Legal Challenges Facing Real Estate Professionals: Annual Convention Summary from Your Legal Helpdesk

Legal Challenges Facing Real Estate Professionals: Annual Convention Summary from Your Legal Helpdesk

At the Alabama REALTORS® Annual Convention last week, Mr. Ralph Holmen, Associate General Counsel for NAR, provided insight on current legal issues affecting real estate. Below is the Legal Helpdesk’s summary of his presentation - focusing on four topics: 1) ADA Website Accessibility; 2) Copyright Infringement; 3) RESPA; and 4) Cyber Fraud. 

Mr. Holmen's presentation "Legal Challenges Facing Real Estate Professionals" can be found here.
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ADA Website Accessibility

The ADA prohibits discrimination against disabled individuals in places of public accommodation. The US DOJ’s position is that all websites are places of public accommodation and must be accessible to disabled individuals. However, no regulations currently govern the issue.

The Federal Circuit Courts are split on the issue - some require a nexus or link to a physical store while other Circuit Courts do not. The 11th Circuit Court of Appeals, which has jurisdiction over Alabama, applies the nexus test, requiring a link between a physical store and the website (e.g., Wal-mart, Target, Hobby Lobby). 

Lawsuits are being filed on the issue, making it important to safeguard against. For example, there are two current cases being appealed to higher courts that may impact the issue. One is out of Florida where a federal district court ruled that Winn-Dixie’s webpages related to coupons violated the ADA because it was inaccessible for sight impaired individuals.

A few tips – 

  1. Include an accessibility statement on your website
  2. Review current accessibility of your website and create a plan for increasing accessibility
  3. Require third party vendors to offer accessibility options
  4. Watch for further legal developments from the DOJ and from courts


Copyright Infringement on Websites

Be careful that the content on your websites does not violate - or infringe upon - copyrights. To post material on a website, the owner or person who posts must have a right to post the material – whether by owning or licensing the copyright to the material, or the copyright has expired and considered “in the public domain”. 

Two ways you may violate the laws include:

  1. By displaying infringing material on one’s own website or on another website, whether Zillow, MLS, or otherwise, and
  2. When infringing material is posted to your site by others.

Two tips were provided –

  1. Know what rights you have in photographs before posting, and
  2. Make efforts to comply with the DMCA Safe Harbor exception to protect against lawsuits over infringing material posted by others.

To comply with the DMCA Safe Harbor exception, you must:

  1. Designate a “copyright agent” to receive takedown requests for content placed on your website by others (more info here),
  2. Not have knowledge that the specific material posted lacks adequate copyright or permission or know of facts indicating that it is posted without copyright or permission,
  3. Adopt and display a notice of termination policy for those who repeatedly post images for which they do not have rights to post,
  4. Not control the copyrighted material or receive a direct financial benefit from the copyrighted material, and
  5. Promptly remove the material from your website when a notice is sent to the designated agent.


RESPA

In general, RESPA prohibits giving or receiving things of value for real estate referrals except for fair market value for goods or services actually provided. Many settlement agents enter marketing service agreements (MSAs) based on this exception.

To ensure compliance with RESPA, your MSA should provide that compensation:

  1. Is not based on or related to the number or success of referrals, and
  2. Is based on the fair market value of marketing services actually provided.


Also, look out for additional guidance from the Consumer Finance Protection Bureau (CFPB) on Co-Marketing Arrangements.

 
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Cyber Fraud

Cyber attacks can happen to you and can cost you a lot of money. 43% of all 2015 cyberattacks were directed at small to midsize businesses. Real estate transactions are prime targets due to the small size of firms, the large sums of money and the large number of parties involved.

Hacked emails are key tools for wire fraud cyberattacks in real estate. Some best practices for prevention include:

  1. Inform clients verbally and in writing of the potential issue,
  2. Avoid sending wire instructions and sensitive information via email,
  3. Instruct homebuyers to confirm with the recipient immediately prior to sending funds,
  4. Do not use the information provided in the email but research the company and independently verify a number before calling.

“Disclaimer: This article provides general information only and does not constitute legal advice. No attorney-client relationship is created by reading, viewing, opening, or other action related to this article. If legal advice or other expert assistance is required, the services of a competent professional should be sought. Specific circumstances may change the applicable law or advice a competent individual would provide. In addition, this information is not meant to supplant or in any way replace Errors and Omissions Insurance or other insurance coverage. Mistakes may occasionally be made. Once notified, we will work diligently to correct the issue in a timely manner and mark any updated or changed articles accordingly.”