Legislature(2015 - 2016)BELTZ 105 (TSBldg)
04/07/2015 01:30 PM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| Confirmation Hearing | |
| SB76 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
| += | SB 76 | TELECONFERENCED | |
SB 76-REAL ESTATE BROKERS; LIABILITY
2:21:06 PM
CHAIR COSTELLO reconvened the meeting and announced the
consideration of SB 76. "An Act relating to private actions and
remedies against real estate licensees for licensee
relationships, disclosures, and activity before January 1, 2005;
and providing for an effective date." She noted that this was
the second hearing.
2:21:42 PM
GENEVIEVE WOJTUSIK, Staff, Senator McGuire, summarized that SB
76 addresses notification requirements for real estate
transactions before January 1, 2005 when the licensee represents
both the buyer and seller. The original statute did not specify
remedies if a real estate licensee violated its provisions and
had no timeline. In 2002 a lawsuit was brought and it became a
class action suit in 2010. SB 76 broadens the language in [AS
08.88.396(e)] to help with that suit.
During the previous hearing, Senator Giessel asked what the law
said in 1998 regarding dual representation. At that time, AS
08.88.396(c) said: "A person licensed under this chapter may act
as an agent for both the prospective seller and a prospective
buyer of real estate, only after the licensee informs both the
seller and the buyer of the dual agency and receives written
consent to the dual agency from both principals." The statute
did not include a timeline for obtaining the written consent to
the dual representation.
2:24:04 PM
CHAIR COSTELLO recalled previous testimony that prospective
homeowners were making on the spot offers after viewing the
properties. As a result, a situation came up where a buyer felt
he/she made an offer without receiving communication from the
agent about their dual representation.
MS. WOJTUSIK confirmed that two people felt that they were not
informed that the real estate licensee represented both the
buyer and seller. They brought legal action in 2002.
CHAIR COSTELLO asked why the new language on page 1, line 6,
striking the term "for" and inserting "arising out of" is a
clarification.
MS. WOJTUSIK deferred to Mr. Pickett.
2:25:34 PM
JEFFREY PICKETT, retained counsel for the Senate Judiciary
Committee, explained that the term "arising out of" is a more
broadly interpreted term by Alaska courts and would cover both
common law and statutory actions. This would clarify the
legislature's intent in 2003 when it limited damages to actual
damages for violations of the dual agency notice requirement.
CHAIR COSTELLO asked if this change might bring consumer
protection concerns.
MR. PICKETT replied he has heard nothing on the consumer
advocate side that would indicate concern with this change. He
explained that the change is focused on the damages a consumer
is entitled to if the dual representation was not properly
disclosed. Should forfeiture be allowed as a remedy for failure
to properly disclose, some 3,500 transactions that took place
during this timeframe would be at risk. That would gravely
damage the entire industry.
2:28:55 PM
CHAIR COSTELLO asked how the bill clarifies the will of the
legislature in 2003.
MR. PICKETT replied the will of the legislature is determined by
courts after a review of the legislative history. This includes
testimony, written comments and anything put on the record. His
understanding is that the legislature in 2003 was trying to
clarify the same thing that SB 76 seeks to clarify. That is that
permitting forfeiture as a remedy for violations of the dual
agency provisions would have a very disruptive impact on the
real estate industry.
CHAIR COSTELLO asked Senator Ellis if he had supplemental
information.
SENATOR ELLIS replied the previous comments reflect his memory.
2:30:53 PM
SENATOR STEVENS asked why the bill is retroactive [to January 1,
1991], if anyone would be harmed by the retroactivity and how
they would be harmed.
MR. PICKETT explained that the bill is necessarily retroactive
so it applies to cases and claims brought since the 1998
amendment made disclosure of dual agency a requirement. The bill
makes it clear to the courts that the intent of the legislature
in 2003 was that only actual damages would be awarded to a
consumer if provisions of the dual agency requirement were
violated.
SENATOR STEVENS asked if there are ongoing court cases to which
this would apply and if it would provide a definitive answer for
any court decisions.
MR. PICKETT confirmed that a case has been ongoing since 2010
could be affected, and others could be brought based on
transactions between 1998 and 2003. He said the ambiguity in the
law is related to whether the limitation to actual damages
applies to common law actions. It clearly applies to statutory
actions. The pending case could be affected because the bill
would require the courts to apply the limitation to actual
damages in any case arising out of the failure to disclose dual
agency representation.
2:34:23 PM
CHAIR COSTELLO asked how to rationalize a retroactive effective
date when one legislature is not able to bind another
legislature.
MR. PICKETT explained that retroactivity is a permitted power of
a sitting legislature. One legislature may not bind a future
legislature, but it is permissible for a legislature to change
what an earlier legislature has done.
SENATOR STEVENS asked for an explanation of actual damages as
opposed to other types.
MR. PICKETT explained that actual damages are out-of-pocket
losses a buyer or seller might have suffered as a result of not
understanding that the agent was representing both parties. The
claimants in the pending case are seeking the punitive damage of
forfeiture. Those claimants would like the real estate agents
that didn't technically comply with the disclosure requirement
to disgorge the commissions and fees that they earned.
2:37:05 PM
CHAIR COSTELLO found no further questions or testimony and
closed public testimony.
2:37:24 PM
SENATOR STEVENS motioned to report SB 76 from committee with
individual recommendations and attached fiscal note(s).
CHAIR COSTELLO announced that without objection, SB 76 is
reported from the Senate Labor and Commerce Standing Committee.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Commissioner DOLWF - Drygas #3.pdf |
SL&C 4/7/2015 1:30:00 PM |
Appointment Confirmations |