All articles and other materials contained on this website are provided as a courtesy. Readers should not rely on anything contained on this website without consulting an attorney to verify the impact of such information as it relates to that reader. Among other things, laws, regulations, standards of care and other circumstances frequently change. By reviewing these communications, an attorney-client relationship has not been established with the reader. In order to establish that relationship, a retainer agreement must be executed with CRELA or Shannon B. Jones Law Group or Spile, Leff & Goor, LLP

Concerns Pertaining to Drones

Agents are now using drones to take video and photographs for purposes of marketing properties.  However, the use of drones is creating potential liability for brokerages.

Liability relating to drones arises out of the following:

  1. Potential claims for invasion of privacy;
  1. Bodily injury or property damage affiliated with uncontrolled drones;
  1. Cyberliabilty and hacking issues; and
  1. Trespassing.

Invasion of privacy claims have been asserted based on property owners claiming that drones were intruding on their privacy and their property.  It is important that agents using drones ensure that they have a release of liability from their clients.  It is also important that agents ensure that drones are not intruding on neighbors’ properties.  Agents may want to consider using drones for rural properties, but not urban properties.

Claims have also arisen relating to bodily injury and property damage.  Operators of drones may lose control of the drones.  Issues have arisen that drones have hit people or property.  It is important that agents use reputable drone companies who are properly insured.

Issues have further arisen relating to cyberliability and hacking pertaining to drones.  Drones can be used to collect information and serve as mobile delivery services.  Drones are also used to collect substantive information, which could be used for software users seeking to steal data.  Such activities can create the theft of important information including trespass.
The use of drones could also be considered a trespass against neighboring properties.

Agents need to be cautious in their utilization of drones and selection of drone providers.


Team Names

The California Real Estate Legal Alliance (“CRELA”) recently posted the attached article entitled, “Summary of BRE regulations regarding Team Names and Fictitious Business Names.”

Broker Compliance Checklist

The California Real Estate Legal Alliance ("CRELA") recently posted the attached Broker Compliance Checklist  prepared by California Compliance Consulting.  We have found this checklist to be quite valuable and encourage CRELA members to review the checklist to ensure compliance.


Agents – Be Aware of Wire Fraud Scam

There is a new wire fraud scam of which real estate professionals need to be aware. Many agents and/or title companies send wiring instructions to their clients to deposit funds into escrow by email. Email hackers are obtaining these emails and sending updated instructions to clients with wiring instructions into their own accounts. Unfortunately, clients believe these emails are coming from agents or the title companies and are wiring their money into the hackers’ accounts. This is creating a lot of issues in transactions.

It is recommended that agents have clients communicate directly with the title company regarding wiring instructions. It is further advised that agents use secure servers to send emails to their clients. For example, agents should consider using their company’s email, as most companies have a secured server which will limit the chances of hacking. Agents should not send emails from publicly accessed emails or through Wi-Fi.

Risk Management Tip Regarding Social Media

Seventy percent (70%) of the online population in the United States is currently utilizing some form of social media. The most popular forms include Facebook, LinkedIn, Twitter and Instagram. While there are innumerable benefits to using social media, there are also detriments, which need to be recognized.

There is a new wave of litigation arising out of social media and claims of defamation. Recently, in a case in California, a jury awarded a plaintiff $2.5 million claiming that the blogger defamed them. (See Obsidian Finance Group, LLC v. Cox 740 Feb 3 1284 (9th Circuit 2014)). While that case was reversed in part on appeal, the point remains the same – the case arises out of a defendant’s objectionable comments on her blog regarding the plaintiffs.

The real estate industry relies heavily on social media. It is strongly recommended that agents use good judgment in their posts on social media. Issues creating concerns include the following: making defamatory statements about real property; making inappropriate comments about clients or other agents; making inaccurate statements; or issuing inappropriate opinions pertaining to the condition or value of property. Agents are encouraged to use social media safely, but to review their submissions before posting to ensure the posts are made with good judgment.

Court Held that Revocation of a Real Estate License Was Not Authorized Where the Salesperson’s Conviction Was Dismissed

In Ryan-Lanigan v. Bureau of Real Estate, a California appellate court held that a revocation of a real estate license was not statutorily authorized where the salesperson’s misdemeanor hit and run conviction was dismissed. In Ryan-Lanigan, a salesperson was charged with a misdemeanor hit and run with property damage. She pleaded no contest and was convicted. The California Bureau of Real Estate (“CalBRE”) sought to revoke her license based on the conviction. Ryan-Lanigan moved to withdraw her plea. The trial court granted the motion and accepted her no contest plea to a violation of basic speed law and dismissed the hit and run charge in the “interests of justice.” The signed order of the trial court also indicated that the conviction was sent aside as of the date of the entry of the plea. Notwithstanding, CalBRE revoked her licensed based on the hit and run conviction.

The agent petitioned the trial court. The trial court entered judgment in the salesperson’s favor and ordered CalBRE to set aside the revocation and remanded the matter for reconsideration. CalBRE appealed contending that the revocation of the license was authorized under Business and Professions Code §10177 despite the plea withdrawal and the set aside of the conviction. The court of appeal affirmed the trial court’s ruling, holding that B&P §10177 did not authorize the revocation of Ryan-Lanigan’s license because the provision does not allow discipline when there has been a dismissal unless the dismissal is pursuant to an expungment.

Teenager Receives $5.7 Million in Premises Liability Case

Plaintiff, a teenager, was drinking with her friends and fell out a window. She suffered multiple skull fractures and traumatic brain injury. Plaintiff claimed that a contractor had replaced the windows, which had fixed bottoms to prevent falls, with large sliding glass windows that were low to the ground. Plaintiff claimed that the installation of such windows was negligent. She also claimed that the owner of the apartment complex had been warned of the potential dangers of the low window sills, but failed to address the issue. Defense counsel claims that the fall was caused by the plaintiff’s drinking and that the windows met requirements of the Building Code. The parties settled for $5.7 million with the contractor paying $950,000 and the owner of the apartment building pay $4.75 million.

City Proposes to use Eminent Domain to Save Underwater Mortgages

The City of Richmond, located in Northern California, has proposed using the power of eminent domain to condemn loans secured against properties where the property is worth less than the loan. This City has started sending letters to hundreds of lenders offering to purchase the loans at a discount. If the lenders refuse, Richmond’s mayor has stated that the City will start seizing the loans based on eminent domain. It is anticipated that the lenders who refuse to transfer the loans, will challenge Richmond’s plan as being unconstitutional. We will continue to post updates regarding the progress of this plan.