Proposed Rule(s) Filing Form

Transcription

1 Department of State Division of Publications 312 Rosa L. Parks Avenue. 8th Floor Snodgrass/TN Tower Nashville, TN Phone: For Department of State Use Only Sequence Number: Rule ID(s): File Date: Effective Date: lt24 1 '-/,3/,J.4//7 1A;-;./J1. Proposed Rule(s) Filing Form Proposed rules are submitted pursuant to Tenn, Code Ann , , and in lieu of a rulemaking hearing It is the intent of the Agency to promulgate these rules without a rulemaking hearing unless a petition requesting such hearing is filed within ninety (90) days of the filing of the proposed rule with the Secretary of State. To be effective, the petition must be filed with the Agency and be signed by ten (10) persons who will be affected by the amendments, or submitted by a municipality which will be affected by the amendments. or an association of ten (10) or more members. or any standing committee of the General Assembly. The agency shall forward such petition to the Secretary of State. Pursuant to Tenn. Code Ann , any new fee or fee increase promulgated by state agency rule shall take effect on July 1. following the expiration of the ninety (90) day period as provided in This section shall not apply to rules that implement new fees or fee increases that are promulgated as emergency rules pursuant to (a) and to subsequent rules that make permanent such emergency rules, as amended during the rulemaking process. In addition, this section shall not apply to state agencies that did not, during the preceding two (2) fiscal years, collect fees in an amount sufficient to pay the cost of operating the board, commission or entity in accordance with (b). _.t\g_e~_cy/boar~/commission: Division: Contact Person: Address:,_ i Revision Type (check all that apply): Amendment New Repeal TN Real Estate Commission Regulatory Boards Sarah Mathews 500 James Robertson_ Parkway, Nashville, T_N Zip: Phone: , Sarah.Mathews@tn.gov Rule(s) (ALL chapters and rules contained in filing must be listed here. If needed, copy and paste additional tables to accommodate multiple chapters. Please make sure that ALL new rule and repealed rule numbers are listed in the chart below. Please enter only ONE Rule Number/Rule Title per row) Chapter Number I Chapter Title , _R_u_le_s_o_f _C_o_n_d_u_c_t Rule Number Rule Title =_i_advertisin_g_ ~----- ~±-_ SS-7038 (June 2016) RDA 1693

2 Chapter Rules of Conduct Amendments Rule has been amended and restated in its entirety so that it will now read as follows: (1) All advertising, regardless of its nature and the medium in which it appears, which promotes either a licensee or the sale or lease of real property, shall conform to the requirements of this rule. The term "advertising," for purposes of this rule, in addition to traditional print, radio, and television advertising, also includes, but is not limited to, sources of communication available to the public such as signs, flyers, letterheads, signatures, websites, social media communications, and video or audio recordings transmitted through internet or broadcast streaming. Advertising does not include promotional materials that advertise a licensee such as hats, pens, notepads, t-shirts, name tags, business cards, and the sponsorship of charitable and community events. (2) For purposes of this rule, the term "firm name" shall mean either of the following : (a) The entire name of the real estate firm as licensed with the Commission; or (b) The d/b/a name, if applicable, of the real estate firm as licensed with the Commission. (3) General Principles (a) No licensee shall advertise to sell, purchase, exchange, rent, or lease property in a manner indicating that the licensee is not engaged in the real estate business. (b) All advertising shall be under the direct supervision of the principal broker and shall list the firm name and the firm telephone number as listed on file with the Commission. The firm name must appear in letters the same size or larger than those spelling out the name of a licensee or the name of any team, group or similar entity. (c) Any advertising which refers to an individual licensee must list that individual licensee's name as licensed with the Commission. (d) No licensee shall post a sign in any location advertising property for sale, purchase, exchange, rent or lease, without written authorization from the owner of the advertised property or the owner's agent. (e) No licensee shall advertise property listed by another licensee without written authorization from the property owner. Written authorization must be evidenced by a statement on the listing agreement or any other written statement signed by the owner. (f) No licensee shall advertise in a false, misleading, or deceptive manner. False, misleading, and/or deceptive advertising includes, but is not limited to, the following: 1. Any licensee advertising that includes only the franchise name without including the firm name; 2. Licensees who hold themselves out as a team, group, or similar entity within a firm who advertise themselves utilizing terms such as "Real Estate;" "Real Estate Brokerage," "Realty," "Company," "Corporation," "LLC," "Corp.," "Inc.," "Associates," or other similar terms that would lead the public to believe that those licensees are offering real estate brokerage services independent of the firm and principal broker; or 3. Any webpage that contains a link to an unlicensed entity's website where said entity is engaged or appears to be engaged in activities which require licensure by the Commission. SS-7038 (June 2016) 2 RDA 1693

