Privacy: More Than Your State Rules Might Apply

By Robert Freedman, Senior Editor, REALTOR® Magazine

Real estate practitioners are far more familiar with the need to institute information privacy practices than they were just a few years ago, but the real estate industry still has a long way to go to really address the risk of liability for breaches that professionals face, two privacy experts told REALTORS® this weekend at the NAR Conference & Expo in New Orleans.

All states with just a few exceptions have information privacy laws on the books and practitioners need to get familiar with them to lessen the chance of them getting penalized for noncompliance, says Darity Wesley of Privacy Solutions in San Diego.

Nevada and Massachusetts have the toughest laws of all states, so if you work in one of those states or work with clients who are located in one of those states, you need to be especially aware of the rules, she suggested.

A little known fact about state information privacy laws is that it’s the state in which the client lives whose requirements you have to meet in addition to your own state rules, says Ken Moyle, chief legal officer of DocuSign in Seattle.

When you’re in a two-state situation like this with one of your clients, your safest bet is to be sure you adhere to the stricter state, he said.

Adding to the confusion are two federal laws that businesses have to adhere to, although one—the recently enacted health care reform law—is less applicable to real estate because it’s about taking steps to ensure privacy of medical information.

The other federal law is the banking modernization law enacted several years ago called Gramm Leach Bliley. That law contains requirements for protecting financial information of your clients, so you’ll want to be familiar with the rules.

More comprehensive federal privacy laws are in the works. A bill in the Senate called the Best Practices Act has been making extensive progress toward passage and, if it passes, will impose nationwide information privacy rules in addition to your state rules.

The Federal Trade Commission is the authoritative resource for you to learn about privacy measures you should implement.

As with any complex set of issues like those involving privacy, you want your first step to be a written policy that everyone in your real estate office follows. And not just them. If you work with third-party vendors whose software or online applications involve processing client information, they have to comply with your policies, too, as does any vendors that they in turn work with and who have access to your data.

Resources are available from NAR. Start with materials at its information privacy page.

Robert Freedman

Robert Freedman is director of multimedia communications for the NATIONAL ASSOCIATION OF REALTORS®. He can be reached at

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  1. Ed

    All these laws are driving practioners and brokers crazy… Like this one. I feel there should be one federal law or one state law on this issue or any issue and the laws can’t be conflicting with other laws and we should be responsible to the law of the state we are licensed in only…we should not have to know every states laws on the subject.