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

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.

(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:

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.

The National Institute of Standards and Technology offers the “Guide to Protecting the Confidentiality of Personally Identifiable Information.”

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:
Washoe County Sherriff’s Office, specifically See Tip #12 Escrow Services Fraud:

•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. 

Relief for Taxpayers Affected by Ongoing Coronavirus Disease

presidential seal


On March 13, 2020, the President of the United States issued an emergency declaration under the Robert T. Stafford Disaster Relief and Emergency Assistance Act in response to the ongoing Coronavirus Disease 2019 (COVID-19) pandemic (Emergency Declaration). The Emergency Declaration instructed the Secretary of the Treasury “to provide relief from tax deadlines to Americans who have been adversely affected by the COVID-19 emergency, as appropriate, pursuant to 26 U.S.C. 7508A(a).” Pursuant to the Emergency Declaration, this notice provides relief under section 7508A(a) of the Internal Revenue Code for the persons described in section III of this notice that the Secretary of the Treasury has determined to be affected by the COVID19 emergency.


Section 7508A provides the Secretary of the Treasury or his delegate (Secretary) with authority to postpone the time for performing certain acts under the internal revenue laws for a taxpayer determined by the Secretary to be affected by a Federally declared disaster as defined in section 165(i)(5)(A). Pursuant to section 7508A(a), a period of up to one year may be disregarded in determining whether the performance of certain acts is timely under the internal revenue laws.


The Secretary has determined that any person with a Federal income tax payment due April 15, 2020, is affected by the COVID-19 emergency for purposes of the relief described in this section III (Affected Taxpayer). For an Affected Taxpayer, the due date for making Federal income tax payments due April 15, 2020, in an aggregate amount up to the Applicable Postponed Payment Amount, is postponed to July 15, 2020. The Applicable Postponed Payment Amount is up to $10,000,000 for each consolidated group (as defined in §1.1502-1) or for each C corporation that does not join in filing a consolidated return. For all other Affected Taxpayers, the Applicable Postponed Payment Amount is up to $1,000,000 regardless of filing status. For example, the Applicable Postponed Payment Amount is the same for a single individual and for married individuals filing a joint return. In both instances the Applicable Postponed Payment Amount is up to $1,000,000.

The relief provided in this section III is available solely with respect to Federal income tax payments (including payments of tax on self-employment income) due on April 15, 2020, in respect of an Affected Taxpayer’s 2019 taxable year, and Federal estimated income tax payments (including payments of tax on self-employment income) due on April 15, 2020, for an Affected Taxpayer’s 2020 taxable year. The Applicable Postponed Payment Amounts described in this section III include, in the aggregate, all payments described in the preceding sentence due on April 15, 2020 for such Affected Taxpayers.

No extension is provided in this notice for the payment or deposit of any other type of Federal tax, or for the filing of any tax return or information return.

As a result of the postponement of the due date for making Federal income tax payments up to the Applicable Postponed Payment Amount from April 15, 2020, to July 15, 2020, the period beginning on April 15, 2020, and ending on July 15, 2020, will be disregarded in the calculation of any interest, penalty, or addition to tax for failure to pay the Federal income taxes postponed by this notice. Interest, penalties, and additions to tax with respect to such postponed Federal income tax payments will begin to accrue on July 16, 2020. In addition, interest, penalties and additions to tax will accrue, without any suspension or deferral, on the amount of any Federal income tax payments in excess of the Applicable Postponed Payment Amount due but not paid by an Affected Taxpayer on April 15, 2020.

Affected Taxpayers subject to penalties or additions to tax despite the relief granted by this section III may seek reasonable cause relief under section 6651 for a failure to pay tax or seek a waiver to a penalty under section 6654 for a failure by an individual or certain trusts and estates to pay estimated income tax, as applicable. Similar relief with respect to estimated tax payments is not available for corporate taxpayers or tax-exempt organizations under section 6655.


The principal author of this notice is Jennifer Auchterlonie of the Office of Associate Chief Counsel, Procedure and Administration. For further information regarding this notice, you may call (202) 317-3400 (not a toll-free call).

To Repair Or Not Repair?

Home Repair

Homeowners who sell their houses “as-is” may end up costing themselves more than they would have spent to make the necessary repairs — if they are able to sell their homes at all. For one thing, most buyers these days don’t want to buy a house that needs work. Fixer-uppers are OK for flippers, who are increasingly putting their own money into the houses they buy, as opposed to just relying on appreciation to make a buck, according to real estate analytics firm CoreLogic. But for the most part, families want a move-in ready place. They don’t want to mess with replacing worn carpeting, remediating a patch of mold or painting the walls. “If you don’t want to do the work,” says Jeanne Gregory of RE/MAX Southwest in Sugarland, Texas, “what on earth makes you think your buyer does?” Equally important: Most buyers have no idea what the necessary fixes might cost. So, they tend to double or even triple what it would cost the seller to do the work, and then reduce their offer by that amount. Consequently, sellers net less — sometimes far less — than if they’d bitten the bullet in the first place. And don’t even think about offering your buyer a credit to cover the cost of repairs. That usually doesn’t work, either. Credits rely on the buyer’s imagination, say Sally and David Hanson of eXp Realty in Brookfield, Wisconsin. A credit is “an open invitation,” they added, for an uneducated guess from an uneducated buyer. All the agents hit on a common theme: The eye buys. So, do what you have to do to fix up your place, even if it’s unpleasant or time-consuming. Otherwise, be prepared to wait a while for one of the few buyers willing to take on your headaches. Prepare yourself, too, to accept less than your asking price. Source: Lew Sichelman, The Housing Scene

What is the responsibility for private businesses to provide housing?

city drawing

I came across this article and wanted to share with others as Lake Tahoe is in the midst of a housing shortage as well. Robert Stiles

Google recently announced its $1 billion+ commitment to increase housing in the Bay Area.

