Ch. 26 - Other Laws Impacting Real Estate

The Junk Fax Prevention Act of 2005, an amendment to TCPA, made a small but significant change to the law, by allowing unsolicited faxes to be sent to individuals and businesses: having an established business relationship. who have yet to create a business relationship. with prior consent. that work with government agencies.

having an established business relationship.

Tie-In Arrangement

or tying agreement- is an arrangement that requires the buyer to agree to something in exchange for the sale.

In June 2003, the Federal Communications Commission (FCC) announced new telemarketing rules to coincide with the FTC's rules. Instead of only applying to interstate calls, unwanted intrastate telemarketing calls were also prohibited to any: local calls. person on the Do-Not-Call list. calls to home phones. calls to cell phones.

person on the Do-Not-Call list.

If someone inquires about a property or listing a licensee has, he or she has the person's consent to respond as long as the response is: through email. related to the inquiry. related to all in house listings. conducted over the phone.

related to the inquiry.

In 1978 the federal government banned the use of lead-based paint in: commercial buildings. wood frame buildings. agricultural buildings. residential buildings.

residential buildings.

The CAN-SPAM Act went into effect on January 1, 2004 and influences the actions of businesses and individuals who: make unsolicited calls. use a fax as a marketing tool. use email as a marketing tool. are on the do-not-call list.

use email as a marketing tool.

As of 2018, any person found guilty of violating the CAN-SPAM Act can be subject to a civil fine of up to: $41,484 per violation. $50,000 per violation, $63,200 per violation. $75,000 per violation.

$41,484 per violation.

Do-Not-Call List

(Telephone Consumer Protection Act), or TCPA(2002) --to stop unwanted interstate telemarketing calls to consumers. --addresses the regulation of unsolicited telemarketing phone calls. -The FCC requires solicitors and their company to maintain a record of consumer do-not-call requests. Requests must be honored for five (5) years. -Penalties: - subject to fines of up to $40,000 per violation, as well as injunctive remedies -note that one call can incur more than one violation.

List the three Do-Not-Call exceptions.

--A person or company can make a solicitation if they are responding to a consumer's inquiry. --Tax-exempt non-profit organizations are exempt. --Solicitations are allowed if the consumer has created an "established business relationship" (EBR) by making an inquiry, application, purchase, or other transaction.

What regulations apply to faxes sent as part of an established business relationship?

--Do-not-fax. Unsolicited fax senders must cease such a practice upon request by the recipient. --Opt-out provisions. Senders must provide notice and contact information allowing the recipient to opt out of future transmissions within 30 days.

Lead-Based Paint Disclosure Laws

--Lead is a highly-toxic heavy metal that is naturally distributed in small amounts on the surface of the earth. -in air, drinking water, food, contaminated soil, deteriorating paint, and dust. --Lead-based paint cannot be absorbed through the skin...dangerous when it enters the bloodstream through ingestion or inhalation. -not at risk unless he or she eats lead-based paint or inhales lead-based paint dust. -Airborne lead enters the body when someone breathes or swallows lead particles or dust. -Federal regulations require sellers or lessors of pre-1978 residential dwellings to disclose the presence of known lead-based paint. -In 1978 the federal government banned the use of lead-based paint in residential buildings.

Do Not Call Registration Program

--The Do Not Call list is compiled from all registered Pennsylvania residents who want to avoid telemarketing calls. --updated and provided to telemarketers on a quarterly basis. --Every telemarketer that calls consumers in Pennsylvania is required to purchase this list and must remove every name on the Do Not Call list from their calling lists within 30 days. --A violation of the law carries a civil penalty of up to $1,000, or $3,000 if the person contacted is age 60 or older (Repeat= banned) --A phone number will remain on the PA Do Not Call List for 5 years.

violation of an antitrust law occurs (when all three occur)

--There is a monopoly, a contract, a conspiracy or a combination of such. --The existence of the monopoly or conspiracy creates a restraint of trade - which is a negative impact on an individual's or a company's ability to do business. --The restraint of trade unreasonably restricts competition and functions against the public interest.

