Beginning in 2014, we started hearing about instances in which sellers recorded the activity in their home during open houses and individual showings. You asked, “Doesn’t the seller have to disclose that they are taping during a showing? Doesn’t the listing agent have to disclose to the cooperating agent? Isn’t it illegal to tape someone without their permission? What do I do as a listing agent if the seller tells me they want to tape their house during showings?”

Let’s first address what a buyer may or may not be permitted to do as far as videotaping or taking pictures of the seller’s house during a showing. Let’s face it — after a while for a potential buyer, remembering which house was which and which house had the vaulted ceiling and which house had the detached garage can be challenging. Even though the MLS and online marketing provide a great amount of information regarding homes, including pictures, sometimes not all pictures are shown online, and videotaping or photography may be a buyer’s personal route in the purchasing process. 

The state-approved WB forms permit a buyer to “photograph or videotape Property unless otherwise provided for in additional provisions at lines 242-250 or in an addendum per lines 251-254.” (See lines 181-182 of the WB-1 Residential Listing Contract Exclusive Right to Sell). 

Therefore by default, a seller allows a prospective buyer to videotape or photograph the seller’s property during open houses and showings. If the seller doesn’t want the buyer to have that ability, then the seller would indicate such in the listing contract in the additional provisions or an addendum; the listing agent would then communicate such to the cooperating agents, likely by use of the MLS remarks section and the datasheet. 

However, the contract does not specifically address what the seller may or may not do regarding videotaping the conversations or acts of the buyer and the buyer’s agent while in the seller’s home. 

The way the seller chooses to disclose or not disclose the videotaping or recording of a showing or open house is up to the seller’s sole discretion — and advisably under the advice of their legal counsel. Not unlike public places, some sellers have placed a visible camera with a sign that says, “smile, you’re being taped.” Other sellers may have a visible camera but no sign; other methods include home security systems, in-home “nanny cams,” oh and don’t forget the baby monitors. Baby monitors can have both audio and video features, and while images may not be recorded, the seller could be just a few doors down within working range, listening and watching as the buyers tour the property.

So is it legal for a seller to videotape a buyer without the buyer’s knowledge? Actually, nowhere in Wisconsin law is information that strictly prohibits the use of surveillance devices in this context. The Wisconsin invasion of privacy law, in Wis. Stat. § 942.08, prohibits surveillance devices when used by someone intending to observe any nude or partially nude person without the consent of the person observed. 

General information about Wisconsin right to privacy is included in the Legislative Reference Bureau publication, “Privacy Laws in Wisconsin,” available online at legis.wisconsin.gov/lrb/pubs/wb/08wb9.pdf. 

Due to the increase in affordability and availability of video and surveillance technologies, licensees and buyers should presume they are being monitored during showings. This type of mentality will afford everyone some expectation of privacy. Licensees may choose to explain to buyers that the seller documenting their tour is possible, and the buyer may wish to refrain from saying certain things about the property — whether good or bad — until outside of the property. For example, a seller who hears the buyer exclaim, “this property is totally worth the money” may take the wind right out of the buyer’s negotiation sails. However, a licensee may also choose not to say anything to a buyer for fear that such a disclaimer may be off-putting to the buyer.
If a listing agent learns that the seller is recording showings and open houses, the listing agent may want to explore the topic with their broker. The listing agent and broker may discuss whether this information should be disclosed to prospective buyers as information suggesting a material adverse fact, although it's not clear on its face how this information is a material adverse fact.

If the broker, as a competent licensee knows that this fact (1) has a significant adverse effect on the value of the property; (2) significantly reduces the structural integrity of the property; (3) presents a significant health risk to the occupants of the property; or (4) is information that indicates that a party to the transaction is not able to or does not intend to meet their obligations under the contract, then the issue constitutes an adverse fact. If a party to the transaction were to so indicate, or if a competent licensee would generally recognize that this fact would affect a reasonable party's decision to enter into a contract or would affect the party's decision about the terms of the contract, the fact is both adverse and material. If this fact is both adverse and material, Wis. Admin. Code § REEB 24.07(2) requires the licensee to timely disclose the fact in writing to all parties to the transaction, even if the client would direct the licensee not to disclose.

Licensees would always be best served to be very careful about their observations and comments regardless if they are knowingly being recorded. My advice — always pretend that you’re being videotaped or recorded when you’re in a property for a showing, and you will likely avoid any suggestion of breach of confidentiality (Wis. Stat. § 452.133(1) duties to all persons in a transaction), or breach of loyalty (Wis. Stat. § 452.133(2) duties owed to a client and Article 1 of the Code of Ethics and Wis. Stat. § 452.133(4) subagent’s duties).

Resources

See the October 2009 Legal Update, "Diligent Disclosure," online at www.wra.org/LU0910 and Legal Update 02.07, "Duty to Disclose," at www.wra.org/LU0207, for further discussion of licensee and seller disclosure obligations.
A sample material adverse fact disclosure letter is available on page 26 of the October 2009 Legal Update, "Diligent Disclosure," at www.wra.org/LU0910 or on zipForm^®.

Cori Lamont is Director of Corporate and Regulatory Affairs for the WRA.