Co-Author: Jon Goodman
Question: I am a listing broker for a seller who has surveillance devices on seller’s property. How does this impact what I do?
Sellers have easy access to surveillance technology. Some Sellers invest in this technology to prevent crime, monitor compliance with showing instructions, and compliance with public health orders.
Colorado has an anti-eavesdropping statute, which essentially states that C cannot listen to a conversation between A and B, unless C is a party to that conversation. If A and B are having a conversation, A can generally record the conversation without B knowing because A is a party to that conversation. If the seller C has recording devices on C’s property, and C is not a party to the conversation between the showing broker A and the buyer B, then the seller is violating the anti-eavesdropping statute if C is secretly recording the conversation between A and B . Therefore, the statue raises some issues for listing brokers.
Six Questions to Consider:
1) Does the listing broker have an obligation to ask the seller about the use of surveillance technology?
Answer: The anti-eavesdropping statute was written as a criminal statute and does not mention the duties of a listing broker in the context of selling homes. In Colorado, license law establishes that brokers do not have an obligation to inspect the property for the benefit of the seller. Colorado law is also clear that a listing broker need not disclose surveillance that the listing broker is not aware of. A listing broker should not, however, ignore red flags that the seller is using surveillance devices. If the listing broker sees surveillance devices, the listing broker should ask the seller whether the seller intends to use the devices during showings. Regardless of how the listing broker learns that the seller intends to use surveillance devices, the listing broker should encourage the seller to authorize the listing broker to disclose the surveillance.
2) How might the listing broker encourage a reluctant seller to disclose the use of surveillance to potential buyers?
Answer: This article may help a listing broker educate a seller about the risks that the anti-eavesdropping statue creates for the seller. Brokers can encourage a seller to consult the seller’s own attorney. Additionally, it may be in the seller’s best interest to inform buyers about surveillance devices to encourage good behavior in the property.
3) How should the listing broker disclose the use of surveillance technology on the property?
Answer: The listing broker should create a record of making the disclosure. The listing broker may make the disclosure in the MLS remarks. Upon showing the house, the listing broker can disclose the seller’s use of surveillance technology when setting the showing appointment. This second disclosure is more valuable than the MLS disclosure because some buyers will learn of the property without the buyers or the buyers’ brokers seeing the MLS remarks.
4) Must the listing broker disclose the use of surveillance technology if the seller does not consent to the disclosure?
Answer: The anti-eavesdropping statue does not address this question. Brokerage law does not squarely address this question. This complication should be handled on a case-by-case basis between the listing broker, the brokerage firm and their attorneys until the law provides a clear answer to this question.
5) Might a blanket disclosure that any property could have surveillance devices suffice to avoid broker liability?
Answer: If the listing broker is not aware that the seller uses surveillance devices, then a blanket disclosure should reduce the broker’s exposure in the scenario where there are surveillance devices of which the listing broker was not aware. If, however, the listing broker knows that the seller uses surveillance devices, a generic disclosure that the property might have surveillance devices is not likely to reduce the listing broker’s risk. The generic disclosure that fails to mention the subject property’s known actual listening devices might enhance risk by being perceived as “too cute by half.”
6) Does it tend to be easier to defend a seller and a listing broker from claims of fair housing discrimination when a seller does not use surveillance devices?
Answer: Yes. As the seller and listing broker know about the race, gender and other protected class status of the candidate buyers, it decreases the likelihood that they can use lack of awareness of protected class status as a defense.
If you have questions about what to do when a seller uses listening or recording devices on the property, please contact Jon Goodman.