Legislature(1997 - 1998)
10/13/1997 01:21 PM House L&C
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
October 13, 1997
1:21 p.m.
Anchorage, Alaska
MEMBERS PRESENT
Representative Norman Rokeberg, Chairman
Representative John Cowdery, Vice Chairman
Representative Jerry Sanders
Representative Joe Ryan
MEMBERS ABSENT
Representative Bill Hudson
Representative Tom Brice
Representative Gene Kubina
OTHER MEMBERS PRESENT
Representative Mark Hodgins (via teleconference)
COMMITTEE CALENDAR
HOUSE BILL NO. 33
"An Act relating to real estate licensing and the real estate
surety fund; and providing for an effective date."
- HEARD AND HELD
(* First public hearing)
PREVIOUS ACTION
BILL: HB 33
SHORT TITLE: REAL ESTATE LICENSING
SPONSOR(S): REPRESENTATIVE(S) ROKEBERG BY REQUEST
JRN-DATE JRN-PG ACTION
01/13/97 36 (H) PREFILE RELEASED 1/3/97
01/13/97 36 (H) READ THE FIRST TIME - REFERRAL(S)
01/13/97 36 (H) LABOR & COMMERCE, FINANCE
03/14/97 (H) L&C AT 3:15 PM CAPITOL 17
03/14/97 (H) MINUTE(L&C)
03/17/97 (H) L&C AT 3:15 PM CAPITOL 17
03/17/97 (H) MINUTE(L&C)
03/24/97 (H) L&C AT 3:15 PM CAPITOL 17
03/24/97 (H) MINUTE(L&C)
10/13/97 (H) L&C AT 1:00 PM ANCHORAGE LIO
WITNESS REGISTER
RON JOHNSON, Broker
Kenai Board of Realtors
610 Attla Way, Suite 6
Kenai, Alaska 99611
Telephone: Not provided
POSITION STATEMENT: Testified on HB 33.
SCOTT CONNELLY, President
Kachemak Board of Realtors
331 East Pioneer Avenue
Homer, Alaska 99603-0437
Telephone: (907) 235-6183
POSITION STATEMENT: Testified on HB 33.
BILL McNall, Esq.
921 West Sixth Street
Anchorage, Alaska 99501
Telephone: (907) 276-2535
POSITION STATEMENT: Testified on HB 33.
SHIRLEY ARMSTRONG, Legislative Assistant
to Representative Rokeberg
Alaska State Legislature
716 West Forth Avenue, Suite 640
Anchorage, Alaska 99501
Telephone: (907) 258-8191
POSITION STATEMENT: Made comments regarding HB 33.
ACTION NARRATIVE
TAPE 97-59, SIDE A
Number 0001
CHAIRMAN NORMAN ROKEBERG called the House Labor and Commerce
Standing Committee to order at 1:21 p.m. Members present at the
call to order were Representatives Rokeberg and Sanders.
Representative Cowdery arrived at 1:30 and Representative Ryan
arrived at 1:36 p.m. Chairman Rokeberg announced a quorum was not
present at the call to order and, under state statute, the meeting
would act as a work session.
HB 33 - REAL ESTATE LICENSING
Number 0058
CHAIRMAN ROKEBERG indicated the committee would address HB 33
"An Act relating to real estate licensing and the real estate
surety fund; and providing for an effective date." He stated he
would like to declare a potential conflict of interest as he is
licensed real estate broker in the state of Alaska and has his own
real estate brokerage. Chairman Rokeberg noted the last hearing on
the legislation was on March 24, 1997. He noted he has
participated in numerous work sessions and meetings with real
estate groups across the state.
CHAIRMAN ROKEBERG said, "Today's hearing will be on House Bill 33,
which is real estate licensing. For the purposes of discussion, we
cannot formally adopt a new version, but were we able to do that,
I'd like to have the consent of the committee to take up Version H
of House Bill 33 as the working document for our working session.
This supersedes Version F. I would indicate, for the record, that
Version H was put together by the committee this summer to give us
a working document that is based on the testimony we've taken to
that point of approximately to the first part of August -- and the
way Version H came out, it came out as two separate bills, one
including what was called a surety fund section. And so we split
the bill in two sections in Version H. However, most of you have
a memorandum written by myself on September 11. It goes to show
certain things about Version H, but it also helps clarify some of
the issues that are before the committee and need to be considered.
