Legislature(1995 - 1996)
04/09/1996 01:35 PM L&C
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
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.