list of states that have introduced advertising rules for teams “indicates the enormity of the future impact if this trend continues throughout the country,” he said.
Though he anticipates it would squeeze “millions of dollars” out of the Florida real estate industry, Frank said adding the restriction discussed by the Florida commission would be “a great first step” for curbing team advertising that he says is causing consumers to confuse teams for brokerages and “is a threat to the credibility of our industry.”
This story has been updated to note that Marti Bedell is a team leader with Columbia, South Carolina-based Keller Williams Realty Columbia.