The reason we did split the bill was there was discussion at the
time, particularly within the real estate community, about the
surety fund, the fees being charged for that and there was a good
deal of discontent. That has not gone away. This committee and
the chairman has asked Legislative Budget and Audit (LB&A)
Committee to review the surety fund and the activities of the Real
Estate Commission for their biannual fees. As a result, I believe
that most of the changes in the surety fund -- well I felt that if
there was a need to do this, we would have vehicle by separating
it. But I think we -- it's my judgement of the chair that we need
to put that back into the bill. The next version of the bill will
have that surety area back into the bill because I believe the Real
Estate Commission has, in a large part, at least addressed some of
the issues brought up in the real estate community. They have
lowered the amount of the fees to the real estate agents. They've
come up with I believe $365. They've drawn that back to $270.
They've also issued a reduction in the surety fund premium from
$125 to $100. I believe this has been promulgated by the
regulations."
Number 0821
CHAIRMAN ROKEBERG indicated he would review Version H for the
committee members and his memorandum of September 11, 1997, as
there is a comparison between the two versions. Chairman Rokeberg
said he would like to point out that in the areas where there is
controversy, he hopes it will be resolved before the legislature
convenes in January.
CHAIRMAN ROKEBERG stated there is a quorum present as
Representative Cowdery and Ryan had arrived.
CHAIRMAN ROKEBERG said, "The chair would entertain a motion to
adopt, in so far as we can statutorily, Version H of House Bill
33."
Number 1012
REPRESENTATIVE COWDERY made a motion to adopt Version H of HB 33,
for the purpose of discussion.
CHAIRMAN ROKEBERG asked if there was an objection. Hearing none,
Version H was before the committee.
Number 1054
CHAIRMAN ROKEBERG referred to item three of his memorandum and
explained that Version H entirely deletes the concept of
endorsement. The original version of the bill came from a task
force established by the Real Estate Commission. The task force
came up with an endorsement concept for sales licensees, property
managers and community association managers.
CHAIRMAN ROKEBERG said, "Because of subsequent meetings I've had,
particularly with the Anchorage Board of Realtors legislative
committee, including about 20 some brokers here, that's chaired by
Mr. Eric Dyruo and Bill Brady, I believe, of Remax -- that
particular meeting there was a -- in my other work sessions that
I've attended, it's the concerned opinion of the chairman that the
endorsement concept, which I endorsed, does not have the
endorsement or approval of the vast majority of real estate
practitioners in the state. Therefore, we have opted to do what I
call a `light bill,' which is the bill before you, in part, to cut
down and diminish some of this controversy. I think the
controversy generated, in a large part, because of the concept of
change within any kind of business and the idea of endorsements of
having to go in and take specific classes for specific things and
then the feeling that a number of people would have to take classes
for all three endorsements, as well as the... The prior bill, if
you recall, had a commercial endorsement in it and it was the
consensus of the chair that also be removed because of the
controversial nature of that particular endorsement. So the
endorsement concept, which would require a real estate licensee,
which now there is a universal test for prelicensing and
postlicensing type education requirements as well as continued
education requirements, has been scrapped. And what's been left in
its place, at this particular juncture, is a requirement for the
Real Estate Commission, however, to come up with curriculum, both
for continuing education for four different areas of specialty.
Now this is just -- it's not prelicensing or getting a license,
this is merely for continuing education in the areas of sales,
property management, community association and commercial
activities. The bill - this version of the bill mandates that
those areas have classes peculiar to their areas of expertise
because now -- that was one of the biggest problems with the prior
bill, you had different endorsements. The classes can be - could
cross fertilize. In other words, you could use some core classes
which are 8 hours, and now there's 12 hours of elective hours,
presently. There is nothing in this legislation or this bill that
wouldn't allow that same type of thing to happen, but still at this
particular juncture requires that there be 8 core hours in a
specialty and 12 elective hours, for continuing education, every
two years on a biannual license renewal."
Number 1443
CHAIRMAN ROKEBERG pointed out that the state of Alaska has among
the least number of hours required for continued education and is
also probably right in the bottom of the barrel for the number of
hours required for prelicensing.
Number 1516
CHAIRMAN ROKEBERG referred to item four of the memorandum and said
it is the requirement for community association managers to be
licensed. It is contained in Section 9, pages 6 and 7, of the
bill. He said this was one of the major reasons he started the
entire rewrite of the statute, that ultimately culminated in HB 33,
which would bring in community association managers under the
statutory regime of the state to provide, in the form of the Real
Estate Commission, a body which had regulatory control over the
activities between the community association manages. He pointed
out that a community association manager, who was a manager for 18
different community associations, embezzled $580,000 in the
Anchorage are a few years back.
