For these reasons, real estate professionals need to stay informed about how these scams work and, more importantly, communicate this information to clients from the beginning of the interaction. Licensees must remain vigilant during the real estate listing, sale and purchase process to protect their own interests and those of their clients.
If regulators fail to educate the public, stakeholders and licensees in their respective jurisdictions about the different types of AI fraud that occur, how to recognize the warning signs and provide prevention tips to help defend against these advanced forms of fraud, Then they would be remiss. To further increase the regulator’s relevance on this issue, licensees and consumers should also be encouraged to report any incidents of fraud they encounter.
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Discussions about artificial intelligence and real estate compliance often remind me of virtual real estate brokerages. Interestingly, in California, many brokerage firms operate “virtual offices” that are not expressly covered by the Real Estate Code.
Until the California Department of Real Estate provides guidance to its licensees, it remains unclear how the department views and may enforce this activity. However, since there are no written rules in this area, these operations and issues are typically reviewed and investigated on a case-by-case basis.
This is no exception. Brokers and agents are currently using artificial intelligence technology to perform various tasks at work. It remains to be seen whether these activities will lead to non-compliant practices and be exploited by some licensed individuals and companies, and how regulators will respond.
Honestly, it’s too early to predict how artificial intelligence and regulatory-enforced real estate compliance will coexist, but some practical measures don’t have to wait. If you are a real estate professional who is considering or already uses artificial intelligence in your business, you may consider the following tips to stay compliant with the law:
1. Cross-check your usage artificial intelligence Illegal. Determine how you plan to use and apply artificial intelligence in your daily business and ensure that these programs, practices, and products comply with your state’s existing laws and regulations. This may involve reviewing the core principles, including some of the issues highlighted in this article, and cross-referencing them against your particular legal framework.
2. Don’t jump into something new without doing your homework. As a licensed real estate professional, you have a responsibility to act with diligence and purpose. If you have questions, ask for answers.
Contact your state regulators and local trade organizations and talk to your supervisors, managing brokers and colleagues. Find advice, property announcements or expert guidance. Stay up to date on the law (and any changes), AI technology, potential issues, and learn how to mitigate risks or resolve issues before they arise.
3. Monitor enforcement actions taken by your state regulatory agencies. I consistently advise my clients on the value of reviewing and monitoring enforcement actions against agents and brokers. This information provides vValuable insights into the regulatory environment, revealing the types of non-compliance activities that lead to breaches of law, how regulators interpret and enforce the law, and the nature and extent of disciplinary actions taken.
It’s an old adage, learn from other people’s mistakes. Understanding how licensees get into trouble can help you eliminate compliance blind spots in your own business and increase your chances of avoiding regulatory scrutiny.
