Legal Update – August 10, 2018 NAR - Professional standards - PowerPoint Presentation

Legal Update – August 10, 2018

NAR - Professional standardsAnne Cockayne

Standard of Practice 1-7 Requires listing brokers to submit all offers and counter offers until closing or a lease is executed unless otherwise instructed by the seller/landlord.

Amendment to SOP 1-7 - 2019Upon the request of a cooperating broker who submits an offer to the listing broker, the listing broker shall provide written affirmation to the cooperating broker stating that the offer has been submitted to the seller or a written notification that the seller has waived the obligation to have the offer presented.

What You Should Know About the Amendment Listing broker is not obligated to affirm receipt automatically. Upon request – no set timeframe to respond Do not expect the seller to sign any documentation acknowledging receipt or waiver of your offer. The listing broker’s response is sufficient. The obligation is on the Realtor.

Ethics Hearings – Respondent’s BrokerRight to be present without notice May make opening and closing statements, examine/cross examine parties and witnesses, introduce affidavits, documents and other admissible relevant evidence Respond directly to questions from the hearing panel

Ethics Hearings – Complainant’s Broker In proceeding where a Realtor® principal is not a co-complainant in an ethics case, the complainant may allow their broker to receive documentation related to the complaint and participate in the hearing as a witness or as [Realtor®] counsel.

Publishing ViolatorsOption 1 – Frequency Based Citation discipline included depending on citation policy Official communication vehicles for members only Firm name is not published Occurs in all instances when a 2nd violation occurs within a 3- year period. Option 2 – Discipline Based Builds on Option 1 Name, photo, articles violated along with description of violation with all names redacted except the violator, discipline imposed. Occurs in all instances where a letter of reprimand, a fine, suspension, or expulsion is imposed. May increase timeframe for certain discipline

Fair Housing/Handicap/Service animalsMeredith Caruso

Fair Housing: Federal LawWhat Are the Protected Classes? Race Color Religion National Origin Sex Disability Familial Status

Anything Else? Check with County and/or CitySeveral counties/cities within Florida have extended Fair Housing protections beyond those under federal law. Miami/Dade, Broward, Palm Beach and Pinellas Counties Some additional protections include: Gender identity Sexual orientation Source of income, i.e. Section 8 Victims of dating violence, domestic violence or stalking Political affiliation

Any Exemptions? 55+ housingAn over-55 community may qualify for an exemption from the Fair Housing Act if the association board can prove: at least one resident in at least 80 percent of the units or properties is 55 years or older the community presents itself as “housing for older persons” in its marketing and controlling documents the board has filed the necessary paperwork for a 55 and older exemption. See additional potential exemptions Fla. Stat. § 760.02

What is a Handicap?The definition under federal law of a person with a handicap, also interchangeable with the term “disability,” is defined as, “any person who has a physical or mental impairment that substantially limits one or more life activities; has a record of such impairment; or is regarded as having such impairment.” In general, a physical or mental impairment includes hearing, mobility and visual impairment, chronic alcoholism, chronic mental illness, AIDS, AIDS Related Complex, and mental retardation that substantially limits one or more major life activities. Major life activities include walking, talking, hearing, seeing, breathing, learning, performing manual tasks, and caring for oneself.

What are the Rules on Service Animals? Landlords are required to provide a reasonable accommodation for individuals who require assistance animals. Landlords cannot charge tenants a pet fee or deposit for a service animal, but tenants may be held liable for any damages that animal causes to the property, i.e. can’t charge a pet deposit, but if the service animal damages the property, the landlord could make a claim on the tenant’s security deposit. Involves an individualized assessment to determine whether or not a person has disability-related need for an assistance animal.