3 (4) Advertising for Franchise or Cooperative Advertising Groups (a) Any licensee using a franchise trade name or advertising as a member of a cooperative group shall clearly and unmistakably indicate in the advertisement his name, firm name and firm telephone number (all as registered with the Tennessee Real Estate Commission) adjacent to any specific properties advertised for sale or lease in any media. (b) Any licensee using a franchise trade name on business cards, contracts, or other documents relating to real estate transactions shall clearly and unmistakably indicate his name, firm name, and firm telephone number (all as registered with the Commission). (5) Internet Advertising: In addition to all other advertising guidelines within this rule, the following requirements shall also apply with respect to internet advertising by licensees: (a) The firm name and the firm telephone number listed on file with the Commission must conspicuously appear on each page of the website. (b) Each page of a website which displays listings from an outside database of available properties must include a statement that some or all of the listings may not belong to the firm whose website is being visited. (c) Listing information must be kept current and accurate. This requirement shall apply to "First Generation" advertising as it is placed by the licensee and does not refer to such advertising that may be syndicated or aggregated advertising of the original by third parties outside of the licensee's control and ability to monitor. (6) Social Media Advertising (a) For the purpose of this rule, "social media" means internet-based applications or platforms that allow the public to create and share content and information. Examples include, but are not limited to: Facebook, Twitter, lnstagram and Linkedln. (b) With regards to social media advertising by licensees, the firm name and firm telephone number listed on file with the Commission must be no more than one click away from the viewable page. (c) Listing information must be kept current and accurate. This requirement shall apply to "First Generation" advertising as it is placed by the licensee and does not refer to such advertising that may be syndicated or aggregated advertising of the original by third parties outside of the licensee's control and ability to monitor. (7) Guarantees, Claims and Offers (a) Unsubstantiated selling claims and misleading statements or inferences are strictly prohibited. (b) Any offer, guaranty, warranty or the like, made to induce an individual to enter into an agency relationship or contract, must be made in writing and must disclose all pertinent details on the face of such offer or advertisement. Authority: T.C.A , , (b), and Administrative History: Original rule certified June 7, Repealed and refiled March 3, 1980; effective April 27, Amendment filed January 21, 1983; effective February 22, Amendment filed April 17, 1985; effective May 17, Amendment filed June 17, 1991 ; effective August 11, Amendment filed March 24, 1994; effective June 7, Amendment filed October 1, 1998; effective December 15, Amendment file July 31, 2006; effective October 14, Amendment filed March 16, 201 O; effective June 14, Amendment filed July 20, 2015; effective October 18, SS-7038 (June 2016) 3 RDA 1693

