Real Estate and the Use of Audio, Video, Drones & Phones

Real Estate and the Use of Audio, Video, Drones & Phones

By Todd Turner, Sorling Northrup Attorneys

Photos and virtual tours of real estate have become common tools for real estate licensees trying to attract buyers. Starting out with exterior photos of homes listed in the MLS, and then growing with the Internet to include exterior and interior photographs of listings on brokers’ web pages. As technology advanced, virtual tours went from a novelty to a staple in the REALTOR® tool box. Potential buyers now expect to be able to “see” and “tour” homes from their computer—even prior to contacting their own buyer’s agent or the listing agent. It is estimated that perhaps as many as nine out of 10 buyers searched online during the home buying process according to a National Association of REALTORS® and Google study. Realtor.org (Jan 16, 2013).

As the cost of video cameras and webcams has become reachable for the average consumer, not only are buyers using the technology, so are sellers. Video surveillance for the purpose of protecting one’s home, possessions, or watching children at home while the owner is away (the so-called concept of the “nanny cam”) has proliferated. When an owner wants to sell a home, the existing surveillance or security system can be used to monitor potential buyers as they tour the house during showings and open houses. Video security is also a tool sometimes used by agents when showing a vacant home or open house as a means of security for the agent—by deterring criminal behavior and physical assault or by at least hopefully having video of any perpetrator of criminal behavior available for police to use.

An even newer use of video and photography that is catching on with buyers is the videoing or photographing the property they are viewing. This issue is generating many questions on the Illinois Association of REALTORS® Legal Hotline, especially, the basic question: “Can a buyer or buyer’s agent take video or photos of the property they are viewing during a showing whether it is a private showing or an open house?” Unfortunately, there is no “yes” or “no” answer to this question in Illinois case law or statute. There are some things that REALTORS®, however, ought to know and think about as they face this question.

1. Eavesdropping Law in Illinois

First, you need to be aware of Illinois law regarding eavesdropping—the potentially illegal activity of listening to or recording someone’s conversation without their knowledge. Illinois’s Criminal Code prohibited eavesdropping. (720 ILCS 5/14-1 et seq.). Although the average person generally knows that “eavesdropping” can be illegal, many are not aware of how strict the Illinois law is (or, as you will see, was).

An eavesdropping device is any device that is “capable of being used to hear or record oral conversation or intercept, retain, or transcribe electronic communications whether such conversation or electronic communication is conducted in person, by telephone, or by any other means . . .”  This would include a common video camera or smartphone video that usually records sound. They would be considered eavesdropping devices, even if you turned the sound feature off because the device would still be “capable” of recording a conversation. Section 14.2 of the Eavesdropping Act goes on to say that it is an offense if a person: “(1) knowingly and intentionally uses an eavesdropping device for the purpose of hearing or recording all or any part of any conversation . . . unless he does so (A) with the consent of all of the parties to such conversation. . .”. Under state law, to record audio of a conversation, all parties to the conversation have to give consent to being eavesdropped. Consent can be actual or implied. Implied consent is found, for instance, where notice is posted that audio recording is taking place or when you hear the often repeated phrase when calling a business, “this call may be recorded for training and quality control purposes,” and you continue to stay on the line.

Illinois had one of the most restrictive private person eavesdropping statutes in the country. However, on March 20, 2014, the Illinois Supreme Court overturned the eavesdropping statute. People v. Melongo, 2014 IL 114852. In this case the Court found that the statute was overbroad because it required consent of all parties, even when there was no expectation that a conversation was private, such as a “loud argument on the street, a political debate on a college quad, yelling fans at an athletic event . . . .”  It also criminalized what should be innocent conduct by criminalizing “the publication of any recording made on a cellphone or other such device, regardless of [whether or not there was] consent.”  Therefore, previous legal news items put out by IAR on eavesdropping are no longer accurate in light of the court’s ruling.