Number 1614
CHAIRMAN ROKEBERG said, "Instead of having the endorsement concept
now, this particular bill, the H Version, allows for the community
managers coming in, but it also provides -- this was done at the
suggestion of the Anchorage board, for additional bonding
requirements. However, the additional bonding, which is in Section
20, page 14, of Version H, I believe now after review of the entire
statutory regime should be deleted in its entirety. And the reason
I say that is that this was suggested kind of as a last minute
suggestion and adopted in this draft by the Anchorage board. I
don't think - we didn't have enough time to really review it. The
concept being that we felt, because the surety fund is only
$250,000 in (indisc.) and then we had this one case of almost a
half a million dollars. However, the existing statutory regime is
such that an individual instance - in other words, if an individual
broker creates a problem, they can only claim against one other
let's say customer/consumer no more than $10,000, then the global
universe of all incidents relaying from this one incident. In
other words, multiple consumers is capped at $50,000. So the most
any one individual could get from the surety fund is $10,000 and
for one incident that would be generated by on (indisc.) type
licensee, the maximum the fund could pay out to any number of
consumers is $50,000."
Number 1845
CHAIRMAN ROKEBERG said it is his recommendation that Section 20 be
deleted which required a $1 million bond for community association
managers. The original idea was that there was a feeling that the
fund would be jeopardy if the community association managers would
be able to tap into the surety fund by misfeasance. He said he
believes that with the existing limitations of $10,000 and $50,000,
there is adequate protection for the fund without the additional
bonding. Chairman Rokeberg said some of the community association
managers, who are being brought in under the law, are not entirely
happy with the circumstances of how it is working out. He said in
his discussions with community association people, they have
indicated that they want to be covered, in a large part, by the
real estate law. This is because if they were to set up a separate
type of a group for community association managers alone, their
biennial fees would be substantially higher than they would be as
a realtor, plus they would have to have additional fiduciary surety
bonding requirements added on to the biennial fees separately.
Number 2031
CHAIRMAN ROKEBERG referred to item five of his memorandum and said
it relates to errors and omissions insurance requirements. He
explained it has generated a lot of negative response within the
community, but he believes it is a matter of misinformation. One
of the problems is that the provision in the bill allows the Real
Estate Commission to go in the marketplace to investigate whether
a $100 annual premium amount is obtainable from the underwriting
insurance community. Chairman Rokeberg said what he has indicated
to the Real Estate Commission, and they've agreed to informally, is
that they will go ahead and endeavor to see if this is at all
practical prior to the legislature convening in January. If there
are no underwriters willing to come forward at the lower rates, it
will be deleted from the bill. Chairman Rokeberg referred to the
agency situation and said he had discussions with Mr. McNall about
that where some portions need to be clarified. Section 32 does
provide for explicit a dual agency which, by implication, is
already in existing law. However, there is a problem in existing
law where you have to disclose what your agency relationship is
every time you show a house. It currently is not being done. He
said, "In other words, whenever a real estate broker or agent has
the clients out, statutorily, we put them in a box where they don't
abide by the law because they do not, at every instance, have a
form for each different house, if you will, which is the way this
law is drafted now." He stated he would be discussing this with
members of the real estate community and will bring recommendations
back to the committee as soon as possible.
Number 2314
CHAIRMAN ROKEBERG referred to item seven of the memorandum
pertaining to Section 33, page 20 and 21, and said it was added at
the request of the Real Estate Commission. He stated the section
allows a real estate agent or an associate broker of a company,
that hires an administrative assistant that is licensed, to absolve
the broker from any responsibility for the payment of federal taxes
on that person. Under existing law, the licensed broker is
responsible for that assistant. This would clarify the
responsibility between that licensee who hires the administrative
assistant and not the broker.
Number 2413
CHAIRMAN ROKEBERG referred to item eight regarding continuing
education credits and said it is in Section 8, page 6. He
explained that he believes the section needs to be tightened. The
commission, as a result of action by the committee, has come up
with some new regulations. He read from subsection (1), lines 8
through 10, "courses required to earn professional designations
sponsored by the National Association of Realtors, the Building
Owners and Managers Association, or other recognized national
organizations;". He stated that wording is too broad. Chairman
Rokeberg said he would prefer to come up with some language and get
direction from the commission to help tighten the language up. His
approach would be to be more specific in that it should be
stipulated who the national organizations are.
