PETER P. CASEY
Law ‘is confusing’

Before picking up the telephone to dial local residents to ask if they need help selling a home, real estate agents are going to have start checking a national do-not-call list. The same may go for Realtors who want to send a fax to colleagues or prospective clients.

Starting Oct. 1, new federal rules barring telemarketers from making unsolicited calls to people who have registered on a national do-not-call list take effect. Much to the surprise and disappointment of local Realtors, the do-not-call rules also will apply to phone calls they make despite state laws that exempted them previously. And now Realtors are wondering how similar do-not-fax rules will affect them.

Already, owners of real estate companies have started telling agents to stop making phone calls until further details emerge. The Massachusetts Association of Realtors has sent e-mails to members notifying them of the rules and posted information on its Web site, and the National Association of Realtors is having a Webcast information seminar on the topic on Tuesday.

Both groups have sent letters to the FCC’s Consumer and Government Affairs Bureau asking the FCC to change its rules on intrastate phone calls.

“It is clear that this federal law is confusing and it is difficult to understand how it’s going to work mechanically and goes far beyond any degree of reasonable effort to make this fair for consumers and businesses who rely on communication to conduct business,” said MAR President Peter P. Casey.

‘Critical’ Distinction

Some real estate agents routinely call consumers to see whether they are considering selling their homes and whether they would like assistance. Other agents check for for-sale-by-owner signs in neighborhoods and contact sellers to see if they would like help in marketing the property, or they’ll call such sellers if they have a client who is interested in buying the home.

With the new rules, agents would have to check a list containing millions of names before making such a call or face a fine of up to $11,000 if they contact a consumer on the list.

Realtors in the Bay State and across the country are troubled by both the do-not-call and do-not-fax rules, which they say are unclear and open to various interpretations. They also say that the Federal Communications Commission sidestepped the normal rule-making process and made an unprecedented move when it issued its do-not-call ruling in the summer, which basically trumped state laws that included exemptions for real estate agents and others.

The FCC do-not-call rules apply to calls made within states, whereas prior rules by the Federal Trade Commission applied only to calls made across state lines. Prior to that, state telemarketing laws governed intrastate calls. In Massachusetts, and a few other states, real estate agents were exempt.

More than 30 states, including Massachusetts, Connecticut and Rhode Island, have their own do-not-call laws. Massachusetts allows residents to register on a do-not-call list maintained by the Office of Consumer Affairs and Business Regulations. Numbers on the list have been shared with the national registry. However, last year, MAR successfully lobbied for a so-called “face-to-face exemption.” Such exemptions apply to solicitors who don’t actually sell services and goods over the phone, including real estate agents and brokers, but make phone calls to set up appointments and face-to-face meetings to generate business.

Casey said such state laws are important because they make a distinction between calls that real estate agents make to set up appointment and “the typical high-pressure sales pitch.”

In a letter they sent to the FCC in July, Casey and MAR Executive Vice President John Fridlington wrote: “There is a critical but necessary distinction between companies who engage in unsolicited telephone sales calls and those that use the telephone as an extension of their business. Our 17,000 members clearly fall in to the latter category. The current exemptions (sic) has proven to work quite well for our members since the process of listing a home or writing up an offer involves such a face-to-face meeting.”

But the FCC basically voided those state laws. “It’s unheard of that a regulatory agency supercedes state laws,” said Casey, who noted that Congress usually takes such measures.

In addition, Casey said the FCC made its decision quickly and without a public comment period, which is unusual in the typical rule-making process.

In August, the FCC also reversed its longstanding interpretation that allowed for an “established business relationship” exception from the preexisting unsolicited fax rule. The new rule, which was scheduled to take effect Aug. 25, requires companies to obtain written permission before sending unsolicited faxes even if there is an established business relationship. Realtors argue that the new fax rule would interfere with day-to-day business relationships between Realtors and their clients as well as unfairly limit communications between state, local and national associations and their members.

The FCC delayed the effective date to Jan. 1, 2005, after NAR and other groups sought clarification and more time to comply.

“Over 2 million U.S. homes are in the sales transaction pipeline on any given day. The ability to move promptly and communicate via fax is instrumental to the success of these transactions in highly competitive housing markets. Yet businesses were originally given less than 30 days to amend their current practices and gain new consent from customers and vendors,” NAR President Cathy Whatley said in a written statement.

For local Realtors, there are too many unanswered questions about both the do-not-call and do-not-fax rules. Last week, Casey wondered whether he would be barred from calling a former client whom he has worked with for 10 years if the client’s name is on the list, or if he would have to get written consent from a customer to fax information about homes only once, or every time a fax is sent.

“It’s unsure the extent to which an agent would have to get permission,” he said.

Jim Polino, president of The Realty Guild and broker-owner of Highland Real Estate in Winthrop, said he met with real estate agents in his office last week and instructed them not to make unsolicited phone calls until he has purchased the national list of names and has further information.

“I think it will have an effect. My particular office is not dependent on cold calling. We do a lot of direct mail. But I know that there are companies out there that do it and it will affect them,” said Polino.

Consumers on the list who receive unwanted calls can write, call or send an e-mail to the FCC’s consumer inquiries and complaint division. The FCC and FTC are in charge of enforcing the rules, although it’s not clear how complaints will be handled, according to critics.

Even if the rules make sense conceptually, said Casey, no one has thought through such details to determine how they will work practically. “The unintended consequences may put a dent in the economy – the only part of the economy that’s working,” he said.