In the not-too-distant future, you'll be able to tap a few Internet keys and find out if someone really has a real estate license. You'll also be able to increasingly hold shady online realty promoters accountable under state rules, according to Craig Cheatham, executive director of the Association of Real Estate License Law Officials (ARELLO).

Later this Spring, says Cheatham, ARELLO will launch in stages an international licensee database at www.arello.com -- not "www.arello.org," the group's usual online address.

The system will allow consumers, brokers, and regulators to type in a name and instantly determine if and where an individual is licensed and verify whether or not that person is authorized to offer realty services. Another use of the system will be to deter FUD -- spreading "fear, uncertainty, and doubt" by those who post online claiming to be brokers and salespeople but are actually unlicensed or inactive.

Because of growing Internet abuse, Cheatham says "some regulators have now adjusted their office practice, especially for their investigative staff, to include time for scans of real estate web sites for unlicensed practice and law violations. These jurisdictions have found more "wrong" on the Internet than they even have time to deal with. Those without such routines have been tapped into ARELLO's information-sharing network, which is full of regular "tips" on sites that are rich in violations."

Real estate rules and regulations, says Cheatham, vary enormously by jurisdiction. To keep up, the association publishes an annual Digest of Real Estate License Laws which is used by many brokerage offices as a reference and to track trends. The Digest includes shorthand grids to compare the rules and regulations from more than 60 provinces, states, territories and countries worldwide, as well as summaries of major real estate rulings, regulatory changes, and new legislation.

One of the most important trends, says Cheatham, is that regulation is increasingly "going federal."

"Real estate practitioners used to look to their state, province or territory for guidance," says Cheatham, "but now they are paying much more attention to federal requirements dealing with RESPA, fair housing, environmental issues and a long list of other" requirements.

This trend, says Cheatham may soon expand to include regulations from the Federal Trade Commission, the Federal Communications Commission, and other agencies not generally associated with real estate regulation.

"I expect this trend toward federal regulation of the details of real estate practice to continue at a fairly rapid pace over the next few years," says Cheatham.

Educational requirements are changing around the country. Some states, explains Cheatham, have added "post-license" requirements for new licensees in addition to traditional continuing education requirements. Also, many agencies are increasing the number of CE hours so that "salesperson" licensees are equal to hourly licensee requirements for brokers. In effect, the educational process is moving a step closer to a single license.

Agency, says Cheatham, remains a core issue for regulators.

"A long list of jurisdictions in the USA and Canada," he says, "have modified or clarified practices in the last several months. This often means more options, more forms and more terms."

Mortgage bankers and loan officers, long outside the realm of real estate regulation in many states, now increasingly fall under real estate license laws. Home inspectors, says Cheatham, may be the next group to find themselves overseen by real estate regulators.

Another change, says Cheatham, concerns minor rule violations. Instead of full-blown hearings, in the next few years he expects many jurisdictions to enact systems that issue citations and fines for "minor" infractions. Such systems, he says "have already had success in cutting through red tape and allowing regulators to spend more time on major threats to consumers."

Despite Internet growth -- which was supposed to reduce the demand for broker services -- the number of licensees has actually increased.

"After a short-lived and slight drop a couple of years ago, it now seems that the number of licensees has begun to grow a little. I think you'll find that NAR has even been a little surprised to see their membership increase lately," says Cheatham.

From a consumer perspective, the most frequent complaint concerns mis-representation, often in the form of a lack of disclosure.

"This seems to be a universal situation, no matter what continent we're talking about," says Cheatham. "It seems that the proper use of disclosure forms can actually help all sides avoid problems, but proper real estate practice is obviously the best measure."

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Published: March 15, 2001

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