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New York State Association of REALTORS®
LEGALLINES
A risk management tool
for
New York’s REALTORS®
THIRD QUARTER 2015
DOS disciplines property manager for multiple violations
By S. Anthony Gatto, Esq., NYSAR Legal Counsel
On June 19, 2015, the matter of New York
State Department of State Division of Licensing Services (DOS) v. Vincent Tortora and
WNY Metro Realty Corp (WNY) was decided by Administrative Law Judge Teneka
Frost-Amusa. It was alleged that Tortora as
broker of WNY acted as a property manager
on behalf of Patrick Filas, the owner of property found at 87 Rosedale, Buffalo, NY, and
in doing so violated numerous provisions of
the Real Property Law.
A complaint was filed with DOS by Filas
alleging that Tortora/WNY failed to turn
over rental monies received for September
and October 2012 and failed to collect
rents for the same time period. Filas and
Tortora/WNY had a property management
agreement, signed by Tortora/WNY but not
signed by Filas, where Tortora/WNY would
receive $40/month per unit and a 50-percent
Tortora/WNY had leased the upstairs unit to
leasing fee for new tenants. This agreement
Tania Colon and Jomayri Amaro (Colon and
was subsequently modified and signed by
Amaro) and they were tenants during the
Filas, but not by Tortora/WNY. As a result,
September and October 2012 time period.
Tortora/WNY acknowledged that there was
The Erie County Department
a verbal agreement between
of Social Services (ECDSS) paid
the parties that commenced
a portion of the rent on behalf
sometime in December 2011
New York News
of Amaro in the amount of
and that there was no binding
$214.29 (September 2012) and
written agreement. Tortora/
$396 (October 2012), and Colon
WNY opened a bank account in
in the amount of $285.71 (September 2012).
the name of “Tortora Property Management
Both checks were made out to Tortora at his
Inc. for Patricia Filas” for depositing the rent.
home address.
When Tortora/WNY agreed to act as a
Colon and Filas both provided a statement
property manager, they entered into an
that Colon entered into a verbal agreement
agency relationship with Filas. At that time,
with Tortora/WNY to rent the upstairs unit
an agency disclosure form should have been
beginning in September 2012 for $500/
presented to Filas indicating Tortora/WNY
month plus utilities. Colon gave Tortora/
were acting on Filas’ behalf and in his best
WNY a $550 security deposit and $500 rent
interest. No agency disclosure form was ever
provided or completed.
See Violations, page 2
Disclosure violations leave broker facing Department of State sanctions
By S. Anthony Gatto, Esq., NYSAR Legal Counsel
In the case of the New York State Department of State (DOS) v. Diane Canterino
d/b/a Twins Realty, DOS found a real estate
broker violated multiple provisions of the
licensing law in a rental transaction.
During the time of the complaint, Diane
Canterino was the broker with Twins Realty. On Nov. 4, 2012, Canterino placed an
advertisement on Craigslist promoting the
rental of a furnished apartment in Staten
Island. The Craigslist advertisement did not
indicate that the advertisement was made by
a real estate broker in compliance with the
advertising regulations found in 19 NYCRR
§175.25(a) that require “all advertisements
placed by a broker must indicate that the
advertiser is a broker or give the name of the
broker and his telephone number.” This advertisement contained no such information.
Canterino also committed another violation
of licensing law by not disclosing that she
was the owner of the premises where the
apartment was located. Licensed real estate
brokers, associate brokers and salespersons
are required to disclose any ownership interest in a property listed for sale or rent. Such
disclosure must be made at first substantive
contact with a consumer (if the owner is
communicating with the consumer) or in
the remarks section of the MLS to disclose
the ownership interest to other cooperating
licensees (and by doing so, their clients/
customers). By not doing so, Canterino
violated provisions of the licensing law.
Canterino was contacted by Michael McKay
who saw the advertisement on Craigslist.
Upon making first substantive contact,
Canterino never provided McKay with an
agency disclosure form pursuant to Real
Property Law §443(3)(b). McKay entered
into a lease with Canterino for $1,100/
month. McKay provided Canterino with
$2,200 for first months’ rent and a brokerage
commission equal to the first months’ rent.
McKay also supplied a security deposit in
the amount of $1,100. It should be noted
that McKay was displaced from his home
due to Hurricane Sandy and some of the
monies used for the rental were supplied
by FEMA.
