March 6th - 2003

Take care with advertising

Advertising plays an important role in a REALTORS day-to-day business and should be carefully thought out for maximum effect.

Advertising plays an important role in a REALTORS day-to-day business and should be carefully thought out for maximum effect. There are also many rules governing real estate advertising designed to protect the consumer.

For example, Rule 21 of the RECO Code of Ethics states, “A Member shall ensure that all advertising and promotion by or on behalf of the Member, including for Properties and services, is not false, misleading or deceptive.” Sections 28 and 47 of the Real Estate and Business Brokers Act also apply to advertising.

RECO’s Complaints, Compliance and Discipline (CCD) panel deals with numerous advertising complaints on a regular basis. Here are a few of the CCD panel decisions and some dos and don’ts to avoid these advertising pitfalls. The complete decisions are available on RECO’s website at www.reco.on.ca.

A Member advertised a "Guaranteed Sale Program" in a misleading manner because her advertisement did not contain any statements disclosing that the program was subject to terms and conditions. She was fined $3,500 and costs of $1,700.

A Member referred to himself in an advertisement as "the #1 Agent in X Village" and "#1 Negotiator in X Village" without any factual or statistical basis and also advertised to would-be-sellers that they could "Get an Extra $10,000 to $15,000 with REALTOR Z!" He was fined $3,000 and costs of $1,700 and placed on probation for a year.

The Member incorrectly advertised a property as being connected to a municipal sewer system when it had a 1959 septic system. The buyers had communicated that they were planning on adding two bedrooms to the house. Permission for that was refused. The buyers will need a costly holding tank; sewers will not be coming to the town for several years. He was fined $1,500 and costs of $1,750.

Promotional material was incorrect as to the location of this commercial property. The building was also shown as 7,700 square feet when it is approximately 6,300 square feet. The Members were fined $2,000 each and costs of $1,500 jointly.

Here are some Dos and Don'ts for advertising:

· Do avoid fine print disclaimers. They often fail to change the general impression conveyed by an advertisement. If disclaimers are used, make sure they are obvious to the reader and that the overall impression created by the ad and the disclaimer is not misleading. The information in disclaimers must not materially limit or contradict the main text. · Do fully disclose all material information in an advertisement.

· Do avoid using terms or phrases in an ad that are not meaningful and clear to the ordinary person.

· Don't use illustrations that are different from the product being sold.

· Don't make a performance claim before you can prove it, even if you think it is accurate. Testimonials usually don't provide adequate proof.

Take the time to learn more about advertising and marketing standards. For further information obtain a copy of the Canadian Real Estate Association’s Guidelines for Real Estate Advertising Standards from your real estate board.

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For more information contact

Ontario Real Estate Association

Jean-Adrien Delicano

Senior Manager, Media Relations

JeanAdrienD@orea.com

416-445-9910 ext. 246

Ontario Real Estate Association
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