Every real estate brokerage should be watching Hollis v. eXp Realty closely, where the court denied eXp Realty’s motion to dismiss, allowing Plaintiff's claims of both direct and vicarious liability to move forward. In this case, eXp is being held responsible for both their own unsolicited telemarketing (like, cold calling and cold texts) and more importantly, the unsolicited telemarketing undertaken by their agents/associated licensees.
The case involves allegations on unsolicited calls made in violation of the Telephone Consumer Protection Act ("TCPA"), which comes with steep penalties of $500 to $1,500 per unlawful call or text. Historically, many real estate brokerages believed that they were insulated from liability because agents/associated licensees were treated as independent contractors so they were not responsible under vicarious liability. However, in the Court's latest ruling, a clear shift occurred where brokerages were told that they can be held accountable when agents/associated licensees, who they supervise, violate the TCPA.
After the denial of their motion-to-dismiss, eXp Realty and the agent defendant filed their answers, and the case is now moving through the discovery process.
Every brokerage should treat this case as a wake-up call. Now is the time to act. Implement or update TCPA compliance policies, train agents/associated licensees on proper lead-generation practices, prohibit unsolicited autodialed calls and texts, audit marketing systems, CRMs, and third-party vendors, and document compliance and supervision efforts.
Failing to supervise agents/associated licensees marketing activities is no longer an option, brokerages can be on the hook for agent misconduct.
If your brokerage needs a TCPA compliance audit or guidance on agent supervision, contact Lieb at Law, P.C.
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