See Sanctions, page 3
PAGE 2
Due diligence helps REALTORS® avoid scams
By S. Anthony Gatto, Esq., NYSAR Legal Counsel
On occasion, the NYSAR Legal Hotline receives a number of phone calls complaining
about a possible scam or fraudulent behavior. This usually involves an individual or
entity offering a product or service outside
of or associated with a transaction.
If a REALTOR® is presented with an opportunity to purchase a product or service, the
REALTOR® should use any tool necessary
to verify the legitimacy of the product or
service. In most cases, entering the name
of the product or service into an Internet
search engine such as Google or Yahoo
followed by the words “complaints” or “reviews” will result in enough information
for most REALTORS® to make an educated
decision. In some cases, a simple Internet
search may not be enough and other resources may be utilized.
Sources like the Better Business Bureau
(www.bbb.org) provide information as to
businesses reputation. The Better Business Bureau also has a feature called “Scam
Tracker,” which follows scams geographi-
Violations continued from page 1
for September and October 2012 totaling
$1,550.
Tortora/WNY admitted that he received
rent paid by ECDSS for both Amaro and
Colon for September 2012 and that the
checks were placed in the operating account
“in error” (instead of the escrow account
as required). Tortora/WNY did not admit
to receiving additional rental monies from
Amaro and Colon.
The Administrative Law Judge found Tortora/WNY: failed to pay monies owed to Filas
from Amaro and Colon; comingled funds;
failed to maintain records of maintenance;
failed to obtain agency disclosure; failed to
cooperate with a DOS investigation; and
failed to complete continuing education. As
a result, Tortora and WNY were fined $2,000
and required to pay Filas $1,550 plus 9-percent statutory interest from September 2012.
cally. “Scam Tracker” can be found at
www.bbb.org/scamtracker/us. You may
also want to explore Internet websites
dedicated to exposing scams such as this
one published by the Federal Trade Commission (FTC) at www.consumer.ftc.gov/
scam-alerts or this one published by the
Federal Bureau of Investigation (FBI)
at www.ic3.gov/media/default.aspx.
Social media is also a helpful tool in determining whether something is a scam
or some type of fraud. A search on social
media for the name of the entity, product, service or individual may be just as
informative as an Internet search. Posts
regarding others’ success, complaints or
general information may be all one needs
to protect themselves.
There are also scams related to real estate
transactions. The majority of these scams
use counterfeit checks or other means to
transfer money. These scams may be an
individual posing as a buyer or seller and
asking to have funds deposited into your
account either by counterfeit certified bank
check or fraudulent money transfer. This
is done under the premise that you will be
acting on their behalf and will use the funds
to purchase a property for them.
After the monies are deposited, the scammer asks for some or all of it to be returned
(sometimes they let you keep a sizable
amount for your troubles). Issuing a refund
is usually done before the bank discovers
the check or transfer was counterfeit (due
to check clearing timelines, your bank may
release the funds only to have the originating bank later reject the check for being
counterfeit). Since some or all of the monies
were refunded, the REALTOR® is the party
responsible for the shortage in the escrow
account now that the scammer cashed the
refund check.
If such a scenario ever presents itself, it is
recommended that you do not use your
brokerage escrow account, but rather have it
deposited into an attorney escrow account.
REALTORS® should not assume additional
liability by acting as a repository for the
funds of a customer or client. Doing so subjects the brokerage to unnecessary liability.
While many of the steps REALTORS® can
take to protect themselves seem like common
sense, scammers rely on you not protecting
yourself. As a result, REALTORS® continue
to be targets for scammers. In the event you
are the victim of a scam, you should notify
the proper authorities immediately.
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Editor’s Note: Reprinted with permission
from
The Decisions
Letter of the Law, ©National
and
DOS
Association of REALTORS®.
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PAGE 3
National Association of REALTORS® and Move win patent case on appeal
In a long-running legal battle over patent
infringement allegations, the Federal Circuit Court of Appeals affirmed a California
federal court’s decision that Move, Inc.’s
(Move) websites, including REALTOR.
com, do not infringe Real Estate Alliance,
Ltd.’s (REAL) patent.
Move operates a number of real estate websites, including REALTOR.com (owned by
the National Association of REALTORS®).
In 2007, Move brought a lawsuit against
REAL seeking a declaratory judgment that
its websites do not infringe REAL’s patents,
which allegedly cover a process for locating
properties on a map via a computer. REAL
filed a countersuit and named a wide variety
of defendants across the real estate industry.
