ForSaleByOwner.com Wins Exemption from Licensing Requirement

A US District Court has ruled it unconstitutional for the state of California to require web sites to obtain a real estate broker's license in order to display property listings. The Court held in favour of New-York based ForSaleByOwner.com, a real estate services company which charges a flat fee for online listings. The company had filed a lawsuit against the state of California last year to challenge the licensing regime. In 2001, the California Department of Real Estate began enforcing against web sites a state law (Calif Bus & Prof Code 10130) under which only licensed real estate brokers can collect advance fees for publishing listing information. However, the statute provides an exemption from the licensing requirement for newspapers and other print publications. The Court found the distinction between online and offline publishers to be "wholly arbitrary," thus violating First Amendment rights. There was no compelling reason to distinguish between the two mediums, said the Court. Even if the distinction was warranted when the law was enacted in the 1950s, held the Court, "that does not mean that the same rationale for exempting newspapers remains viable in 2004, given the vast advances in technology that have occurred in the meantime." Left for future decision is whether, when faced with web sites that are complex, interactive and information-rich, the courts will continue to treat real estate and other consumer product sites as exempt from licensing requirements. To view the California statute, see: http://makeashorterlink.com/?X536526F9. For related news reports, see: http://www.bchomesellers.com/edits/US_FSBO.htm; http://www.ij.org/media/first_amendment/real_estate/; or http://www.inman.com/inmanstories.aspx?ID=43863. Summary by: Rosa Kim