Cold Calls

December 29, 2017 | By Charles Botensten

Q. I am a licensed real estate broker.  Can I make cold calls?  What should I be aware of?

A. Yes, a real estate licensee may make cold calls, but should be aware that federal and state laws and regulations impose certain restrictions on who the real estate licensee may call.

A cold call refers to a situation where a real estate licensee contacts a homeowner but has no previous contact or relationship with the homeowner.  A cold call can refer to contact done by postal mail or email, in person, or, most commonly, by phone. This form of solicitation does not include advertisements in media such as television, radio, websites, general-interest newspapers and magazines, or billboards.

Two important provisions that govern cold calling are the New York Cease-and-Desist Regulation (the “NY Regulation”) and the Federal and New York State Do-Not-Call Laws (the “DNC Laws”). 

The NY Regulation creates certain geographical areas that are considered cease-and-desist zones (the “Zones”). Homeowners in the Zones can register to be placed on a cease-and-desist list (the “List”), which prohibits real estate licensees from contacting the homeowner. Certain parts of the Bronx, Queens and Brooklyn are in the Zones.  The List, which is updated annually, can be ordered on-line, or viewed or purchased at Division of Licensing offices. The Regulation presumes that all real estate licensees know about the List.  Accordingly, a real estate licensee will be found to be in violation of the NY Regulation if he or she contacts a homeowner on the List.  Violating the NY Regulation may result in a fine and/or license suspension for the real estate licensee.

The DNC Laws give consumers the ability to add their home and mobile phone numbers to a Do-Not-Call Registry (the “Registry”).  Once on the Registry, a consumer may not be contacted.  There are two exceptions to the DNC laws: (i) if the consumer has expressly requested the call or (ii) when the consumer has a previous or existing business relationship with the caller.  Violating the DNC Laws can result in fines up to $11,000 per incident. 

Even if the NY Regulation and the DNC Laws do not apply, New York State law permits cold calls only between the hours of 8:00 AM and 9:00 PM, and requires the caller to begin every call with the caller’s name, company name, the purpose of the call, and the goods or service being offered for sale.

Important Tip: Real estate licensees must: (i) maintain the most current List and Registry and (ii) implement very specific policies, procedures and record keeping systems relating to cold calls in order to comply with the NY Regulation and the DNC Laws.  Failure to do so can result in very significant fines.

The Legal Line Question by:
Neil B. Garfinkel
REBNY Broker Counsel

Partner-in-charge of real estate and banking practices at Abrams Garfinkel Margolis Bergson, LLP