What are the Rules?

But not every agent has the sales figures to support their sometimes ambiguous claims. And in those particular instances, the usage of such advertisements carries serious legal implications. To better understand how the various laws and statutes apply in situations specific to real estate, Better Business Bureau Vice President of Marketing and Communications Tom Joyce shared his insight.

“In general, No. 1 claims would require substantiation, which should be a specific report by an entity recognized in the business, and who regularly publishes such reports,” he said. “Without adequate substantiation, such claims could be considered deceptive.”

While Joyce explained there are no laws specifically written to address false claims of No. 1 status, he did confirm that general deceptive practices laws do apply. Particular to Illinois, buyers or sellers who believe themselves to have been mislead or deceived by an agent or brokerage claiming to be No. 1, could, according to state law, move forward with legal action under the Uniform Deceptive Trade Practices Act, section 2, sub-section a.5 and a.7, which read:

Sec. 2. Deceptive trade practices.

a. A person engages in a deceptive trade practice when, in the course of his or her business, vocation, or occupation, the person:

5. Represents that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities they do not have or that a person has a sponsorship, approval, status, affiliation, or connection that he or she does not have;
7. Represents that goods or services are of a particular standard, quality, or grade or that goods are a particular style or model, if they are of another;

Separate from state law, false or misleading advertising is a practice expressly forbidden by NAR’s Realtor Code of Ethics, which is updated every year. In article 12 of the document, the language clearly states that Realtor members “shall be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing and other representations.” Failure to do so, while not resulting in legal action, could cost a Realtor their membership, as well as the accompanying perks.