Offering of Inducements

Q: I recently saw an ad where a real estate agent was offering free vacations to sellers and buyers. Is this permissible?

A: The Real Estate Licensing Laws do not contain any blanket prohibition against the offering of prizes or gifts by real estate agents to prospective clients. However, General  Statutes §93A-6(a)(3) states that the Real Estate Commission shall have authority to discipline a licensee if the licensee is guilty of “pursuing a course of misrepresentation or making of false promises through agents, salesmen, advertising or otherwise…” Also, if the agent is a REALTOR®, the Code of Ethics would apply. Standard of Practice 12-3  states as follows: “The offering of premiums, prizes, merchandise discounts or other inducements to list, sell, purchase, or lease is not, in itself, unethical even if receipt of the benefit is contingent on listing, selling, purchasing, or leasing through the REALTOR® making the offer. However, REALTORS® must exercise care and candor in any such  advertising or other public or private representations so that any party interested in receiving or otherwise benefiting from the REALTOR®’s offer will have clear, thorough,  advance understanding of all the terms and conditions of the offer. The offering of any inducements to do business is subject to the limitations and restrictions of state law and the ethical obligations established by any applicable Standard of Practice.” Therefore, although neither the licensing laws nor the Code of Ethics prohibits the type of  advertising set forth in your question, any such advertising should clearly set forth all of the terms and conditions of the offer so as not to be misleading.