201 KAR 11:105 - Advertising
RELATES TO: KRS 324.117, 324.160(4)(d), (6)
NECESSITY, FUNCTION, AND CONFORMITY:
KRS
324.281(5) and
KRS
324.282 require the Kentucky Real Estate
Commission, with the approval of the executive director of the Kentucky Real
Estate Authority, to promulgate administrative regulations to carry out and
enforce the provisions of KRS Chapter 324.
KRS
324.117(5) requires the
commission to promulgate administrative regulations to define false,
misleading, or deceptive
Section 1. Consent
Required to Advertise a Specific Property.
(1)
(a) A licensee shall not:
1. Advertise real estate for sale or lease
without the written consent of the owner;
2. Place signage or another advertisement on
any private or listed property without the written consent of the owner;
or
3. Promote or advertise a
specific property listed by another principal broker unless the licensee has
requested and obtained written consent from the listing principal
broker.
(b) Nothing in
paragraph (a)1. through 3. of this subsection shall prohibit a licensee from
utilizing public information, including information regarding real estate
closed by another licensee , to market his or her real estate brokerage services
to consumers.
(2) A
licensee who served as a buyer's agent may advertise his or her role in a sale
after a closing has occurred if the advertisement clearly and visibly states
that the licensee's participation was as the buyer's agent.
Section 2. Content Required.
(1)
(a) The
principal broker, or his or her designee, shall establish written standards for
review and approval of advertising activity of the real estate company and
affiliated licensees to ensure compliance with KRS Chapter 324 and 201 KAR
Chapter 11.
(b) Pursuant to
KRS
324.160(6), a principal
broker shall be held liable for acts by an affiliated licensee or licensees
that the principal broker knew or should have known about that are in violation
of either the principal broker's standards for review and approval, or KRS
Chapter 324 and 201 KAR Chapter 11.
(2) All advertisements shall include:
(a) The full name of the real estate
brokerage company registered with the commission; or
(b) The full name of the principal broker
registered with the commission, with a clear designation of principal broker
status.
(3)
(a) An advertisement may include in written
text an affiliated licensee's first and last name, or an alternate or assumed
name as set forth in Section 4 of this administrative regulation, as registered
with the commission, if the principal broker has informed the commission of the
affiliated licensee's first and last name, or alternate or assumed name being
used.
(b) Each affiliated licensee
shall be limited to the use of one (1) nickname in place of, or along with, the
licensee's first name, and it shall be the responsibility of each individual
licensee to inform the commission of the nickname being used. A nickname shall
not be used unless the nickname is reflected on the licensee's online services
portal before use.
Section
3. Display of Content Required.
(1) The content required by Section 2(2) of
this administrative regulation shall be displayed in written text. The content
shall:
(a) Be clear and visible to a typical
observer of the advertisement ; and
(b) Not be false, misleading, or
deceptive.
(2)
(a) The content permitted by Section 2(3) of
this administrative regulation shall not appear larger than the content
required by Section 2(2) of this administrative regulation.
(b) The requirements of paragraph (a) of this
subsection shall not apply to the following promotional materials that
advertise a licensee :
1. Hats;
2. Pens;
3. Notepads;
4. Apparel;
5. Name tags; and
6. The sponsorship of charitable and
community events.
(c)
The commission shall waive the requirements of paragraph (a) of this subsection
for specific promotional materials not stated in paragraph (b) of this
subsection upon finding the proposed promotional material would not constitute
false, misleading, or deceptive advertising .
(3)
(a)
1. For purposes of real estate company or
licensee advertisement via internet, social media, or other digital or online
forms of advertisement , every individual viewable page or post shall constitute
a separate advertisement ; and
2.
Each advertisement shall contain the content required by Section 2(2) of this
administrative regulation in the page or post header, or visible on the page or
post without the observer scrolling or otherwise navigating the page or post to
view the content required; or
(b) If a page or post cannot reasonably
comply with Section 2(2) of this administrative regulation, the advertisement
shall include a clickable direct link, that is clear, visible, and identifiable
as a link, to a page, post, or user account profile that contains the content
required displayed in accordance with paragraph (a)2. of this
subsection.