Number 2622
CHAIRMAN ROKEBERG referred to Section 7, page 5, and read from
subsection (e), "In order for an educational course to be
recognized for credit under this section, the course outline and
the instructor of the course must have been approved by the
commission or the commission's designee before the course was
conducted." He pointed out that this is a problem for the national
courses because currently the commission has established a $25 fee
to get your course approved. We've created a cottage industry in
the state of Alaska from a bunch of real estate course instructors.
Part of the problem is that in the past, some of the national
organizations have come to the commission at the request of the
members, paid the $25 fee and put their courses in play, but that
is a pain in the neck for them. Chairman Rokeberg said he wishes
that they had language to exempt the specific organizations from
the filing fee. In other words, the commission, because of their
filing fee requirement, could overcome the statute to not allow the
classes. He noted the classes can cost up to $1,000 a week and if
you leave Alaska to take them, it can cost you $2,000 to $3,000.
They are not receiving continuing education credits which is
ridiculous.
Number 2819
CHAIRMAN ROKEBERG informed the committee members the commission has
also had some problems with the language that reads, "courses
approved by commission for computer training that is specially
designed to be useful for persons...." although they are basically
going along with it. The computer course has to be specifically
designed for the real estate agents taking the course. In other
words, you can't take a course on how to run Windows 95, et cetera.
Number 2902
CHAIRMAN ROKEBERG said, "With that subsection (1), under Section 8,
the approval, the tightening of that up and the approval for the
university courses and the national courses need to be tightened
up."
Number 2931
CHAIRMAN ROKEBERG referred to item nine of the memorandum, and said
it pertains to Section 37, pages 22 to 25. He referred to
subsection 19 and said he would like to have input from the
committee members to resolve some of the language. Chairman
Rokeberg said, "These are provisions that except those people from
having to have a license. There is a number of these things that
came down here. The first thing I'd like to bring to the attention
of the committee is on page 23, line 18, subsection (9) -- I can't
remember if this is new or not. This is a major change and I'm not
sure we had this in our last go round. I know the current law.
I'm talking about the last in section F -- Version F. Anyway,
whether we did or not makes little difference because we have it
now. And what we're doing here is clearly defining who can do real
estate business and who can't. Previously, there was allowed --
the corporation, partnership, et cetera, they were performing acts
that require a license, under the statute, in their regular course
of business were exempt, but now we're changing that to incidental
to their regular course of business. What we're doing here is
clearly stating, for final after all these years, who can do real
estate and who can't. And with these numerous exceptions that we
have - some 19 here, this clearly will state that nobody can do
these things unless they're an attorney or there -- as stipulated,
that's one of the exceptions up here. And that there is 19
different categories you come into, but this will clarify a problem
that I know has been in the business for a number of years about
who needs to be licensed. It particularly comes into play when the
people are managing property and own buildings - managing it and so
forth, but it didn't work previously licensed. Now they have been
under the more recent versions of the law and this I think
clarifies very strongly that these people need to be licensed to do
this. I do need to review this slightly further and I want to talk
to the homebuilders about it - whether the sales of a homebuilder
may be restricted with this type of language. We may have to put
some other exemptions in here given this, but I just want to bring
it to the committee's attention. This could be a very, very major
controversial issue, although I hope it isn't, because it really
goes a long way in clarifying who can do business in this state.
And this is an important issue. There is another thing we can talk
about later where it comes back into play on."
Number 3340
CHAIRMAN ROKEBERG said the major thing is on page 24, subsection
(19). This provision was a result of the drafting by legal counsel
in Juneau. It is a generic request to meet the requirements that
Representative Cowdery brought to the committee. It would allow
relatives and so forth to act as managers of properties. He
pointed out that on line 13, subsection (19), the words, "an
attorney in fact..." He said, "I think it is important and I think
a lot of the people in the real estate community have appreciated
this where anybody who is going to act, as there is in the older
law where you can have an attorney in fact, or have a power of
attorney. If you had that, you were limited to two transactions.
What we're doing here is expanding the number of people who can act
for that property owner, but we are requiring them to have a power
of attorney giving them that ability. But we're also limiting it
to their relative. The question that I have and I want to ask the
committee to consider is, `How far do we go?' Frankly, I think the
way this is drafted now goes a little too far. We're talking about
nephews and aunts and uncles and nieces, but also I think it does
exclude step relationships, which I think is a problem in this day
and age of multiple extended families, divorce and the like. In
many instances, there are closer relationships between a stepchild,
if you will, than there would be an aunt, uncle or niece."
Number 3538
REPRESENTATIVE JOHN COWDERY said subsection (19) talks about
authorizing the specific real estate transaction. He asked if that
means whoever signs the document agrees to it or does it mean the
person puts it together and the principal still signs for it.