The promised money won’t be in the form of straight cash. Of this $1 billion promise, $750 million will come from land Google currently owns, to be repurposed for housing. Google estimates the amount of land it’s devoting to the project will house roughly 15,000 new units, to be built over the next ten years. They propose these units will be available to “all income levels” of Bay Area residents, though the final number of affordable housing units built will be up to the private developers who bid on the projects.

Google is also promising to establish a $250 million investment fund to help developers finance 5,000 affordable housing units across the region. Finally, they will give $50 million in grants to nonprofits focused on assisting the Bay Area’s homeless population.

However, rest assured that Google’s move is not quite as generous it seems, as land it gifts for the construction of housing may be used as a tax write-off. Further, the broad promises and lack of detailed plans have many questioning how Google is going to spend its money and whether it will actually make a mark on the region’s housing crisis.

Still, Google’s announcement is in sharp contrast with Amazon’s behavior over the past year, as it forced dozens of U.S. cities to compete for the location of their next headquarters. In return for the promise of more jobs, Amazon sought tax breaks and other incentives. Instead of asking for more, Google is now trying to do its part to alleviate a housing crisis it helped create.

More jobs, more housing

Since Google started in the Bay Area, it has created 45,000 jobs in the region. Not all of these jobs have gone to current residents, so where do these new workers live?

When more jobs come to a region, one can expect more people will want to move there. The Bay Area already has some of the longest commutes in the country, especially for lower-income workers like those who work in the service and retail industries, and even essential employees like first responders and teachers.

But over the past two decades, housing growth has fallen far behind the pace of job additions in the Bay Area, and pretty much everywhere else in California. For every four new residents moving to California between 2010 and 2016, just one new housing unit was constructed, according to Redfin. Worse, most of this construction is located in the mid- and high-price tiers, meaning very few units affordable to low-income households have been constructed.

As a result, home prices and rents have increased more quickly than incomes, meaning residents are forced to spend a significantly higher portion of their paycheck on housing each month. The other option — one that more households are increasingly forced to take — is to move further away from jobs, into the suburbs. For example, just 2% of San Jose homes for sale and 1% of San Francisco homes are affordable on a teacher’s salary. For comparison, 17% of homes are affordable to the average teacher’s salary statewide.

Related article:


Why hasn’t housing been able to keep up with new jobs across California, and especially in the Bay Area?

The culprit is a lack of residential construction, due to a variety of factors, including:

  • tight zoning restrictions in job-heavy areas;
  • a lack of builder incentives to build low-tier housing; and
  • long and costly building permits and environment review processes.

This begs the question — if new residential construction is lagging behind job creation and business growth, do the private businesses involved have any obligations to get involved like Google is doing?

Housing: Public or private issue?

Some might claim that businesses are already doing their part. For example, the taxes that businesses — and their employees — pay contribute to government-funded housing efforts. But is this enough?

As traditional as the separation of church and state, housing has long been the issue of governments, while the business of businesses are profits and investors. However, as the CEO of San Francisco-based Salesforce acknowledges in a 2018 editorial, businesses like his “are part of our community and our community is in crisis.”

In this editorial, he describes how the increasing homeless crisis is scaring away tourists and other visitors. He says businesses are less likely to consider San Francisco as a home base when the crisis makes it so that there are no safe places to live. As a solution, the author encourages voters to pass Proposition C, which charges a 0.5% tax on the city’s biggest businesses (charged on any money generated over $50 million in annual revenue in the city).

In November 2018, voters did just that, and the city began collecting money from San Francisco’s largest businesses. However, due to legal challenges, the city has held off on spending the funds to help the homeless. Even when a judge dismissed a major lawsuit by the Howard Jarvis Association (the same folks who champion the controversial tax initiative, Proposition 13) in June 2019, the city is still afraid to spend the money due to threats of future legal action by the organization.

Meanwhile, the city’s homeless crisis continues to worsen, and residents’ quality of life remains in decline.

Glancing further up the income spectrum, high housing costs themselves are enough to deter businesses from investing jobs in California’s high-cost areas. They realize that in order to do business in the state, they will need to pay their employees enormous salaries so they can afford a decent standard of living. This suggests that more housing is needed not just to make this a more livable state, but to give jobs and the economy a boost.

The easiest solution that encompasses the most issues plaguing California’s housing market is to ensure more residential construction. Ideally, the government would take care of everything, including allocating funds, amending zoning regulations and encouraging building by removing barriers to construction.

But government efforts have fallen short, bullied into submission by lawsuits and vocal not-in-my-backyard (NIMBY) advocates. It’s time for businesses big and small to step up, or else watch their communities continue down an unsustainable path.

Carrie B Reyes, Market Watch Editor