A multi-year investigation into the advertising practices of real estate agents and brokerages has led to a new set of rules published by the New York Department of State (DOS), which are set to go into effect on November 2. The changes, which can be viewed here in full, could have a major impact on the way brokerage websites display listings in New York.
Among the new rules, is a guideline that states, “Licensees may not advertise property that is subject to the exclusive listing of another broker without first having received the authorization and consent of the broker who holds the exclusive listing to the property.”
If a licensee does obtain consent, the listing advertisement must “clearly and conspicuously” list the name of the broker who holds the exclusive listing. It’s a change that will impact the way a number of New York City’s big brokerages display listings.
Compass was the first of the big New York City brokerages to always display the listing agent on every listing, even ones not represented by the brokerage. It’s top New York City competitors — like Corcoran and Douglas Elliman — don’t currently list the listing agents if it’s another brokerage.
Any advertisement placed on a third-party platform — like StreetEasy in New York City — must disclose that it’s an advertisement.
The new guidelines also set specific guidelines that use of nicknames or informal titles, must not be misleading.
“As a licensed broker or salesperson it is important to become familiar with these requirements as the Department will seek to impose sanctions, including, but not limited to license revocation or suspension, fines and restitution against any licensee found to have violated these regulations,” the new guidance reads.
“It is also important to note, that these rules and the guidance provided apply equally to ‘residential brokers’ and ‘commercial brokers’; commercial and residential brokers are treated no differently under the applicable laws and regulations.”
The new guidance comes on the heels of a multi-year fight over advertising regulations in the state, that saw the Real Estate Board of New York (REBNY) specifically pointing fingers at StreetEasy, the Zillow-owned third party listings portal.
“These new guidelines will play an important role in addressing REBNY’s longstanding concerns about the need for greater transparency in real estate advertising,” Mckenna Warren, senior vice president of brokerage services for REBNY, said in a statement. “Importantly, under the new guidelines, all websites advertising real estate listings in New York State will be required to disclose more accurate information, which will benefit consumers by increasing transparency and clarity.”
The Real Estate Board of New York (REBNY), in a March 2017 letter to DOS, claimed that StreetEasy’s Premier Agent program has created confusion for many customers. REBNY cites multiple examples of customers accidentally contacting a Premier Agent when they intended to contact the selling agent that listed the property.
The guidance, however, is likely to have a much bigger impact on brokerage websites — many of which are powered by REBNY’s residential listing service — than StreetEasy.
“The new rules taking effect in November reflect the need for simplicity and clarity to effectively inform consumers in today’s digital world,” a spokesperson for Zillow, told Inman.
“They help ensure that consumers are informed of the role that individual agents and brokers play in relation to specific home listings, in a way that is fair to all parties,” the spokesperson continued. “We appreciate the thoughtful, inclusive and meticulous way DOS approached this process to settle on a set of rules affirming that advertising programs such as Premier Agent play a positive and beneficial role in New York real estate.”
The new display advertising guidance isn’t the only change of which New York City brokers and agents need to be aware. DOS recently adopted a regulation to establish a massive five-year cease and desist zone in Brooklyn, set to get into effect on November 1.
The cease and desist zone makes it “unlawful for any licensed real estate broker or salesperson, or any other person regularly engaged in the business of buying and selling property to solicit a homeowner within the zone that has filed a notice with the Department requesting not to receive such solicitations and appears on a list published by the Department..”
The New York State Association of Realtors (NYSAR) is recommending that any broker or brokerage that advertises in or near the zone, implements a strong compliance policy, which includes providing agents a list of the addresses participating on a monthly basis.
“Sending solicitations to a homeowner that has registered with the DOS can result in monetary fines and/or the suspension or revocation of your license,” NYSAR said in a statement.