Real estate broker publishes names of top five sales representatives in a city

PIPEDA Case Summary #2005-303

(Section 2; subsection 5(3); Principle 4.3)

Complaint

Two real estate sales representatives complained when a broker they did not work for published their names and the number of houses they sold in a year, in an advertisement in a real estate flyer. They had not consented to this information being disclosed.

Summary of Investigation

The advertisement was paid for by a sales representative from the brokerage in question. The intent of the advertisement was to promote the sales representative, by ranking the top five homesellers in a particular city. The representative who paid for the advertisement came in first, with the complainants placing third and fifth. The advertisement also indicated how many homes each representative sold. The source of the information was credited as being the local real estate board’s Multiple Listing Service (MLS) system and another third-party organization.

The representative stated that he bought a statistical report concerning the performance of real estate sales representatives within a particular area from the third-party organization. He also stated that this information was available from the real estate board’s MLS system until the spring of 2004. The statistical report that he purchased contained such information as the representative’s name, the franchise name, the number of units sold, their value, average days on the market, and the average sale price per agent. The representatives are ranked by number of units sold and dollar value.

The representative who purchased the advertisement stated that consumers are most often interested in a sales representative’s track record (i.e. sales performance) and frequently ask him to share his track record with them before selecting a real estate sales representative. His intention was to provide accurate, unbiased confirmation to the consumer of his claimed track record (hence, purchasing a report from a third-party organization). In an industry with many sales representatives claiming to be number one, he felt that by including statistics, he would be providing positive information to the consumer.

He also stated that since this information (the MLS information) was available at the time to both users of MLS and the third-party organization, it should not be considered personal information. In his view, when an individual becomes a licensed real estate sales representative, he/she is providing a service, as a business, and the performance of this business becomes public information.

The MLS is a co-operative system used only by Canada’s real estate boards to give exposure of properties listed for sale. Realtors can access sold prices, list prices, average time on market, historical data and conduct comparative market analyses. The system evolved because brokerage companies wanted to exchange information and wanted a co-operative way to work on selling properties. The system is intended to provide enough information to allow a broker to show a property and prepare an offer of purchase.

The real estate board that was referred to in the advertisement confirmed that prior to the spring of 2004, an agent could search on many fields, including the agent’s name. The system would give results, but not "statistics." In other words, it could not rank agents in a given area. To find such information, a member of the real estate board would have to search under every agent’s name in a particular area and figure out the ranking on his or her own. The board stated that the ability to conduct a search by agent was removed in response to new privacy legislation.

Members of the real estate board sign a user agreement that allows them to use the MLS system. The board’s privacy policy states that information within the MLS system is considered to be personal information to the extent that it is or can be associated with an individual, and that, to the extent possible, such information will be collected directly from the listing broker/salesperson. Users consent to the collection, retention and disclosure of all information submitted in the form of listings, including the user’s name and relationship to a real estate transaction and all financial particulars of the transaction. According to the agreement, personal information includes the user’s name, phone number, business address, and employer.

The real estate board confirmed that it did not have a contractual relationship with the third-party organization the sales representative bought the statistics from, contrary to the sales representative’s understanding. The organization, for its part, stated that it provides statistical information for the real estate community and that the information comes from the MLS database that is available to that community.

Findings

Issued May 31, 2005

Application: Section 2 states that personal information is information about an identifiable individual but does not include the name, title or business address or telephone number of an employee of an organization. Principle 4.3 stipulates that the knowledge and consent of the individual are required for the collection, use, or disclosure of personal information, except where inappropriate. Subsection 5(3) establishes that an organization may collect, use or disclose personal information only for purposes that a reasonable person would consider are appropriate in the circumstances.

In making her determinations, the Assistant Privacy Commissioner deliberated as follows:

• She was satisfied that the information in question was the complainants? personal information, as defined in section 2.
• She noted that it was clear that the complainants did not expressly consent to the use or disclosure of their personal information. The issue to consider was whether there was implied consent – in other words, ought the complainants to have known that their personal information could be used or disclosed in the manner in which it was.
• The Assistant Commissioner considered the typical scenario that a real estate representative encounters. A customer approaches a representative to sell his or her house. The representative’s brokerage accepts the listing, with the representative’s name, address and telephone number included in the listing, and the information is entered into the MLS system. As an authorized user of the MLS system, the representative consented to this collection for the purpose of selling real estate. The representative knows that other sales representatives will see his or her name attached to the listing, as well as the financial particulars of the transaction, to which she or he also consented.
• Authorized users of the MLS system were also aware, at the time of the complaints, of the ability to do a search of the system on a sales representative’s name. This function was in place for a legitimate purpose, namely, for a representative to know how many properties he or she sold or listed. Such information could be useful for prospective clients.
• The representative who purchased the advertisement indicated that his purpose was to provide the consumer with information to support his claims of being a top seller in a particular city. To do so, he needed to have information that ranked the representatives in that area.
• The MLS system, however, could not do comparative analyses. The system could give another representative’s listings and sales, but it could not rank them against other representatives. The representative had this information compiled and ranked, and then he disclosed it in the flyer.
• In the Assistant Commissioner’s view, there was no implied consent – the real estate board members would not have reasonably expected the information they consented to provide for listings to be used and disclosed in such a manner, and the user agreement did not contemplate such a use or disclosure either. She did not believe that a reasonable person would infer from the agreement that one of the purposes of collecting users? personal information would be a comparative analysis used for advertising by other sales representatives.
• In sum, the Assistant Commissioner determined that the broker used and disclosed the complainants? personal information, without their consent, contrary to Principle 4.3, and for a purpose that a reasonable person would not consider appropriate in the circumstances, contrary to subsection 5(3).

The Assistant Commissioner concluded that the complaint was well-founded.