Advertising Rule Violations for Real Estate Agents

The Texas Real Estate Commission (TREC) licenses and regulates real estate professionals, including real estate sales agents. These professionals are subject to the Texas laws and TREC rules that govern them. If real estate agents violate those rules or laws, including those concerning advertising, TREC investigates and takes enforcement action as needed. Disciplinary actions against real estate licenses can lead to a loss of licensure and other severe consequences. Therefore, having a real estate license defense attorney on your side can make a significant difference in the outcome of your case.

Complaints that TREC Handles

Members of the public and other real estate professionals can file complaints before TREC within four years of the incident that is the subject of the complaint. However, TREC only handles disputes concerning alleged violations of the rules and laws that govern real estate professionals. Individuals with other complaints about real estate professionals, including personal or contractual disputes with real estate agents, must pursue them through independent civil litigation. Likewise, TREC will not address rude, unprofessional, disparaging, or offensive comments on social media, except if the matter concerns unlawful discrimination by a real estate professional during a real estate action. 

Advertising Rules for Real Estate Agents and Brokers

TREC can only enact certain advertising restrictions on real estate agents. Specifically, under Tex. Occ. Code §1101.156, TREC may not adopt any rules that restrict advertising or competitive bidding by a person regulated by TREC except to prohibit a false, misleading, or deceptive practice by the person. This section explicitly prohibits TREC from including any of the following in its advertising rules:

  • Restrictions on the use of any advertising medium;
  • Restrictions on the person’s personal appearance or use of the person’s voice in an advertisement;
  • Restrictions relating to the size or duration of an advertisement used by the person;
  • Restrictions on the person’s advertisement under an assumed or trade name that is authorized by a law of this state and registered with the commission; or
  • Restrictions on the term “broker,” “agent,” or a similar designation or term, a reference to the commission, or the person’s license number to be included in the person’s advertisement.

22 Tex. Admin. Code §535.155 outlines the requirements for advertisements by real estate agents. All advertisements must contain the name of the licensed individual placing the advertisement and the broker’s name in at least half the size of the largest contact information for any sales agent, associated broker, or team name. This information must be in a readily noticeable location in the advertisement. If the advertisement is on social media, it may be on a separate page, so long as it is readily accessible via direct link and readily noticeable on the separate page on the user account profile. 

Tex. Occ. Code §1101.652(23) states that real estate agents can face disciplinary action if they publish or cause to be published advertisements that:

  • Mislead or are likely to deceive the public;
  • Tend to create a misleading impression;
  • Imply that a sales agent is responsible for the operation of the broker’s real estate brokerage business; or
  • Fail to include the name of the broker for whom the license holder acts, which name may be the licensed name, assumed name, or trade name of the broker as authorized by a law of this state and registered with the TREC.

For the section cited above, 22 Tex. Admin. Code §535.155(d) states that an advertisement is misleading or likely to deceive the public, tends to create a misleading impression, or implies that a sales agent is responsible for the operation of the broker’s real estate brokerage business, if it:

  • Is inaccurate in any material fact or representation;
  • Does not comply with this section;
  • Identifies a sales agent as a broker;
  • Uses a title, such as owner, president, CEO, COO, or another similar title, email or website address that implies a sales agent is responsible for the operations of a brokerage;
  • Contains a team name with terms that imply that the team is offering brokerage services independent from its sponsoring broker, including, but not limited to, “brokerage,” “company,” and “associates”;
  • Contains the name of a sales agent that is not the name as shown on the sales agent’s license issued by TREC or an alternate name registered with TREC;
  • Contains the name of a sales agent whose name is, in whole or in part, used in a broker’s name and that implies that the sales agent is responsible for the operation of the brokerage;
  • Causes a member of the public to believe that a person not licensed to conduct real estate brokerage is engaged in real estate brokerage;
  • Contains the name or likeness of an unlicensed person that does not disclose that the person does not hold a license;
  • Creates confusion regarding the permitted use of a property;
  • Addresses the value of a property unless it is based on an appraisal that is disclosed and readily available upon request by a party or it is given in compliance with §535.17;
  • Implies the person making the advertisement was involved in a transaction regarding a property when the person had no such role;
  • Addresses a property that is subject to an exclusive listing agreement without the permission of the listing broker and without disclosing the name of the listing broker unless the listing broker has expressly agreed in writing to waive disclosure;
  • Offers a listed property that is not discontinued within ten days after the listing agreement is no longer in effect;
  • Addresses a property ten days or more after the closing of a transaction unless the current status of the property is included in the advertisement;
  • Offers to rebate a portion of a license holder’s compensation to a party if the advertisement does not disclose that payment of the rebate is subject to the consent of the party the license holder represents in the transaction;
  • Offers to rebate a portion of a license holder’s commission contingent upon a party’s use of a specified service provider or subject to approval by a third party such as a lender, unless the advertisement also contains a disclosure that payment of the rebate is subject to restrictions;
  • Offers or promotes the use of a real estate service provider other than the license holder, and the license holder expects to receive compensation if a party uses those services if the advertisement does not contain a disclosure that the license holder may receive compensation from the service provider;
  • Ranks the license holder or another service provider unless the ranking is based on objective criteria disclosed in the advertisement; or
  • States or implies that the license holder teaches or offers TREC-approved courses in conjunction with an approved school or organization unless TREC approves the license holder to teach or offer the courses.

Types of Disciplinary Sanctions

Real estate agents and other real estate professionals regulated by TREC can face various sanctions if TREC finds that they have violated any rules or laws that govern them, including advertising rules. These sanctions may include the following:

  •  Monetary fees
  • Injunctive action
  • License suspension
  • License revocation

If a violation occurs, TREC will send a written Notice of Alleged Violation (NOAV) to the real estate agent, who has 30 days to respond. The real estate agent may either accept the recommended sanction and sign an agreement or request a hearing on the violation, the proposed penalty, or both. Under Tex. Occ. Code §1101.657, if the real estate agent requests a hearing, an administrative law judge at the State Office of Administrative Hearings (SOAH) will hold a hearing before to determine the recommended sanction. Considering the administrative law judge’s proposed decision, TREC will ultimately determine the sanction.

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We Will Stand Up for Your Rights Before TREC

The experienced real estate license defense lawyers at Bertolino LLP, will defend you against any TREC disciplinary proceedings that you may be facing. We will investigate the complaint and allegations against you, evaluate the evidence, present your options, and devise the best defense strategy for your case. Together, we will work to clear your name and protect your real estate license. Call us at (512) 515-9518 or contact us online.

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