The Controlling the Assault of Non-Solicited Pornography and Marketing (CAN-SPAM) Act of 2003

--created a single national standard aimed at controlling the growing problem of deceptive or fraudulent emails. --specifically regulates commercial electronic messages, which are messages sent for the purpose of offering, supplying, providing, advertising, or promoting any of the following: Goods or services Land or an interest in land A business opportunity A business investment -went into effect on January 1, 2004 and influences the actions of businesses and individuals who use email as a marketing tool -prohibits sending unwanted "commercial" e-mail messages" to wireless devices without express prior authorization. -The ban covers messages sent to cell phones and pagers if the message uses an Internet address that includes a URL. -exclude "transactional or relationship" messages -Need to obtain consent- ---Express consent is when an individual provides an email or phone number and gives consent to send messages. ---Inferred consent can occur through an existing business relationship or through conspicuous publications of work-related email address in certain situations. -responsibility of the sender to keep a record of all consumers who have provided consent -Penalties As of 2018, any person found guilty of violating the CAN-SPAM Act can be subject to a civil fine of up to $41,484 per violation, as well as criminal penalties

Residential Lead-Based Paint Hazard Reduction Act

-1992 US Congress -requires seller disclosure of lead-based paint and lead-based paint hazards in connection with the sale or lease of pre-1978 dwellings.

Pennsylvania Statutes Regarding Electronic Mail

-3 Rules: 1) Chapter 59. Public Indecency--Dissemination of unsolicited explicit sexual material via an electronic communication is illegal. Penalty, fine of $100-$500 per message and/or imprisonment for not more than 90 days for a first offense and a fine of not less than $500-$1,000 and/or imprisonment for not more than one year for a subsequent offense 1) Chapter 76. Computer Offenses Subchapter E. Electronic Mail-- Unlawful transmission of electronic mail. A person commits the offense of unlawful transmission of electronic mail if he or she: ---Uses a computer or computer network without authority and with the intent to falsify or forge electronic mail transmissions. ---Sells, gives, or otherwise distributes or possesses with the intent to sell, give, or distribute computer software which is designed to enable the falsification of electronic mail transmission. 3)Chapter 40A. Unsolicited Telecommunication Advertisement-- No person may initiate a transmission or conspire with another person to initiate a transmission or assist a transmission of an unsolicited commercial electronic mail message or fax from a computer or fax machine located in this Commonwealth or to an electronic mail address that: --Uses a third party's Internet domain name --Includes false or misleading information --Contains false or misleading information in the subject line --Fails to operate a valid sender-operated return e-mail address Additionally, no person may use a covered mobile telephone messaging system to transmit an unsolicited commercial electronic mail message.

price fixing

-Collusion between brokers and sales people with competing companies to set commission rates is illegal.

Marketing Restrictions;

-Do-Not-Call List -CAN-SPAM Act -Junk Fax Prevention Act -FACT Act

FACTA information sharing

-FACTA restricts and has specific requirements for sharing credit information between an authorized recipient company and other affiliate organizations of that company unless permitted by the subject consumer

Penalties for Sherman Antitrust Act

-Individual violators of the Sherman Act can be fined up to $350,000 and sentenced to up to 3 years in federal prison for each offense; corporations can be fined up to $10 million for each offense -In June of 2004, President George W. Bush signed into law the Criminal Antitrust Penalty Enhancement and Reform Act, increasing the maximum criminal penalty for individuals to 10 years' imprisonment and a $1 million fine, and the maximum penalty for corporations to a $100 million fine.

Group Boycotts

-Licensees should never "get together" and boycott a company because of their business practices. -Don't be fooled by what constitutes a "group." As few as two brokers can be found guilty of a group boycott.

Market Allocation

-Market allocation occurs when competing firms agree to split up an area and refrain from doing business in each other's territory. -does not just apply to geographic territories as illustrated above. They could also be about: Price ranges Types of properties Sociological divisions of business Refusal to deal with a competitor -ex; An example would be two companies getting together and deciding that one company would take one part of town, while the other company takes the other part.

Junk Fax Prevention Act

-addressed in the Telephone Consumer Protection Act of 1991 (TCPA). -made it illegal for any person to send unsolicited advertisement to a fax machine. -an amendment was made in 2003 that made it illegal to send junk faxes from within the United States and from other countries. The Junk Fax Prevention Act of 2005, an amendment to TCPA, made another small but significant change to the law. This amendment allows unsolicited faxes to be sent to individuals and businesses having an established business relationship (EBR). -A business can be exempted from the junk fax regulations if they already have a business relationship with the consumer and they obtained the fax number penalties; -file a complaint with the FCC or in state court to recover actual monetary loss resulting from the violation or up to $500 in damages per violation - whichever is greater. The court may triple the damages for each violation if it determines the defendant willingly or knowingly committed the violation.

