Business Email Compromise

NV Assoc of Realtors

— Think Twice Before Clicking Send —

Christal Park Keegan
NVR Legal Info. Line Attorney


Cybercrimes against real estate transactions are increasing and unsecured email correspondences are a target. Realtors® need to beware that hackers can intercept emails between clients and real estate agents that could enable the thief to steal funds. Further, you can be held liable to the victim for negligent cybersecurity, as was the case where a jury found in favor of the buyer and entered a verdict of $170,000 against the listing agent and broker (Bain v. Platinum Realty, LLC, D. Kan. 2018). It’s crucial that all parties involved in the transaction are diligent in their communication and take necessary precautions to protect Personal Identifying Information (PII).


NVR’s LIL Attorney Christal offers members some best practices based on Nevada law NRS 603A, along with information provided by the National Association of REALTORS® (NAR), as well as feedback from title companies.

Encrypt email and attachments. In addition to checking your email settings for encryption capabilities, there are numerous companies (such as Virtru and ShareFile) that provide this service. Although an original email may be encrypted, it’s important for brokers and their agents to know that when an email is forwarded it is not encrypted.


Do not email unredacted earnest money deposit (EMD) checks. Doing so violates NRS 603A because it includes a client’s PII. Take care on who is copied on emails that include EMD checks and only include persons absolutely necessary. Consider letting the title company directly reach out to your clients to get the information they need, which limits your exposure to a potential mishandling of PII claim.


Be patient with log-in issues with encrypted and/or multi-step authentication emails. Understand that requesting the title company to send a PDF of an attachment to bypass multi-step verification processes violates NRS 603A. Call the title company and troubleshoot the issues or seek in-house IT assistance if available.


Check your E&O insurance coverage. Ensure it covers business email compromising events. In light of wire fraud scams, ask about social engineering and impersonation
coverage.


Consider the timing of social media postings. Hackers lie in wait, silently monitoring real estate transactions, until the most opportune moment to strike. Consider delaying posts of upcoming and real-time closing signings so as not give the criminals a heads-up.


Do not log in to public WiFi. Hackers, malware and other threats pose security risks. When using your business email ensure you are on a secured network.


Install anti-malware protection and regularly update it. At a very minimum, a computer itself should be protected with basic anti-malware software. Monitor email accounts for unrecognized activity and regularly purge unneeded emails from your account. Check your email settings to ensure your emails aren’t being impermissibly copied and forwarded. Never click on links or attachments in unverified emails because they may deploy malware.


Every single agent, staff member, and employee should be trained on best email handling practices. Often data breaches result from negligence on the part of an otherwise well-meaning employee. Make sure everyone on your team is on the same page.


RESOURCES
(Differerent web browsers treat various links in different ways. If a link does not seem to be clickable, try copying and pasting the link directly into your web browser.)


The NAR shares several examples of wire fraud notices used by other REALTOR® associations as an educational and risk management tool to protect real estate professionals from liability related to wire fraud:
•https://www.nar.realtor/data-privacysecurity/wire-fraud-notices


Numerous federal agencies have issued warnings and tips, including the Consumer Financial Protection Bureau, the Federal Trade Commission (in cooperation with NAR) and the FBI/IC3.
•https://www.consumerfinance.gov/about-us/blog/mortgage-closing-scams-howprotect-yourself-and-your-closing-funds/
•https://www.consumer.ftc.gov/blog/2017/06/protect-your-mortgageclosing-scammers
•https://www.ic3.gov/media/2018/180712.aspx


The National Institute of Standards and Technology offers the “Guide to Protecting the Confidentiality of Personally Identifiable Information.”
•https://nvlpubs.nist.gov/nistpubs/Legacy/
SP/nistspecialpublication800-122.pdf


The NAR provides a Toolkit which includes information about data security and privacy protection, as well as various helpful checklists on issues to consider when drafting a tailored security program:
•https://www.nar.realtor/sites/default/files/documents/Data%20Privacy%20and%20Security%20Toolkit_081117_rev.pdf
Washoe County Sherriff’s Office, specifically See Tip #12 Escrow Services Fraud:
•https://www.washoesheriff.com/sub.
php?page=cyber-security-awarenesstips&expand=General%20Information

