Updated: Apr 17, 2020
We live in a day and age where they are literally EVERYWHERE – doorbell cams, security cameras, phone cameras, and various other recording devices of all shapes and sizes. They are incredibly useful, but can sometimes have unintended consequences, especially in your home. How should you use or be aware of an in-home recording system in your next home transaction?
Federal wiretapping laws make it illegal to audibly record individuals who are without at least one party to that conversation consenting. To be enacted the law has to show that the buyers have a reasonable expectation of privacy. If there is a reasonable expectation of privacy, it is very likely courts will hold sellers liable for audio recordings due to significant legal precedence in prior court cases.
Privacy laws focus on if a person’s privacy was invaded. It has to be non-consent and the location could be an issue (bedrooms/bathrooms. Privacy Laws rely heavily on the 4th amendment test; 1) whether the person has a subjective expectation of privacy and 2) whether that expectation is one that society would recognize as reasonable. The Carter Case helps us to define expectations of privacy. This spectrum points out five situations and shows the expectation of privacy going from the least amount of privacy to greatest expectation of privacy.
What if I Disclose there is a Camera that is Recording?
If a seller discloses the existence of a nanny cam, it destroys the expectation of privacy (including the expectation of a buyer-agent confidentiality agreement).
Potential FHA Violations
Sellers should be aware that if they record a buyer/agent walking through their home and they review the video to evaluate the buyer and their offer on the home, the seller has the potential to run into a slew of Federal Housing violations. The minute you see and hear a buyer on camera, you now know the buyer’s skin color, potential familial status, if they are handicap, their sex, and potentially you may learn their religious status. These are all protected classes! Brian Swan CEO of OnCourse Learning Real Estate said, “if the buyer lodges a complaint with HUD, regardless of whether any fault is eventually found, the investigation is going to be costly for the seller.”
Can Sellers Use Information Captured on Video Cameras After Going Under Contract?
Like each point of this article, this one is a double-edged sword. In a real estate transaction, there is an implied covenant of good faith and dealing. This means both parties will act fairly and in good faith with one another. If there is a breach in the contract and it can be linked to something possibly discovered through a video recording, the buyer/seller could have a contract lawsuit case.
Here is what you need to know. As a Brokerage, Discover Realty neither recommends nor advises one way or the other. “There are two sides to every argument,” Swan said. “[It] may not be as cut and dried as it might seem.” Below are some quick take-aways:
Sellers should either turn off nanny cams or disclose their existence.
The biggest threat is not wiretapping laws, but FHA discrimination violations.
Seller curiosity is OK, but know that perceptions govern buyers conduct.
Buyers should not say anything material about the home or transaction until they are out of the house.
Always assume you are on camera.
Under the Carter Test the buyer does not have an expectation of privacy. However, if they are with their agent society would expect them to have more privacy.
We recommend buying and/or selling with a competent and experienced agent to help you navigate the potential pitfalls of a home transaction. A Realtor will represent you, counsel with you, and will help increase your opportunities for success while decreasing the chances of running into major roadblocks.
A home transaction is one of the largest and most important events most people will ever make. Having the best agent representation can make a huge difference! Call us to set up your free consultation with a Real Estate professional today.