4 * If a roll-call vote was necessary, the vote by the Agency on these rules was as follows: Board Member Aye No Abstain Absent John Griess Diane Hills Marcia Franks Bobby Wood Rick Douolas Fontaine Taylor Johnny Horne Garv Blume Austin McMullen Signature (if required) I certify that this is an accurate and complete copy of proposed rules, lawfully promulgated and adopted by the Tennessee Real Estate Commission on 1/11/2017, and is in compliance with the provisions of T.C.A The Secretary of State is hereby instructed that, in the absence of a petition for proposed rules being filed under the conditions set out herein and in the locations described, he is to treat the proposed rules as being placed on file in his office as rules at the expiration of ninety (90) days of the filing of the proposed rule with the Secretary of State. Date: 6 I 1.J/2-or1 ~, ,,, Signature 2ulA.4J.Lt ~ -Jrl.~ ~~'$,~~-~~ff!.{f!~ Name of Officer:,.'r... ::,t, S~N-\ N\. N\,kn-\e\J\}S ~ ~ ~ f TENNESSEE : ~,!, rs;>;:>...,,.,,,,-e_,o_v... >.L\f\NL -l,l.,,._,_t _ '-4J"~'"--=-"U""-f'-"~>---= =---,, 1,,...U!:. ~ NOTARY : ~ I I fl~/ STATE OF \ \ T'1tle of Off'1cer. l\c~\~'1"',.,..., <'\ ~\c:nm 1 "'U'" \Cc:::-1 ==-_,._.,_N=- 1 ~=--='--=- %, ~ \ PUBLIC/ ~ '2-. ~- " i ribed and sworn to before me on : _v~ (...[) J_ =-----' //'\\~ (.J...) =---'---...,_._-+---r "1- ",.,..s'& ~... s~' ~ ~ c:,~1,,,,'fl'jer a,,,,,,... ".:,.,; 'f h......,.. le.. _, '"¾111 8 ~~/~;;~~~ 1 9-~'::i Notary Public Signature:~. HY\..., My commission expires on:... \-\..;...:.. \ L... L-=w"""--,'-~-' All proposed rules provided for herein have been examined by the Attorney General and Reporter of the State of Tennessee and are approved as to legality pursuant to the provisions of the Administrative Procedures Act, Tennessee Code Annotated, Title 4, Chapter 5. ~w-d.&p HerbertH.Slati y Ill Attorney General and Reporter ~1k1l.O/ 'J 1 r Date SS-7038 (June 2016) 4 RDA 1693

5 Department of State Use Only Filed with the Department of State on : Effective on : {p / ~ // ,-'----&..e.-' ~~,J-, Tre Hargett Secretary of State,.., = -..J :x --- :.I» ; l :;:o -..,, N,(.;:- I ; -0 -~ :JC: N SS-7038 (June 2016) 5 RDA 1693

6 Regulatory Flexibility Addendum Pursuant to T.C.A through , prior to initiating the rule making process, all agencies shall conduct a review of whether a proposed rule or rule affects small business. 1. The type or types of small business and an identification and estimate of the number of small businesses subiect to the proposed rule that would bear the cost of, or directly benefit from the proposed rule: This rule would provide a direct benefit to individuals licensed as affiliate brokers and brokers by removing and clarifying certain requirements with regards to the size of the firm name and telephone number on advertising. Additionally, this rule allows those individuals to advertise through social media by using the "one-click rule." The "one-click rule" allows a licensee to advertise on social media accounts without including all the required information, as long as that required information is one click away from the social media advertisement. 2. The projected reporting, recordkeeping and other administrative costs required for compliance with the proposed rule, including the type of professional skills necessary for preparation of the report or record: There are no projected administrative costs as a result of these amendments. 3. A statement of the probable effect on impacted small businesses and consumers: The effect will be that licensed affiliate brokers and brokers will be able to more clearly understand the requirements in the rule and will now be able to advertise through social media by using the "one-click rule." The "one-click rule" allows a licensee to advertise on social media accounts without including all the required information, as long as that required information is one click away from the social media advertisement. There is no probable effect of this rule on consumers. 4. A description of any less burdensome, less intrusive or less costly alternative methods of achieving the purpose and objectives of the proposed rule that may exist. and to what extent the alternative means might be less burdensome to small business: The Commission knows of no other alternative method to achieve the goals exhibited by these rules. 5. A comparison of the proposed rule with any federal or state counterparts: With regards to the "one-click rule" the Commission knows that Alabama follows that standard. But the Commission knows of no other rules, federal or state, that compare. 6. Analysis of the effect of the possible exemption of small businesses from all or any part of the requirements contained in the proposed rule: An exemption for small businesses to this rule would not be beneficial. SS-7038 (June 2016) 6 RDA 1693