However, Illinois will undoubtedly formulate a new eavesdropping statute soon. It will probably no longer require the consent of all parties to a conversation in all situations. Because we do not yet know what a new eavesdropping law will look like, best practices for REALTORS® and sellers is to go ahead and let potential buyers know that conversations may be picked up either by telling them directly or by posting notice that audio devices in the property may record conversations. Posting notice may be the best method to use so that if you fail to tell someone directly and get their consent, posted notice will show implied consent.

2. Video Recording

The second issue to keep in mind is that even if you are using a device that is not capable of recording sound, there is a limitation placed upon video recording or live video feed by Illinois law at 720 ILCS 5/26-4 which deals with disorderly conduct. This section is more applicable to sellers who are recording video or using a live video feed in their home. While consent is not required by Illinois law if you are videoing persons in your own home, section 26-4 requires that you must have the consent of a person (in this case a buyer) to record a person in certain locations, including a bathroom. Therefore, under the law, a seller could not video a prospective buyer viewing a bathroom without consent.

3. Photographing or Taking Video of a Home

Third, how should an agent handle a situation where the buyer at a private showing or an open house wants to photograph or record video of the home they are viewing? More and more often, especially with the proliferation of quality cameras and video recorders in the typical smart phone, buyers want to take videos or photos in order to help them remember later what the home looked like, or the photos or video are to be used to show to a spouse, for instance, who could not be present for the showing. Must the potential buyer obtain actual consent from the seller or the seller’s agent, or may the potential buyer take photos or videos since they are already there with the consent of the seller? As stated above, there is no Illinois law on point regarding this issue. Best practices that we recommend are for the buyer to obtain the seller’s consent. Therefore, if you are representing the buyer, you should ask the listing agent if it is okay if the potential buyers take photos or videos. Because oftentimes the sellers, themselves, are not present at the showing, a buyer’s agent ought to try and ask the sellers’ agent prior to the showing to allow the listing agent the time to ask the sellers. Perhaps a buyer’s agent should routinely ask for permission when setting up a showing so as to avoid the situation where the seller is unavailable to the listing agent to ask for permission.

Additionally, listing agents may want to ask their clients before any showing or open house whether they are okay or not with a potential buyer taking photos or videos of the home. Many sellers may agree because perhaps this will help sell the home, but other sellers may believe that this is an invasion of their privacy and/or have items in the home that they do not want photographed that might be valuable and a target for criminals posing as buyers. Additionally, once a potential buyer has taken the photos or videos, the sellers have no way to control how the photos will be used. Most buyers will be honest and only use them for their own, honest purpose, but in the digital age, the photos and videos can be uploaded to the Internet and be accessible to anyone online who may use the images in a negative or embarrassing way.

If a seller does not want photos or video of their home taken by potential buyers, the sellers’ agent should instruct someone asking for a showing that the sellers have asked that no images of the interior of the home be made. At an open house, a sellers’ agent may want to post notice near the front entry or other conspicuous location that instruct visitors that taking photos or video of the interior of the home is not allowed. In reality, however, there is only so much that an agent can do. Some potential buyers may still take photos or videos anyway, whether blatantly or surreptitiously with their camera phone. An agent should not try and physically intervene in such a situation, but they may want to give a reminder about a seller’s wishes and report what happened to the sellers. Some persons take the view that if a person has put their house on the market for sale and allows tours, then the buyers are free to photograph or video all that they wish. Legally, however, that is not necessarily the case. (See e.g. Garden Web.com http://ths.gardenweb.com/forums/load/realestate/msg0201264118540.html) That is a lengthy online comment thread on what is the proper etiquette if a buyer wants to take images of the interior of a seller’s home during a showing.