The trial court entered judgment that Move
did not infringe REAL’s patents.
REAL appealed the ruling, however,
and the United States Court of Appeals
for the Federal Circuit vacated the trial
court’s decision based on improper claim
construction for one of the patents. The
case was remanded to the trial court, and
both parties filed for summary judgment.
Using the claim construction ordered
by the Federal Circuit, the trial court
again found that Move’s websites did not
infringe REAL’s patent. REAL appealed,
and the Federal Circuit affirmed the trial
court’s decision, upholding the finding
that Move’s websites did not infringe
REAL’s patent.
Claim construction is the term of art describing the process courts use to construe
the claims of a patent in order to give them
meaning. The claim construction is compared to the allegedly infringing device or
method to determine infringement or to
prior art to determine validity.
The trial court originally construed
REAL’s patent to require a website user to
choose “a geographic area of interest by
causing a boundary to be superimposed
over the displayed map using [a] selection curser [sic].” In its review of the trial
court’s claim construction, the Federal
Circuit instead interpreted REAL’s patent to require “selecting an area” and not
“defining an area.” In other words, the
boundaries of the selected area do not
have to be created in any specific manner.
Furthermore, the Federal Circuit found
that either a human user or a computer
could perform the “selecting.”
Sanctions continued from page 1
According to the decision, two days after
agreeing to lease the apartment, McKay
changed his mind because he believed the
building was unsafe. He contacted Canterino and asked for a refund of the rent and
commission. Initially, Canterino refused to
return any of the monies to McKay. About
one week later, Canterino returned the
$1,100 paid for rent but refused to return
the $1,100 paid for her commission, which
she still retained at the time of the hearing.
The administrative law judge found that
Canterino violated numerous provisions of
the license law including: failure to provide
an agency disclosure form; failure to identify herself as a broker in an advertisement;
failure to disclose an ownership interest in
a listed property; and failing to return an
unearned commission. The unearned commission charge was a result of Canterino
violating the agency disclosure law as well as
not disclosing an ownership interest in the
property. A broker who receives a commission in a transaction that is tainted by their
violations of Real Property Law §443 and
19 NYCRR §175.25 should not be allowed
to profit from such violations.
As a result, Canterino was ordered to pay
a fine of $1,500 and if such fine is not paid,
her license will be suspended. Furthermore, Canterino must refund the $1,000
paid for the commission plus statutory
interest of 9 percent computed since 2012
(approximately $1,300).
Using the Federal Circuit’s claim construction, Move argued on summary judgment
that its websites do not infringe REAL’s
patent. Move submitted its websites do not
select an area because only the user may
do so via clicking on an area of a map, a
point in a map, a zoom bar, or a name in
a drop-down menu. In sum, the user does
the selecting and Move’s websites merely
respond by gathering information. As a
result, Move’s websites do not perform the
steps set forth in REAL’s patent.
The trial court agreed with Move’s position.
REAL argued in its summary judgment
motion that a user of Move’s websites only
inputs information but the websites ended
up selecting the geographic boundaries. The trial court rejected this position.
Instead, the trial court found that there
are specific geographic boundaries for zip
codes and towns/cities, so the boundaries were not selected by Move’s websites.
Similarly, zooming in or out was a user
function. Thus, the websites did not select
the geographic area as described by REAL’s
patent, and the trial court found in favor of
Move on summary judgment.
REAL appealed in March 2012. The Federal Circuit Court of Appeals affirmed the
trial court’s decision on July 15, 2015. An
affirmed decision by a Court of Appeals
means the Court finds the trial court’s decision is correct and will, therefore, stand as
rendered by the trial court.
M o v e , I n c . v. R e a l E s t a t e A l l i a n c e L t d . , N o. 2 0 1 4 - 1 6 5 7 , 2 0 1 5
WL 4257797 (Fed. Cir. July 15, 2015)
[This is a citation to a Westlaw document.
Westlaw is a subscription, online legal
research service. If an official reporter
citation should become available for this
case, the citation will be updated to reflect
this information.]
Editor’s Note: Reprinted with permission
from The Letter of the Law, ©National Association of REALTORS®.