7 I Rules of Tennessee Real Estate Commission Impact on Local Governments Pursuant to T.C.A and "any rule proposed to be promulgated shall state in a simple declarative sentence, without additional comments on the merits of the policy of the rules or regulation, whether the rule or regulation may have a projected impact on local governments." (See Public Chapter Number 1070 ( us/sos/acts/106/pub/pc1070.pdf) of the 2010 Session of the General Assembly) The Real Estate Commission foresees no impact on any local governments. I SS-7038 (June 2016) 7 RDA 1693

8 Additional Information Required by Joint Government Operations Committee All agencies, upon filing a rul e, must also submit the following pursuant to TC.A (i)(1). (A) A brief summary of the rule and a description of all relevant changes in previous regulations effectuated by such rule; These rules amend the current advertising rule in the following ways: Eliminate the size requirement for firm telephone number, Clarify the size requirement for firm name, by removing the "prominent" requirement and instead stating that the firm name must simply be the same size or larger than the name of any licensee or team name. Eliminate the requirement that any licensees using a franchise trade name must in use the phrase "each office is independently owned and operated." Adds a section on social media advertising, specifically the "one-click" rule, which requires a licensee to list the req uired information within one click from the social media posting.. (B) A citation to and brief description of any federal law or regulation or any state law or regulation mandating promulgation of such rule or establishing guidelines relevant thereto; I There is no known federal or state law mandating promulgation of this rule. (C) Identification of persons, organizations, corporations or governmental entities most directly affected by this rule, and whether those persons, organizations, corporations or governmental entities urge adoption or rejection of this rule; Licensed individuals who hold licenses as affiliate brokers and brokers will potentially be affected by this rule. It is anticipated that these individuals will urge adoption of this rule because it removes certain size requirements with regards to advertising and also adds a section focused on social media advertising, including the "one-click" rule. (D) Identification of any opinions of the attorney general and reporter or any judicial ruling that directly relates to the rule or the necessity to promulgate the rule; There are no known opinions of the Attorney General and Reporter or any judicial ruling that directly relates to this rule. (E) An estimate of the probable increase or decrease in state and local government revenues and expenditures, if any, resulting from the promulgation of this rule, and assumptions and reasoning upon which the estimate is based. An agency shall not state that the fiscal impact is minimal if the fiscal impact is more than two percent (2%) of the agency's annual budget or five hundred thousand dollars ($500,000), whichever is less; This rule is not expected to create a probable increase or decrease state and local government revenues and ex enditures. (F) Identification of the appropriate agency representative or representatives, possessing substantial knowledge and understanding of the rule; Malcolm Young, Executive Director 500 James Robertson Parkway Davy Crockett Tower, 4 th Floor Nashville, TN SS-7038 (June 2016) 8 RDA 1693

9 Sarah Mathews, Assistant General Counsel 500 James Robertson Parkway Davy Crockett Tower, 5th Floor Nashville, TN (G) Identification of the appropriate agency representative or representatives who will explain the rule at a scheduled meeting of the committees; Malcolm Young, Executive Director, Real Estate Commission Sarah Mathews, Assistant General Counsel (H) Office address, telephone number, and address of the agency representative or representatives who will explain the rule at a scheduled meeting of the committees; and Malcolm Young, Executive Director 500 James Robertson Parkway Davy Crockett Tower, 4 th Floor Nashville, TN Sarah Mathews, Assistant General Counsel 500 James Robertson Parkway Davy Crockett Tower, 5th Floor Nashville, TN (I) Any additional information relevant to the rule proposed for continuation that the committee requests. I There is no known additional relevant information. SS-7038 (June 2016) 9 RDA 1693