Representative Cowdery said his mother can still sign her
documents, but he puts a package together for her approval. She
goes to the title company and signs the title document.
CHAIRMAN ROKEBERG said it could be limited in the power of
attorney. He said he wants to leave wording in the bill so they
have the ability for one party to act for another. He said you can
limit the degree in which a power of attorney is drafted to the
powers you're going to be granting the other party. For example,
if a person would want to limit their stepchild to manage your
property and limit him to the acceptance and collection of rent and
the ongoing upkeep and maintenance of rental property, you could
limit him to that. You could also exclude his ability to sell your
property.
Number 3750
CHAIRMAN ROKEBERG pointed out that on page 24, items (16) and (17)
are specifically added for community association activities. He
said (16) indicates that an owner of a unit of a self-managed
community association, managing the community association without
remuneration, would be an exemption. Chairman Rokeberg said if you
were, for example, a condominium owner and wished to act on behalf
of an association, which is allowed, it may be appropriate to
reimburse you for your time.
Number 3913
CHAIRMAN ROKEBERG referred to subsection (17) and said it provides
that a developer retains control of at least 51 percent of the
association which is consistent. He noted that he needs to double
check on the Alaska Common Ownership Act regarding consistency.
Number 3945
CHAIRMAN ROKEBERG referred the committee members the transitional
provisions on page 26. He said the prior version of the bill
allowed community association managers, if they had two years of
experience, to become licensed community association managers with
their endorsement. They could only conduct their activities and
wouldn't have to take a licensing examination, but would take only
the continuing education examinations. Chairman Rokeberg said he
thinks Version H is drafted too stringent. It would allow the
community association manager to petition the commission that they
be granted a license. Now they're able to practice for a year
after the effective date at which on or before that time, they
would have to pass the real estate examination. Chairman Rokeberg
said the implications are that after one year, if you didn't pass
that examination, you'd be out of business if you were a community
association business manager or broker. Previously, they were able
to petition the commission and were then granted a license
endorsement in which they could only practice in that particular
profession. They were grandfathered in. Chairman Rokeberg said it
is the committee's ultimate decision to decide whether or not these
people should be required to pass an examination for the general
sales of real estate because we no longer have endorsements.
TAPE 97-59, SIDE B
Number 0443
CHAIRMAN ROKEBERG indicated that Version H of HB 33 does not
provide for grandfathering and, therefore, it mandates that these
people become licensed within one year which will allow them to
sell real estate. Chairman Rokeberg said, "There is another
concept that I have discussed with a number of people and that is
for the establishment of a provisional license to allow for the
transition of these people with experience at those levels, a
broker, an agent of community manager associations, to transition
into it where their actions would be upon the effective date of the
legislation. They would apply to the commission and receive a
provisional license for only their activities as it relates to
community management associations and not their ability to sell
real estate." He asked what the fair way is to handle those people
who have commitments. Chairman Rokeberg indicated he gave a
presentation to the Anchorage Chapter of the Community Association
Management Institute and noted there were about 30 people in
attendance of which only about 35 percent were licensed realtors.
Chairman Rokeberg noted he also has been involved in the
development and activities of community associations because he has
acted a community association president; he has taught property
management at the University of Alaska and was involved with the
establishment of the first specialized property management
department in the Alaska real estate market. He stated the most
important thing is that these people be able to be included under
the licensing law and that it be done in a fair and reasonable
manner. He asked if the grandfather provision should exist
indefinitely or should people be required to become licensed after
two years.
Number 1001
CHAIRMAN ROKEBERG referred to item 11 and said the previous version
of the bill allowed the Real Estate Commission to establish a
separate state code of ethics by regulation. He said that has been
taken out of the bill because there was opposition by the realtors
in Anchorage. He noted the National Association of Realtors has a
code of ethics.
CHAIRMAN ROKEBERG referred to the committee to page 6, line 29, of
Version H, and said currently, a license is required to collect
rent for any real estate. He said, "As a practical matter, this
has caused me some heartache because when receptionists or certain
other staff people of brokerage houses are at the front desk and
clients come in and want to pay their rent, they're not able to
accept it. You have to actually be a licensee to be able to accept
rents and I think that I would like to look at modifying that with
language that would allow an employee of that licensee to accept
that rent. They would be required to issue a written receipt if,
in fact, if they -- if they can collect the rent if they issue a
written receipt as evidence by that. Therefore, the broker would
still be responsible because of the agent/principal relationship
(indisc.) would exist between and employee and employer."
