January 4th - 2005

More buyers shop online for mortgage info

Businesses and professionals regularly advertise to attract new business and promote themselves.

Businesses and professionals regularly advertise to attract new business and promote themselves. In real estate, advertising is a regular part of a REALTOR’s day-to-day business and plays a very important role.

But complaints about REALTOR advertising are also very regular according to the Real Estate Council of Ontario (RECO). RECO’s Complaints, Compliance and Discipline (CCD) panel deals with numerous advertising complaints from members – mostly from other RECO members.

There are many rules governing real estate advertising designed to protect the consumer, and REALTORS need to be aware of these rules to ensure their ads are compliant.

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.”

Misleading advertising is a criminal offence under the Competition Act, with penalties including fines, imprisonment or both. RECO also enforces advertising standards under Sections 28 and 47 of the Real Estate and Business Brokers Act. Article 18 of CREA's Standards of Business Practice addresses advertising standards.

According to the Competition Act, misleading advertising occurs when a representation is made to the public that is materially misleading. If the representation could influence a consumer to buy the product or service advertised, it is material. The literal meaning of an ad as well as the general impression it leaves are both considered when deciding if it is misleading. It doesn't need to be proven that the ad actually mislead someone, only that the ad was capable of misleading. The actual wording of an ad may be correct, but the general impression can still be false, perhaps as a result of not mentioning certain essential information.

Here are a couple of the RECO CCD panel decisions and some dos and don’ts to avoid these advertising pitfalls.

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.

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.

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.

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 real estate advertising and marketing standards. OREA offers a continuing education classroom course called “Getting It Right the First Time: Advertising Guidelines for Real Estate Professionals”. Check with your local boards for course offering and registration. For further information look under “Latest” and “Real Estate Competition Guide” on Realtor Link™, or obtain a copy of CREA’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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The trademarks REALTOR®, REALTORS®, and the REALTOR® logo are controlled by The Canadian Real Estate Association (CREA) and identify real estate professionals who are members of CREA. The trademarks MLS®, Multiple Listing Service® and the associated logos are owned by The Canadian Real Estate Association (CREA) and identify the quality of services provided by real estate professionals who are members of CREA. Used under license.

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