The National Association of Realtors&Reg; (NAR) recently advised its members regarding revised rules under the Junk Fax Prevention Act of 2005. These rules became effective August 1, 2006. Not all members will read the five-page single-spaced advisory, so it might be well to cover some of the highlights here. This, of course, is not an issue of interest just to Realtors; most consumers want to know about it too.

It's important to note at the outset, that the rules apply to faxes that contain unsolicited advertisements, that is, "any material advertising the commercial availability or quality of any property, goods, or services … ." They don't apply to faxing offers and counter offers back and forth or to other transactional documents.

While there are some similarities between the fax rules and the do-not-call telephone rules, the differences are very important. For one thing, there is no do-not-fax list. If you don't want to receive commercial faxes, you don't need to enter your fax number(s) on a list somewhere. Congress has taken the initiative for you. It is prohibited to send unsolicited advertising to any person or business unless an exception applies.

One exception is that the recipient has given his, her, or its express prior permission to receive such advertising. Of course, that never happens. The other exception is that the parties already have an "established business relationship" (EBR). A business has an EBR with anyone "(i) with whom it has had a transaction, or, (ii) who has made an inquiry to the business about products or services offered by the business." There must have been an actual inquiry. Simply having visited the business' website would not, for example, be sufficient to establish an EBR. Unlike the telephone rules, there is no time limit placed on the EBR.

Even if an EBR exists, the sender must be able to demonstrate that he had received the recipient's fax number voluntarily. That can be satisfied in one of two ways. Either the sender had an EBR and the fax number prior to July 9,2005 (the effective day of the legislation) or the number had been acquired through a communication from the recipient or from a public source such as a website.

Also, even if an EBR exists, the sender's fax must contain an "opt-out" clause "clear and conspicuous in its terms and on the first page of the fax (cover sheet if using one)." While there is no specific opt-out language required, the opt-out notice must include a domestic telephone number and fax number where the request can be sent, and it must provide a cost-free means of doing so (usually accomplished by providing a toll-free number).

Just about everyone has seen an opt-out notice on junk fax (i.e. unsolicited ads), but there is a persistent misconception about these notices. The fact that an opt-out notice is present is not sufficient to make sending the fax allowable. The notice is required on all junk faxes, to be sure. But the faxes are not legal unless express prior permission has been given, or there is an existing business relationship between the parties.

The do-not-call rules provide for hefty fines for violations -- $11,000 per occurrence; whereas the fax fines are much more modest at $500 per offense, with treble damages if the faxes are sent willfully or knowingly -- which would pretty much apply to every case. However, a lot of faxes can add up. One case resulted in more than $11 million in fines being assessed.

It is also a specific part of the legislation that private actions in state courts can be instituted against transgressors. For an individual, this would probably mean a small claims court action, and would thus probably be confined to those unwanted faxes that came from within the same state.

Real estate offices virtually hum with incoming faxes. Many of those are illegal unsolicited ads from entities such as mortgage companies, insurance firms, travel agencies, seminar sponsors, and the like, who have no EBR with the company. In those areas where the market has slowed down a little too much, where budgets are stretched and profits are thin, maybe going after prohibited junk fax senders could turn out to be a good way to pick up some spare change.