Property ManagementMost Realtors Unaffected By New Privacy Regulations, Says NAR
An opinion issued today by the National Association of Realtors® Legal
Affairs Division maintains that most
real
estate brokerages and property management
firms will not be required to comply with new federal privacy disclosure
regulations that take effect July 1.
Appraisers who conduct appraisals for consumers and brokerages that engage
in ancillary services that are financial in nature such as mortgage lending or
mortgage brokering would be required to comply with the new regulations.
Brokers who are not involved in providing ancillary services that are
financial in nature are not included within the scope of the new regulation.
Appraisers who work for banks also would not be impacted by the regulation,
although the bank for which the appraisal services are performed will be
according to the opinion of NAR?s legal department.
The regulations, issued under the authority of the Gramm-Leach-Bliley Act,
require all businesses engaged in financial activities to inform consumers how
any information collected, either directly or indirectly, from the consumer in
connection with the providing of a financial product or service will be used.
A business that intends to share the consumer"s personal information with
unaffiliated third parties must provide the consumer with notice and the
opportunity to opt-out of the information sharing.
Once a consumer establishes a
"customer relationship" with a business covered by the regulations, the
customer must be provided at the outset of the customer relationship with a
copy of the business privacy policy notice and annually thereafter until the
customer relationship terminates, regardless of whether the information is
being shared with third parties or
not.
"Because real estate brokerage and property management are not financial
activities, we do not believe that they are covered under the regulations. Only
appraisers who conduct appraisals for individuals and brokers who engage in
mortgage lending or other financial activities will be required to comply,"
said Laurie Janik, NAR"s general
counsel.
Currently NAR is aggressively opposing a
regulation proposed by the Federal Reserve Board that would allow banks to
enter real estate brokerage and property management on the grounds that these
real estate activities are not financial in nature. However, the privacy
regulations have no direct relationship to the Federal Reserve rule because
they are being implemented by a different federal agency, she said. For more
information about the privacy regulations, Realtors® should read the current
issue of Letter of the Law, a monthly newsletter written by NAR?s Legal
Division and available on
OneRealtorPlace.