Professional Standards Case Study – Article 12

Article 12 of the Code of Ethics and Professional Standards states:  ‘Realtors® shall be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing, and other representations.  Realtors® shall ensure that their status as a real estate professional is readily apparent in their advertising, marketing, and other representations, and that the recipients of all real estate communications are, or have been, notified that those communications are from a a real estate professional.  (Amended 1/08).

While Article 1 was the most cited article in cases filed with the Grievance Committee this year, Article 12 can rear its ugly head often too.  Not sure what your advertising requirements are?  Here’s a great article we posted in July.  Following is a case study, published by the National Association of Realtors, pertaining to Article 12.  Read through…what do you think?  Is Realtor® V in violation, or not?


 

Realtor® V was the sole proprietor of a property management firm. Realtor® V hoped to expand into residential brokerage and concluded that attracting buyers and sellers to his website would enhance the growth of his firm’s brokerage activity. Realtor® V sought the advice of several website developers, each of whom had suggestions on how best to attract and hold visitors. One suggestion Realtor® V found particularly interesting was to create domain names similar, but not identical, to the names of established brokerage firms in the area. Realtor® V registered and began to use domain names that, while similar to the names of the five largest residential brokerage firms in the area, were each spelled slightly differently than those firms’ actual names.

In short order, complaints were filed against Realtor® V by Realtors® from each of the five largest firms. The grievance committee concluded the complaints were related and consolidated them for consideration at one ethics hearing.

At the hearing, Realtor® V acknowledged that Article 12 requires Realtors® to be “honest and truthful in their real estate communications” and that Realtors® must “present a true picture in their advertising, marketing, and other representations.” “If I had used the actual names of any of these firms in my domain names, that would have been a misrepresentation,” continued Realtor® V, “but when I changed spellings, I constructively created meaningless domain names which aren’t deceptive since they don’t reflect the name of any actual real estate firm.”

The hearing panel did not agree with Realtor® V’s defense, finding that each of the “slightly misspelled” domain names were so similar to the names of Realtor® V’s competitors that reasonable consumers would readily conclude they would lead consumers to those firms’ respective websites. As Realtor® V’s “misspelled” domain names would mislead reasonable consumers, Realtor® V was found in violation of Article 12, as interpreted by Standard of Practice 12-12.