Tag Archives: Legal Issues

Copyright and Solds-Over-IDX

Lawsuit

Judging by the stats, it appears that few people actually took the time to listen to my most recent podcast, featuring Brian Balduf of VHT Studios. We discussed a number of issues surrounding copyright of photographs and liability that arises from misuse, which… yeah, I understand those are sleeping aids for most people. Nonetheless, I wanted to write this brief (I hope?) post because the issue is important and one that MLSs and brokerages need to get ahead of right now, rather than waiting for a lawsuit to land on their desks.

If you do have the time, I’d recommend going and listening to the full podcast. Brian’s perspective is invaluable here. But, let me give you the bottom line here.

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Notorious POD: Episode 12 – Photos, Copyrights, Liability with Brian Balduf, VHT

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It’s been months since my last podcast, but that’s just how things work out sometimes. But with T3 coming up, I figured I should upload this.

Brian Balduf, CEO of VHT, joined me to discuss an issue that’s really going a bit under the radar. His post Now Is The Time to Shield Your Real Estate Brokerage From Intellectual Property Liability dealt mostly with direct syndication to portals such as Zillow. But in this podcast, we discuss copyright violations and liability at the MLS level, and within IDX, given the new rules about sold data over IDX.

I suppose you have to be a real geek about real estate industry stuff, but I do think this is an important topic for brokers, MLS, and even agents. You may be on the receiving end of some letter from a “copyright enforcement company” demanding thousands of dollars for unauthorized usage of photographs.

I’d listen, then read Brian’s post, and think about a strategy for dealing with this important issue.

-rsh

Raising the Bar and Lawsuits… A Thought

I know I haven’t been blogging, but hey… when you’re sitting on the beach in Aruba staring at gently lapping waves of turquoise waters, diving into the Interwebz isn’t real high on your list of priorities. Trust me on that. :)

In any event, saw an interesting little tidbit this morning on Inman News that got me thinking. The item is this: “Realtors are all talk when it comes to education” The embedded video is below.

I met Leigh Brown at HearItDirect/RETSO event in Atlanta, and thought she was energetic and not afraid to speak her mind (as you can see above).

But here’s the thing. Leigh equates more education with Raising the Bar (an ill-defined concept, I know, but one that most of us kinda ‘get’ in our guts). She asks what’s it gonna take.

What if the answer is something seemingly unrelated? What if the answer is a lawsuit currently making its way through the California court system? Let me explain.

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Competition Is Not Tortious Inteference

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A brief note this Saturday morning…

Conversations around my last post, about FTC taking action on anti-competitive Code of Ethics provisions, have raised an interesting and salient point. The best example comes from the comments, where Brian Rayl writes:

Despite what the FTC states in terms of “soliciting other’s clients” there are very strict laws – federal laws – that prohibit interfering with a contract.

http://en.wikipedia.org/wiki/Tortious_interference

If someone is going down a list of new listings and contacting them with the intention of damaging the contractual relationship, they are guilty of tortious interference. I’m not sure why the FTC would require the code of ethics to allow this when the federal government doesn’t? What are your thoughts on that?

My thoughts are that tortious interference with contract requires a tort. Obviously, what is about to follow is legal mumbo-jumbo, which I do for fun as a blogger with a law background. Please consult your own attorney or counsel; this is not legal advice.

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Why Are Referrals Still Legal?

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A brief question, born out of discussions online and offline in the wake of the Zillow-Trulia deal…. Let me set the stage.

More than a few people think that Zillow will ultimately want a piece of the commission (as evidence, they point to the brokerage licenses that MarketLeader once owned, which then Trulia owned, and in the future, the combined Zillow-Trulia entity will own). But no one thinks that Spencer Rascoff is going on listing appointments. The thought is that Zillow will just charge 25% referral fees for sending a lead to one of its Premier Agents.

That 25% referral fee, of course, is standard industry practice. Your seller is moving to another state? You find an agent, refer your client, and you’ll get 25% of the commission if/when she buys a house.

In fact, this practice is so common that it is widely abused by “paper brokerages”. (See Inman’s excellent coverage of the issue starting here.) From Inman:

“Paper brokerages” — companies that join multiple listing services in order to access and display MLS listing data online, but don’t provide brokerage services to consumers — could be the next big thing in online real estate. But only if the traditional brokers who control the nation’s MLSs continue to tolerate them.

The missing piece from the Inman story is how these paper brokerages make money: referrals. I mean, why else join MLS’s and display listings online while not providing any brokerage services if it weren’t for the fact that they can make money simply from referrals?

Thing is, once upon a time, these kinds of referrals were commonplace in the larger real estate industry as well. Mortgage companies, title companies, escrow companies, etc. all routinely paid referrals to real estate agents for sending them business. Until Congress passed RESPA (Real Estate Settlement Practices Act) in 1974 banning pretty much all such practices. Sure, there are narrow exceptions today (affiliated businesses, etc.) but for the most part, it is illegal for a mortgage company or a title rep to provide anything of value to a real estate agent for sending leads their way.

So… the question is, given the obvious problem of paper brokerages, and given that the spectre of Zillow-charging-referrals would be eliminated overnight by extending RESPA to agent-to-agent referrals… why aren’t we advocating for this as an industry?

Well, yeah, sure, the obvious answer as to why not: it’s all about the Benjamins. I get that. But is there any reason that isn’t patently self-serving not to prohibit referrals altogether?

If what’s good for the goose (the title companies, mortgage banks, and escrow companies) is not good for the gander (real estate agents paying 25% of the commissions to each other), I’d like to understand why. I think I’m pretty knowledgeable about the industry, but this is one of those practices that has me scratching my head….

-rsh