Real Estate Teams have grown in prominence over the last quarter century, and with all things that are new and all things in law, the original state of something does not define the final state. In Oregon, with the passage of HB 3137 and its effective date of January 1, 2026, some regulations will be applied to teams [“team” at law is defined as any real estate licensee performing professional real estate activities under a name other than the registered business name of the affiliated brokerage], and among those regulations is a restriction that prohibits the real estate team from naming itself using the terms “realty,” “real estate,” or using a name that has already been registered. For example, “ABC Realty Group” would no longer be compliant with Oregon law, and the name must change; whereas “ABC Home Group” would not be out of compliance. Oregon is not the first state to regulate team names; rather, back in 2008, Michigan was one of the first states to ponder the issue that was posed by unregulated teams and team advertising. The state and the Michigan Association of REALTORS® noted that licensing laws at the time did not regulate team advertisements, but oftentimes had lateral requirements that a broker advertise that they were under the supervision of Michigan’s version of a principal broker, but there was no further guidance about how prominent or obvious the broker’s connection to the principal broker or brokerage needed to be. The guidance in 2008 noted that many states had similar laws, lacking regulation of teams, but impliedly requiring the broker to make it clear that they worked for a regulated business supervised by a principal broker. The guidance ominously ended with a statement that requiring more clarity in team name displays would likely require changes in licensing laws.
Changing licensing laws to address these concerns of lack of clarity began to filter through the nation shortly thereafter. One of the earliest examples of the license law change was Maryland’s 2010 HB 406, prohibiting team names from containing the words “real estate,” “real estate brokerage,” or “any other term that would lead the public to believe that the team is offering real estate brokerage services independent of the real estate broker.” Maryland’s stated reason for the change was that “[c]urrent laws and regulations do not recognize or regulate teams and groups,” and a statement that the Maryland Real Estate Commission established a list of “do’s and don’ts” for teams but lacked enforcement to discourage certain practices, hence the law was established to allow the Real Estate Commission to more comprehensively enforce best practices. Similarly early to the regulatory game was California’s 2014 Assembly Bill 2018 prohibiting the “team” from using the terms “real estate brokerage, broker, brokerage, real estate broker, or “any term that would lead a member of the public to believe that the team is offering real estate brokerage services, that imply or suggest the existence of a real estate entity independent of a responsible broker.” The stated reasoning in California was to address “[t]he lack of clear regulation creat[ing] confusion throughout the real estate industry on what is and what is not a fictitious business name,” and “establishing clear standards for the use of ‘team’ names that are not fictitious business names.”
The story is repeated in Ohio, Florida, Nebraska, Texas, Mississippi, Connecticut, Colorado, New York, and Washington, all for seemingly the same reason – a “team” is not a registered business, but rather a permission within the brokerage to advertise under a different name. For each state, the issue is identical: the consumer deserves to know when they are dealing with a registered, regulated business, and there are some words or terms that notify the consumer that they are dealing with a professional, registered, regulated business. The words and terms vary from state to state, with some restricting the terms “realty” and “real estate” and others restricting terms like “property,” “properties,” “associates,” “group,” “team,” and “affiliates.” Oregon has chosen to use merely the words “realty” and “real estate” and has taken the stance that those terms indicate a registered, regulated real estate business.