ZeroBrokerFees.com
files lawsuit
Site: Regulators may want Realtor license
By LISA ARSENAULT -Concord Monitor staff
- June 14. 2006 8:00AM
A Massachusetts company that advertises property for sale
online is challenging New Hampshire's real estate laws.
The owners of ZeroBrokerFees.com of Beverly, Mass., say
websites that help people sell their homes online without
a Realtor shouldn't have to get a real estate license to
do so.
In what it called a pre-emptive move, the company sued
the state in federal court yesterday because, it says, state
realty regulators are trying to prevent websites from distributing
real estate information -- and violating the owners' constitutional
rights in the process.
"We do not give out advice. We merely educate people
on how to better advertise their property,"said Frank
Mackay-Smith, chief operating officer of ZeroBrokerFees.com.
"I think it makes us a publisher, not a Realtor."
He said the New Hampshire Association of Realtors and the
state Real Estate Commission have made it clear they will
"go after websites like ours."
The state realty experts say New Hampshire law does not
require such websites to have licenses -- only if they are
doing more than advertising.
"It's just not true that we are against internet advertising,"
said John Sullivan, general counsel for the New Hampshire
Association of Realtors. "We freely acknowledge that
there are a great number of websites that provide important
services and they fit the needs of certain buyers."
State realty regulators have not filed any complaints against
ZeroBrokerFees.com. The owners of the company said they
want to expand their business in New Hampshire but don't
want to get into a costly legal battle with the New Hampshire
Real Estate Commission as a result.
Paul Griffin, executive director for the New Hampshire
Association of Realtors, said if a website company is helping
negotiate, set prices or show the property, then the site
should be required to get a real estate license.
The association brought a complaint against another New
England website because it was "clearly not just an
advertising site," Griffin said. The site also was
charging buyers' agents a fee if they wanted to show a property
that was listed on the website, helping sellers set prices
and negotiate deals, and withholding information about how
to contact owners of listed properties until prospective
buyers were preapproved, Griffin said.
New Hampshire real estate law requires all real estate
brokers to be licensed. It defines a broker as anyone who
charges an advance fee to promote the sale or lease of real
estate through a listing in a publication or database. Those
who collect fees "solely for advertisement in a newspaper
or other publication of general circulation" do not
count as brokers and therefore do not need to be licensed.
Mackay-Smith and the site's founder, Ed Williams, said
their website falls in the exempt category because they
merely collect advertising fees for publishing real estate
listings, just like a newspaper that runs real estate ads.
ZeroBrokerFees.com charges home sellers $49 to place an
ad on the website. The services are free to interested buyers
who use the website to search for properties, and the only
advice consultants offer is how to better advertise properties,
Mackay-Smith and Williams said.
Of the 14,000 properties nationwide advertised on ZeroBrokerFees.com,
only 74 are in New Hampshire. Mackay-Smith said state regulators
have made it clear that they intend to be "hostile"
to any further expansions.
The Institute for Justice, a libertarian public interest
law firm in Virginia, filed yesterday's lawsuit on behalf
of ZeroBrokerFees.com at U.S. District Court in Concord.
Valerie Bayham, a staff attorney with for the institute,
said people who run websites like her clients' are being
treated as "second-class citizens." She said state
real estate regulators have a double standard because they
allow newspapers to publish real estate ads without a license
but not websites like ZeroBrokerFees.com
The institute filed a similar suit in California four years
ago and won, Bayham said.
Part of the problem may be that the state's laws were written
before the internet age, said Peter Wright, a professor
at Franklin Pierce Law School and a former real estate lawyer.
The statute defining brokers and licensing does not make
mention of the internet nor websites that list real estate.
"In this digital age, there is so much information
that is exchanged and disseminated through the internet,"
Wright said. "It may be that the New Hampshire law
needs to be changed to reflect that fact."
The attorney general's office and members of the New Hampshire
Real Estate Commission declined to comment on the lawsuit.
------ End of article
By LISA ARSENAULT
Link
to Original Article at the Concord Monitor
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