10 Department of State Division of Publications 312 Rosa L. Parks Avenue, 8th Floor Snodgrass/TN Tower Nashville, TN Phone: For Department of State Use Only Sequence Number: Rule ID(s): File Date: Effective Date: Proposed Rule(s) Filing Form - REDLINE Proposed rules are submitted pursuant to Tenn. Code Ann , , and in lieu of a rulemaking hearing. It is the intent of the Agency to promulgate these rules without a rulemaking hearing unless a petition requesting such hearing is filed within ninety (90) days of the filing of the proposed rule with the Secretary of State. To be effective, the petition must be filed with the Agency and be signed by ten (10) persons who will be affected by the amendments, or submitted by a municipality which will be affected by the amendments, or an association of ten (10) or more members, or any standing committee of the General Assembly. The agency shall forward such petition to the Secretary of State. Pursuant to Tenn. Code Ann , any new fee or fee increase promulgated by state agency rule shall take effect on July 1, following the expiration of the ninety (90) day period as provided in This section shall not apply to rules that implement new fees or fee increases that are promulgated as emergency rules pursuant to (a) and to subsequent rules that make permanent such emergency rules, as amended during the rulemaking process. In addition, this section shall not apply to state agencies that did not, during the preceding two (2) fiscal years, collect fees in an amount sufficient to pay the cost of operating the board, commission or entity in accordance with (b). Agency/Board/Commission: Division: Contact Person: Address: Zip: Phone: TN Real Estate Commission Regulatory Boards Sarah Mathews 500 James Robertson Parkway, Nashville, TN Sarah.Mathews@tn.gov Revision Type (check all that apply): Amendment New Repeal Rule(s) (ALL chapters and rules contained in filing must be listed here. If needed, copy and paste additional tables to accommodate multiple chapters. Please make sure that ALL new rule and repealed rule numbers are listed in the chart below. Please enter only ONE Rule Number/Rule Title per row) ~P-ter Number Chapter Title Rules of Conduct Rule Number Rule Title Advertising

11 Redline Proposed Rules Tennessee Real Estate Commission Chapter Rules of Conduct Amendments Rule has been amended and restated in its entirety so that it will now read as follows: (1) All advertising, regardless of its nature and the medium in which it appears, which promotes either a licensee or the sale or lease of real property, shall conform to the requirements of this rule. The term "advertising," for purposes of this rule, in addition to traditional print, radio, and television advertising, also includes, but is not limited to, sources of communication available to the public such as signs, flyers, letterheads, signatures, websites, social media communications, and video or audio recordings transmitted through internet or broadcast streaming. Advertising does not include promotional materials that advertise a licensee such as hats, pens, notepads, t-shirts, name tags, business cards, and the sponsorship of charitable and community events. (2) For purposes of this rule, the term "firm name" shall mean either of the following: (a) The entire name of the real estate firm as licensed with the Commission; or (b) The d/b/a name, if applicable, of the real estate firm as licensed with the Commission. (3) General Principles (a) No licensee shall advertise to sell, purchase, exchange, rent, or lease property in a manner indicating that the licensee is not engaged in the real estate business. (b) All advertising shall be under the direct supervision of the principal broker and shall list the firm name and the firm telephone number as listed on file with the Commission. The firm name must appear in letters the same size or larger than those spelling out the name of a licensee or the name of any team, group or similar entity. W ith Fegard to the size and visib~ity-gt-th~d firm telophoae number, al l of tho fouawi-rg-sl:lal~ly; 1. The fiur-ram&+aiibt be the most-f}rorninont name ~~e adf1ertising, wheth6f-4t be by print or other mod~oo 2. Tho firm's toloprgfle number shall he tho same size or larger than the telephone number of any indi1jielual licensee OFiJFGHP-Gf-1.iconsees. (c) Any advertising which refers to an individual licensee must list that individual licensee's name as licensed with the Commission. (d) No licensee shall post a sign in any location advertising property for sale, purchase, exchange, rent or lease, without written authorization from the owner of the advertised property or the owner's agent. (e) No licensee shall advertise property listed by another licensee without written authorization from the property owner. Written authorization must be evidenced by a statement on the listing agreement or any other written statement signed by the owner. (f) No licensee shall advertise in a false, misleading, or deceptive manner. False, misleading, and/or deceptive advertising includes, but is not limited to, the following: 1. Any licensee advertising that includes only the franchise name without including the firm 2