Number 1216
CHAIRMAN ROKEBERG indicated the committee members have some
information from Grayce Oakley which relates to some changes in the
bill that revolved around the reimbursement or fee-sharing based on
relocation companies. He noted it has to do with a defected
regulation promulgated by the commission in the summer. He said he
believes there needs to be some statutory changes. Chairman
Rokeberg indicated he would address the issue later in the meeting.
Number 1445
RON JOHNSON, Broker, Kenai Board of Realtors, testified via
teleconference from Kenai. He referred to Version H, pages 6, 8,
9, 10, 12, 20, 21, 22, 26 and 27 and said "real estate services
licensee" was dropped and the term "salesman" was included. He
indicated he like to see it changed at least to "real estate
licensee," but would prefer, "real estate services licensee."
CHAIRMAN ROKEBERG noted that has been brought to his attention and
he agrees.
Number 1539
MR. JOHNSON referred to page 1, line 13, item (4), "certify courses
required under this chapter;" and asked if it would be better to
approve the courses as well as approving the instructors. He asked
if the courses should be certified. Mr. Johnson asked if it
wouldn't be better approve the instructors and approve the courses
rather than certify one and approve the other.
CHAIRMAN ROKEBERG said Section 2 allows the commission to designate
or have an assistant do the functions.
MR. JOHNSON said his thinking was to keep the language so that the
assistant would approve everything rather than approve some things
and certify some things.
Number 1635
CHAIRMAN ROKEBERG asked if he is saying that if they are going to
approve the courses, they should approve the instructors for those
courses as a policy matter.
MR. JOHNSON answered in the affirmative.
Number 1644
MR. JOHNSON referred to page 3, line 18, and said the words,
"Department of Law" were changed to "Department of Commerce and
Economic Development." He asked if that will allow the commission
to do their own policing.
CHAIRMAN ROKEBERG responded that is the intention. He said the
commission is having difficulty getting the Department of Law to
provide the manpower to prosecute some of the cases. Chairman
Rokeberg said the change was requested by the commission to try to
bring the in-house ability to pursue cases, with their
investigators, through the administrative hearing process and to be
the moving party rather than having the Department of Law be the
moving party.
MR. JOHNSON questioned whether the Department of Commerce has any
policing authority.
CHAIRMAN ROKEBERG responded, "That's why we're trying to give it to
them in statute."
Number 1804
MR. JOHNSON referred to page 6, line 29, "(3) collect rent for the
use of real estate;" and said if you pursue the collection of rent,
it would be licensed, but to accept rent a license is not required.
He pointed out that was the result of a discussion about seven
years ago on whether the communication information could be given
by an unlicensed person to a licensed person. At that time, it was
determined by the commission that collecting rent was receiving
rent and collecting rent meant you would actually be out pursuing
the collection of the rent. Mr. Johnson said accepting rent is
alright because someone would be sitting there and accepts rent as
it comes through the door. It is like accepting the mail. To
actually go out and pursue collection of rents required a license.
Number 1914
CHAIRMAN ROKEBERG asked if there was an opinion from the
commission.
MR. JOHNSON said he believes it was in their policy manual, but
suggested checking with Ms. Oakley.
CHAIRMAN ROKEBERG said the law currently says, "the collection of
rent." He said he thinks the wording needs to be modified.
Number 2000
REPRESENTATIVE JOE RYAN said if a tenant hasn't paid their rent for
several months and they are evicted, the landlord decides to turn
the account over to a collection company, and the collection
company very aggressively tries to collect the rent. He questioned
whether the collection company has to licensed by the real estate
commission to collect that debt.
MR. JOHNSON said as he recalls, that particular situation was
discussed and it was determined that past-due rents are debt rather
than rents that are due.
CHAIRMAN ROKEBERG said it is something that needs to be clarified.
Number 2133
MR. JOHNSON suggested condominium associations or homeowner
associations should have limited specific licenses so that they
don't get into the sales picture.
CHAIRMAN ROKEBERG pointed out that is basically what the
endorsement concept is, but it also added property management.
MR. JOHNSON explained he was and probably still is in favor the
endorsement concept. The problem with it is that created a
perceived headache in the eyes of some of the brokers. Rather than
an endorsement, maybe there should be a specific license that is a
condominium homeowners association license.
CHAIRMAN ROKEBERG asked Mr. Johnson how he feels about making the
transition provisional with limitations and then require them to
get a real estate license after two years, or all new people who
come aboard have to get a real estate license.
MR. JOHNSON said if there was a specific limited real estate
license, he could live with that. To require them to get a regular
real estate license might be counter productive.
