Best of the Hotline – This room is huge!

By James L. Goldsmith, Esq.

Q. Here is a question that comes, verbatim, from a recent Hotline caller: "Lately I have been losing listings to competitors using the fisheye lens or photo shop technique to make the worst homes look beautiful and the smallest spaces appear huge. Am I permitted to exaggerate the way a home really looks in my marketing? Most buyers and agents do not like the distorting images. If other companies are permitted, then I will buy the software and camera that do the same! If it is wrong, then I do not want to jump on this bandwagon."

A. I wish I had known about this technique when I sold my home! Then again, I am a layperson not bound the Real Estate Licensing and Registration Act ("RELRA") and the Code of Ethics.

RELRA prohibits (makes unlawful) the "making of any substantial misrepresentation" and engaging in "any misleading or untruthful advertising." The Real Estate Commission would determine, after a properly conducted hearing before an administrative hearing examiner, whether an advertisement violated either of these provisions of RELRA. If so, a fine would likely be issued for a first offense.

I presume that any licensee defending such allegations would argue that "puffing," or the exaggeration commonly found in advertising, is neither misleading nor a misrepresentation. Puffing has been tolerated in ads and is generally expected. It cannot be the basis of a civil lawsuit for fraud or breach of contract unless the exaggeration exceeds reality. Is a fisheye photograph and outright lie that has no basis in fact, or an innocent exaggeration?

It is difficult to predict the outcome of a prosecution for misleading advertising without having a specific case before us. Would prosecution be less compelling if the buyer actually viewed the property before submitting an offer? My presumption is that it would take a fairly distorted view to constitute a violation of law (pun intended).

Pennsylvania has adopted the Unfair Trade Practices and Consumer Protection Law ("UTPCPL") which also prohibits false or misleading advertising and which is not limited to real estate licensees. Under UTPCPL the attorney general or a district attorney in any county can bring an action against a perceived violator. The law also permits a private suit by any person who has suffered an ascertainable loss. To my knowledge, no licensee has ever initiated a UTPCPL claim asserting that he/she has suffered a financial loss as a result of a fisheye photo of a listed property. I am not holding my breath that one will be filed soon. The remedies, however, are greater than one might expect. An aggrieved person can seek their actual financial loss, which in this case would be hard to prove, or $100. If the ad is found to violate the UTPCPL then the Plaintiff may also be awarded three times their damages, attorneys' fees and costs. Again, I am not holding my breath.

Another thought occurs to me. Article II of the Code of Ethics states REALTORS® "shall avoid exaggeration, misrepresentation, or concealment of pertinent facts. . ." Further, Article XII requires REALTORS® to be "honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing, and other representations . . . " (Emphasis added.) Whether an ethics hearing panel would find these "distorted" photos to violate the Code is something I cannot predict. I suppose if one felt greatly offended by these ads, a claim of an ethical violation can be filed and you will learn the answer!

Camera buffs know that the 50mm lens closely approximates what is seen by the human eye. Unfortunately, such a lens is unlikely to capture much of an interior space and hence the photographer resorts to a 28mm or an even more exaggerated lens. Usually these wide-angle lens give their telltale curvilinear barrel distortion (fisheye affect). There are special wide-angle lens that are designed so that straight lines in the scene will appear straight in the photographic image. These photos lack the extreme distortion of the fisheye lens, although they too are not perfect. Generally, a layperson can determine a scene captured by a wide-angle lens from one that is not.

Even side mirrors on vehicles warn of the distortion created by the convex shape of the mirror. Is it possible for listing agents to note the same in the multi-list description? To further reduce the likelihood of a claim, a listing agent could assure that the rooms photographed have their dimensions noted. A room that looks to be 24 X 24 feet that is stated to be but 12 X 12 would seem to cure any misrepresentation suggested by the photograph.

Copyright © James L. Goldsmith, Esquire, CALDWELL & KEARNS, P.C., 2014

All Rights Reserved

Jim Goldsmith is an attorney with Caldwell & Kearns and serves as general counsel to PAR. A substantial portion of his practice is dedicated to providing advice and counsel to real estate licensees. He and his firm represent and defend real estate salespersons and brokers in civil lawsuits and licensing claims across the Commonwealth. Jim also defends REALTORS® in disciplinary hearings conducted by the Real Estate Commission. He routinely counsels employers on employee relations issues and is one of the voices of the PAR Legal Hotline. He may be reached at www.realcompliance.com.