Legislature(1995 - 1996)

04/09/1996 01:35 PM L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                                                                               
        HB 478 REALTORS MAY PREPARE CERTAIN LEGAL DOCS                       
                                                                               
 Number 001                                                                    
                                                                               
 CHAIRMAN KELLY called the Senate Labor and Commerce Committee                 
 meeting to order at 1:35 p.m. and brought up HB 478 as the first              
 order of business before the committee.  He called the prime                  
 sponsor to testify.                                                           
                                                                               
 Number 015                                                                    
                                                                               
 REPRESENTATIVE NORMAN ROKEBERG, prime sponsor of HB 478, informed             
 the committee that he has been a licensed real estate broker in the           
 State of Alaska for twenty-five years.  Therefore, he is intimately           
 aware of the circumstance surrounding the necessity of this                   
 legislation.  He made it clear that he has an inherent conflict of            
 interest, because he could benefit by the bill.  However, the bill            
 was introduced at the request of the Alaska Real Estate                       
 Association, the Alaska Association of Realtors, and some local               
 real estate boards.  He thanked the committee for developing a                
 senate committee substitute removing the words and concepts of                
 deeds of trust and mortgages.  That is the only difference between            
 the bill passed by the house and the scs.  He recommended that                
 language be removed due to recent conversations he's had with the             
 Real Estate Bar, which thinks that the administration of documents            
 performed by a real estate professional does not specifically                 
 include deeds of trust and mortgages, which are more typically                
 drafted by counsel at the request of title companies or clients of            
 title companies for the conveyance and alienation of real property            
 interests.  Real estate brokers do not normally draft, or even fill           
 in the blanks, of deeds of trust and mortgages.                               
                                                                               
 SENATOR KELLY asked if all that is being accomplished by removing             
 deeds of trust and mortgages then is to keep the status quo.                  
                                                                               
 REPRESENTATIVE ROKEBERG replied that is correct.                              
                                                                               
 SENATOR KELLY asked, since that language was deleted, what is left?           
                                                                               
 REPRESENTATIVE ROKEBERG responded that what is left are the                   
 documents normally prepared and used by real estate brokers,                  
 associate brokers, and agents throughout the state.  The reason for           
 the bill is that the Alaska Bar Association drafted a new bar rule,           
 33.3, that was transmitted last October to the Supreme Court.  The            
 adoption of this new bar rule would redefine the scope of the                 
 practice of law in the State of Alaska.  He is concerned that the             
 new bar rule could affect members of the real estate industry.  The           
 real estate industry has been concerned with this for the past five           
 years or so, because there is a feeling that there is no clear                
 demarcation between standard real estate practices and practices              
 conducted by members of the legal profession.  This law is                    
 necessary to keep from impeding the typical bargaining process.  A            
 strict interpretation of the bar rule would require that all forms            
 of bargaining be approved by an attorney, which could mean that               
 even every counter-offer would have to be approved by an attorney.            
 The Alaska Bar Association denies this though, making HB 478                  
 preemptory legislation.                                                       
                                                                               
 Number 120                                                                    
                                                                               
 CHAIRMAN KELLY asked Representative Rokeberg if he is suggesting              
 the Alaska Bar Association's 2,000 members would try to stretch out           
 their ability to generate fees in the State of Alaska.                        
                                                                               
 REPRESENTATIVE ROKEBERG replied he wouldn't suggest that; he would            
 be much more clear about that being probable.  If this law is not             
 passed, real estate commerce could be impeded.                                
                                                                               
 SENATOR KELLY commented there was a statement from the Alaska Bar             
 Association that indicated they weren't trying to do this.                    
                                                                               
 REPRESENTATIVE ROKEBERG stated committee members have in their bill           
 packets a letter from the Alaska Bar Association counsel that is a            
 written response to information requested by Representative                   
 Rokeberg.  The letter indicates that sections 3-e and d of the bar            
 rule specifically exclude members of a profession from using legal            
 proceedings--documents that they prepare.  But he draws committee             
 members' attention to section 3-d, which only addresses filling in            
 forms approved by the court system for use by non-attorneys, or               
 standardized forms prepared and reviewed by counsel.  Every                   
 document used by a real estate professional would have to be                  
 approved on a pre-determined basis.  He thinks that would even                
 include real estate leases.  Real estate agents and brokers do not            
 practice law; that is not the intent here.  All they are asking for           
 is to preserve the status quo and be able to perform their                    
 profession with documentation that has customarily and                        
 traditionally been used.                                                      
                                                                               
 Number 205                                                                    
                                                                               
 CHAIRMAN KELLY asked if there were questions of the sponsor.                  
 Hearing none, he called other witnesses to testify.                           
                                                                               
 Number 210                                                                    
                                                                               
 JOAN SHEPPARD, realtor, testifying from Anchorage, stated she                 
 advises clients to get legal advise.  Realtors currently do not               
 practice law, they are just writing simple contracts negotiated               
 between buyers and sellers.  If it was mandated that these                    
 contracts be written by attorneys, it would be more expensive and             
 take more time to conduct real estate transactions.  She agrees               
 with the deletion of language relating to deeds and mortgages from            
 the legislation.  Ms. Sheppard supports passage of HB 478.                    
                                                                               
 Number 230                                                                    
                                                                               
 CRAIG JOHNSON, realtor, testifying from Kodiak, stated he echoes              
 what has already been said.  He hasn't heard any reasons for                  
 opposing HB 478.  The nation-wide trend has been to move away from            
 required attorney involvement.  He asked that the committee release           
 HB 478.                                                                       
                                                                               
 CHAIRMAN KELLY asked if there are any questions.  Hearing none, he            
 asked if there was a motion for the adoption of the Senate Labor &            
 Commerce Committee substitute.                                                
                                                                               
 Number 260                                                                    
                                                                               
 SENATOR TORGERSON made a motion to adopt the committee substitute             
 for HB 478.                                                                   
                                                                               
 CHAIRMAN KELLY, hearing no objection, stated the committee                    
 substitute was adopted.  He asked the pleasure of the committee.              
                                                                               
 SENATOR TORGERSON made a motion to discharge HB 478 from the Labor            
 & Commerce Committee with individual recommendations.                         
                                                                               
 SENATOR KELLY, hearing no objections, stated HB 478 was discharged            
 from committee.                                                               

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