Follow these steps to ensure you’re not running afoul of the law when using pictures online.

You have blogs, brochures and social media pages to fill with content, and a photo can be worth a thousand words—or a stiff financial penalty if you’re not minding copyright laws. Ignorance of the law is not a legal defense against accusations or lawsuits.

“A copyright owner owns the rights to reproduce, distribute copies, perform, display and prepare derivative works of the copyrighted material,” Chloe Hecht, senior counsel at the National Association of REALTORS®, says in the latest “Window to the Law” video. “Using a copyrighted work without permission is an infringement and could result in liability.”

Hecht offers several tips in the video to minimize risks of a copyright infringement accusation, including:

• Check permissions. Do you have permission from the owner to reuse the image or reprint the text? Permissions are also needed to use music in podcasts or videos or even at events.
• Don’t rely on a third party’s compliance. You still need to obtain permission from the copyright owner or ensure that the third party does. “The owner may not be immediately apparent, so budget time to conduct any necessary research and to communicate with the owner about permission,” Hecht cautions. “If you cannot determine who the owner is, don’t use the work.”
• Get permission in writing. If you’re granted permission, use a license agreement that describes the scope of work that you’re permitted to use. For your listing photos, NAR has created sample photo agreements that could be used with photographers.

©National Association of REALTORS®
Reprinted with permission

Iowa Supreme Court says it all boils down to possession of the property.

One of the most common hazards at a showing? Slip and falls—and the lawsuits that might follow. But the particular circumstances of a case can have a big effect on the legal outcome, as demonstrated by a recent Iowa lawsuit in which a prospective buyer’s fall on the property didn’t result in broker liability.

The case: After she slipped, fell, and injured herself on the icy driveway at a vacant for-sale home, prospective buyer Amanda DeSousa sued the homeowners, Matthew and Melissa Fynaardt, and the listing brokerage, Iowa Realty. Neither the Fynaardts nor the Iowa Realty broker were at the property that morning.

DeSousa, who visited the property with her buyer’s agent, alleged the defendants were negligent because they didn’t warn her about or remedy the icy driveway. Iowa Realty argued it owed no duty because it didn’t own the property, none of its agents were there at the time and the danger was obvious. But DeSousa argued there was a material fact as to whether the list- ing broker controlled the property.

The ruling: The Dallas County District Court denied Iowa Realty’s motion for summary judgment, saying a jury could plausibly find the brokerage should have cleared the area.

Iowa Realty appealed the denial to the Iowa Supreme Court. The argument on both sides turned to whether the listing broker had a duty to protect prospective buyers from hazards on a property as the “possessor.” Relying on state precedent, the court noted that a land possessor is someone who:

• Occupies and controls the land
• Is entitled to immediate occupancy and control, if no one else is
• Had occupied and controlled it, if no one subsequently became a possessor

The court reversed the lower court’s decision, ascribing a duty of safety only to the homeowners as “possessors” of the property. The justices noted that Iowa Realty’s sell- ing role didn’t entitle the brokerage or its agents to occupy or control the property, likening the situation to vacationing homeowners leaving their keys with a neighbor. The court held that scheduling a showing doesn’t transfer control, so Iowa Realty couldn’t be held responsible for DeSousa’s injuries. While the court didn’t explicitly say so, it can be inferred from the language of the decision and from past case law that had the listing broker been there, the court might have found him liable in a “dual possession” capacity because he was conducting business on behalf of the owner.

Best practices: The case centered around an accident that followed an overnight winter storm, not a condition that could have been known in advance by
the listing agent. However, if there are known property hazards in a listing, it’s important for the listing broker to review them with the sellers and note them in the MLS. That’s especially important for vacant properties. And keep those insurance policies up-to-date.

©National Association of REALTORS®
Reprinted with permission

The steps you need to take if you receive a fair housing complaint.

If you’ve ever been on the receiving end of a fair housing complaint, you know how badly it can rock your world. Whatever the circumstances, you’ll have a better outcome if you take a serious, straightforward approach.

Start by contacting your attorney. Then, call your local or state association’s legal hotline for advice on next steps. You’ll want to gather records of all contacts you’ve had with the complainant. That’ll be easier to do if you have a system for keeping track of all your client interactions, including e-mails, text messages, and signed agreements and contracts.

Once an investigation starts, it’s important to stay out of the way and let the investigators find out what happened, says Idaho practitioner Steve Osburn, who faced a complaint against his former company.

In 2008, a local fair housing group charged that one of his agents tried to steer sales in a new housing community toward people 55 and over. The Intermountain Fair Housing Council in Boise was performing testing in the community, which the developer had been advertising as an active-adult community, though it did not qualify for the Housing for Older Persons Act exemption to the Fair Housing Act. Osburn—at the time broker-owner of Windermere Real Estate/Capital Group Inc. in Boise—says the complaint was slim on details, and he was confident the agent had done nothing wrong. He fully cooperated with the U.S. Department of Housing and Urban Development’s investigation. “You don’t want to push too hard against the complaint or the investigation,” he says. “You don’t want to look like you have something to hide.” 1:21

The council dropped its claim with HUD but, nevertheless, filed a $300,000 lawsuit against Osburn’s company. During the discovery phase, Osburn’s attorney showed that HUD hadn’t found evidence of wrongdoing by the agent. The attorney said HUD was about to side with Osburn when the council dropped its claim. Osburn settled the lawsuit for $500 and admitted no wrongdoing.

“From a broker’s perspective, educate your agents frequently and talk about fair housing openly so they have good information,” says Osburn, now a broker-associate with Better Homes and Gardens 43˚ North in Meridian, Idaho. “Second, never roll over and just accept a complaint—but do allow the investigation to get the facts.”

