New technologies raise new legal issues

by Blake Hegeman, VAR’s Associate Counsel

The expanded use of online marketing and social media within the REALTOR® community has created new and exciting opportunities. However, its use has raised novel legal issues. Here’s how to protect your business when using these new tools.

The Code of Ethics and online advertising

The internet is a cost-efficient and effective way to market your brokerage services. It is becoming the norm for many REALTORS® to maintain sophisticated and informative websites to reach customers and other agents. While VAR encourages its members to use this medium, we also caution you to adhere strictly to the rules in the Code of Ethics pertaining to advertising.

This year, NAR amended several sections of the Code to account for the increasing use of the Internet. Below are highlights of those additions (found in Articles 9, 12, and 15):

  • The name of the REALTOR® firm and state of licensure must be disclosed in a reasonable and readily apparent manner when advertising listed property on its website or a REALTOR® or affiliated non-member licensee’s website.
  • Information on REALTOR® websites must be current, and if it is out of date, the information must be removed immediately.
  • REALTOR® websites must present a true picture in their advertising, including URLs and domain names. The following are strictly prohibited:
    • Engaging in deceptive or unauthorized framing of real estate brokerage websites;
    • Manipulating (e.g., presenting content developed by others) listing content in any way that produces a deceptive or misleading result; or
    • Deceptively using metatags, keywords or other devices/methods to direct, drive, or divert Internet traffic, or to otherwise mislead consumers.
  • REALTORS® intending to share or sell consumer information gathered via the Internet must disclose that possibility in a reasonable and readily apparent manner.
  • The duty to avoid making false or misleading statements about competitors’ businesses and practices includes the duty not to knowingly or recklessly repeat, retransmit, or republish false or misleading statements made by others using electronic means.
  • When assisting or enabling a client or customer in establishing a contractual relationship (e.g., listing and representation agreements, purchase agreements, leases, etc.) electronically, REALTORS® must make reasonable efforts to explain the nature and disclose the specific terms of the contractual relationship being established.

Using blogs to connect with the community

Blogs raise a number of legal issues that haven’t been thoroughly reviewed by the courts. Chief among these issues is the potential liability a blog operator faces for content posted on the online forum it provides. Despite the lack of established law, we have guidance from the courts and experts in intellectual property.

A recent California Supreme Court case addressed the question of whether a blog operator may be held liable for defamatory statements posted on the blog by third parties. Interpreting the Communications Decency Act of 1996, the court held that plaintiffs who were defamed in an internet posting may recover only from the original source of the statement. Although this exact reasoning has not been applied in Virginia, it is encouraging that an influential court has limited the liability of blog operators. Also, opinions written by the U.S. Court of Appeals for the Fourth Circuit, which includes Virginia, have suggested that liability would not fall on Internet forum providers for comments made by third parties.

Bloggers may be held liable for copyright and trademark infringement if precautions are not taken. A good rule of thumb is to post only material you own, you have permission to use, or that is within the scope of the fair use doctrine (permitting reproduction of certain copyrighted materials without a fee, usually in connection with reviews, research, reporting, or teaching).

Also, to prevent liability from third party postings, include in your Terms of Use a statement that subscribers affirm that they have the right to post the material they are using. Another step in reducing liability is to remove infringing content as soon as it is discovered. With regard to trademarks, use only those you have permission to use and delete posts that infringe on others’ trademarks.

Disclaimers in your Terms of Use are important to protect you and your business from liability. Examples provided by intellectual property law expert Lawrence Savell of Chadbourne & Parke LLP in New York include:

  • Parameters of use/requirement of compliance: We grant you a nonexclusive, nontransferable, limited right to access, use and display the blog and the material provided hereon, provided that you comply fully with these Terms and Conditions of Use.
  • Postings may not be current: The information on the blog may be changed without notice and is not guaranteed to be complete, correct or up to date.
  • Distinguish firm from individual authors/posters: The opinions expressed on the blog are the opinions of the individual author and may not reflect the opinions of the firm or any individual employee or client.
  • External links: Links to external sources are provided solely as a courtesy to our blog visitors. We are not responsible for and do not endorse or warrant in any way any materials, information, goods or services available through such linked sites or any privacy or other practices of such sites.”

There are a few other important steps you should take to limit potential liability. Instruct your employees and members to use caution when posting on your blog; the company may be responsible for anything an employee posts in the course of his employment. You should realize that your blog can be viewed as an advertisement and follow all applicable rules. Also, selecting or editing messages could subject you to greater liability because you are exercising more active involvement in the contents of the publication.

Blogs provide an excellent forum for the exchange of ideas with your customers, and VAR encourages their use. By instituting common-sense precautions and a well-crafted Terms of Use, REALTORS® can limit exposure to liability.

Source: “Is Your Blog Exposing You to Legal Liability?” by Lawrence Savell www.varealtor.com/12071