Federal court and state regulatory agencies have upheld Internet companies' right to carry FSBO (for sale by owner) advertising without the need for real estate brokerage licenses. A legal fracas in New Hampshire pits www.ISoldMyHouse.com (an affiliate of East/West Mortgage Co., whose principal owner is Commerce Bank and Trust of Worcester, MA) against the New Hampshire Assn. of REALTORS®. NHAR filed a complaint last year asking for sanctions against the web site's owners for allegedly acting as a broker without a license. The state's Banking Department Commissioner stepped into the ring asserting sole authority in enforcement of its licensees. The Banking Department Commissioner ruled in East/West Mortgage Co.'s favor,
NHAR enters this fray with the added muscle of $10,000 from The National Assn. of REALTORS(S) (NAR) and the history of prior support from the New Hampshire attorney general.
Chris Gallagher, a lawyer who is representing ISoldMyHouse.com, said "there is in this matter a compelling irony" because NHAR has argued that this banking entity should obtain a real estate brokerage -- meanwhile, NAR has been lobbying hard to keep banks out of the real estate brokerage business.
"I really don't understand why they're doing what they're doing," he said. If an entity such as an Internet-based property advertising service is required to obtain a brokerage license, then it could similarly be argued that multiple-listing services, as property advertising vehicles, should be required to obtain a real estate brokerage license".
A federal judge in California recently ruled in favor of www.FSBOonline.com and struck down a law that required Internet based real estate advertising sites to obtain real estate licenses. The court concluded that the law violated First Amendment guarantees of free speech and freedom of the press.
(I will review several FSBO Internet sites in a future post of TheREALTYgram Blogger.)
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