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Necessary Documentation and Privacy Considerations

LOUISIANA REALTORS • Apr 01, 2020

CORONAVIRUS: NECESSARY DOCUMENTATION AND PRIVACY CONSIDERATIONS[1] 

By:  Patricia B. McMurray, JD and Melissa M. Grand, JD
 Baker, Donelson, Bearman, Caldwell & Berkowitz, PC
450 Laurel Street, Chase Tower North, 21st Floor
Baton Rouge, Louisiana 70801
        In this uncertain time, it is critical that REALTORS® consider what paperwork related to COVID-19 they should be maintaining.  Federal loan programs, like the new CARES Act, and other grant programs require that certain documents be submitted in the application process to prove the loss sustained as a result of the pandemic. You might have business interruption insurance or be eligible for other new programs that are still being formulated if you can show your lost income.  Not having proper documentation may mean not being able to apply for or receive certain loans, grants, or other funds.  Additionally, REALTORS® may be collecting confidential documentation, such as health information in a coronavirus screening questionnaire from clients, employees, and independent contractors.  REALTORS® also store personal and confidential information of clients and employees during the regular course of their business.  Maintaining the confidentiality and security of this information obtained by your business is important.      

1. What documentation should I be keeping as I consider applying for various reimbursement programs, loans, grants, business interruption insurance or other sources of funding? 

Short Answer:     In addition to your general record-keeping practices, we suggest that you maintain documentation of any COVID-19 related expenses or losses separately from other payments and expenses, if possible.   

The CARES Act created two new Small Business Administration (SBA) initiatives: the SBA 7(a) “Payroll Protection Program” and the SBA “Economic Injury Disaster Loan” (EIDL) grant program. Visit SBA's Disaster Assistance website for more detailed information on these programs. See also, the National Association of REALTORS®’ (NAR) guidance on the CARES Act and REALTOR® Magazine article on new small business loans.  As the U.S. Chamber of Commerce guidance explains, in evaluating eligibility under the CARES Act, lenders will ask for a good faith certification that the uncertainty of current economic conditions makes the loan request necessary to support ongoing operations.  It is a best practice to maintain detailed documentation of your COVID-19 related payments and expenses separately from your regular business payments and expenses, for your use in demonstrating the economic impact of COVID-19 on your business.  For example, emails, copies of texts or correspondence related to closings which were canceled because of delays related to the Governor’s Stay Home Orders, documentation of canceled open houses, etc. should be retained. 

Other information you may be asked to provide in applying for a loan under the CARES Act includes basic identifying information for your business, your business TIN number, your average monthly payroll, the number of jobs supported by your company and what specifically you want to use the loan money for. See Treasury.gov.  You will also be asked to list all owners who hold at least a 20 percent ownership stake in the company and affirm that they are not party to federal crimes.  See id.  Also, you may be asked to provide the lender with documentation regarding your employee headcount over time, as well as your payroll costs. Tax returns may also be required.      

2. I am requesting that all clients complete a coronavirus questionnaire before they enter a property I am showing.  I am also asking my employees and independent contractors to complete a coronavirus questionnaire form and self-report if they have been exposed to coronavirus.  What should I do with these completed forms?  

Short Answer:     You should maintain a copy of the screening forms when completed.  Keep the completed forms secure and confidential such as in a locked filing cabinet or password-protected electronic file.  

The information collected on the screening forms may contain medical information and should be treated as confidential.  The National Association of REALTORS® guidance on general document retention may be found here. Also Louisiana REALTORS® (LR) discussed coronavirus screening questionnaires and provided sample questions in LR’s article on hold harmless agreements, here.  

3. What are my obligations to generally maintain documents? 

Short Answer:     You must maintain certain records for 5 years pursuant to the real estate license law. Keep the documents properly indexed, and secure (physically secure, for example in locked cabinets, and/or electronically secure) to preserve client privacy and confidentiality.  

LA. R. S. §1449D1 provides:

D. (1)  Individual real estate brokers shall retain all of the following records, readily available and properly indexed, for a period of five years:

(a) Bank statements, copies of deposit slips, and canceled checks on all escrow or trust accounts.

(b) Copies of all documents that pertain in any way to real estate transactions wherein the individual real estate broker or licensees sponsored by the individual real estate broker have appeared in a licensing capacity.

(2) The requirement regarding copies shall not be altered by the transfer of a broker to that of an associate broker, an unlicensed person, or an inactive licensee.

E.(1) Partnerships, limited liability companies, associations, corporations, or other legal entities, foreign or domestic, and real estate brokers shall retain the following records, readily available and properly indexed, for a period of five years:

(a) Bank statements, copies of deposit slips, and canceled checks on all escrow or trust accounts.

(b) Copies of all documents that pertain in any way to real estate transactions wherein the partnership, limited liability company, association, corporation, or other legal entity, foreign or domestic, the designated qualifying broker, or licensees sponsored by same, have appeared in a licensing capacity.

(2) This requirement, regarding copies, shall not be altered by the partnership, limited liability company, association, corporation, or other legal entity, foreign or domestic, transferring the broker license to the inactive status or failure to renew such license.

All businesses, including real estate firms, should have policies and procedures in place for keeping client information secure and disposing of consumer information in a manner that preserves client privacy and confidentiality.  A comprehensive data security plan will ensure that businesses collect only the consumer information needed, keep the information safe, and dispose of the information securely.  