CHAIRMAN ROKEBERG stated they would be required to pass the real
estate exam. They would have gone through the requirements of
meeting the license requirements.
MR. JOHNSON suggested limiting it to the law portion of the exam.
CHAIRMAN ROKEBERG said it would set up a de facto endorsement. He
indicated this is something the committee needs to consider.
Number 2613
CHAIRMAN ROKEBERG asked, "My comments about deleting the
endorsements and the commercial endorsement, particularly, is that
pleasing to the folks down in Kachemak Bay?"
Number 2633
SCOTT CONNELLY, President, Kachemak Board of Realtors, responded
via teleconference. He said he is sure that it will be pleasing.
Number 2745
BILL McNALL, Esq., came before the committee to testify on behalf
of himself. He noted he is an attorney of real estate law in
Anchorage and was on a task force of Community Association
Institute. Mr. McNall informed the committee that a community
association might be managed by funded or licensed compensated
officers or directors who live in the association. He pointed out
there was a recent article where there was a complaint about how
self-managed associations couldn't have some discretion. Mr.
McNall said, "One of the fundamental thoughts behind community
associations is this is a neighborhood concept, you have
neighborhood members serving on the board and doing it as
volunteers." Mr. McNall pointed out that there have been national
discussions on how to get bring in professional mangers, attorneys,
realtors and people who are trained managers. He said they are
asked to serve on the association boards as what is called a super
board member. They have done that because boards get stuck, they
don't know what to do. They're sometimes more directed by their
own personal pocketbook and what the monthly/annual budget might
mean than they are about what the legal obligation to the
association might be. Mr. McNall said he has represented over 200
associations and he can say that issue is often the most common
issue they have to deal with, or it knows what it has to do, but
just doesn't want to do it because it is very unpopular. Mr.
McNall said, "If you're going to allow them to build into the
budget a salary for themselves as officers, or a salary for
themselves as directors, my concern would be that they'll do what
Congress has done to us which is to consistency see a need for
budget cuts, but their own personal salaries go up. So it's an
issue that I'm quite concerned about. The ultimate concern is that
if you're going to allow these folks to be able to be paid for
their services, you're going to have to probably take a look at the
association's documents because this will be a major change -- And
certainly build in the right for the association members to say
`yes' to that by a majority or maybe super majority, as well as the
association's lenders - people that hold the mortgages on these
properties, who have that property as security for their loans,
probably would be obligated under the Common Uses Ownership Act to
say `yes' as well."
Number 3049
MR. McNALL said, "My concern is that if you don't pay your bills,
if you have some people serving at $5,000 or $10,000 a year in
these positions and you have federal withholding, you have state
tax bills that have to be paid and those are not paid, then what
you'll have is a lien, not against the individual officer's home,
but against every home in the subdivision - every house that's in
that condominium or every unit in the condominium project. And I
think it's one of those steps you have to look at very, very
careful because I think that it's right for abuse, if you will."
CHAIRMAN ROKEBERG asked if he recommends against allowing it.
MR. McNALL said until we see some amendments to the Common Uses
Ownership Act, the Uniform Act and some solution at the national
level, he isn't sure that the state would want to jump into that.
Number 3258
CHAIRMAN ROKEBERG said, "The issue that we talked about in terms of
transition -- would you care to venture an opinion on that? And
the fact that the endorsement concept I think is dead on arrival
now in terms of it's ability to be passed in the legislation."
MR. McNALL said he doesn't object to Mr. Johnson's approach as an
endorsement concept as that is what we started out with. He said,
"The goal that the committee had was to -- we didn't care
necessarily what the mechanism was. What they got out of it was
the mandatory educational requirements, so what you had was
community association managers being educated as a community
association managers, not as sales people. And so I think you've
achieved that and I think that what you ought to put in - a one-
year or two-year requirement doesn't make any difference to me
whatsoever as long as what it's tied to is the achieving of the
educational goal for that time period. So you got to do 20 hours
a year. They want to get licensed at the end of two years, they
better be able to show they got 20 hours in year one and 20 hours
in year two because ultimately, that's exactly the issue (indisc.)
have to do it and I have two specific examples if you'd care to
listen."
MR. McNALL said in Washington, D.C., the American Bar Association,
Real Property Section, has a separate committee dealing with
community association properties of which he is a member of. He
said they are dealing with "Megan's Law," which is about the little
girl that was seriously sexually abused by one of her neighbors.