©National Association of REALTORS®
Reprinted with permission

The meticulous work of drafting a new ethics rule will pay off in clarity for our profession and the public.

Nothing matters more to a service profession than public trust. REALTORS®, whether specializing in sales, appraisals, property management or other disciplines, need to be trusted by members of the public in order for our services to be valued and considered beneficial to society.  

In recent times, no topic has tested the public trust more than the issue of appraisal bias, and specifically appraisal bias against people of color.  

It is deeply troubling to me, and to appraisers in general, to hear stories in which families are affected in such a way that they feel they must hide who they are in order to obtain a fair valuation. No one should ever have to go to such lengths.  

The Appraisal Standards Board takes the issue of appraisal bias very seriously. An independent board of the Appraisal Foundation, ASB is tasked with writing and updating the professional appraisal standards used in every state and territory of the United States. The Appraisal Foundation is a nonprofit entity that was granted the authority by Congress to be the keeper of these standards, known as the Uniform Standards of Professional Appraisal Practice.  

Over the last several years, the ASB has been working on clarifying standards regarding discrimination that go beyond the existing requirement of simply not performing an assignment with bias. The ASB is getting closer to adopting these enhanced ethical obligations, with the goal of maintaining public trust in the profession.  

As a third-generation member of the National Association of REALTORS®, I understand the need for strong ethical standards to govern our profession, as well as the need for REALTORS® to understand and uphold them. Furthermore, in order to maintain the public’s trust, we must allow the public to see our standards and understand them as well. The work the ASB is doing will result in clear and enforceable standards that everyone, both within our profession and outside of our profession, will be able to understand.  

When making changes to USPAP, the ASB releases a document known as an exposure draft to the public. The draft shows what the ASB proposes to change within USPAP, as well as ASB’s rationale for proposing the change. The ASB solicits feedback on exposure drafts from various stakeholders including appraisers, regulators, federal agencies, lenders, educators, professional organizations and consumers. Based on that feedback, the ASB may decide to adopt the changes or may make additional revisions and issue a subsequent exposure draft. No change to USPAP may be made without exposure and public comment.  

At our public meeting last month, the ASB announced that, in response to feedback from the public, we are continuing to work on the proposed edits to the USPAP ethics rule. This rule specifies the personal obligations and responsibility of the individual appraiser. The ASB will continue this engagement so that the revised rule and accompanying guidance will clearly convey the prohibition against illegal discrimination.  

Four exposure drafts have been released to date, and a fifth one will be released soon, most likely within the next few weeks. (Watch The Appraisal Foundation’s website(link is external) for updates.) Making revisions to USPAP is an intense and exacting process, because it is imperative that the ethical and performance standards for the valuation profession be clear and enforceable. This process demonstrates the ASB’s commitment to drafting precise, clear and direct language.  

There’s a light at the end of the tunnel. When our work is finished, USPAP will include language in the ethical standards that will enhance public trust and allow for those both within the profession and outside the profession to understand the obligation for equal treatment under the law.

©National Association of REALTORS®
Reprinted with permission

Home buyers or sellers may back out of a home sale for any number of reasons, but lawsuits are a real risk. Know how to protect yourself.

Most real estate professionals have had a client with cold feet back out of a deal at the last minute. Maybe the client got psyched out over finances or is dealing with a life-changing circumstance that prevents him or her from following through on a sales contract. Whatever the case, you need to make sure that when you cancel a contract, you’re not breaking your fiduciary responsibilities.

While only 5% of sales contracts nationwide were terminated in January, according to the most recent REALTORS® Confidence Index, that figure was at 16% last July—the highest rate in the previous two years. The midsummer spike was attributed to a sharp rise in mortgage rates, which scared off many buyers at the closing table. The latest Window to the Law video from the National Association of REALTORS® addresses the legal considerations you should keep in mind in case you’re involved in a canceled contract.

Even though signed purchase contracts are legally binding, they often include an exit plan if one party wants to back out. A home buyer, for example, may be able to cancel a contract because of a contingency or during an attorney review period. Canceling a contract can become trickier when the reason falls outside of the agreed-upon contingencies. But unfortunate circumstances, such as a job loss or change in household status, may result in the need to cancel.

In every transaction, real estate professionals can help their clients understand the acceptable “outs” to avoid the risks of losing escrow money or even facing a lawsuit, NAR staff attorney Mike Rohde says in the Window to the Law video. “Every contract has an implied duty of good faith and fair dealing, which means parties must act honestly, cooperate with the other party and not discourage or hinder the agreement’s completion,” he adds. Breaching this duty could jeopardize a buyer or seller’s legal rights and lead to litigation. “And as a fiduciary, an involved broker’s actions or inaction may be scrutinized when a contract is terminated.”

For example, if a home seller backs out, a buyer could try to pursue any number of avenues if they think there was a breach of contract. A buyer could try to receive liquidated damages specified in the contract or compensatory damages calculated by actual economic losses. The buyer also could cite specific performance by asking a court to require the parties to complete the originally agreed-upon transfer of property. 

To avoid these risks, Rohde urges real estate professionals to advise their clients about the importance of contingencies and meeting deadlines as well as the risks of waiving contingencies. Also, “avoid casual communications with other parties via text or email, and assure amendments are in writing and signed by all parties to avoid doubts about enforceability,” Rohde adds. And be careful not to overstep your duties. “While you may understand the terms of the agreement, your state law and Article 13 of the Code of Ethics prohibit the unauthorized practice of law,” Rohde says. “Filling in state-approved forms with factual data is generally permitted. However, use caution when interpreting or amending contract provisions. Your state may have statutes governing specific procedures for effectuating a notice of termination or the disbursement of disputed escrow funds.”

©National Association of REALTORS®
Reprinted with permission