Legal Challenges that Brokers Face

Legal issues permeate all aspects of the real estate industry, and the business of brokerages is no exception. The National Association of Realtors® (NAR) is committed to helping brokers negotiate the complex and ever-evolving legal landscape. Here are several common legal challenges that brokers face, along with some of the many resources NAR offers to guide them.

Wire Fraud on the Rise

Costly wire fraud scams impacting real estate transactions across the U.S. are on the rise. A hacker sends a fake, but authentic-looking, email to homebuyers at closing with “new” instructions for sending funds. The buyers then unwittingly wire the funds directly into the hacker’s account. According to the FBI, real estate scams have climbed more than 1,000 percent since 2015, and in 2017, $969 million was “diverted or attempted to be diverted” from a real estate transaction to criminally controlled accounts.

NAR has several resources available to help you prevent your buyer clients from becoming part of these statistics, including videos like “How to Avoid Wire Fraud in Transactions” and “Wire Fraud Alert for Buyers”; a downloadable handout, “Protecting Your Business and Your Clients from Cyberfraud”; the downloadable “Data Security and Privacy Toolkit”; and a “Wire Fraud Email Notice Template” to alert customers as part of your standard email signature.

Texting Without Consent

If you or your agents use texting or cold-calling for marketing purposes, you need to comply with the Telephone Consumer Protection Act (TCPA). Recently, texting has been targeted by plaintiff’s lawyers in class-action lawsuits alleging that real estate companies are violating the TCPA by sending text messages without the recipient’s consent.

Prior consent is required for most texts and calls, and our team offers guidance on how to legally use these tools. Refer to NAR’s Window to the Law monthly video series for the “TCPA and Texting,” and the brand-new “Do Not Call Compliance” videos, as well as a variety of legal case summaries addressing this issue. Another video, “Hot Topics in Broker Risk Reduction,” released this May, also provides specific tips to reduce your risk of violation.

Sources: NAR.realtor/legal | RISMedia