Sign Code & Advertising Rules

The definition of advertising set out in OAR 863-015-0125(1): includes “advertising activity conducted by mail, telephone, the Internet, the World Wide Web, E-mail, electronic bulletin board or other similar electronic common carrier systems, business cards, signs, billboards and telephonic greetings or answering machines.” The list contained in the rule is not exclusive because “advertising” includes “all forms of representation, promotion and solicitation disseminated in any manner and by any means of communication for any purpose related to professional real estate activity.” In short, if you are making information about property, or even yourself or your company, available to the public, to a member of the public, or even to other agents, you are advertising. For instance, your remarks in the MLS data are considered advertising.

OAR 863-015-0125(2): There are five specific criteria that apply to all real estate advertising. They are: (1) identity of ad as that of a licensee; (2) truthfulness; (3) correct license status (if used); (4) correct expertise (if used); and (5) property owner”s permission. These five criteria will no doubt result in unwritten interpretations as time goes by. For that reason, it is wise to look to the underlying purpose of these rules when trying to decide what may or may not be allowed. That purpose is to prevent the public from being deceived or mislead when dealing with real estate licensees. According to Oregon courts, any statement by a licensee in any form is a violation of license law if the statement is “of such a character as reasonably to induce any person to act to his damage or injury.”

OAR 863-015-0125(3): Subsection (3) in the latest version of the advertising rule attempts to clarify the identity requirement by demanding that advertising that includes the licensee’s name use the licensed name or the licensed last name and a “common derivative” of the first name. Licensed names can be verified by doing a licensee search on the Real Estate Agency website. Using anything other than the name found on the Real Estate Agency website because that is what they have as your “licensed name,” can cause you trouble. The narrow exception is that you may use a “common derivative” of your first name. For instance, “Bob” instead of “Robert” or “Rich” instead of “Richard.” Nicknames probably aren’t going to qualify as “common derivatives” of the first name, and therefore can be used only with the entire licensed name.

OAR 863-015-0125(4): Subsection (4), the latest version of the advertising rule, requires that the principal broker’s, sole practitioner’s or property manager’s licensed or registered business be “prominently displayed, immediately noticeable and conspicuous in all advertising.” This rule has taken the place of the never-implemented rule that the licensee’s name had to be smaller than the principal broker’s. That rule – often called the “font rule” – was intended to take effect in March of 2008. Its purpose was to prevent licensees associated with principal brokers from advertising as if they were independent brokers with their own businesses. The new rule abandons the legally questionable and impractical font rule in favor of demanding prominent, noticeable and conspicuous display or the principal broker’s licensed name or registered business name. Almost all existing advertising by licensees meets this standard.

OAR 863-015-0125(5): The latest version of the advertising rule requires licensees to subject all advertising, except where the licensee is selling their own unlisted property, to their principal broker for approval prior to release of the add. The new rule places a new temporal requirement on advertising by demanding broker review and approval prior to release. How this will work as a practical matter remains to be seen. In addition to the new review and approval prior to release requirement, the rule requires licensees to keep record of the approval and make that approval available to the Real Estate Agency upon request. The new rule will require many to change their business practices. An approval form brokers can sign, date and give to licensees is going to be required, as are some record keeping changes so that advertising approval prior to release can be proved to Agency investigators upon request.

OAR 863-015-0125(6): This new provision incorporates the vicarious liability for principal brokers provision announced in the last version of the advertising rule with the new review and approval requirements. Except where an agent is selling their own property and has not listed it with the principal broker, the principal broker is “responsible for all advertising approved by the principal broker.” The principal broker is required to review all advertising. This rule creates direct vicarious license law liability for content of all agent advertising. How the Real Estate Agency will use this new vicarious liability provision is not clear. It is clear, however, that simply having processes and procedures in place to reasonably assure compliance with laws and rules is no longer the rule when it comes to advertising.

OAR 863-015-0125(7): A principal broker may delegate “direct supervisory authority and responsibility” for branch office advertising to the principal broker who manages the branch. The delegation must be done in writing. This provision allows the principal broker who registers the business name to escape responsibility for the advertising done in branch offices if that responsibility is assigned to a principal broker who manages the branch. No such delegation would be possible if the branch is not managed by a principal broker.

OAR 863-015-0125(8): Subsection (8) of the latest version of the advertising rule contains the limited exceptions to the principal broker review and approval rules set out in subsections (5) & (6). No review or approval is required if a licensee is advertising their own property for sale, exchange or lease option, as long as the property is not listed with their principal broker. The advertisement must, however, state that the owner is a real estate licensee and comply with all other applicable license law provisions (e.g. be truthful and not misleading). If the property is listed with the principal broker, all advertising, even by its licensee owner, must be reviewed and approved.

OAR 863-015-0125(9): Electronic advertising has been subject to separate rules for many years. The latest version of the advertising rule brings back some of the old electronic advertising rules. Advertising in “electronic media” and by “electronic communications” must not only conform to the other provisions of the advertising rule but must also have on the first page:

1. The licensed name as required under subsection (3);
2. The licensed name of the principal broker, sole practitioner or property manager; and
3. A statement that the licensee is licensed in Oregon.

Sponsored links, which are paid advertisements located on search engine result pages, do not have to meet these three requirements as long as the first page following the link complies. In plain English, that means that you don’t have to have name, rank and serial number on the link to your webpage that comes up on REALTOR.com or your local MLS when consumers are searching the web, but you do have to have it on the first page that comes up when the consumer clicks the link and goes to your webpage. Emails get an exception from the “first” page requirements as long as the “initial communication” contains all the required information.

OAR 863-015-0125(10): The latest version of the advertising rule contains a new provision that says “no advertising may guarantee future profits from any real estate activity.” It is not clear why this provision was included or its exact reach. “Guarantee” is an inexact term with a number of meanings. As an example, something like: “You will make a million dollars on this deal,” is probably the type of expression at which the provision is aimed. Whether this new provision of the advertising rule will reach more conduct than “truthful and misleading” remains to be seen.

OAR 863-015-0125(11): The last provision of the latest version of the advertising rule deals with advertising using the term “team” or “group.” The rule is written in the permissive as in, “a licensee may use their terms if…” There are six “ifs” in the rule. The first attempts to enforce business license and trademark regulations by demanding that the use not unlawfully use a trade name or be deceptively similar to a name under which someone else is doing business. It is not clear why the Real Estate Agency would want to insert themselves into trade name battles, or their authority to do so, but the rule does just that. It also requires that the team or group include at least one person with a license; that the licensed members are all associated with the same principal broker; that licensed members use their licensed names as required under subsection (3); that if unlicensed persons are named, their lack of license be stated; and that the advertising comply with all other laws and rules.