PAGE 4
Supreme Court upholds Fair Housing Act disparate impact liability
In a much anticipated housing discrimination case, Texas Department of Housing
and Community Affairs ET AL. v. Inclusive
Communities Project, Inc. ET AL, the Supreme Court of the United States addressed
the issue of whether the federal Fair Housing
Act (FHA) prohibits housing decisions that
have a disparate impact. The Court, in a 5-4
ruling, held that disparate-impact claims are
cognizable under the FHA.
The plaintiff in the case, Inclusive Communities Project, Inc. (ICP), alleged that the
defendants, the Texas Department of Housing and Community Affairs (department),
violated the FHA by allocating a disproportionate number of federal low-income
housing tax credits in predominately black
inner-city areas, rather than in predominately white suburban neighborhoods. ICP
alleged that the department’s selection criteria for allocating the tax credits perpetuated segregated housing patterns, resulting
in a disparate impact on minorities in violation of the FHA. Disparate-impact claims
challenge practices of housing providers
that have a disproportionately adverse effect
on minorities.
Relying on statistical evidence presented by
ICP, the district court concluded that ICP
successfully established a prima facie case
of disparate impact. While the district court
accepted the department’s interests in allocating the tax credits as legitimate, the district court required the department to show
that there was no other less discriminatory
alternative to advancing the department’s
legitimate interests.
After defendants failed to meet this burden, the district court entered a remedial
order requiring the department to add new
selection criteria for distribution of the tax
credits. On appeal, the Fifth Circuit Court
of Appeals held that disparate-impact
claims are recognizable under the FHA, but
reversed and remanded based on its finding
that the district court improperly placed the
burden to demonstrate no less discriminatory alternative on the department.
tion of these holdings. In addition, the court
In reaching its holding that the FHA recfound that the 1988 Amendments presupognizes disparate-impact claims, the court
posed the existence of disparate-impact lifound support from two other antidiscrimiability, and that the “exemptions embodied
nation statutes, Title VII of the Civil Rights
in these amendments would be
Act of 1964 (Title VII) and the
superfluous if Congress had asAge and Discrimination in Emsumed disparate-impact liability
ployment Act of 1967 (ADEA). National Case
did not exist under the FHA.”
Both Section 703(a)(2) of Title
VII and Section 4(a)(2) of the
While the court recognized
ADEA contain language, similar to language
disparate-impact liability, the court limited
in the FHA, which speaks to the conseits scope in order to ensure that housing
quence of an actor’s actions, rather than the
authorities and housing developers could
actor’s intent. The court determined that
still maintain a policy that serves a legitimate
prior decisions of the court “instruct[] that
business interest. After a plaintiff establishes
antidiscrimination laws must be construed
a prima facie case showing of disparate imto encompass disparate-impact claims when
pact, the burden shifts to the defendant to
their text refers to the consequences of acprove the challenged practice is necessary to
tions and not just to the mindset of actors
achieve one or more substantial, legitimate,
and where that interpretation is consistent
non-discriminatory interests. The court inwith statutory purpose.” Section 804(a) of
structed that the burden then shifts back to
the FHA includes the phrase “otherwise
the plaintiff to show the existence of another
make unavailable,” which is similar to
practice with a less discriminatory effect that
phrasing in Title VII and the ADEA, and
would still serve the defendant’s legitimate
previously found by the court to refer to
business interest. In addition, central to this
the consequences of the actor’s actions
burden-shifting framework is the requirerather than the intent. Also persuasive to
ment that a plaintiff be able to show a causal
the court was the fact that Title VII, the
connection between a specific policy or poliADEA, and the FHA were passed close in
cies of a defendant and the disparate impact.
time to each other.
The court also found support from the 1988
amendments to the FHA (1988 Amendments). At the time of the 1988 Amendments, Congress was aware that all nine
Courts of Appeal had addressed the issue
and unanimously held that the FHA recognized disparate-impact liability. Therefore,
the court determined that Congress’ 1988
Amendments to the FHA served as a ratifica-
The court recognized that disparate-impact
claims play an important role in uncovering discriminatory intent and unconscious
biases that may serve to thwart the FHA’s
goals, and the court found disparate-impact
liability under the FHA to be consistent with
the FHA’s purpose of ending segregated
housing patterns and moving our nation
See Fair housing, page 10
NYSAR Legal Update
Monday, Oct. 5, 2015
The Turning Stone, Verona, NY
12:30 p.m.
