The following questions have been posted recently to the Wisconsin REALTORS® Association Legal Hotline about electronic communications, social networking and the new Wisconsin rules relating to vermiculite and asbestos.
Social networking
What is social networking and is it regulated by the Code of Ethics?
The concept of social networking is evolutionary; it captures the essence of how we communicate electronically. It is about how information is published, communicated and received. Social networking can include communication by posting, publishing or uploading comments and information to interactive electronic media that may include, for example, websites, blogs, social networks or listserves. Article 12 of the Code of Ethics was amended in 2008 to clarify the Code’s applicability to all communications, whether in person or electronic. According to the Code, REALTORS® shall be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing and other representations including social networking.
Article 12 and blogs
An agent has created a blog and placed an ad citing the blog address asking consumers to “check it out” for free housing information, prices, trends and terminology. The ad does not identify the agent or the agent’s company, but the blog does advertise real estate and real estate services. Is this appropriate?
Wis. Admin. Code § RL 24.04(1) prohibits advertising in a manner that is “false, deceptive, or misleading.” Wis. Admin. Code § RL 24.04(2) also requires disclosure of the broker’s name in advertisements. Similarly, Article 12 of the Code of Ethics requires REALTORS® to present a true picture in their advertising and communications to the public. The Standards of Practice that accompany Article 12 clearly provide that REALTORS® must identify themselves as real estate professionals in their real estate communications. The recent changes to the Code are intended to include all real estate communications in any electronic media including blogs and other social networking media. Clearly identifying oneself as a real estate professional and including the broker or firm name will assure compliance with law and Code.
Broker supervision
What role does the broker have regarding the activity of agents when it comes to social networking?
A real estate office risks potential liability when an employee or an agent uses office computers, email or Internet services for business and personal use. Therefore brokers may consider revisiting office policies regarding the use of electronic communications and media use by agents. Brokers may provide guidelines and policies relating to social networking including monitoring any blogs, listserves, Twitter, Facebook, Linkedin or other social media used by agents. Article 15 of the Code provides that REALTORS® may not knowingly make false or misleading statements against their competitors or their competitors’ business practices. The corresponding Standard of Practice includes the duty to not knowingly or recklessly repeat, retransmit or republish false or misleading statements made by others. This duty applies whether the statements are made in person, in writing or by technological means. Office policies may include mechanisms to assure monitoring of the licensee’s communications as well as to assure compliance with the Code of Ethics.
Brokers may also consider office policies to assure compliance with the record retention rules found in Wis. Admin. Code § RL 15.04. Brokers are required to retain for at least three years exact and complete copies of documents and correspondence received or prepared by the broker in connection with any real estate transaction and must make these records available to the Department upon request. If correspondence relating to a transaction occurs in an electronic media the current rule requires the broker to make it available for inspection and copying by the Department. As this publication goes to print, the Real Estate Board is considering a proposal to modify § RL 15.04 that would specifically address retention of records, documents and correspondence in electronic formats.
More information about broker supervision is available in “Know What Your Agents Are Doing Online” in the December 2007 Broker Supervision Newsletter at www.wra.org/BSNDec07 and the March 2008 Legal Update, “Running a Real Estate Office,” at www.wra.org/LU0803.
Copyright
Can an agent use, copy, or reproduce photos from the MLS or use the photos from a previous listing?
Photographs are subject to copyright law. Copyright protection exists from the time a work, such as a photograph, is created. The copyright of the work immediately becomes the property of the author, here the photographer, who created the work. Only the author or those deriving their rights through the author can rightfully claim copyright. The 1976 Copyright Act generally gives the owner of copyright the exclusive right to do, and to authorize others to do, the following:
- Reproduce the work.
- Modify the work.
- Distribute copies of the work to the public by sale or other transfer of ownership, or by rental or lease.
- Display the copyrighted work publicly.
Anyone who violates any of the exclusive rights of a copyright owner is an infringer and may be liable for damages. Courts also have the power to issue an injunction to prevent or restrain copyright infringement. The terms of use of the MLS allow limited use of the photographs of other MLS participants and subscribers. They do not allow copying for future listings or the advertising of sold property.
Vermiculite/asbestos
The home inspection reveals that the insulation in the attic appears to contain vermiculite. The home inspector cites the Environmental Protection Agency website, which states that vermiculite may contain asbestos. The buyer requests that the seller pay for the insulation to be tested and, if asbestos is found, that the seller pay for removal of the asbestos. What is the seller’s legal obligation and, if this deal falls through, what, if anything, is the seller obligated to disclose?
Asbestos cannot be identified simply by looking at it unless it is labeled, so the only way to know for sure if it is present is to get a sample analyzed. Generally only asbestos material that is damaged or will be disturbed needs to be tested. Undisturbed asbestos that is in good condition generally will not release asbestos fibers and may best be handled by leaving it alone. Problems with friable or damaged asbestos may be treated by either repair or removal. Repair usually consists of sealing or covering the asbestos material.
However, under the newly revised asbestos rules in Wisconsin that went into effect on May 1, 2009, vermiculite insulation is assumed to be asbestos-containing material unless proven otherwise in accordance with EPA-recommended sampling and analysis protocols specific to vermiculite insulation. At this time, the EPA has not yet published official guidance for sampling and testing vermiculite insulation for the presence of asbestos fibers. Therefore, vermiculite insulation must be treated as asbestos-containing material. This may necessitate the use of certified asbestos workers for any projects disturbing or impacting the insulation. Information about the new asbestos rules and certification requirements for asbestos workers is found at www.dhs.wisconsin.gov/asbestos.
Given the apparent presence of insulation containing vermiculite, the seller should amend the real estate condition report for subsequent transactions to include the information the seller now knows from the home inspection report. If the seller does not disclose to buyers, that task may fall to the real estate licensee.
An agent arguably should disclose the features potentially containing asbestos (insulation apparently containing vermiculite) as information suggesting the possibility of material adverse facts and direct the parties to the appropriate experts for further information and investigation. Wis. Admin. Code § RL 24.07(3) states that a licensee will be practicing competently if the licensee makes timely written disclosure of the information suggesting the material adverse fact to all parties to the transaction, recommends the parties obtain expert assistance to inspect or investigate for the possible material adverse fact and, if directed by the parties, drafts appropriate inspection or investigation contingencies. The duty to disclose has priority over any duty owed to the client.
Whether the presence of vermiculate insulation, which is presumed to contain asbestos, constitutes a fact a licensee needs to disclose as a material adverse fact is a judgment that only the licensee can make after considering all of the facts and circumstances in the situation. If the agent, as a competent licensee, knows that this fact: (1) has a significant adverse affect 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 his or her 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 is of such importance that it 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 the fact is both adverse and material, then Wis. Admin. Code § RL 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.
For further discussion of vermiculite insulation containing asbestos, review Pages 13-15 of Legal Update 01.04, “Environmental Update 2001,” at www.wra.org/LU0104, and visit dhs.wisconsin.gov/eh/HlthHaz/PDF/Vermiculite.pdf.
Tracy Rucka is a Staff Attorney for the WRA.