June 2024
The Oregon Real Estate Agency (OREA), industry trade associations, and subscription-based companies each play important roles in serving real estate consumers. However, their respective authorities are derived from different sources and may not overlap. With the future of real estate business practices making the news almost daily, we thought it would be helpful to discuss these different roles in this issue of the Oregon Real Estate News-Journal.
OREA’s authority is defined in Oregon Revised Statute (ORS) and Oregon Administrative Rules (OAR). In order for OREA to act, the authority must first exist in statute or rules, which you may visit on our website. Similarly, trade associations such as the National Association of Realtors — in conjunction with their state and local counterparts — each have their own sets of rules that they enforce on their voluntary members. Those rules may set additional requirements on members beyond what exists in state and federal laws — but may not conflict with them. This holds true for other optional subscription services such as Multiple Listing Services.
At OREA we regulate licensees, not any outside organizations which they may choose to join. While we do not regulate trade associations, OREA views them as vital external partners. They are often closest to the day-to-day business issues, market conditions, and the needs of both licensees and active consumers. Often, they play a key role in proposing new legislation. Perhaps it is no surprise that this ongoing collaboration sometimes creates confusion about “who does what,” and that confusion is occasionally reflected in the communication and questions we receive.
A common example includes complaints that involve how a licensee performed and refer to violations of the Code of Ethics (COE) or other violations imposed by outside entities. The COE is enforced by the Realtor associations and does not exist in statute; instead, statutory language refers to obligations to a buyer (ORS 696.805), obligations to a seller (ORS 696.810), and obligations when representing both buyer and seller (ORS 696.815).
We recognize that consumers may conflate the term “Code of Ethics” with “statute,” as the former is a term used nationwide and the latter may not be as readily understood. That said, we may still open an investigation that uses the phrase Code of Ethics when there is evidence in the complaint that the licensee may have also violated ORS 696.301, Grounds for Discipline, or supporting rules. In other instances, we may recommend that the complainant contacts the Realtor association regarding their Code of Ethics complaint process because the potential violation does not overlap with statutes and rules at all.
The OREA recently received an advertising complaint that helps illustrate the different roles of the Agency and trade associations. The complainant stated that a licensee was misusing the term REALTOR by using a descriptive word in front of it, that the licensee violated the Clear Cooperation Policy by stating that the licensee had a pocket listing, and that the licensee has had a for sale sign on a property that has been up for a long time that is not in the MLS. The complainant wrapped up their submission stating, “We need more education for these agents.”
This complaint has multiple components, and enforcement falls under multiple entities: OREA, MLS, and the Realtor association.
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Social Media Advertising: OREA would evaluate this complaint by applying advertising rule, OAR 863-015-0125, notably the provisions for “Advertising in electronic media.”
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REALTOR trademark violations: This is outside OREA’s authority, and we would direct the complainant to their local or state Realtor association.
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Clear Cooperation Policy: This involves agreements between NAR and MLSs and is outside OREA’s authority.
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For Sale Signs and MLS rules: Oregon law requires that listing agreements must be in writing but does not contain a requirement to market a listed property on an MLS or to post a For Sale sign.
OREA can parse through the overlapping areas and redirect when a complaint is multifaceted. For example, in the case above, we may request a response from the person named in the complaint (the respondent), confirming that they are adhering to advertising rules. For first-time minor violations our general practice is to issue a non-disciplinary Education Letter of Advice (ELOA); repeat violations may result in disciplinary action. For the areas that are outside our purview, we may also direct the complainant to other entities to assist in their complaint.
This example underscores why it is OREA’s practice to request that complaints not be anonymous; without a named complainant, we are unable to assist the complainant appropriately. Moreover, it is essential for trust and transparency in our work. Complainants are copied on our responses and are informed of the outcome, such as whether an ELOA was issued or if the complaint was closed for no violation or for no jurisdiction.