New rule governing team names effective July 1
By Peg Ritenour, Ohio REALTORS Vice President of Legal Services
Over two years ago, the Ohio Division of Real Estate and Professional Licensing began the process to amend the existing rule regarding team advertising to also regulate team names. The rule adoption process was recently completed by the Division and these new provisions will become effective on July 1.
Although advertising by teams has been regulated by the Ohio Division of Real Estate and Professional Licensing for many years, the newly adopted amendments will now impose limitations on team names. The rule will also clarify the definition of a team.
Definition of a “Team”
A "team" is now defined in the license law as “any group of two or more associated real estate licensees affiliated with the same brokerage and any other non-licensed professionals, such as administrative assistants and other professionals specializing in real estate related fields who advertise together in a group with a group name and that name is not licensed pursuant to Chapter 4735. of the Revised Code.” (New language in bold.)
The purpose of amending the team definition was to clarify that while agents may work and advertise together, those agents will only be considered by the Division to be a team (and therefore subject to the team advertising requirements) if they use a team or group name in their marketing.
For example, under the team definition above, if two agents are a married and advertise as Joe Smith and Mary Smith, they would not be considered a team because they only use their individual names and not a separate group or team name. However, if that same couple included the “Smith Team” in its marketing, the Smith Team would fall under the definition of a team, because the Division does not license teams or their names. As a team, these agents would be required to follow the team advertising provisions in the license law.
The changes to the amended team rule that garnered the most attention are those that pertain to the name used by a team or group. Pursuant to the new provision, any team name established after the July 1 effective date must meet the following name requirements:
- The word “team” or “group” must be included in the team’s name.
- The terms “realty” and “associates” cannot appear in a team’s name (i.e., “Jones Realty Team”, “Mary Smith and Associates” will be prohibited).
The rationale for these new restrictions is the Division’s concern that the public is often misled to think a team is a brokerage, especially by use of the terms “realty” or “associates” in a team name. The Division believes that by barring use of these terms and requiring the inclusion of “team” or “group”, the appearance that these entities are a brokerage will be reduced. It should also be noted that the Division did change its former position on the use of “real estate,” now allowing this to be included in a team name.
To conclude, teams and their brokerage should keep the following key points in mind:
- The Division has indicated that the above name requirements will only apply to team names established on or after July 1. Team names in use prior to that date will be “grandfathered,” meaning existing teams will not need to change their name to comply with the new provisions.
- The Division does not license teams and there is no team name registration process at the Division that must be followed.
- Teams must continue to comply with all other team advertising requirements in the license law. A complete discussion of these can be found in the Team White Paper located on the Ohio REALTORS website -- CLICK HERE to access.
Legal articles provided in the Ohio REALTORS Buzz are intended to provide broad, general information about the law and is not intended to be legal advice. Before applying this information to a specific legal problem, readers are urged to seek advice from an attorney.