Brokerage Competition in Residential Real EstateJuana Watkins

Federal Trade Commission-Department Of Justice WorkshopJune 5, 2018 Washington, DC In 2007 the FTC and DOJ published the Report on Competition in the Real Estate Brokerage Industry. The workshop was held to explore: The Real Estate Innovation Road: How Far Have We Traveled? Listings Data, Emerging Technology, and the Structure of the Real Estate Market Developments in Real Estate Fee and Service Models Regulatory and Industry Factors Affecting Residential Real Estate Competition

SpeakersNational Association of Realtors Inman Redfin Zillow Realtor.com ERA Franchise Systems Purplebricks Glass House Real Estate TRELORA California Regional MLS Cornell University Consumer Federation of America Texas A & M Univ. School of Law The Honorable Joseph Simons, Chairman of the Federal Trade Commission Robert Porter of the Antitrust Division of the Department of Justice

Topics DiscussedExisting and emerging platforms for consumer access to listing information Changes in traditional real estate broker, brokerage, and Multiple Listing Service (MLS) practices Emergence and growth of nontraditional fee and service models Regulatory and state licensing regimes relating to residential real estate transactions

What’s Next?Diverse perspective on the state of competition particularly with respect to compensation Innovative fee and service models Focus on issues critical to consumers: lower prices higher qualit y more innovation greater choice Public comments were accepted until July 31st

Technology UpdateJoel Maxson

Telephone Consumer Protection Act (TCPA)Led to creation of the National Do Not Call Registry Prohibits sending text messages using auto dialers without consumer consent and ability to opt out Regulations also cover robocalls and faxes Can be enforced by private lawsuit, FTC, FCC, or the state of Florida Penalties of up to $1,500 per violation

TCPA: TextingConsent to receive texts sent using an auto dialer is required Telemarketing texts require signed consent; non-telemarketing texts require prior express consent Best practices when obtaining consent Use clearly stated consent forms and keep a record If verbal consent is used for non-telemarketing texts, follow up with written confirmation Include consent language on forms

TCPA: TextingConsumer may revoke consent to receive texts using any reasonable means Best practices for opt-out requests Enable consumers to text a single word, such as “STOP” or “UNSUBSCRIBE” Promptly honor all opt-out requests Create a record to show when the opt-out was requested and honored

TCPA: Do Not Call RegistryNational Do Not Call Registry allows consumers to add their cell or landline telephone numbers to the registry and indicate their preference to limit telemarketing calls Phone numbers stay on the national list permanently In addition to the national registry, the Florida Do Not Call Program is maintained by the Department of Agriculture and Consumer Services

TCPA: Do Not Call Exemptions Business-to-business calls; Calls involving an established prior business relationship within 18 months preceding a call; Calls to consumers who have given written permission to call; Informational calls; Survey or political calls; Calls promoting a political party or candidate; and Non-profit organization solicitations for charitable contributions

TCPA: Do Not Call Safe Harbor There is a safe harbor for companies that:Have written procedures to comply with the do not call requirements; Train personnel in the procedures; Monitor and enforce compliance with the procedures; Maintain a company-specific list of telephone numbers that it may not call; Access the national registry no more than 31 days before calling any consumer, and maintain records documenting this process; and Show that any call made in violation of the do not call rules was the result of an error

EU General Data Protection Regulation (GDPR) Effective May 25, 2018Applies if you collect personal data of European Union residents Consumers have the right of: Access (access the data and get a list of specific uses) Rectification (request corrections to inaccurate data) Erasure (have their personal data deleted) Restriction of processing (require consent before processing the data) Object to Processing (object to specific uses of their data) Data Portability (receive a copy of their personal data)

TakeawaysWRITE internal policies and procedures TRAIN personnel how to comply MONITOR for compliance

Teams/FREC Trends/ FAR/BAR CaseMarcia Tabak

Diaz v Kosch Attorney Buyers, the Diazes had substantial experience with real estate transactions and title matters 9/12 buyers entered into “AS IS” Residential contract for $2,850,00 for Coral Gables home, initial deposit, $50,000 2 nd deposit, $235,000 due last day of inspection During 10 day inspection, Buyer timely discovered open permit and believed Sellers had unpermitted work performed; they tell their broker

