As a real estate agent, you have likely been approached by telemarketers (or other marketing companies) who promise to provide you a large number of new, quality, leads. The person who approached you likely seemed friendly and knowledgeable. You likely searched their company online and they had a website and customer testimonials. It seems like a pretty amazing opportunity; however, this isn’t your first rodeo and you ask the person who contacted you how they planned to provide you so many leads. They explained that they will be making calls to people in your area, but not to worry because everything they do is above board. They likely reassured you that you have nothing to worry about.
The above is a sales pitch that you might have received already or might in the near future. It does sound like an amazing opportunity. After all, cold calling is a tried and true way for realtors to acquire new business, but it is not always the most enjoyable task. You may even have been warned by your broker about some of the regulations limiting such phone calls. As a result, it is tempting to retain a third party to make these calls for you; however, according to the Unsolicited Telecommunications Rules and the Canadian Radio-television and Telecommunications Commission (the “CRTC”), simply retaining a third party to make these calls does not circumvent your own obligations under those Rules.
Whether you are making the calls yourself or retaining a third party to make the calls on your behalf, it is important to be familiar with both your and your broker’s obligations.
Know your obligations as a realtor and a broker
The purpose of the Unsolicited Telecommunications Rules is to protect potential consumers from “undue inconvenience or nuisance” (Section 41 of the Telecommunications Act, S.C. 1993, c. 38). In achieving this, the drafters have not only imposed obligations on those making the calls, but, in some cases, they have explicitly imposed obligations on those who have retained third parties to make such calls. The CRTC, charged with administration of this regime, has even taken a very broad approach in the interpretation of these obligations.
Most real estate agents are aware of the Unsolicited Telecommunications Rules and take steps to ensure that prior to picking up the phone to make a cold call that they remain in compliance with them. Most brokerages take steps to ensure you are aware. As a real estate agent, if you aren’t aware of the Rules and you make cold calls to potential clients, it is incumbent upon you to review the Rules and contact a lawyer, if necessary, to ensure that you understand your obligations before making any further calls to avoid potentially large penalties. If you are a broker, you may also be liable in the event your agent makes any calls that violate the Rules. It is important that you take steps to ensure you and your agents are educated regarding their obligations when it comes to these Rules.
Not only do you need to be aware of your obligations as a broker or an agent before making any form of marketing calls you need to understand that you cannot abdicate your responsibilities by retaining a third party to make those calls on your behalf. As discussed in detail below, it is therefore important that prior to entering into any contract with a company offering to provide the realtor (or any sales person) with leads, that the contracting party takes steps to ensure they are protected from administrative penalties.
What are some of the violations?
The CRTC has established the Unsolicited Telecommunications Rules, which include the National DNCL Rules and the Telemarketing Rules. It is the CRTC’s position that these rules not only apply to the party who is making the calls, but apply equally to those who retained their services for that purpose.
For example, the CRTC takes the position that the party retaining the telemarketer is subject to the following Rules and, in the event the party retaining the telemarketing company or the telemarketing firm itself breaches any of these Rules, the party retaining the telemarketer and possibly the brokerage is also liable:
Section 4 of the National DNCL Rules requires the client of a telemarketer to make reasonable efforts to ensure that a telemarketer does not phone a consumer whose number is on the National DNCL List, unless proper consent has been provided by the consumer.
Section 7 of the National DNCL Rules requires the client of a telemarketer to be a registered subscriber of the National DNCL and applicable fees paid by the client.
Section 3 of the Telemarketing Rules requires the client of a telemarketer to be register with and provided information to the National DNCL Operator and applicable fees been paid.
Each call made by the telemarketer on your behalf could constitute and infringement of all three of the above provisions. For instance, if the telemarketer makes a call to a person who is listed on the do not call list, the Commission could take the position that the real estate agent, who retained the telemarketer, is liable for three violations:
1) The brokerage / realtor was not a registered subscriber of the National DNCL;
2) The broker / realtor was not registered with nor provided their information to the National DNCL operator; and
3) The broker / realtor failed to take steps to ensure that the telemarketer did not call someone on the National DNCL.
Each contravention of one of the rules above could result in an administrative monetary penalties of up to $1,500, in the case of an individual, or $15,000, in the case of a corporation. This means, in the hypothetical case above, the real estate agent could be subject a penalty of $4,500 per phone call and a brokerage could be liable for $45,000 per phone call. It is therefore of the utmost importance that prior to retaining any one to make calls on your behalf that you first ensure that you, your brokerage, and the telemarketer are all in compliance with the applicable legislation.
What can you do to limit exposure?
The purpose of the Unsolicited Telecommunications Rules is not to prevent ALL telemarketing. It is to ensure that the people you are calling want to be called (or at least have not taken the step to stop you from calling). The key thing to remember is that in order to start cold calling people you need to ensure that you, or your brokerage, are in compliance with Section 7 of the National DNCL Rules and Section 3 of the Telemarketing Rules. You should ensure that you only call those consumers who have not registered on the updated list. The exception to this, of course, is your consumers who have provided you proper consent to call them.
When retaining a third party to provide you with leads, it is essential that you get any potential contract reviewed by a lawyer. The fact that a telemarketer tells you that they will be acting in compliance with the Rules, may not be enough to avoid administrative penalties. You will need to ensure that it states clearly and unequivocally, in writing, that the third party is going to abide by the National DNCL Rules and the Telemarketing Rules. In addition, you will need to ensure that the telemarketing company is registered with the National DNCL Operator. Your real estate brokerage also needs to be registered with the National DNCL Operator and also subscribed to and access the National DNCL and ensure that the updated list is provided to third party monthly. These are only some of the steps that you should take to ensure you are protected.
In short, you need to familiarize yourself with the Unsolicited Telecommunications Rules and be proactive by ensuring you and your brokerage are protected from liability.
We recommend that prior to entering into any contract with any company offering to provide you leads, you first retain the services of a lawyer to ensure that you understand your obligations. At the very least, a lawyer can review the contract to ensure that you are protected from violating the Rules. The CRTC maintains that you have an obligation to ensure that the company you hire to do your telemarketing is in compliance with the rules.
In the event that you have already worked with one of these companies, we recommend that you contact a lawyer to ensure that the company is acting in compliance with the regulations and, at the very least, to ensure you are protected against any future exposure.
If you have any questions or concerns, please do not hesitate to contact our office for further information.
Please feel free to forward this or any of our other blog post to your friends or colleagues. If you have not already, please sign up for our blog by entering your information in the pop up. You will then receive a confirmation email to your email address. Please follow the instructions on that email to confirm that you would like to receive updates from our firm. You can also follow us on twitter or linkedin.
Disclaimer: the blog covers various areas relating to law for educational and non-commercial purposes only. The blog is not intended to be the source of legal advice. If you choose to rely on the material in this blog or elsewhere on this website, you do so entirely at your own risk.