What’s New With Team Names and Fictitious Business Names

By David Hamerslough

July 11^th, 2017

Over the last several years, laws have been passed regarding team names and fictitious business names. The Bureau of Real Estate recently published the “most frequently asked questions” received by the BRE in response to the legislation on these topics. The list below is taken directly from the BRE memo with respect to questions on these subjects.

1. “Team name” means a professional identify or brand name used by a salesperson and one or more real estate licensees for the provision of real estate licensed services.
2. A team name must include the surname of at least one member of the team, in conjunction with the word “group,” “team,” or “associates.”
3. The use of the words “broker,” “real estate brokerage,” “real estate broker,” or any other term that would lead a member of the public to believe that the team is offering real estate brokerage services or that suggests the existence of a real estate entity independent of the responsible broker is not allowed.
4. It is permitted to include the words “realty” or “real estate” as part of a team name provided that the surname of at least one team member and either “group,” “team,” or “associates” is used in conjunction with the team name. The BRE identifies “Smith Real Estate Team,” for example, as an acceptable team name.
5. Advertising and solicitation materials, which include business cards, print and electronic media, and “for sale” signage, must include in a conspicuous and prominent manner the team name and the surname and license number of at least one member of the team.
6. Advertising and solicitation materials must also include the responsible broker’s identity, which shall be displayed as conspicuously and prominently as the team name, in all such materials. By way of example, the BRE indicates that if the font on your team name advertising is a 12-point font, then your responsible broker’s name must be in an equal or greater font size.
7. Advertising and solicitation materials, as defined above, must include the responsible broker’s name or both the broker’s name and license identification number. This information, again, must be displayed as conspicuously and prominently as the team name in all such materials.
8. The term “responsible broker identity” means the name under which the responsible broker is currently licensed by the BRE and conducts business in general or as a substantial division of the real estate firm, or both the name and associated license identification number.
9. A “broker associate” who is working in the capacity of salesperson for another broker or corporation can advertise and operate on behalf of a “team name” as long as all the team name requirements have been met. In contrast, brokers who operate as brokers and not broker associates are precluded from using a “team name” as that term is defined in the B&P and are instead required to file for and obtain a fictitious business name pursuant to the B&P Code.
10. “Fictitious business name” means a professional identity or brand name under which activity requiring a real estate license is conducted and the use of which is subject to approval by the BRE.
11. Under the real estate law, the use of a team name is not considered use of a fictitious business name. No paperwork needs to be submitted to the BRE to use a team name.
12. Any licensee who desires to have the license issued under a fictitious business name must file a certified copy of his or her fictitious business name statement filed with the County Clerk in any county or counties where the name will be used with his or her application to obtain a real estate license. Advertising and solicitation materials, including business cards, print and electronic media, and “for sale” signage, using a fictitious business name shall include the responsible broker’s identity in a manner equally prominent as the fictitious business name. The definition of a responsible broker’s identity and what it means for that identity to be displayed equally as prominently as the fictitious business name are the same as those provided previously in this article. This advertising and solicitation material must also include the name and license number of the salesperson who is using the fictitious business name.

Finally, the BRE memo did not cover this subject, but the statute also addresses the fact that a responsible broker may, by contract with the salesperson, regulate the application, use, payment, and ownership of a fictitious business name. Therefore, any licensee who desires to obtain and use a fictitious business name should discuss the matter with his/her broker and obtain that broker’s permission before doing so in order that all rights and obligations relating to the use of that name are understood between the parties.

The disclosure requirements discussed in this article relate to real estate salespersons and do not pertain to mortgage loan advertising. The disclosure requirements for mortgage loan advertising are more extensive, even if a team name is used.