•Statements made by the Nevada REALTORS® Legal Information Line attorneys on the telephone, in e-mails, or in legal e-news articles are for informational purposes only. Nevada REALTORS® staff attorneys provide general legal information, not legal representation or advice regarding your real estate related questions. No attorney-client relationship is created by your use of the Legal Information Line. You should not act upon information you receive without seeking independent legal counsel. Information given over the Legal Information Line or in these articles is for your benefit only. Do not practice law or give legal advice to your clients! Inform your clients they must seek their own legal advice.

Seven Changes of the Paycheck Protection Program Flexibility Act of 2020

On June 3, the U.S. Senate passed the PPP Flexibility Act of 2020, which places a more rigorous requirement to spend a minimum of 60 percent of the loan proceeds on payroll costs in order to qualify for loan forgiveness. Previously, this requirement was 75 percent of the forgiveness amount. The bill does not alter many other rules of forgiveness, including the FTE reduction or salary/wage reduction calculations, affiliation rules, certification of economic uncertainty, and the necessity of loan request.

Here are the seven most notable changes to the PPP:

  1. The maturity of loans is extended to a minimum of five years. This provision applies only to loans entered into on or after the date that the bill is enacted.
  2. As mentioned above, borrowers are required to spend at least 60 percent of the loan proceeds on payroll costs in order to be eligible for loan forgiveness.
  3. The Covered Period extends to the earlier of (i) 24 weeks from the date of disbursement of PPP loan funds to the borrower, or (ii) December 31, 2020. Existing borrowers with loan origination dates prior to enactment of this Act can elect to keep their Covered Period at eight weeks from the date of loan fund disbursement.
  4. The time period employers have to rehire former employees (or hire new ones in their place) and restore salary levels is extended to December 31, 2020 from June 30, 2020.
  5. For the purposes of determining loan forgiveness, consideration of the employment level of a company is prohibited as long as the borrower, in good faith, can document that the company was unable to: 
    1. Rehire individuals that were employees of the eligible recipient on February 15, 2020; AND
    2. Hire someone of similar qualifications as a former employee by December 31, 2020; OR
    3. Return to the same level of activity the business was operating at before February 15, 2020, due to their compliance with guidelines or requirements related to the pandemic issued by the CDC, the Department of Health and Human Services, or the Occupational Safety and Health Administration (OSHA).
  6. Payments of interest and principal are deferred until the SBA remits—to the lender—the amount of forgiveness granted to the borrower, provided the borrower applies for PPP loan forgiveness within 10 months of the end of the covered period.
  7. Companies receiving PPP loan forgiveness will no longer be ineligible for the delay of payment of employer payroll taxes.

Showing Requirements during Covid

I wanted to provide a quick update to let you know how things are changing and adjusting – again.  Hopefully some of these changes will make things easier on you.
Last week, the state of California issued guidance (new law) for showing practices during the pandemic in coordination with Cal Osha and the Department of Public Health.  For the most part, they adopted the California Association of REALTORS (C.A.R.’s) Best Practices with some changes.
All Brokers must have a plan and rules for showing property.  To satisfy the state requirement:
1-The Best Practices are no longer a recommendation, they are now law and required.  C.A.R. is updating them to include everything that the state added in their last update.  These will be considered “the plan.”
2-The PEAD form (Coronavirus Property Entry Advisory and Declaration) will be updated and split into 2 separate forms – one for the occupants to sign and one for those who will enter the property.  This will be considered “the rules.”
3-Listing agents must post a blank copy of the PEAD form (rules) and a pictogram (above) at the entrance of the property.
The pictogram is also being revised.  Gloves and booties will no longer be required to be worn by everyone entering the property, but they must sanitize hands prior to entering or wash hands immediately after entering, and the seller must provide either the sanitizer or a wash station in the home for this purpose.  The seller (or listing agent) must also provide masks and sanitizing wipes (for cleaning after the showing).  Although gloves and booties are not required, masks still are, and while the hope is that people have their own masks, they may not enter listing properties if they don’t have one.
With the new regulations by the state, agents are also responsible for “thorough cleaning and disinfecting between showings.”  C.A.R. was able to have language removed from the law that also would have required period deep cleaning of the listing properties.  It is unclear who is required to do the cleaning, but it is most likely the showing agent(s) as the occupants of the home and the listing agent(s) is/are not present during and immediately after showings.
If you are conducting “open houses by appointment” agents will need to adjust the appointment times to allow for the thorough cleaning and disinfection in between each showing.
C.A.R. hopes to send out the revised Best Practices, PEAD forms and pictogram to all members later this week. 

