Real Estate and Redaction Rules
What is redaction, and why does it matter in real estate?
Redaction is the term that describes the removal of some content from records, media, video, or other data to protect privacy. In many transactions, especially financial ones, both the buyer and seller give a great deal of information to the transaction, including personally identifiable information (PII). Regardless of the type of transaction, PII is defined as “any information that can be used to distinguish or trace an individual’s identity, such as name, social security number, date, and place of birth, mother’s maiden name, or biometric records; and any other information that is linked or linkable to an individual, such as medical, educational, financial, and employment information.”
Real estate transactions are loaded with forms of PII. The transaction forms, land, and public records could contain information about the owner’s name, date of birth, financial, or even employment information. Releasing this information publicly could set the homeowner up for fraud, abuse, or other criminal actions. Other reasons – not removing this information could be harmful to homeowners. These documents contain data regarding where they live. In cases of domestic violence, government or political figures, police, doctors, or other influential individuals, the release of their personal data could be detrimental to their unique circumstances.
In order to protect individuals, real estate agents and brokers are required to redact certain specific information from contracts, public land records, and other transactions. While the homeowner’s details are still attached to the primary documents, any available version of these documents would have PII removed. This form of redaction shields the location, address, or other personal information to recognize safety concerns with these details accessible through public land records. The need to sanitize or redact documents for those who fall in protected classes; these omissions need to be processed in a way that does not impede any normal business activities.
Public Land Records
Public land records are used in real estate transactions. A property title search is a method of retrieving documents that give the history, including current and past ownership, of a specific tract of land or property. There are a variety of reasons for legitimate property title searches for business transactions. The documents can give details about the current use or any regulations that concern the real estate. During a prospective purchase, a title search is done to answer three main questions concerning the real property before the sale:
- Does the seller have ownership title and a saleable or marketable interest in the property?
- Are there any types of restrictions or allowances that pertain to the use of the land? These would include real covenants, easements, and other equitable servitudes. This could consist of being in areas where a homeowners association program may cause restrictions as well.
- Does the seller owe money, or are there any liens placed on the property which need to be paid off at closing? These would be mortgages, back taxes, mechanic’s liens, and other assessments.
The purchase and transfer of real property are considered one of the cornerstones of individual wealth. The transfer of real property should be made safe and efficient. The public land record is critical to defining ownership of specific real property, homes, or land. When the realtor, broker, or other agent uses redaction on particular parts of the documents or sanitizes the entire record, it prevents unauthorized access to information or other documents that are required for constructive notice, protecting land rights, and even preventing fraud or theft.
The downside of redaction or unintended consequences of sanitizing public land records includes creating a lengthy effort for the homeowner to access their own records and even prevent future buying or selling of the real estate without first proving ownership. Also, when an individual homeowner feels protected due to sanitized land records, it can create a false sense of security and increase the risk of certain types of fraud.
Data Required for Redaction
Specific federal regulations require the removal of certain data. The Gramm-Leach-Bliley Act is a federal regulation that was passed to protect consumer financial privacy. The basics of the Act is that it limits when a financial institution may disclose a consumer’s “nonpublic personal information” to any nonaffiliated third parties. The Gramm-Leach-Bliley Act (GLB) was enacted in November 1999. The date for full-compliance to the regulations by all covered financial entities was July 2001.
The GLB covers real estate transactions and banking institutions. To comply with the federal requirements set forth under the GLB, agents are required to protect Nonpublic Personal Information (NPI) and specifically an individual’s name associated with any of the following:
- Social Security Numbers.
- Credit or Debit Card Numbers.
- State Identification Card Numbers.
- Driver’s License Numbers.
- Bank or Financial Account Numbers.
- Specific Login or Password Credentials.
Special Circumstances or Individuals
Under the GLB, certain individuals require specific extra concerns when it comes to protecting data privacy. Loss of their personal information can impact their lives, careers, or even safety. The GLB addresses this concern by listing individuals that financial institutions, including real estate transactions, must consider their circumstances in allowing for extra redaction or sanitization of personal details from public land records. To comply with the GLB, an effective solution is required to handle their data carefully, not to place anyone’s safety at risk. These individuals covered by the GLB ARE:
- Victims of domestic violence.
- Peace Officers, Military Servicemembers, and other First Responders.
- Legislators and Judges.
- Regulators and Code Enforcement Personnel.
- Medical Professionals.
- Other Public Figures.
Impact of Redaction on Public Records
Redaction on land or real property should be handled with extreme care. There are potential impacts of redaction on public land records for both consumers and business owners. These impacts can be detrimental, create time-consuming processes, and create an additional burden for the property owner. Some of the reasons that redaction should be handled with extreme caution include the following:
For Consumers –
- Homeowners and prospective purchasers may experience significant delays, burdensome work, and extra steps to complete real estate transactions because documented ownership cannot be ascertained through the intended use of the public land record.
- Consumers may have an inability to get offered the lowest interest rate for mortgages and refinances.
- Redaction can create gaps in ownership records, which could be used for fraudulent land transactions.
For Businesses –
- Banks, financial institutions, and other lenders are prohibited from allowing loans without the ability to document and prove land ownership.
- Construction services may have difficulty in successfully filing any mechanics’ lien.
- Title companies may find complications in determining and property liens before the use of the public record.
Realtors spend a great deal of time on the road. They meet clients at a variety of addresses showing them the homes and properties available for purchase. Finding a way to handle redaction as part of the extensive amount of paperwork involved in handling real estate transactions can become burdensome and even expensive. When a real estate firm uses an automated redaction software system like CaseGuard, manual redaction hours can be reduced to a few clicks and a few short minutes. This time-saving feature allows a realtor to get back to his other clients, sell more homes, spend more time with family, or even simply find time to relax.
Today’s realtors handle a great deal of data in a variety of formats. When selling real estate or posting ads, the realtor takes image files, video files, and many documents. CaseGuard brings it all together by handling any type of media file. One system can use artificial intelligence and automation to reduce labor hours over various data to mere minutes. Using automated redaction software can also be far more accurate than manual human redaction. When realtors face compliance with federal regulations such as the GLB, mistakes can come with costly penalties.
These errors can also create havoc in the lives of the customers whom they want to protect. Accuracy of redaction through intelligent automation can make mistakes nearly impossible. Once the realtor sets the specified data points to search for, the software will automatically remove faces, names, social security numbers, or any other set data points, thoroughly lending to sanitized documents ready for processing.
CaseGuard has the added benefit of being designed for anyone, even those with no redaction process experience. Realty agencies can cross-train all of their realtors and office staff quickly. This benefits the entire agency as everyone works to the same standards and on the same software package. This protects the data that the agency houses in its computer systems from breach or fraudulent misuse. It makes a great deal of sense that realtors and realty agencies choose the most accurate and easy-to-use redaction software on the market. That is CaseGuard!