New York’s DOS licensing rules treat marketing and communications as part of the regulated brokerage business. Telemarketing compliance therefore connects directly to broker supervision obligations.
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New York’s DOS licensing rules treat marketing and communications as part of the regulated brokerage business. Telemarketing compliance therefore connects directly to broker supervision obligations.
Direct solicitation has always been a key revenue generation tool for real estate brokerages. However, it is critical for licensed brokers and salespersons to be aware that it is a heavily regulated consumer-protection activity. In New York, General Business Law (“GBL”) Section 399-z [see https://bit.ly/3KW2KyR] governs telemarketing and do-not-call compliance and adds a heightened restriction during a declared State of Emergency or Disaster Emergency.
Additionally, federal regulations [see https://bit.ly/3Y04Ssq] administered by the Federal Trade Commission can also apply, particularly when calling programs involve interstate activity or vendors. Finally, because marketing and solicitation are part of the brokerage’s business, telemarketing compliance intersects directly with broker supervision and advertising-control requirements under New York Department of State regulations, including section 175.25 [see 19 NYCRR § 175.25 at https://bit.ly/4rZVzpY].
GBL § 399-z is New York’s primary “Do Not Call” statute. It broadly targets telemarketing campaigns designed to induce a consumer to purchase or pay for goods or services. For real estate professionals, this can capture common scenarios, such as calling homeowners to solicit listings, calling consumers to market brokerage services, or running scripted calling campaigns through teams or vendors.
‘Telemarketing’ and ‘Unsolicited Telemarketing Sales Calls’
The statute’s definitions matter because many restrictions are triggered only when the contact is “unsolicited.” As a practical compliance rule, brokerages should assume a call is “unsolicited” unless it is clearly tied to (i) the consumer’s express request for contact (for example, an inbound lead), or (ii) a documented established business relationship that has not been terminated and has not been opted out of. If a brokerage relies on an “established business relationship” rationale, it should be prepared to prove such a relationship with customer relationship management entries, engagement dates and opt-out history.
Time-of-Day Limits and Opening Disclosures
New York restricts telemarketing calls to the hours of 8:00 a.m. through 9:00 p.m. local time at the consumer’s location, unless the consumer expressly agrees to be called at another time. The law also requires clear, beginning-of-call disclosures, which identify the caller and the entity on whose behalf the call is made, and which requires a meaningful pathway for the consumer to request to be placed on the caller’s internal do-not-call list.
Internal Do-Not-Call List, Opt-outs and Records
GBL § 399-z contemplates more than a one-time scrub against a registry. Brokerages should maintain an internal, entity-specific do-not-call list and honor opt-out requests consistently across the entire brokerage firm, all of its offices and all of its agents. The statute also imposes record-retention expectations (i.e., 24-month retention requirement) that, in practice, require brokerages to retain: (i) dialing lists or list sources; (ii) proof of registry scrubs; (iii) internal suppression lists; and (iv) opt-out logs. A compliance program that cannot produce records is often treated as no compliance program at all.
GBL § 399-z contains a specific and frequently overlooked prohibition that is especially relevant to real estate prospecting. It is unlawful for a telemarketer doing business in New York to knowingly make an unsolicited telemarketing sales call to any person located in a county, city, town, or village that is under a declared State of Emergency or Disaster Emergency under Executive Law sections 24 or 28. The restrictions relating to cold calling also apply to statewide issued States of Emergency and Disaster Emergency declarations.
These emergency declarations can be broad, or can be narrow and specific (storm events, flooding, public safety events and other localized emergencies). Currently, there are statewide States of Emergency in effect and, therefore, cold-calling is currently prohibited. Nevertheless, it is imperative that before any cold calls are made by any licensed broker, salesperson, or any team members, they always check with their broker, legal counsel (whether in-house or outside counsel), and even with the New York State Association of Realtors.
Accordingly, a brokerage that uses purchased lists, neighborhood “FSBO/expired” datasets, predictive dialers, or distributed agent calling should implement an operational method to suppress calls in declared emergency locations. Some of the options or tools can include geo-fencing by ZIP/county, pausing specific campaigns and maintaining a dated log of when and how the office implemented the suppression. Further, brokerage firms, brokers and salespersons should also be wary of representations made by services or companies selling these lists that the consumer has approved or consented to being solicited. If any consumer on such lists files a complaint and has not opted in or provided consent, the burden would be on the broker to prove otherwise.
