Hot Topics in Broker Risk Reduction
November 2022 | NAR Legal Affairs
Competition in Real Estate
REALTORS® help foster competition through their participation in local MLS broker marketplaces. These marketplaces help create highly competitive real estate markets that are friendly to small businesses and new market entrants. REALTORS® work together for the benefit of consumers and help ensure buyers and sellers have the greatest access, transparency and choice in their homeownership journeys. As a result, brokerages of all sizes are able to compete and provide their services to consumers, who in turn have the freedom to choose between different service models and pricing that best meet their needs.
Call to Action
Resources
Realestatecommissionfacts.com
Use and share this website to access information and facts about how real estate commissions work, and why the listing broker paying the buyer broker a commission underpins the local broker marketplaces, and enables efficiency, effectiveness and accessibility for all homebuyers, and especially first-time, low- and middle-income buyers.
Cybercrime and Wire Fraud
Cybercrime continues to be a top concern in the real estate industry. In 2021, the FBI Internet Crime Complaint Center (IC3) reported a year over year increase in both the number of claims and total victim losses. with nearly 850,000 complaints with an estimated total loss of $6.9 billion dollars.
The Top Scams Facing Consumers & Businesses Are:
Real estate professionals should be aware of the risks facing not only their businesses, but also consumers, and educate staff and clients about preventative steps they can take to prevent falling victim to cybercrime.
Risk Reduction Tips
Resources
FBI Resources
From the REALTOR® Store
Avoiding Wire Fraud in Transactions
Video
October 1, 2022
Protecting Your Business from a Ransomware Attack
Video
October 20, 2021
Cybersecurity: What You Need to Know
Video
September 28, 2020
Emerging Tech Episode 3: Ransomware
Video
November 5, 2020
What to Do If Your Business Faces a Ransom Threat
October 7, 2022
Cybersecurity Best Practices in the Era of COVID-19
Video
November 2, 2020
Cyber and Fidelity Insurance Report
Report
May 16, 2017
Copyright Infringement
It is easier than ever for unauthorized uses of third-party works to be discovered. To avoid costly copyright infringement demands, real estate professionals should be sure to obtain permission to use any third-party work and comply with any license terms to avoid copyright infringement. Be sure to maintain records to easily confirm rights, if challenged. Be sure to confirm that any rights received align with the current and planned use of photographs or other third-party work before using it, including on a website, in the MLS, and marketing materials. Real estate professionals should also ensure proper rights to any music used at live events, such as an open house, and before incorporating into recordings. Keep in mind that specific types of licenses must be obtained before incorporating music into a video recording. In addition, real estate professionals should comply with the Digital Millennium Copyright Act safe harbor to reduce risk when third-parties post on their websites, including photos and music that appear through an IDX display.
Risk Reduction Tips
Resources
Protect Your Website from Copyright Liability
Video
June 1, 2022
Copyright Best Practices for Listing Photos
Video
September 4, 2018
Make NAR's Marks Remarkable & Copyright Best Practices
Video
March 14, 2022
Listing Photo Sample Agreements
Copyright: Best Practices to Avoid Costly Claims
Video
September 21, 2021
Who Owns Your Property Photos?
November 9, 2016
Window to the Law: How to Avoid Copyright Infringement
Video
January 3, 2018
Data Privacy and Security
The amount of consumer data collected by businesses has dramatically increased, and with increasing rates of cyber and other types of theft, data privacy and security needs to be top of mind. Keep in mind, the REALTOR® Code of Ethics requires REALTORS® to maintain the confidentiality of clients’ personal information, both during and after the transaction. Although there is no comprehensive federal data security law that applies to real estate brokerages, at least 35 states have enacted laws addressing the proper disposal of personal data and all 50 states have laws requiring businesses to provide consumers with notice of security breaches involving a consumer’s personal information.