This web page revealed a lot about how buyers, sellers, and real estate agents felt about the issue. Some comments stated that once you invite a person into your home you have no control over their behavior. This statement, legally, is flat-out, dead wrong. When you invite someone into your home, even when the home is up for sale, the owner has not lost the right to control conduct of the buyer. In other words, a seller can invite someone into the home and set limits on what the invitee is allowed to do. If you do not want pictures taken, you can require that invitee to leave the premises. Theoretically, a seller might have an action for trespass when an invitee’s conduct exceeds the authority granted by the owner of the home. However, this requires a lawsuit and is totally impractical to address an immediate problem. Most postings showed that many believed that asking permission was the proper thing to do, although many thought it acceptable to take photos without asking for permission. Again, best practices are to obtain a seller’s consent before taking images of the interior of the home. Failing to ask for consent is not necessarily illegal or in violation of any case law, however, you do not want to be a participant in the first lawsuit by a seller for invasion of privacy or trespass over this issue.

4. Use of Drones

A new twist on photography of a seller’s home is the use of unmanned drones carrying cameras in order to take outdoor photos of a seller’s home for display in the MLS or on a listing broker’s website. This, of course, should only be done with the seller’s consent. There are legal issues, however, to take into account when using drones. Foremost is that the Federal Aviation Administration (FAA) takes the position that using drones for commercial purposes violates the law. At the date of writing this article, only one person has been fined by the FAA for violation of FAA regulations while using a drone. The operator was using his drone for hire to take photos and video near the campus of the University of Virginia. The FAA imposed a $10,000 fine on the drone operator. The drone operator took his case to the Office of Administrative Law Judges of the National Transportation Safety Board. The Administrative law judge ruled against the FAA and dismissed the FAA’s action. The Administrative law judge ruled that the provision under which the FAA was fining the drone operator were not properly adopted rules, and he ruled that drones should be treated as model aircraft by the FAA which had only imposed voluntary guidelines regarding the flying of such craft such as operating under certain altitudes and certain distances from airports. Federal Aviation Administration v. Raphael Pirker (Docket CP-217) (March 6, 2014). The FAA has said that it is going to appeal the order to the U.S. Court of Appeals for the District of Columbia and could also try issuing emergency rules that could be implemented and used against other operators. Therefore, the legality of using drones for commercial purposes such as photographing homes you have listed is not yet clear.

The National Association of REALTORS® along with the Aircraft Owners and Pilots Association and other groups have sent a letter to the FAA urging the FAA to adopt rules for the use of drones for commercial purposes in order to provide for clarity and safety. The Washington Post, (April 8, 2014 by Brian Fung). According to this same article, an FAA spokesperson said that they hope to publish formal rules on small drones “later this year.”

An online search for the use of drones in real estate sales will reveal a number of REALTORS® are already using drones in various parts of the country, including Illinois. Drones are being piloted by real estate agents themselves, while others are piloted by a third-party contractor. The drones are being used in “increasing numbers to capture new angles on high-end homes for sale.” Realtor.com, “Drones Could Be Next Tool for Real Estate Agents” (Jan. 2, 2014 by Erik Gunther).

Besides the basic question as to whether it is currently legal to use drones in this manner, a number of other legal concerns arise. For instance, privacy. If you are taking photos you might catch a neighbor in his own yard who has not given any permission to anyone to photograph him or his property. Another issue is liability for damage to property or injury to a person if a drone should crash. You would want to make sure that the drone operator had adequate liability insurance. The next question would be whether an agent who hired a drone operator could be liable for such damages, and should they carry their own additional insurance for aviation mishaps.

The technology is here to stay and will become more and more common in the real estate profession. Others say that this will only be a fad in the profession because of the cost-benefit analysis—will drones really deliver more and quicker sales over and above what current photography and virtual tours do? Inman News reports that “NAR and other groups claim that the drone industry will create an estimated 100,000-plus jobs and $82 billion in economic impact during the first decade it is integrated into the FAA’s regulatory framework . . .”  Inman.com “NAR Joins Push for FAA Rule on Commercial Drone Use” (April 8, 2014). It will be interesting to see how things work out over the next few years. This is a topic you may want to keep your eye on as the legal issues are addressed. 