Presented by NYSAR Director of Legal Services
S. Anthony Gatto, Esq.
PAGE 5
NYSAR Legal Hotline call report
Second Quarter 2015
HOTLINE ISSUES
COMMISSION
LICENSE LAW
12%
20%
FAIR HOUSING
CONTRACT
DISCLOSURE
11%
AGENCY
5%
3%
1%
2%
2%
1% 2%
DOS
REFERRALS
ARBITRATION
24%
9%
8%
CODE OF ETHICS
BOARD/ASSOCIATION
MLS
OTHER HOTLINE ISSUE
ISSUES
COMMISSION22412%
LICENSE LAW19411%
FAIR HOUSING533%
CONTRACT43624%
DISCLOSURE1458%
AGENCY1599%
DOS352%
REFERRALS251%
ARBITRATION372%
CODE OF ETHICS
39
2%
BOARD/ASSOCIATION111%
MLS935%
OTHER HOTLINE ISSUE
363
20%
TOTAL ISSUES……………
1814
The NYSAR Legal Hotline is available to members
by calling 518-436-9727 Monday through Friday from 9 a.m. to 3 p.m.
PAGE 6
U.S. Supreme Court strikes down sign ordinance
The Supreme Court of the United States has
considered whether a town’s ordinance that
regulates signs based on the content of the
sign violates the First Amendment of the
United States Constitution.
The town of Gilbert, Arizona (town) has a
code that regulates the display of outdoor
signs (sign code). The sign code identifies
signs by various categories, and the categories are then regulated in different ways. In
particular, the sign code has particular regulations for “Temporary Directional Signs
Relating to a Qualifying Event,” which are
signs directing the public to the meetings of a
nonprofit group. These signs can only be six
square feet in size, can only be displayed for
12 hours and can only be placed in certain
locations. The sign code also regulates other
noncommercial signs such as political signs
and ideological signs.
The Good News Community Church
(church) operates in the town and does not
have a permanent location. Therefore, the
church uses signs to direct attendees to the
different locations where it holds its services. The signs would be posted around the town
on Saturday morning and then removed
after the services on Sunday afternoon. The
town’s sign compliance manager noticed the
signs, and fined the church twice for failing
to comply with the sign code because the
signs were up for more than 12 hours. The
church tried to negotiate an accommodation
for its signs, but the town refused.
The church filed a lawsuit challenging the
sign code as an unconstitutional abridgement of their speech in violation of the
United States Constitution. The trial court
denied the church’s motion for a preliminary
injunction staying enforcement of the sign
ordinance, and the appellate court affirmed,
ruling that the sign ordinance did not regulate signs based on their content. The church
appealed.
The Supreme Court of the United States
reversed the lower courts and ruled that the
sign ordinance’s regulations for “Temporary
Directional Signs” are content-based that
cannot survive review and so are unconstitu-
tional. The First Amendment prohibits laws
that limit free speech, and laws that regulate
based on the speech’s content are presumptively unconstitutional and require the
government to show that the law is narrowly
tailored to serve a compelling governmental
interest in order to survive review.
The court determined that the sign code
regulated speech based on its content, as the
sign’s content determined how it was regulated. The town argued that its regulations
were content neutral and did not single out a
particular viewpoint for different treatment,
and the lower courts had agreed with this
rationale. However, the court stated that
the First Amendment prohibits any regulation of speech based on the speech’s content
and, therefore, the regulations were subject
to strict scrutiny, regardless of whether the
sign code was neutral or not in its regulation. The temporary direction signs were
treated differently than political signs, and
both were treated different than ideological
signs, showing that the sign’s content determined how it was regulated.
The sign code failed to pass the scrutiny
tests applied to content-based restrictions on
speech. The town offered two governmental
interests to support the distinctions made
in the type of signs: preserving the town’s
aesthetic appeal and traffic safety. Neither
interest was narrowly tailored to support the
content regulation, as other types of signs
could be unlimited in number while directional signs were strictly regulated and so the
town had not shown how these regulations
protected the town’s aesthetics. Similarly, the
town did not show how limiting directional
signs protected traffic safety while at the
same time allowing an unlimited number
of other signs. Because the town’s contentbased regulations could not pass the strict
scrutiny test, the court reversed the lower
court’s rulings and sent the case back to the
lower courts for further proceedings.
Reed v. Town of Gilbert, Ariz., 135 S. Ct.