(4)
Advertisements that include an audiovisual presentation shall include an
audible announcement or written display of the content required by Section 2(2)
of this administrative regulation at the beginning of the
advertisement .
(5) Any internet,
social media, and other digital or online form of advertising that was true and
accurate at the time it was made shall not be in violation.
(6) A logo that does not contain written text
of the content required by Section 2(2) of this administrative regulation shall
not constitute a substitute for the content required.
(7) If the licensee 's principal business
location is outside Kentucky, the advertisement shall:
(a) Indicate that the licensee holds a
Kentucky license to broker real estate; and
(b) Include the regulatory jurisdiction of
the licensee 's principal business location.
(8) The requirements established by this
administrative regulation shall not apply to logos, brands, or directional and
open house signs if the logo, brand, directional, and open house signs do not
contain the name of a sales associate.
Section 4. Use of Alternate or Assumed Names.
(1) More than one (1) licensee , whether a
team, group, other business arrangement, or real estate brokerage company , may
collectively use an alternate or assumed name for advertising with the written
approval of the principal broker.
(2) Prior to allowing the use of an alternate
or assumed name in advertising , a principal broker shall:
(a) Register, or ensure the registration of,
the alternate or assumed name with the commission; and
(b) Ensure that the alternate or assumed name
is populated in the principal broker's or affiliated licensee 's online services
portal.
(3) An alternate
or assumed name shall not:
(a) Contain terms
that may lead the public to believe the licensee or licensees approved to use
the alternate or assumed name is offering real estate brokerage services
independent of the principal broker, unless the alternate or assumed name is
for the real estate brokerage company ; or
(b) Be used by more than one (1) group of
licensees within the principal broker's brokerage company , unless the alternate
or assumed name is for the real estate brokerage company .
(4) An alternate or assumed name may include
reference to a name or person, if the name or person has not lost the ability
to engage in real estate brokerage through administrative discipline or by
operation of law.
(5) If the
alternate or assumed name applies to a team or group, the alternate or assumed
name shall end with the word "team " or "group."
Section 5. False, Misleading, or Deceptive
Advertising .
(1) False, misleading, or
deceptive advertising is prohibited pursuant to
KRS
324.117(1).
(2) An advertisement is false, misleading, or
deceptive, if the advertisement :
(a) Is known
or reasonably should have been known to be false or contrary to fact at the
time of placement of the advertisement ;
(b) Misleads or misinforms the general public
in any manner; or
(c) Would lead a
reasonable observer to believe that real estate brokerage services were being
offered by an affiliated licensee or licensees independent of their real estate
brokerage company or principal broker.
Section 6. Guaranteed Sales Plans.
(1) If a licensee advertises a guaranteed
sales plan , the licensee shall disclose in writing whether:
(a) A fee is charged for
participation;
(b) The real estate
shall meet qualifications for participation;
(c) The purchase price under a guarantee of
purchase of the owner's real estate shall be determined by the licensee or a
third party;
(d) The owner of the
real estate shall purchase other real estate listed for sale by the licensee or
his or her designee; and
(e) An
exclusive buyer agency agreement is required.
(2) The advertisement may be in print or
electronic display, on radio, or on television and shall be clear and
understandable.
(a) For print or electronic
display advertising , the letters shall be at least twenty-five (25) percent the
size of the largest letter in the advertisement;
(b) For television advertising , written
communication shall appear on the screen:
1.
At least three (3) seconds for the first line of lettering and at least one (1)
second for each additional line of lettering; and
2. In letters that shall be at least eighteen
(18) video scan lines in size for uppercase letters or at least twenty-four
(24) video scan lines for uppercase capital letters if uppercase capitals and
lowercase letters are used.
Section 7. Client Advertising . Consistent
with
KRS
324.117(4), a licensee shall
advise his or her client of the advertising obligations contained in this
administrative regulation.
Section
8. Effective Dates. The commission shall begin enforcement of
Section 3 of this administrative regulation six (6) months after the effective
date of this administrative regulation.
Notes
STATUTORY AUTHORITY: KRS 324.117, 324.281(5), 324.282
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