By Riki Markowitz
Last October, Inman News published an article titled, “NAR warns government may crack down on real estate teams.” It attracted a lot of attention, for good reason. Several states had recently passed rules regulating real estate team names. It was controversial — some arguing the new regulations will provide clarity to consumers while others claiming that it wasn’t a big enough problem in the first place. But the threat that more crackdowns are coming is ominous.
Real estate teams by the numbers
First, it’s helpful to understand what real estate teams are and how prominent they are. The National Association of REALTORS (NAR) has a membership of 1.3 million REALTORS. Last year, the organization surveyed nearly 3,400 members and published a report called “2018 Teams Survey.” They defined real estate teams as consisting of two members to 16 or more (29 percent of teams had two members; 20 percent had six to 10 members). Finally, most team members hold a real estate license.
Why real estate teams in Texas might be concerned with crackdowns
According to NAR, real estate teams are very popular right now and “becom[ing] a fixture of the contemporary real estate environment.” As a result, industry regulators will be watching. A NAR press release reports, “In recent years, 24 states have statutes or formal regulations in place that address real estate teams.” NAR doesn’t say which states, but we can safely assume that Texas is on that list. New advertising rules were passed just last May regulating team names, specifically how a name can appear on signs and ads. There was no exemption for teams that had already been operating with a now-banned name. They were required to register a new business name.
It was a stressful time for teams here in Texas, and not just for those who had to scramble to register a new name and then also change letterhead, signs, ads, flyers, etc. But in a few short months, Texas’ 86th state legislative session would be in session. If there were going to be a crackdown on teams, or the industry, those bills would become law by June 2019.
Since Texas has a very short regular legislative season — 140 days — and lawmakers only meet on odd numbered years, sessions are a busy time for legislators, but it’s also an extraordinarily hectic time for industry watchdogs. It’s their job to keep an eye on every single piece of legislation that could affect REALTORS in the state. It was difficult to predict what 2019 would be like for several reasons, but a big one was that power in the House — and the Senate, to a smaller degree — shifted more than it has in recent years. Regardless, lawmakers were expecting a sober session with a focus on “bread and butter issues,” including the economy, jobs, healthcare, education and infrastructure.
Regulation crackdowns in Texas
So, were there any surprises — any imminent real estate team crackdowns? Bryan Hutchinson, Williamson County Association of REALTORS (WCREALTORS) association executive, provides a big, reassuring, “not here!” More specifically, he said “one of the great things about Texas is that we’re very pro-business.” While brokers and agents — and various other real estate team members — are busy with their day-to-day work, folks like Hutchinson at WCREALTORS, Jaime Lee at Texas REALTORS, and Christine Anderson at TREC — just to name a few — are monitoring everything happening in the legislature. “At the state and local level, we spend thousands of hours watching what happens,” says Hutchinson. “Last legislative session, more than 7,000 bills were filed. As an association, we monitored close to 3,000.”
And that brings up an interesting point. While real estate teams saw the new advertising law as added regulations, lawmakers didn’t necessarily see it that way. Legislators say it was an effort to protect consumers. And when there’s a decision to pass consumer protection legislation, it often starts with complaints filed at the state level. Presumably, there was enough confusion regarding the different roles brokers and agents occupy that consumers needed clarification in the form of protections so that the onus isn’t solely on them to differentiate between those acting in good faith and those who bend the rules (or just plain break them).
Texas is safe from crackdowns right now
One thing that keeps TREC, ABoR, WCREALTORS and others busy during the legislative session is tracking bills from the point they’re initially filed, if they make it out of committee, and then if they reach the floor for a vote. And it doesn’t end there. Bills can be amended. Also, the words “real estate” or even REALTOR, more specifically, don’t necessarily need to appear in a bill for that legislation to have a positive or negative impact on the real estate industry. Bills in categories like infrastructure, transportation, jobs and even disaster relief can have far reaching implications for many different industries, including real estate. So, between January and June, people like Lee and Hutchinson, and dozens of their colleagues and coworkers, read bills, riders, and amendments looking for any little thing that could change how REALTORS on the ground conduct business. One big goal, says Anderson, is to “carefully consider innovation and to quickly correct inequities.”
What real estate team members can do?
If it comes as a surprise how much work goes into being a legislative watchdog, it shouldn’t. That just means that Texas’s pro-business policies are working in your favor. But that doesn’t mean you shouldn’t pay attention. New regulations typically mean added fees, more paperwork, or any number of additional inconveniences.
In order to follow what’s happening in the real estate industry at the legislative level, real estate teams (as well as independent REALTORS) need to stay up-to-date on industry news. REALTOR Dillar Schwartz with The Seely Group, says that she was introduced to the underbelly of real estate laws a few years ago and she was blown away by how much she didn’t know. “It’s up to each of us to know what’s happening in the industry,” says Schwartz. “But if you’re on a team, there’s a tendency to be in a position where you’re spoon fed some of this important information.”
The good news is that there are several ways to keep up: take continuing education classes, network with colleagues, sign up for updates from industry associations or volunteer with ABoR or WCREALTORS. Both organizations have government affairs committees that put members in a position to monitor any potential changes. And you’ll likely be happy to know that REALTORS had a great legislative session. According to Lee, real estate advocates worked very hard on educating legislators on issues regarding agents, brokers and consumers. “We were really busy,” says Lee, “but feel very good about it.” RL