2218 (U.S. 2015).
Editor’s Note: Reprinted with permission
from The Letter of the Law, ©National Association of REALTORS®.
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PAGE 7
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PAGE 8
Answers to REALTORS®’ frequently asked questions about drones
In response to members’ growing interest in
drones, or unmanned aircraft systems (UAS)
as they are referred to by the Federal Aviation
Administration (FAA), the National Association of REALTORS® has assembled answers
to frequently asked questions it receives
regarding the legal and regulatory landscape
of UAS, and a real estate professional’s ability
to use this emerging technology.
1) What is a UAS?
A UAS is the unmanned aircraft (UA) and
all of the associated support equipment,
control station, data links, telemetry, communications and navigation equipment, etc.,
necessary to operate the unmanned aircraft.
The UA is the flying portion of the system,
flown by a pilot via a ground control system,
or autonomously through use of an onboard computer, communication links and
any additional equipment that is necessary
for the UA to operate safely. The FAA issues
an experimental airworthiness certificate for
the entire system.
2) How do UAS typically operate?
UAS flights are typically short in duration
and flown at low altitudes in order to gather
only the desired images or information related to a specific property or location. Most
UAS fall into what is referred to as the micro
UAS category, which means the UAS weighs
4.4 pounds or less. UAS operations are typically brief and more affordable than manned
aircraft, making them well-suited for use by
the real estate industry.
3) May I use a UAS to take aerial
images of my real estate listings?
You may use a UAS only if you have received
a Section 333 waiver from the FAA. Current
FAA laws and regulations generally prohibit
the commercial use of UAS, which includes
for the purpose of real estate marketing.
4) May I hire someone to operate
a UAS to take aerial images?
Yes. You may hire an individual or company
to operate a UAS on your behalf. However,
before doing so, be sure to verify that the
individual or company has successfully obtained a Section 333 waiver from the FAA.
5) Has NAR taken a position on
UAS?
Yes. On Nov. 10, 2014, the NAR Board of
Directors approved the following official
policy statement on unmanned aerial vehicles:
The National Association of REALTORS®
advises members that the use of unmanned
aerial vehicles for real estate marketing is
currently prohibited by the Federal Aviation Administration. Such prohibited use
of unmanned aerial vehicles may lead to the
assessment of substantial fines and penalties.
The National Association of REALTORS®
supports efforts to create new federal regulations to allow for the future commercial use
of unmanned aerial vehicle technology by
the real estate industry.
The National Association of REALTORS®
is committed to working with the Federal
Aviation Administration, and any other relevant federal agencies, during the regulatory
approval process. NAR will continue its ongoing efforts to educate REALTORS® about
the current and future regulatory structure
for the safe and responsible operation of
unmanned aerial vehicles.
6) Are there any exceptions to
the prohibition on the commercial use of UAS?
Yes. The FAA Modernization and Reform
Act of 2012 provides the FAA with the
ability to issue Section 333 waivers, which
grant authorization for certain unmanned
aircraft to perform commercial operations
on a case-by-case basis.
7) How do I apply for a
Section 333 waiver?
The Section 333 waiver process involves the
filing of a petition of exemption with the
FAA. You can find more specific information about what a petition of exemption
must contain and how to file your petition
on the FAA’s website at: www.faa.gov/uas/
legislative_programs/section_333/how_to_
file_a_petition/.
8) Does the Section 333 waiver
require the petitioner to have a
pilot’s license?
Yes. An FAA-issued pilot’s license is a required element of successfully obtaining a
Section 333 waiver.
9) How long does the Section
333 waiver process take?
The FAA advises that Section 333 petitioners
should allow up to 120 days after submission
for a decision to be made on a petition of
exemption. However, in March of 2015, the
FAA made certain procedural changes that
often result in a faster approval time. Since
these changes were implemented, the FAA
has been approving an average of 50 Section
333 waivers a week.
10) Are there any proposed
regulatory changes to allow for
the future commercial use of
UAS?
Yes. The FAA Modernization and Reform
Act of 2012 charged the FAA with integrating the commercial use of UAS into national
airspace. In February 2015, the FAA took the
first step in doing so, and issued a Notice
of Proposed Rulemaking on the Operation and Certification of Small Unmanned
Aircraft Systems. You can find a summary
of the rule on the FAA’s website at:www.
faa.gov/regulations_policies/rulemaking/
media/021515_sUAS_Summary.pdf.
