Miscellaneous Advertising Rules
Code of Ethics - Article 12
Key: "True picture in their advertising and representations to the public"
Fair Housing Act and Iowa Code 216.8(3)
Protected Classes: makes it unlawful to discriminate in the sale, rental, and financing of housing and in the provision of brokerage and appraisal services, because of RACE, COLOR, SEX, HANDICAP, FAMILIAL STATUS, RELIGION, CREED, or NATIONAL ORIGIN.
Handicapped: having a physical or mental impairment which substantially limits one or more major life activities; or having a record of having such an impairment; or being regarded as having such an impairment. (Does not include current drug users, but recovering addicts are considered handicapped).
- Must allow handicapped to make reasonable modifications to a rental unit as long as it is at their own expense
- They must restore to original condition (if directed)
- Must have reasonable/nondiscriminatory or hardship rules/procedures for tenants
- New constructed structures (over four units) must have accommodations
- "one or more persons under the age of eighteen being domiciled with a parent or another person having legal custody..." (also pregnant)
- Discriminatory protections apply
- Accommodations must be made
- Housing designated by HUD for the elderly
- Intended for, and generally occupied only by persons 62 years or older
- Housing generally intended and operated for at least one person 55 or older which also meets other HUD regulations
- Exception to the Act is provided for "housing for older persons." Applies to anyone who causes or makes, prints, or publishes any notice, statement, or advertisement
Must watch subtle references. HUD guidelines indicated words such as "adult building, Jewish home, restricted, private integrated, traditional. References to a property’s location can also imply discriminatory preference or limitation, such as its relation to landmarks that are associated with a nationality or religion. References to a parish or a synagogue or to a club or school used exclusively by one sex are also examples. Pictorial representations using human models as residents or customers that depict one segment of the population while not including others in the protected classes are discriminatory. The media used for promoting property or real estate services cannot target one population to the exclusion of others. The selective use of media, whether by language or geography, for example, may have discriminatory impact.
Fraud/Misrepresentation: Facts must be true ("new house" must not have been occupied, zoned as ______, built in _____). Opinions must be worded so clearly understood ("quietest" house in neighborhood, convenient location).
In particular, under the Truth-In-Lending Act, "Regulation Z", it is clear that if any advertising or ad has any of the following "trigger" terms:
- The amount or percentage of any down payment, or
- The number of payments or period of repayment, or
- The amount of any payment, or
- The amount of any finance charge
Then the ad MUST also disclose ALL of the following terms:
- The amount or percentage of the down payment, and
- The terms of the repayment, and
- The annual Percentage Rate with that term spelled out or abbreviated, APR, and, if the rate may be increased after the sale, that fact.
The Consumer Protection Division of the Iowa Attorney General's office has taken the position that "terms of repayment" must include the number of payments and either the amount of each payment or total of the payments under the sales agreement.
Only providing the initial down payment, and the monthly amount due, is likely insufficient. Generally, under the federal and state law, any advertisement stating the amount of any payment under a financing plan must clearly and conspicuously disclose the complete terms of repayment, including the amount of down payment, Annual Percentage Rate of interest, and the number of payments and amount of each payment, including the two different monthly repayment amounts under the financing plans and the number of repayments to be made at each such amount.
Other general rules regarding Regulation Z, detail the disclosures which normally must be made. (Note: It is stated that when making loans (not advertising) the disclosure must be made within three days of a loan application).
Under Iowa Administrative Rule Chapter 10 (Advertising) Real estate advertising shall not be misleading, deceptive, or intentionally misrepresent any property, terms, values, or policies and services of the brokerage.
See Iowa Administrative Rule Chapter 10 - Advertising under own name
See Iowa Administrative Rule Chapter 10 - Signs on property
Watch List/Brokerage Agreements
Under proposals oftentimes offered by REALTORS® would be advertising other entities (i.e., banks) messages on the REALTORS® for sale sign (sort of like a billboard). It seems like it would not be too much of a stretch to be misled into believing the REALTOR® had something to do with the financing.
A property owner must follow the signing ordinance of their jurisdiction. If some other type of entity wants to advertise, it would not be unreasonable for them to advertise upon their own signage on the prospective seller property. I believe this would help to clarify to the public that the REALTOR® is not involved in the financing, and would assist in walling off any liability for any improper advertisements.
Tying arrangements of a transaction to one bank would be strictly prohibited by Iowa Administrative Rules Chapter 11, and any affiliated business arrangement would likely require further disclosures (IA Rule Chapter 11), and referral business to another business entity has further disclosure rules (IA Rule Chapter 11).