5 Risks of Social Media

Social media can be a great tool for reaching out to customers, but if you don't watch it, you might find yourself in some legal trouble.

April 1, 2010

You have a great listing that you can’t wait to publicize, so you do what so many people do these days: You send a tweet to your followers on Twitter, post an update on Facebook, and maybe even write about it on your blog. After all, isn’t that what the new social media revolution is all about—getting information out instantaneously to all your connections?

But social media isn’t without legal and ethical pitfalls.

Failure to comply with real estate licensing laws and regulations. Everything done in connection with your real estate business is likely to be governed by state laws and regulations that are designed to protect the public. That includes your use of social media to attract buyers and sellers.

For example, if you’re using Twitter and regulations require disclosure of the broker’s name in your communications, check to see if you can link to a Web page that includes the information to satisfy the disclosure requirement. You have a right to disagree with a law or regulation, but not to ignore it.

Defamation and libel. False statements about other people or their businesses that are made by you and expressed as facts can be the basis for legal liability. There are examples of blogs, including in the real estate business, in which blog authors have been sued.

In general, you will not be liable for libel or slander based upon the comments of others posted on your blog or other social media site, under a provision within the federal Communications Decency Act. However, you still want to be aware of everything that’s being said on your site. The fair housing community has expressed concerns about real estate–related sites that contain any statement, regardless of who the author is, that might be interpreted as expressing a preference in connection with a protected class.

Copyright infringement. Copyright laws protect the original expression of authors and include all kinds of different works including books, articles, photographs, drawings, and videos. Using the work of others as a part of your social media communications without the owner’s permission is always risky. Just because you see something on the Internet or in your MLS does not mean you’re authorized to use it in your messages.

You may have heard something about a legal defense to copyright lawsuits called "fair use." This does exist, but it’s a complicated balancing test and unless you’re very familiar with copyright rules, relying on the concept of fair use will still leave you at risk. The Digital Millennium Copyright Act includes a safe harbor provision for people who operate social media Web sites such as blogs, which allow others to post information or comments. There are, however, a number of very specific requirements that are a prerequisite to taking advantage of this safe harbor.

Trademark infringement. Using a trademark without permission, or exceeding the scope of permission, can result in liability. This includes the trademarked term REALTOR®; it’s generally not OK to use any descriptive word or phrase, including the names of cities or communities, to modify the term REALTOR® or REALTORS® in your blog name, Twitter handle, or Web site address.

An ethical breach. Separate from legal liability, REALTORS® pledge to abide by the REALTOR® Code of Ethics, which addresses many of these same issues.

Both Article 12, the duty to honest and truthful in real estate communications, and Article 15, the duty to avoid knowingly or recklessly making false or misleading statements about others in the real estate business, have obvious applications in the social media world. The Code’s requirements may duplicate, or in some instances exceed, the standards required by law.

Michael Thiel is associate counsel, Legal Affairs, for the NATIONAL ASSOCIATION OF REALTORS®