11) When is it anticipated that
the rule will become final?
The FAA is working diligently to consider
the more than 4,000 comment letters it
received during the rule’s comment period.
While the typical timeframe for a proposed
rule to become final is 16 months from the
time a rule’s comment period closes, the
rule has the highest priority within the FAA.
The FAA is determined to move forward as
PAGE 9
quickly as possible, and a final rule could be
issued as soon as August 2016.
12) What if I want to use UAS
before the rule becomes final?
There are two options: 1) You can apply
for a Section 333 waiver or 2) you can hire
a company or individual that has already
successfully obtained a Section 333 waiver.
If you choose to hire a company to operate
a UAS for your real estate marketing needs,
or for some other commercial purpose, be
sure to ask the individual or company if they
have a Section 333 waiver to operate the UAS
for the purpose you are requesting.
13) Is insurance available for
UAS operators?
Yes. Insurance companies offer coverage
for UAS operators. Be sure to ask any individual or company you are working with if
they are insured for the UAS operation. In
addition, request that you be named as an
additional insured for purposes related to
the UAS operation.
14) What can I do to limit my
legal liability when hiring a UAS
operator?
You should request that the UAS operator
indemnify you against any action, suits,
damages, losses, costs and expenses (including, without limitation, attorneys’ and fees
and costs) arising from the UAS operation
or the use of the related UAS images.
15) Where can I find a list of
individuals and companies that
have obtained a Section 333
waiver?
NAR maintains a list of the individuals and
companies specific to the real estate industry
that have been granted Section 333 waivers,
available on REALTOR.org: www.realtor.
org/articles/list-of-faa-approved-droneoperators-available.
The FAA’s website also contains an up-todate list of all of the individuals and companies that have been granted Section 333
waivers: www.faa.gov/uas/legislative_programs/section_333/333_authorizations/.
16) Could I be legally liable if I
hire a photographer who does
not have a Section 333 waiver
to operate a UAS for commercial
purposes?
The FAA’s mission is the protection of national airspace and the safe operation of
aircraft. As such, the FAA’s enforcement
efforts with respect to UAS are focused on
the UAS operator and the safety of the flight.
Therefore, an impermissible or careless or
reckless operation of a UAS could result
in an FAA enforcement action against the
UAS operator. However, beyond FAA enforcement, a real estate professional could
be the subject of legal risk under state law
if an individual is injured or an individual’s
privacy or property rights are infringed upon
as a result of the UAS operation.
17) Where can I report any suspected improper use of a UAS?
Any concerns regarding the unauthorized
commercial use or unsafe operation of a
UAS can be directed to the FAA or to local
law enforcement authorities.
18) Does use of a UAS without a
Section 333 waiver constitute a
violation of the REALTOR® Code
of Ethics?
The REALTOR® Code of Ethics does not
address this type of conduct. While REALTORS® are encouraged to always abide
by local, state, and federal laws, it is not a
REALTOR® association›s role to adjudicate
whether a REALTOR® has violated a local,
state or federal law.
19) What duty does an MLS
have to remove UAS-obtained
images in a listing that were
obtained without a Section 333
waiver?
An MLS does not have an obligation to
investigate or to remove UAS-obtained images in listings where the MLS suspects that
such images were not taken pursuant to a
Section 333 waiver. An MLS may create a
policy prohibiting MLS participants from
placing images on the MLS where such
images were taken in violation of the FAA’s
prohibition on the commercial use of UAS.
Before creating a policy on this issue, an MLS
should consider its ability to consistently
police and thoroughly investigate whether
such images are compliant with FAA rules
and regulations.
20) Where can I find additional
information about UAS?
There are many valuable UAS resources
available on REALTOR.org, including:
• REALTOR.org page dedicated to UAS, providing legal and regulatory updates, as well
as other relevant UAS news and information:
www.realtor.org/topics/drones
• “Drone Fever: Getting Permission to Fly
in the U.S.” webinar, hosted by the National
Association of REALTORS® and presented
by Hogan Lovells: www.realtor.org/articles/
nar-hosts-uas-webinar-with-hogan-lovells
• “Window to the Law” video on the FAA’s
February 2015 Notice of Proposed Rulemaking on the Operation and Certification of
Small Unmanned Aircraft Systems: www.
realtor.org/videos/window-to-the-law-faaproposes-drone-rules
• Current list of real estate-related Section
333 waiver holders: www.realtor.org/articles/list-of-faa-approved-drone-operatorsavailable
• The FAA’s website is also a great resource
for UAS information: www.faa.gov/uas/
• Information about the “Know Before You
Fly Campaign”, a campaign dedicated to
educating prospective UAS users about the
safe and responsible operation of UAS, is
available here: www.knowbeforeyoufly.org/
Editor’s Note: Reprinted with permission
from The Letter of the Law, ©National Association of REALTORS®.
