Are You Being Watched?

Sellers marketing their homes are often concerned about what goes on inside their house when they’re not there. This has led to the installation of surveillance equipment in many homes for sale. Maybe the seller has a security concern: who is coming into my home and what are they doing? Are they stealing? Or maybe their interests are purely professional. What are potential buyers saying about my new floors? Is my agent working hard for me? Regardless of the motive, this is something real estate professionals must be aware of, particularly when the seller is not present.

These days it’s easy for a homeowner to keep their home under surveillance and find out what’s happening in their absence. From openly visible security cameras to so-called “nanny cams” (hidden cameras designed to innocuously keep an eye on caretakers that are often adopted for other purposes), there are lots of ways to keep watch.

You may be asking, is this legal? The answer is yes, for video recording – more on audio in a moment. Unless a person being recorded is somewhere they can reasonably expect privacy (e.g. a bathroom, changing room, etc.), video surveillance is legal. Considering a real estate agent is inside of someone else’s home, it is unlikely that court proceedings would determine that they could have reasonably expected privacy in the event they are recorded.

If you are listing agent and see cameras, you need to get on the same page as the seller if at all possible. Ask if the cameras are on when you are showing the home and what the purpose is. You will probably be asked about the cameras by potential buyers and agents and you should be prepared for that question.

It’s also possible that you may not know about the presence of cameras in your listings, particularly if they are hidden. If you feel comfortable asking the question, you could simply ask your seller if any recording equipment is in the property. These days, it’s probably safest to assume that cameras exist inside the home. While this should not affect what you do on the property (as you should already have been following all legal and ethical requirements that coincide with holding a real estate license), a mindful outlook on the situation may prevent professional issues with your clients.

Audio recordings are another legal issue. Depending on the state it is illegal to record a conversation without the consent of all recorded parties. In California, the legal standard is that “confidential communication” cannot be recorded without two-party consent. “Confidential communication” is defined as any communication in circumstances as may “reasonably indicate that any party to the communication desires it to be confined to the parties thereto”, as long as the communication is not made in a “public gathering”, “in any legislative, judicial, executive or administrative proceeding open to the public”, or “in any other circumstance in which the parties to the communication may reasonably expect that the communication may be overheard or recorded”. This leaves a significant loophole. How do you define a reasonable expectation to be overheard?

According to the law offices of Stimmel, Stimmel, & Smith, answering this question will be left to the proceedings of each trial (and thus either the jury or judges). It is quite possible that a recording in someone’s home would not be considered a violation of privacy because the recorded persons are on someone else’s property, but there is not a guarantee. Real estate agents are invited into a home for business purposes and conversations are part of that standard business practice. It is entirely possible that a judge and jury would rule that privacy should not be expected.

Does all of this sound paranoid? Consider a few cases where that surveillance revealed some unpleasant facts. In 2013 an agent was caught stealing underwear from his female client. In 2014 two real estate agents were caught having sex on secret cameras in the home one of them was listing. And just last year a real estate agent was caught stealing prescription pain medication from a house she was showing. Obviously these happenings are rare, but it does prove that some homeowners had good reason to be suspicious.

So for our students preparing for the California real estate exam, know that obtaining a license is not an endorsement of character. Some sellers will be skeptical or nervous about the prospect of letting strangers into their home and real estate professionals should be prepared for how those clients try to protect themselves.

Do you have any experiences with recording equipment in a listed property? Comment below! As always, feel free to reach out to the writer, cody@adhischools.com , if you have any questions.