12 name; 2. Licensees who hold themselves out as a team, group, or similar entity within a firm who advertise themselves utilizing terms such as "Real Estate," "Real Estate Brokerage," "Realty," "Company," "Corporation," "LLC," "Corp.," "Inc.," "Associates," or other similar terms that would lead the public to believe that those licensees are offering real estate brokerage services independent of the firm and principal broker; or 3. Any webpage that contains a link to an unlicensed entity's website where said entity is engaged or appears to be engaged in activities which require licensure by the Commission. (4) Advertising for Franchise or Cooperative Advertising Groups (a) Any licensee using a franchise trade name or advertising as a member of a cooperative group shall clearly and unmistakably indicate in the advertisement his name, firm name and firm telephone number (all as registered with the Tennessee Real Estate Commission) adjacent to any specific properties advertised for sale or lease in any media. (b) Any licensee 1:1sing a franchise trade name or ad1o. ertising as a member of a cooperati'tle 9ro1:1p, wh&r ae Jertising other than specific propertles-.fgr sale or lease, sh~e tt:le following legonel to af)poaf m-th-e-ael\'ertlsement In a manner reasonably calculated to attract the attention of tho publlo: "eaoh (Franchise Trade Name or Cooperative Group] Offlse Is lnaeperqently Owned and 013erated." Any licensee using a franchise trade name on business cards, contracts, or other documents relating to real estate transactions shall clearly and unmistakably indicate thereon: 1. his name, firm name, and firm telephone number (all as registered with the Commission )... ~ 2. the fact that his office is Independently O\V.flOEl-aR.d ol')erated. (5) Internet Advertising: In addition to all other advertising guidelines within this rule, the following requirements shall also apply with respect to internet advertising by licensees:.-h**l::igm~t not limited to, social mec:lia: (a) The firm name and the firm telephone number listed on file with the Commission must conspicuously appear on each page of the website. (b) Each page of a website which displays listings from an outside database of available properties must include a statement that some or all of the listings may not belong to the firm whose website is being visited. (c) Listing information must be kept current and accurate. This requirement shall apply to "First Generation" advertising as it is placed by the licensee and does not refer to such advertising that may be syndicated or aggregated advertising of the original by third parties outside of the licensee's control and ability to monitor. (6) Social Media Advertising (a) For the purpose of this rule. "social media" means internet-based applications or platforms that allow the public to create and share content and information. Examples include, but are not limited to: Facebook. Twitter, lnstagram and Linkedln. (b) With regards to social media advertising by licensees. the firm name and firm telephone number listed on file with the Commission must be no more than one click away from the viewable page. (cl Listing information must be kept current and accurate. This requirement shall apply to "First Generation" advertising as it is placed by the licensee and does not refer to such advertisf ng that may be syndicated or aggregated advertising of the original by third parties outside of the licensee's 3

13 control and ability to monitor. ~ill.guarantees, Claims and Offers (a) Unsubstantiated selling claims and misleading statements or inferences are strictly prohibited. (b) Any offer, guaranty, warranty or the like, made to induce an individual to enter into an agency relationship or contract, must be made in writing and must disclose all pertinent details on the face of such offer or advertisement. Authority: T.C.A , , (b), and Administrative History: Original rule certified June 7, Repealed and refiled March 3, 1980; effective April 27, Amendment filed January 21, 1983; effective February 22, Amendment filed April 17, 1985; effective May 17, Amendment filed June 17, 1991; effective August 11, Amendment filed March 24, 1994; effective June 7, Amendment filed October 1, 1998; effective December 15, Amendment file July 31, 2006; effective October 14, Amendment filed March 16, 2010; effective June 14, Amendment filed July 20, 2015; effective October 18,