Protection of Personal Data in the Real Estate Industry

One of the pillars of the relationship between real estate agent and client is trust. In fact, some industry professionals say that this aspect is the most fundamental and the one on which a successful transaction turns, because the client’s assets and confidential information are in the hands of the agent. Therefore, it is very important to safeguard said data and establish an environment of security and certainty during the purchase-sale process.

Reynaldo Álvarez, director of the firm Álvarez & Asociados Abogados, offered us some recommendations real estate professionals can follow to protect the personal data of their clients and generate a bond of trust. A specialist on the subject, Álvarez advises Puerto Vallarta real estate companies about this and other legal matters. In addition, he is a member and trainer of the Asociación de Profesionales Inmobiliarios de Vallarta (APIVAC) (Association of Real Estate Professionals of Vallarta).

“Definitely, and by the nature of their work, real estate professionals have access to a large amount of a client’s personal data, such as name, age, address, marital status, nationality and banking information or situation, among others. Some personal information is considered to be ‘sensitive,’ because unauthorized use can damage or put at risk the person’s physical or financial integrity, hence, the importance of putting it to good use and protecting it.”

Álvarez explains that the regulatory body that ensures the proper and lawful use of this type of information is the Ley Federal de Protección de Datos Personales en Posesión de Particulares (Federal Law on Protection of Personal Data Held by Private Parties), which came into effect in 2010. Its provisions apply to all people and companies that collect or process personal data in the exercise of their activities. Therefore, real estate companies and real estate professionals who work independently are obligated to comply. The body that monitors compliance with this law is the Instituto Nacional de Transparencia, Acceso a la Información y Protección de Datos Personales (INAI) (National Institute of Transparency, Access to Information and Protection of Personal Data).

Thus, a real estate company can collect clients’ personal information for its use, disclosure or storage (indicating the purposes for which it will be used and with the prior consent of the owner). The most important point to act on under this guideline is having a privacy notice.

“The privacy notice is a document that can be written, digital or audio. It tells the client—the holder of the personal data—the information that will be requested, the objective, the way in which it will be used and with whom it could be or will be shared. It also specifies who is responsible for taking care of the client’s personal data, which generally is the legal representative of the company or owner. It is very important that companies or people dedicated to the real estate business have a privacy notice, show it to their clients and make sure they sign it before collecting that information. Otherwise, a company that makes unauthorized use of it may incur a fine ranging from $8,836 to $14,137,600 pesos, depending on the intent, the damage caused and the size of the company.”

In the case of companies, it is advisable to establish internal policies to promote a culture of protection of personal data, so employees are aware of the appropriate treatment and possible penalties. In addition, if you have a web page, it must show the privacy notice regarding user data that it will store.

Reynaldo took the opportunity to also mention the risks that exist in the virtual world, when installing software on mobile devices or computers, for example. Generally, to be able to use this type of platform or application, it is necessary to provide some personal data and accept the application accessing the information that is stored in the device.

“In the digital area, we must take greater care, because it is easier for our databases to be breached and for people without authorization to have access to them and misuse this information. Many people do not read the conditions this type of application establishes to allow use, and sometimes these conditions are available in only another language, which hinders full understanding.”

In addition to the Ley Federal de Protección de Datos Personales en Posesión de Particulares, other correlated regulations related to the real estate industry include the Código Fiscal de la Federación (Fiscal Code of the Federation), the Ley de Extinción de Dominio (Law of Extinction of Domain), the Ley Condominal (Condominium Law) and the Ley Federal para la Prevención e Identificación de Operaciones con Recursos de Procedencia Ilícita (Federal Law for the Prevention and Identification of Operations with Resources of Illicit Origin), so receiving professional advice to gain full knowledge of the implications and how they are interconnected is recommended.