Federal Antitrust Laws

-are state and federal laws designed to maintain and preserve business competition. -based on the belief that free enterprise and healthy competition are good for individual consumers as well as the economy.

lead-based paint Health Effects;

-cause difficulties during pregnancy, reproductive problems in women and men, high blood pressure, and muscle and joint pain. -Memory problems Seizures Confusion -In children, studies have shown that lead alters the development of growing brain cells. -attacks the central nervous system

The Fair and Accurate Credit Transactions Act of 2003 (FACT Act or FACTA)

-is a federal consumer-rights law that amended the Fair Credit Reporting Act of 1970 (FCRA). -is legislation which regulates confidential consumer credit information. -Its primary goal is to reduce the risk of identity theft by regulating how consumer information is handled. -FACTA grants consumers the ability to place fraud alerts in their credit files. -gives consumers the right to one free credit report a year from the credit reporting agencies. -Penalties for violating FACTA can be substantial, and there is no cap on the amounts. -FACTA is enforced by the Federal Trade Commission (FTC), the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision.

The Clayton Antitrust Act of 1914

-made both substantive and procedural modifications to federal antitrust law. -designed to cover restraints on interstate trade or commerce that are not covered under the Sherman Act. -preventing individuals from serving as directors at competing companies. **private individuals are permitted to sue antitrust violators. If the suits are successful, the individuals can recover three times the damages incurred plus court costs and attorneys' fees.**

Pennsylvania Unsolicited Telecommunications Advertisement Act (Spam Law)

-protects consumers from any fax that includes false or misleading information in the subject line, return addresses, or false and misleading return addresses and telephone numbers which could be used to "opt out" of future messages. -a consumer may report receipt of a fax that includes false and misleading information.

FACTA disposal rule

-require institutional recipients of sensitive customer credit information to protect such information and to adopt acceptable disposal methods. (requires that any person who possesses consumer information for business purposes must take reasonable measures to protect against unauthorized access or use when disposing of the information) -applies to every business and every person in the United States.

The Sherman Antitrust Act of 1890

-the principal federal statute that covers competition and is one of the most important pieces of antitrust legislation.

Pennsylvania Unfair Trade Practices and Consumer Protection Law (UTPCPL)

-used to protect consumers when purchasing household goods and services. -to prevent businesses from participating in deceptive or unfair practices.. includes: victims of deceptive insurance companies, car dealerships, and real estate brokers. -allows for anyone who lost money or property due to businesses engaging in unjust practices to bring suit. -centerpiece of the UTPCPL, located at 73 P.S. § 201-1, et seq., is an extensive definition of conduct deemed to be "unfair methods of competition" and "unfair or deceptive acts or practices." The definition consists of a laundry list of twenty-one separately enumerated unfair or deceptive acts or practices. -The Consumer Protection Bureau of the Pennsylvania Attorney General's Office is charged with enforcement of the UTPCPL.

Federal Trade Commission

-was formed through an act of Congress in 1914. -power to judge whether particular trade practices are unfair. -can enforce compliance with the Sherman Act and some sections of the Clayton Act.

How long does a buyer of a property have to get lead-based paint testing done? 3 days 5 days 7 days 10 days

10 days

How are lead levels tested in the body? A wipe of the forearm A blood test A urine test A hair sample test

A blood test

How many days does the buyer have to test for lead-based paint according to Federal law?

A buyer is allowed to up to 10 days to have the testing done.

Which agency protects the public against unreasonable risk of injury from consumer products through education, safety standards activities, and enforcement? Agency Against Fraud Better Business Agency Fair Trade Association Consumer Product Safety Commission (CPSC)

Consumer Product Safety Commission (CPSC)

Federal lead-based paint disclosure laws apply to what type of residential housing?

Houses built prior to 1978

Identify three types of housing units that are exempt from lead-based paint disclosure laws.

Housing built after 1977 Zero-bedroom units, such as efficiencies and lofts Housing which is leased for less than 100 days, such as vacation houses or short-term rentals Housing exclusively for the elderly, unless there are children living on the property. Housing for the handicapped, provided there are no children living on the property Rental housing that has been inspected by a certified inspector and found to be free of lead-based paint Foreclosure sold homes

How does a consumer file a complaint against a business that violates the Junk Fax Prevention Act?

