Learn about the possible legal risks when you use social media to communicate about your real estate business.
Window to the Law: Social Media's Legal Risks: Transcript
Social media can provide businesses with robust access to clients, referrals, and business partners. On the flipside, failing to take proper precautions when leveraging social media can land your business in hot water.
To mitigate potential risks, consider the following:
Have a transaction question about a client’s pending sale? It may seem convenient to tap into the knowledge of your fellow professionals via a quick “seeking advice” Facebook post. Think twice before doing this. Why?
Even if you’re careful not to mention a client by name, your local competitors may have information that would allow them to figure out the client and deal you’re referencing. If that’s the case, your “seeking advice” post could be a breach of confidentiality. It could also put your deal (and your reputation) at risk.
The internet doesn’t acknowledge geographical boundaries. Asking for advice on a pending contract in Idaho may elicit advice that’s fantastic for a California licensee…but totally inapplicable to you.
The best practice here? When you have a transactional question, contact your attorney. And if your state REALTOR® Association offers a Legal Hotline, you can always start there – for free.
The Federal Trade Commission is the federal regulatory entity tasked with protecting consumers from unfair and deceptive commercial practices. To that end, the FTC requires the disclosure of payment for endorsements. For example, if you post a glowing review of a business, and that business is compensating you to do so – with money or with free products or other perks – you do need to disclose that fact.
Best practice: If you’re getting something to say good things about someone else, be up front about it by including a simple disclaimer with your endorsement.
What does antitrust law have to do with your social media posts? Two things.
U.S. antitrust laws prohibit competitors from joining up to boycott a particular individual or business. For example: Let’s say you belong to a Facebook group for local real estate professionals. You all agree that a particular businessperson in your community engages in ethically questionable business practices, and hurts the bottom line for all of you. The solution? Everyone just agree to stop doing business with them. This is not the solution. This is a group boycott in violation of antitrust laws.
Best practice: If you believe a business is engaging in ethically questionable practices, don’t discuss it on social media. Instead, speak in confidence with your attorney, your local REALTOR® Association, or your state licensing body about appropriate next steps.
Think commissions are too low these days? Think it would be a good idea to strike up a conversation on social media about how 10% commissions would make life sweeter for everybody? Think again. U.S. antitrust law prohibits price fixing among competitors.
Best practice: Set your own prices. When it comes to everybody else… let the market do its thing.
As a general proposition, “defamation” means harming someone’s reputation by making a false statement about them to someone else. Simple enough to avoid, right? Be nice. Don’t lie. In reality, tricky situations can come up. For example: Let’s say you’ve heard about an individual who shows up at open houses, and items mysteriously disappear in their wake. A “heads up” to local real estate professionals via Facebook may seem like a great way to put people on notice. But if your post identifies the suspected individual, and ends up being unfounded? …You could be engaging in defamation.
Best practice: If you suspect criminal activity, first contact the police. If you decide to put out an alert, make sure to frame it with the guidance of the authorities – and ideally, with the help of your attorney.
Knowing and following the NAR Code of Ethics is a failsafe for avoiding the bulk of the pitfalls discussed in today’s Window to the Law. So read it. Know it. Then – and only then – go ahead and post those status updates to your heart’s content.
For more information on all of these topics, please see the following resources.
As always, thank you for watching Window to the Law.