Can I Buy or Sell a House During the Coronavirus Pandemic?

Coronavirus

As spring homebuying season approached this year, Mike and Tammy York of Lompoc, California, listed their house for sale and started looking for a home to buy in Bakersfield, California, where they want to retire.

But then the coronavirus outbreak called everything into question. When the governor of California issued a statewide stay-at-home order March 19, the York’s wondered if they were stuck.

“We thought, ‘Now what are we going to do?'” Mike York says.

Welcome to today’s real estate market, where many ask if it’s still possible to buy or sell. As the Yorks have found, the answer is yes, though the process includes some new challenges.

“There are people out there buying and selling real estate,” says Jeanne Radsick, president of the California Association of Realtors and a real estate agent with Century 21 Jordan-Link & Co. in Bakersfield. “But it’s not just business-as-usual.”

Government social distancing regulations vary by state, county and city. Some states never instituted stay-at-home orders. Others plan to reopen soon, and still others have not set a date to end strict shelter-in-place requirements. Rules about whether real estate is an essential service during a stay-at-home order also vary.

If, like the York’s, you want to sell or buy a home despite the pandemic, here are some of the things you may encounter.

About the author: Barbara Marquand writes about homeownership and mortgages, and is NerdWallet’s authority on insurance.

2020 – 1st Quarter Real Estate Update

REAL ESTATE UPDATE LAKE TAHOE

Chase International just released their local statistics for the 1st quarter at South Lake Tahoe.  I must say some of the numbers are weaker than I thought they would be.  Keep in mind while the coronavirus picked up steam in March, most of March sales volume occurred from business written in January and February.  Nonetheless we had a strong first quarter for condo sales increasing a whopping 93% from this time last year to $13,571,000.  Note that condo sales increased by 11% on the Nevada East Shore.  However single family sales volume declined 14% to $54,321,000 at South Lake while Nevada declined 29%.  The median sales price for condos rose by 11% to $352,000 while single family homes declined 20% to $444,000.  Not sure what’s up with the condo market but that’s where the action is right now.

I’m sure you heard about the Nevada Governor Directive where open house showings, and in-person showings of single family and multi-family residences currently occupied by renters of real estate on the market for sale, are hereby prohibited for the duration this Directive is in effect.  However you can transfer ownership, as long as you do not need to view the property interior, inspectors do not need to go inside, appraisals are done from the exterior or the buyer waives his rights.  The new owner still has to honor the current lease and also cannot evict until this Directive is over.

I can be reached at 775-309-8454 if you need assistance.  My email is RStiles@TahoeSouthRealty.com. Be safe everyone!

Home Inspections

Home Inspection

I was curious as to how the home inspectors were handling the coronavirus so I reached out to Josie at TAG for an update.  Her response is below.
Hey Robert,
As of now, we are still working our inspections that were on the books.
We usually were 14 weeks fully booked with 2 per day.
What we did to minimize exposure is spread out our inspections doing 1 per day only which will keep us busy till about 3 weeks into April.
And with restrictions of course.
Properties need to be vacant, no tenants, buyers or sellers present and we wear our protective gear. 

Hope this helps,
Josie& Alan

Tag, inc