Risk Reduction Tips
Resources
Creating an Effective Data Security Plan
Video
July 1, 2022
Managing Business Records Efficiently
Video
May 19, 2022
Know the Rules for Using Consumer Reports
Video
September 1, 2022
Data Security and Privacy Toolkit
File
April 29, 2022
Creating a Record Retention Program for Brokerages
Fair Housing
NAR’s Fair Housing Action Plan, abbreviated ‘ACT,’ emphasizes (A)ccountability, (C)ulture Change, and (T)raining in order to ensure America’s 1.5 million REALTORS® are doing everything possible to protect housing rights in America. Fair housing laws prohibit discrimination, the refusal to rent or sell real property and other actions, to a party because of a protected characteristic. Steering, blockbusting, and refusing to provide equal services to all clients are obvious fair housing violations, but liability may also arise when a policy or action disproportionately harms a protected class. It’s imperative that all real estate professionals incorporate fair housing compliance and implicit bias training into their strategic plans.
Risk Reduction Tips
Resources
Advertising Within the Fair Housing Framework
Video
April 1, 2022
Housing Vouchers and Fair Housing
Video
September 13, 2021
Criminal Background Checks and Fair Housing
Video
November 1, 2021
Creating a Diversity, Equity & Inclusion Policy
Video
April 1, 2021
NAR’s Fair Housing Action Plan
Video
January 1, 2021
Window to the Law: Fair Housing Update
Video
January 1, 2020
The AHWD Certification
Fairhaven: A Fair Housing Simulation
ADA Website Accessibility
Americans with Disabilities Act (ADA) website accessibility claims continue to grow, with a reported 14% increase in federal lawsuits filed in 2021 as compared to 2020. Additionally, the real estate industry has continued to see a wave of demand letters alleging a business website’s inaccessibility in violation of the ADA and unsupported claims that it also violates the Fair Housing Act (FHA). Businesses continue to wait for the Department of Justice to issue regulations addressing this issue. In the meantime, in March 2022, the DOJ issued website accessibility guidance and a new webpage with information about website accessibility. In the guidance, the DOJ provided information on how businesses can use existing standards to make their websites accessible to people with disabilities. Real estate professionals should continue to work with website vendors to conduct accessibility audits of their websites and use existing technical standards, such as the Web Content Accessibility Guidelines, to ensure accessibility of a website’s features. NAR will continue to advocate for regulations with clear standards that take into consideration the challenges that businesses face in developing and maintaining accessible websites.
Risk Reduction Tips
Resources
ADA Demand Letters: A Vexing Reality for Real Estate Pros
April 27, 2021
Is Your Website ADA Compliant?
April 2, 2016
Window to the Law: ADA and Website Accessibility Update
Video
September 3, 2019
Window to the Law: Websites and the ADA
Video
May 2, 2016
Additional Resource
For additional information, view the U.S. Department of Justice Civil Rights Division's Guidance on Web Accessibility and the ADA
TCPA & DNC: Texting and Calling
To avoid costly legal actions, including class action lawsuits, alleging a violation of the Telephone Consumer Protection Act (TCPA) and Do Not Call (DNC) laws be sure to obtain any necessary consent prior to sending text messages and placing phone calls. Specifically, the TCPA requires prior express written consent before using an automatic telephone dialing system (ATDS) to place telemarketing calls or texts to wireless numbers.
In a recent ruling, the United States Supreme Court1 recently narrowly defined the TCPA’s ATDS definition to require that the call technology not only store or dial numbers, but actually use a random or sequential number generator to place the calls. Thus, calls using random or sequential number generators still require prior express written consent, which involves a signed agreement clearly and conspicuously disclosing the text recipient’s permission to receive call and text messages from the sender. However, now it is clear that calls generated individually - not using a random or sequential number generator - need not obtain prior consent at all, even if the device has the ability to store and dial call lists. Keep in mind that DNC laws should always be followed, which prohibits individuals from contacting phone numbers contained in the DNC registry.
1. https://www.supremecourt.gov/opinions/20pdf/19-511_p86b.pdf
Risk Reduction Tips: TCPA
Risk Reduction Tips: Do Not Call
Resources
Window to the Law: Comply With The Do Not Call Registry
Video
July 1, 2019
Window to the Law: TCPA and Texting
Video
April 4, 2018
TPCA Update on Cell Phone Marketing
Video
May 3, 2021
Do You Know Who You Are Calling?
July 3, 2019
Additional Resources
- View the TCPA Quick Reference Guide
- View the Federal Trade Commission's National Do Not Call Registry