Brokers are often confused about measuring and square footage requirements, whether or not they can use technology to assist, and whose requirements they are complying with. This article is designed to provide clarification, answer frequently asked questions and correct misconceptions.
FACT #1 – The North Carolina Real Estate Commission does not require that the square footage of a property be advertised.
- If there is an advertising requirement for square footage, it is likely from a local MLS. It is important to know the difference between the rules of NCREC, your firm, and every MLS that you choose to join, as they are all separate organizations with separate rules.
- If the square footage is advertised (as well as all other information), the NCREC requires it to be accurate. Brokers-in-charge are responsible for all advertising, including representations about square footage in the MLS. Individual brokers are also responsible for any representations they make about the property in advertising, the MLS, or otherwise. North Carolina License Law states:
§ 93A-6. Disciplinary action by Commission.
(a) The Commission has power to take disciplinary action. Upon its own initiative, or on the complaint of any person, the Commission may investigate the actions of any person or entity licensed under this Chapter, or any other person or entity who shall assume to act in such capacity. If the Commission finds probable cause that a licensee has violated any of the provisions of this Chapter, the Commission may hold a hearing on the allegations of misconduct.
The Commission has power to suspend or revoke at any time a license issued under the provisions of this Chapter, or to reprimand or censure any licensee, if, following a hearing, the Commission adjudges the licensee to be guilty of:
(1) Making any willful or negligent misrepresentation or any willful or negligent omission of material fact.
(3) Pursuing a course of misrepresentation or making of false promises through agents, advertising or otherwise.
FACT #2 – Last year, the NCREC received approximately 1,500 complaints. 45% of these were about the failure to disclose material facts. Square footage misrepresentations was number 2 among the complaints related to material facts.
- When a listing agent gathers information on a property to prepare to advertise it, they can measure the property themselves or have a qualified person measure it for them such as a competent state-licensed or state-certified appraiser or another agent with greater expertise. When hiring an individual or company, the broker who relies on another’s measurement is expected to recognize an obvious error in the reported square footage and to alert any interested parties.
- Any individual or company performing the measurement of a residential property on behalf of a broker should follow the Commission’s Residential Square Footage Guidelines (found here https://www.ncrec.gov/Brochures/Measurementbooklet2013.pdf ), those approved by ANSI, or comparable guidelines.
- There are several tools available to measure a property that you can use – a standard tape measure, laser tape measure, or even an app on your cell phone. Bear in mind though, that some technology is more reliable than others, and the technology is only as good as the operators. The NCREC does not endorse any particular technology, but does not discourage the use of technology for the purpose of measuring a property, as long as it is accurate.
FACT #3 – When advertising square footage, heated living area (HLA) is the primary space that is included in the calculation. Keep in mind that there may be other types of square footage that should be excluded entirely or separately calculated and disclosed.
- Whether utilizing technology to perform measurements or a simple tape measure, be sure to observe the unique characteristics of the property that may cause your measurement to be off. Is there a 2 or 3 story foyer? Interior space that is open from the floor of one level to the ceiling of the next higher level is included in the square footage for the lower level only. Do you have a room with a slanted ceiling? Make sure the ceiling height is 7’ or higher for at least 50% or more of the room and then include only the space that is 5’ or higher.
- Another requirement for HLA is that you must be able to enter one room from another through heated living area. If you have to enter a room through an unheated space it is considered ‘additional square footage’ and should be reported separately.
- Finally, areas such as additions must be permitted, and if the property is on a septic system bedrooms advertised must match those permitted. Just because the seller is utilizing a space as a bedroom does not mean a broker can advertise it as such. If a property is on septic, the number of bedrooms permitted is determined by the capacity of the septic system. Minimum square footage, number of points of egress and regress, and whether a bedroom must have a closet are sometimes local restrictions.
When property is measured, a broker should be able to ascertain the different type of square footage such as HLA, Additional Square Footage and Unpermitted Square Footage and advertise it correctly. Technology can do an efficient job at measuring. Your job as a broker is to make sure those areas are properly identified on the floorplan of the property. If you hire an expert to measure for you, be sure that you provide them with information about any space that is unpermitted.
In summary, the NCREC does not prohibit the use of technology or a qualified service provider to assist you with measuring a property. Brokers are liable for their representations and BICs are liable for advertising errors by their brokers. Technology can be a tremendous tool to provide fast, accurate measurements and dynamic images at affordable prices. The photos, virtual tours, floor plans and 3D modeling can dramatically enhance your marketing program. These enhancements may lead to more showings, more offers and perhaps even higher prices. As good as the technology is, however, there is no substitute for you as the listing agent verifying the type and accuracy of advertised square footage.