If a person or company violates the Act, the consumer can file a complaint with the FCC online, via phone, or by mail. A consumer can also file a complaint with state authorities, including consumer protection offices and the Attorney General's office.

Why should brokers avoid having negative conversations about another brokers' business practices? It could be viewed as engaging in market allocations. It could be viewed as engaging in a group boycott. It could be viewed as engaging in price-fixing. It could be viewed as engaging in tie-in arrangements.

It could be viewed as engaging in a group boycott.

Under what conditions are agents of the seller responsible for ensuring compliance under the lead-based paint disclosure rule?

Listing salespeople, selling salespeople, and buyer's brokers, if paid by the seller through a cooperative brokerage agreement, are agents of the seller and are responsible for ensuring compliance under the rule.

Why is it important for real estate professionals to be aware of the CAN-SPAM Act regulations?

Real estate professionals need to be aware of the CAN-SPAM Act regulations since they commonly send emails and texts messages promoting a property, follow-up messages to other agents or consumers after viewing a property, and emails or text messages to solicit the listing of a person's property.

Explain the "opt out" condition of the CAN-SPAM Act.

Receivers of authorized messages must also be given an "opt out" choice to terminate the sender's messages, which the sender must honor within ten days if exercised. Opting out must always be easy for the recipient.

The FCC requires solicitors and their company to maintain a record of consumer do-not-call requests for how long?

Requests must be honored for five (5) years.

The CAN-SPAM Act supplements the: Telemarketer Restriction Act Telephone Consumer Protection Act. Junk Fax Prevention Act Sherman Act.

Telephone Consumer Protection Act.

What Act was designed to cover restraints on interstate trade or commerce that are not covered under the Sherman Act? The Rutledge Antitrust Act The Clayton Antitrust Act The Moore Antitrust Act The Phillips Antitrust Act

The Clayton Antitrust Act

Matt Bower is a developer. Will Jones is a builder. Matt agrees to sell Will a lot, but he conditions the sale by insisting that Will agree to list the property with him after the home is built. What is Matt in violation of? The CAN-SPAM Act The FACT Act The Sherman Act The Clayton Act

The Sherman Act

What was the significant change regarding junk fax that was passed in the Junk Fax Prevention Act of 2005?

The change allows for an exception to previous junk fax legislation. Now, a business can be protected from violations of sending unsolicited faxes if there is already an established business relationship and the sender obtained the fax number according to specific guidelines.

What was the intention of the Do-Not-Call federal registry?

The intention of the FTC's Do-Not-Call registry is to stop unwanted interstate telemarketing calls to consumers.

What is prohibited by the CAN-SPAM Act?

This Act prohibits sending unwanted "commercial" e-mail messages" to wireless devices without express prior authorization.

What is the primary goal of FACTA?

To reduce the risk of identity theft by regulating how consumer information is handled.

What are the penalties for violating the National Registry?

Violations of the National Registry are subject to fines of up to $40,000 per violation, plus possible injunctive relief.

If an MLS would not allow a particular broker to become a member because he or she had a different fee schedule than the other members it would be considered: market allocation. a tie-in arrangement. price fixing. a group boycott.

a group boycott.

State and federal laws designed to maintain and preserve business competition are called: contract laws. antitrust laws. security laws. corporate laws.

antitrust laws.

The Do Not Call list is compiled from all registered Pennsylvania residents who want to: control fraudulent emails. avoid junk faxes. restrict the sharing of credit information. avoid telemarketing calls.

avoid telemarketing calls.

According to the FACTA disposal rule, all consumer information should be shredded appropriately or the brokerage office should: hand it over to the FTC. contact a company whose purpose is to destroy confidential information in accordance with FACTA. dispose of it in any way possible. call the Board of Governors to find out how to dispose of it.

contact a company whose purpose is to destroy confidential information in accordance with FACTA.

The CAN-SPAM Act of 2003 created a single national standard aimed at controlling the growing problem of: text messages that are solicitations. telemarketing calls. deceptive or fraudulent emails. unwanted faxes.

deceptive or fraudulent emails.

The Do Not Call list is updated and provided to telemarketers: every 3 months. every 6 months. every 9 months. every 12 months.

every 3 months.

When an individual provides an email or phone number and gives consent to send messages, the consent is called: construed consent. express consent. assumed consent. inferred consent.

express consent.