The advertisement from the February 22 blog did contravened Section 37 of the Real Estate and Business Brokers Act, 2002 (REBBA 2002), which reads: No registrant shall make false, misleading or deceptive statements in any advertisement, circular, pamphlet or material published by any means relating to trading in real estate.
The potentially contentious statements were:
“# 1 Brokerage in Town”
“Chairman’s Club Award Winner”
“I have sold more homes for more money than other any other salesperson in the area”
“Lowest commission rate in town”
The assumption is that what is said/written in an advertisement should be taken at face value. This premise is reflected in other legislation, such as in the federal Competition Act, 1985, the Canadian Code of Advertising Standards, and The REALTOR® Code of The Canadian Real Estate Association. Article 15 of The REALTOR® Code states that claims or offerings in advertising must be accurate, clear, and understandable.
Therefore, potentially problematic statements should be truthful, detailed (i.e., full disclosure), and defendable.
For the advertisement to comply, the statements should read as follows:
“#1 Brokerage in Town (based on 2011 MLS® statistics of the Toronto Real Estate Board)”
“Chairman’s Club Award Winner for 2011 (award given for earning more than $50,000 in 2010)”
“According to 2011 MLS® statistics for the Toronto Real Estate Board (TREB), no other sales representative has sold as many homes as have in 2011.”
“Lowest commission in town (does not include commission for buyer/co-operating brokerage)” – OR – Delete statement if you cannot prove it
OREA Advertising DOs and DON’Ts
DO:
• Ensure your advertising is not only truthful, but also not deceptive or misleading
• Ensure that all your claims are true not only in the literal sense, but also in the general impression being conveyed
• Fully and clearly disclose all material information in the advertisement
• Make complete disclosures when advertising all aspects of services, including fees
• Ensure all claims of savings or comparisons about commission are accompanied by enough information for the consumer to make a proper comparison
• Seek legal advice if there are any doubts
If using disclaimers, DO ensure that:
• the overall impression created by the ad and the disclaimer is not misleading
• the information in disclaimers does not materially limit or contradict the main text
• any important additional information or conditions/restrictions are clearly stated
• they are clearly connected to the material that they are related to and large enough to be seen clearly
DON’T:
• Mislead the public in advertisements or representations
• Use illustrations that are different from the product being sold
• Make a performance claim unless you can prove it, even if you think it is accurate (testimonials usually do not amount to adequate proof)
• Make performance claims unless accompanied by the appropriate disclosures [see RECO’s Advertising Guidelines]
• Make claims that compare performance unless you disclose the basis of that comparison
• Refer to an honour or award unless the source is provided
• Refer to an honour or award that was purchased
• Use terms or phrases that are not meaningful and clear
Stay Tuned
We will examine the consequences of non-compliant advertising in a future post.
For More Information
For examples of appropriate and inappropriate advertising, review RECO’s Advertising Guidelines at http://www.reco.on.ca/UserFiles/Advertising%20Guidelines/P3/index.html
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