            There is no one-size-fits all approach to data security and compliance, but many resources exist to assist businesses in complying with their legal responsibilities.  Available resources include:

  • The National Association of REALTORS® 2011 Data Security and Privacy Toolkit; 
  • FTC Publication, “Protecting Personal Information: A Guide for Business,” available at ftc.gov; and
  • Additional FTC resources on Data Security are available at ftc.gov.



DISCLAIMER

Information and additional guidance and orders regarding the pandemic are being issued daily.  The information is the article was last updated on April 1, 2020 at 12:30 p.m.  

These materials are to be used for informational purposes and should not be construed as specific legal advice.  These materials are not designed to cover every aspect of a legal situation for every factual circumstance that may arise regarding the subject matter included.

This publication is for reference purposes only and association members or other readers are responsible for contacting their own attorneys or other professional advisors for legal or contract advice.  The comments provided herein solely represent the opinions of the authors and is not a guarantee of interpretation of the law or contracts by any court or by the Louisiana Real Estate Commission.


By Louisiana REALTORS® 29 Apr, 2024
Bill Tracking Report as of 4/26/2024
By Louisiana REALTORS® 26 Apr, 2024
From REALTOR® Magazine by Stacey Moncrieff Don’t talk about business as usual to this group: NAR’s culture transformation commissioners and new leadership are helping to usher in big changes for the nation’s largest real estate organization. When the National Association of REALTORS® named its Culture Transformation Commission—a group of more than 70 members; state and local association staff; and NAR staff selected through a collaborative process—the aim was to identify and break down impediments to being an inclusive, welcoming and respectful organization for all. NAR’s Leadership Team announced the Commission in October 2023 as an essential step in putting the organization on a new path forward. NAR continued down that path the following month with the appointment of Interim CEO Nykia Wright and again in December with the appointment of Chief Marketing & Communications Officer Suzanne Bouhia. In February, Wright engaged Karyn Detje to lead NAR’s human resources transformation. Along with the staff changes have come shifts in NAR leadership. Kevin Sears, a broker from Springfield, Mass., stepped into the presidency in January, making a commitment to help return the organization to stable ground, get back to the business of helping members succeed, and eliminate distractions from the job. Shortly after taking office, Sears announced that two former NAR presidents, Vince Malta and Sharon Millett, would fill vacancies in the 2024 NAR Leadership Team. Malta is a broker from San Francisco and was NAR’s 2020 president. Millett, a broker from Auburn, Maine, was NAR’s 1999 president. “The real story [of NAR] is progress,” Wright said in a letter to members in February, calling out the CTC’s role. The group’s recommendations, she said, will shape the association’s progress into the future. “We’ve reached out directly, and the overwhelming majority of our members have told us they trust in what we are doing to transform the organization,” Wright says. “We are not taking their trust lightly but are working every day to earn their continued confidence.” Under the new staff and member leadership, NAR is communicating more deliberately, sharpening its focus on the core mission of serving its members, and moving toward becoming a nimble organization. Four Areas of Focus Part of that comes with the delivery of the CTC’s recommendations, some of which are expected in the fall, according to Ryan Davis, NAR’s vice president of diversity, equity and inclusion. “This is a ripe opportunity for change,” says Davis, who serves as co-lead on the project. “While some of the work will likely spill over into 2025, we expect to see formal recommendations in November [at NAR NXT(link is external), Nov. 8–10, Boston].” Under the leadership of its tri-chairs, the CTC has completed two of four phases of its work—information and data gathering and aligning on priorities. In the information-gathering phase, commissioners heard from thousands of association members and staff via interviews, focus groups, open forums and informal conversations. In the second phase, they aligned the findings into four common themes and identified opportunities for culture transformation within each theme. Theme 1: Mission and Values Opportunities: Clearly define our real estate–driven mission; appreciate and understand the work that NAR staffers, members, and state and local association staff perform; set expectations around how members and staff treat one another; and embed change throughout NAR. Theme 2: Leadership Opportunities: Set clear expectations and standards for those who lead across NAR—members, state and local association staff, and NAR staff. Review the entire leadership process—from the selection, training and evaluation of senior staff to the election, appointment and training and expectations of member leaders. Theme 3: Governance Opportunities: Rethink the association’s governance structure, its focus, and how it operates to enable members and staff to do their best work. Theme 4: Compliance Opportunities: Provide a safe space for all and promote accountability. To guide the next two phases of the work—developing implementation plans and final review, adoption and implementation—the group recently engaged McKinley Advisors, a firm with deep roots and expertise in association management and transformation. Working in parallel with the CTC, a Policies and Procedures Task Force is creating recommendations to improve NAR’s policies, procedures, trainings and systems to prevent inappropriate member behavior, encourage reporting of alleged misconduct, and promote an environment of transparency and accountability. “Culture change takes time,” says Detje, who has led staff transformations within large organizations and is co-leading the project with Davis, “but I see an incredible commitment among the members and staff to make it happen. One thing I’ve found really remarkable is that, despite having been through an incredibly challenging 18 months, people are passionate about this organization and the work they do.” The commission continues to welcome feedback from members and association staff. Want to share your ideas on transforming the culture of NAR and the REALTOR® organization? Email culture@nar.realtor .
By Louisiana REALTORS® 23 Apr, 2024
Last week, NAR President Kevin Sears checked in from the NAR Broker Summit, where he learned new tools to strengthen his business alongside several hundred fellow brokers. Next stop, Washington, DC for the REALTORS® Legislative Meetings, where we’ll show Congress our grassroots strength in action. We encourage you to watch Kevin’s video here to learn more about what NAR is advocating for this year at RLM. As always, the overarching theme is increasing access to homeownership. This video is also in the video section of our website. Stay tuned for Kevin’s next update.
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