Inspection Period Not Extended Buyer emails Seller on last day of inspection period, accusing Seller of misrepresentation, lack of good faith, as a result property is less valuable. Buyers threaten litigation, and asserts contact requires extension of inspection period but DID NOT actually obtain extension of inspection period or terminate Then, Buyer tenders the second deposit after, Buyer cancels. Escrow agent unsuccessfully sought mutual releases, Buyer files suit Oct, 2012

Buyer Sues for Breach of Contract and Fraud 5 years later, Court found - can’t extend inspection period unless mutually agreed Ruled for Sellers on summary judgement: number of issues on appeal, too numerous for our discussion, but court found contract controlled B tried to argue inspection period extended by making second deposit - this was part of original agreement, not a modification extending inspection period, with additional consideration Sellers were awarded $850,000. (attorney fees and costs)

Conclusion:The AS IS residential contract developed jointly by the Florida Realtors and The Florida Bar reflects a middle of the road form intended to reduce the legal fees that could be incurred if purchase contracts started from scratch for each transaction. The form reflects a wealth of experience with both successful and failed transactions among professional Realtors and real estate attorneys.

Tenants’ claim against leasing agent involved tenant, agent and unit in same building Muchnick v Goiman - 3 rd DCA

Leasing Agent: Directed tenants to property, Unit leased for 2 years: $7,500/ mo to be paid in 6 month installments, At walk thru cosmetic issues noted - scuffed floors, touch up paint needed Agent said this would be fixed prior to move in Not done, but tenants moved in

Upon occupancy: More problems. Water damage due to leaks in bathroom Mold in ventilation system – resulted in tenants’ children needing meds Tenants communicated problems to agent, per agent instructions Couldn’t get repairs done, tenants moved out 6 months early and sued: fraud, breach of good faith, negligence, etc. Tenants won on summary judgement

On Appeal, AGENT’S DEFENSE: Not negligent - agent, not owner Court said, once agent promised to fix the problems and managed the repairs, he did have a duty to exercise reasonable care in making the repairs “Agent” made it very clear that since they lived in the building together, if there were any issues, to let him know and he would be on top of it. “He was the go-to guy” for purposes of addressing issues with the apartment both before and after family moved in

Undertaker’s Doctrine: There is liability if you undertake an act - exercise reasonable care, which results in increased harm to the beneficiary or the beneficiary relies upon the one providing the service and is harmed.

Team Advertising Rule – 61J2-10.026 Team or group = name or logo of one or more licensees who represent themselves to the public as team or group, No words must be in team name Prohibited in name: agency, associates, brokerage, brokers, company, property, properties, real estate, realty, corp., or Other similar words that suggest team or group is a separate brokerage

Compliance by July 1, 2019 Covers all team advertisements Team name and logo can not appear in larger print than name or logo of brokerage Monthly, Broker must keep written record of names of team members Team must file with broker licensee responsible for team ads Violations: have not yet been affixed

Send ? legalnews@floridarealtors.org Asking FREC for guidance to enable licensees to comply At July FREC meeting: Neither team website address nor email address alone fall within advertising by a team (if part of ad, ad must comply with rule). No presumption that 2 agents who share ad, without more (no brand) are a team No exemption for small trinkets to comply with team ad rule Broker not required to keep monthly list of team members until 7/19

FREC Trends: Reminder – License renewal - All license renewals by 9/18 must include 3 hours of FREC approved Ethics and Business Practices course (along with 8 hours specialty and 3 hours core law) Excludes post licensing Report to DBPR convictions and withholds – within 30 days Update current mailing address on file Licensees check website to verify you are with current brokerage, active and have obtained the required 14 hours of c.e. Visit updated website, myfloridalicense.com

More Questions?Call us on the Legal Hotline at 407.438.1409 Or, stop by “Live from the Legal Hotline” Sebastian Foyer