GBL § 399-z is enforced through the DOS Division of Consumer Protection. Enforcement is often complaint-driven and can require rapid production of records showing the basis for the call, the office’s scrubbing practices, and its internal do-not-call list controls. The Division of Consumer Protection can also subpoena and obtain records from the FTC as well as other parties in connection with any enforcement action. It is important for brokers and agents to visit the DOS website to review all of the requirements and restrictions relating to cold-calling [see https://bit.ly/4pKdIqs].
Any party found to be in violation, after notice and a hearing, will be subject to a civil penalty of up to $20,000 per violation. Each unlawful solicitation call will be treated as a separate violation, creating significant aggregate exposure. Robo-call services can make several hundred and even thousands of calls, and each call would be subject to a separate penalty of up to $20,000. Additionally, the Division of Licensing would also institute parallel suspension or revocation proceedings from a licensing standpoint.
Many brokerages also need to account for federal telemarketing rules. The FTC’s Telemarketing Sales Rule (“TSR”) [see https://bit.ly/3XW9vnu] regulates certain telemarketing campaigns that involve interstate activity and are designed to induce a purchase or payment for goods or services. Real estate businesses often become “interstate” by outsourcing calls to out-of-state inside sales teams, using national lead vendors or running multi-state campaigns through a centralized dialer.
Transparency, Do-Not-Call Compliance, and Recordkeeping
While the TSR contains detailed provisions, the operational themes most relevant to brokerages are: (i) truthful and non-deceptive sales practices; (ii) required disclosures during telemarketing calls; (iii) honoring Do-Not-Call and opt-out requests; and (iv) retaining required records. Brokerage firms that use third parties should require contractual compliance, including obligations to follow the TSR, maintain records and cooperate with any inquiry.
Even when a brokerage believes it is operating “locally,” vendors and technology can create interstate activity and broaden exposure. For risk management, brokers should treat telemarketing compliance as a vendor-management issue as much as an agent conduct issue, and should demand written compliance representations, documented scrubs, and audit rights from any platform or marketing provider engaged to generate calls or texts.
New York’s DOS licensing rules treat marketing and communications as part of the regulated brokerage business. Telemarketing compliance therefore connects directly to broker supervision obligations. If a broker encourages cold-calling, provides scripts, distributes lists, or adopts calling tools, the broker must supervise those activities as brokerage operations. Section 175.25 is framed as an advertising rule, but it reinforces a broader compliance principle. The broker is responsible for advertising and communications published or made under the brokerage’s name and must control the content and method of those communications.
From a failure-to-supervise perspective, a broker’s exposure increases when the brokerage lacks written procedures, does not train licensees, does not monitor cold-calling practices, and cannot demonstrate corrective action when violations occur. In a telemarketing investigation, the broker’s supervision file (for example, policies, training logs, audits, discipline and other records) can be as important as the call itself.
A defensible cold-calling compliance program should be operational, documented, and easy to enforce. At a minimum, brokerages should:
Brokers and managers should supervise and maintain internal checklists, and a system of checks and balances. Brokers and managers must be sure to address any violations quickly and definitively. If there is a violation discovered, a broker must take swift action and, where necessary, terminate an agent’s affiliation with the brokerage firm immediately.
Cold-calling is not prohibited in New York. However, it is heavily conditioned and regulated. It is important to note that during declared emergencies, unsolicited calls are strictly prohibited, and are unlawful where legal requirements are not followed and adhered to. The penalties can be severe, up to $20,000 per violation. Violations can quickly add up when a robo-call service is utilized (making hundreds and even thousands of calls) resulting in potentially hundreds of thousands to millions of dollars in fines. The best protection is a brokerage-level compliance program that controls lists and tools, trains licensees, supervises outreach under DOS standards and retains the records needed to prove it.
Legal Corner Column author John Dolgetta, Esq. is the principal of the law firm of Dolgetta Law, PLLC. For information about Dolgetta Law, PLLC and John Dolgetta, Esq., please visit http://www.dolgettalaw.com. The foregoing article is for informational purposes only and does not confer an attorney-client relationship and shall not be considered legal advice. The views and opinions expressed in this article are solely those of the author and do not necessarily reflect the views or positions of HGAR, its affiliates, or any other entity.
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