In June, the Rhode Island Department of Business Regulation (RI DBR) issued FAQs regarding teams and team management. Recently, Dean deTonnancourt, 2019 President of the Rhode Island Association of REALTORS (RIAR) and RIAR General Counsel, Monica Staaf, met with RI DBR to express concerns and questions about the recently released FAQs. Watch the video to see their takeaways from the meeting.
If you are curious about how and why the FAQs came about, the following provides some background information on the topic as well as resources for your use:
In 2017, members of the National Association of REALTORS® Risk Management Issues Committee identified teams as an emerging issue of liability in the real estate field. The topic was the top issue of concern among those surveyed.
The intent of state regulations is to ensure that consumers understand that a team is not a licensed real estate brokerage and that all deposits paid in a real estate transaction must be held by the broker in charge of the office and not by a team. In recent years, regulators and legislators in different states across the country have been facing growing concerns and have stepped up their review of teams in order to clarify regulatory language and minimize consumer confusion. States such as Florida for example, have adopted specific regulations about team names.
In Rhode Island, the RI Department of Business Regulation (DBR) has received an increasing number of calls about teams. Common topics of concern include alleged violations of state law in areas such as advertising, relationship disclosures and compensation.
To that end, RIAR has helped publish information to its members, including several articles and resources on the topic of teams including a recent guide produced by the RIAR Risk Management Committee named A REALTOR®’s Guide to Best Practices: Team Management. The guide provides guidance to principal brokers, team leaders, team members and other real estate licensees. (See links to other publications at the end of this article.)
A REALTOR®’s Guide to Best Practices: Team Management was developed with input from DBR, who asked RIAR to emphasize that principal brokers are responsible for the actions of teams. RIAR distributed this guide via email to all RIAR members, posted it on RIRealtors.org’s password protected Risk Management page and printed and distributed 1,000 hard copies. RIAR pre-licensing instructors also review these topics in class.
At a Real Estate Commission meeting in April, 2019, DBR discussed creating a bulletin with FAQs about teams that could be distributed to all Rhode Island real estate licensees – both RIAR members and non-members. DBR asked members of the Real Estate Commission and RIAR for information about best practices and laws and regulations of teams in other states. RIAR provided information from various states.
At its bi-monthly meeting in June, the Real Estate Commission reviewed and supported a draft team memo from DBR, none of which included new regulations. The FAQs were sent on June 17, 2019 to all real estate licensees. The intent of the bulletin is to provide guidance about existing regulations, ultimately with consumer protection in mind.
RIAR held a free open session with RIAR President Dean deTonnancourt and RIAR General Counsel Monica Staaf to discuss the bulletin on Friday, June 28th. If you weren’t able to attend, you can watch a video of the presentation at rirealtors.org/team-talk.
More information can also be obtained by contacting William DeLuca, DBR Real Estate Administrator, at (401) 462-9506 or through the links below:
- Legal Hot Line questions
- “Part of a Team? Play By the Rules”
- “10 Ways to Make Your Social Media Legit”
- “10 Common Mistakes that Real Estate Licensees Make – And How to Avoid Them”
- “A REALTOR’S Guide to Best Practices: Team Management”
- NAR articles and resources about teams
- “Certified Real Estate Team Specialists”