PAGE 10
DOS publishes 2Q 2015 ALJ decisions
The Department of State, Division of Licensing Services (DOS) receives complaints about
real estate licensees. The DOS investigates
the complaints and if they are found to have
merit, a licensee may be subject to a hearing
before an administrative law judge (ALJ) to
determine whether the licensee violated any
law, rule, regulation or other duty expected
of a licensee.
The following citations refer to DOS decisions
before an administrative law judge. Each decision provides a brief description regarding
the subject matter of the violation(s) being
heard before the administrative law judge.
NYSAR is providing this information to REALTORS® in an effort to better educate our
members as to what constitutes a violation, and
how to avoid having a complaint filed against
you. Full copies of the decisions are available in
the Legal Resources section of NYSAR.com via
the court and DOS decisions link.
The following are the second quarter 2015
ALJ decisions:
• 185 DOS 15
failure to satisfy judgment
• 202 DOS 15
misstatement on application, failure to cooperate
• 212C DOS 15 denial of license, criminal
conviction
• 219 DOS 15
tion
misstatement on applica-
• 224 DOS 15
misstatement on application, failure to cooperate
• 235 DOS 15
agency, advertising, failure to disclose ownership interest, unearned
commission
• 244 DOS 15
misstatement on application, failure to cooperate
• 248 DOS 15
conviction
denial of license, criminal
• 254 DOS 15
misstatement on application, failure to cooperate
• 257 DOS 15
misstatement on application, failure to cooperate
• 291 DOS 15
misstatement on application, failure to cooperate
• 289 DOS 15
misstatement on application, failure to cooperate
• 292 DOS 15
misstatement on application, failure to cooperate
• 290 DOS 15
misstatement on application, failure to cooperate
296 DOS 15
escrow, agency, failure to
cooperate, accounting
Fair housing
continued from page 4
towards a more integrated society. For these
reasons, the Supreme Court of the United
States affirmed the judgment of the Court
of Appeals for the Fifth Circuit.
Three judges dissented from the court’s
opinion, arguing that the key phrase in the
text of Section 804(a) of the FHA is the use
of the phrase “because of,” which the dissent pointed out was previously held by the
court to mean “by reason of ” or “on account
of,” requiring a showing of discriminatory
intent. The dissent was unpersuaded by the
majority’s reading of the plain language of
the statute or the majority’s conclusion that
Congress authorized disparate-impact liability under the FHA.
Texas Dep’t of Hous. & Cmty. Affairs v.
Inclusive Communities Project, Inc., No.
13-1371, 2015 WL 2473449 (U.S. June
25, 2015) [This is a citation to a Westlaw
document. Westlaw is a subscription,
online legal research service. If an official reporter citation should become
available for this case, the citation will
be updated to reflect this information].
Editor’s Note: How Does Disparate Impact
Theory Impact Real Estate Professionals?
The effect of the Supreme Court’s decision will
largely be felt by housing developers, multiunit property managers, lenders and government agencies. To the extent that a real estate
professional serves in one of these capacities,
particular attention should be paid. While the
result of this decision will unlikely affect real
estate professionals to any great extent, there
is potential for a real estate professional to be
subject to disparate-impact liability where a
real estate professional adopts a policy that
causes a disparate impact on a protected class.
For example, if a real estate professional were
to adopt a policy that the real estate professional would only show properties to individuals with advanced degrees, and a plaintiff
were able to establish that this policy caused a
disparate impact on minorities, a real estate
professional could potentially be held liable
for violating the federal Fair Housing Act.
In addition, for real estate professionals that
also operate as property managers or housing
developers, consideration should be given to
the effect of any adopted policy related to these
activities to ensure that the policy does not
have any unintended disparate impact on a
protected class under the Fair Housing Act.
Reprinted with permission from The Letter of the Law, ©National Association of
REALTORS®.
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