Mr. McNall said, "The question is in a state like Alaska where you
have mandatory public registration of these folks and a manager --
all they have to do is dial the phone to find out where these
abusers live and there is one in our condo project and they don't
call, what's the liability of the association?" He said it is an
issue that people have talked about, but nobody has looked at it
and asked, "What is the responsibility for the association or the
manager of that association?" He said you would only get to that
issue if you're taking courses that will talk about those sort of
issues. You won't get that in a sales/service course, you'll only
get it in a specific educational program designed for these people.
Number 3505
MR. McNALL explained he is very concerned about the issue of the
association's liability, as an association, for acts of violence
within the association where the association has some knowledge
that there are violent people in the project. So there could be a
spousal abuse problem, you have gangs in the association, et
cetera. You may wind up, as an association, liable like a
landlord.
MR. McNALL said if there is a landlord that knows of a dangerous
condition on their property, they really do have some obligations
to tell the people that are on the property about the dangerous
condition. They may have an obligation to disclose conditions they
may not even know about because they have some duty to investigate
their property. In the community association context or the
community association manager context, you would probably agree
that if there is obvious stuff, maybe there is some duty to
disclose to the members or to the (indisc.) about this dangerous
condition.
TAPE 97-60, SIDE A
Number 0154
MR. McNALL said, "If you got the right case, with the right abused
child, with the right family and the right abuser, the amount of
the judgement would have no end of zeros after it and that would be
against the association for failing to warn. How in the world
would you ever have enough insurance or how would those owners
because the liability for that, after the insurance runs out,
becomes a part of each and every owner's life. You, as an owner of
a condo, wind up having to pay your pro rata share."
Number 0247
CHAIRMAN ROKEBERG asked Mr. McNall if he has a personal opinion
about the issue of the limited license versus the provisional
license.
MR. McNALL said they have provided for a specialized curriculum of
education in a specialized area.
CHAIRMAN ROKEBERG indicated that there is the transition issue and
he would like to make it as painless as possible. He asked Mr.
McNall if a limited license would work.
MR. McNALL responded that a limited license would work, but it has
to be tied to the educational program. He said at 40 hours of
education over two years, that person should be able to become a
full-blown licensee.
Number 0420
MR. JOHNSON said he also thinks it would work, but added he doesn't
see the necessity. He noted he sees Mr. McNall's side of the
argument which makes sense.
Number 0438
CHAIRMAN ROKEBERG said, "But the other situation about putting up
a provisional license and then requiring after the two-year period,
we're mandating a real estate examination or lose their business.
Would that be too objectional to the community association
membership now or...?"
Number 0455
MR. McNALL said you would get into a philosophical discussion at
that point that. "After two years and all the education, they
can't pass the licensing exam, should they be in business?" That
is a lot of work and a lot of day-to-day application of things.
CHAIRMAN ROKEBERG asked how new entries would come into the
business once the limited license is established. He suggested
there be a grandfather provisional or limited license, but anybody
that is a new entry into the business would have to take the real
estate exam if they wanted to work in that type of business.
MR. McNALL said, "I think that the managers that I recall
testifying at the committee or coming to talk about their concerns
were extremely concerned about having somebody killed in a car
accident and not being able to get anybody to come in and do any
work because they would have to go get a license first. And I
think we talked about some sort of right to hire off the street and
then get them registered with the Real Estate Commission and have
them, over a period of time, take the classes and, of course, learn
how to do this."
CHAIRMAN ROKEBERG asked how new people would get into the business,
after the transition is made, if we have a limited license. He
said they would be setting up an endorsement. By deleting the
endorsement concept, you would have to replace it with something.
Chairman Rokeberg said he doesn't want to see one exclusive
endorsement just for community association people. He stated he
believes people who are duly experienced and are licensed realtors
should be able to do community association work, which they
currently can do. All they have to do is go out and hang their
shingle up.
MR. McNALL indicated that is correct. He said, "In my office I
have looked at, again, for association to -- really can afford to
push the issue -- the problems created by the very same people that
you want to have out there or that are currently able to do that
without having any education whatsoever. And I know they're
managing today and I know that the stuff they're managing they're
not doing right because they don't know, because they haven't taken
the classes because they take advantage of associations - small
corporations off the seat of their pants. That was the thrust of
trying to come up with separate licensing and separate educational
(indisc.)."
Number 0811
CHAIRMAN ROKEBERG said he calls the limited license the de facto
endorsement. He calls the provisional license the transition
license that would require, at certain point, the new entries. He
said a new entry would have to take the real estate examination to
be licensed as a realtor. He referred to the provisional
grandfathered person and asked if he would ever need to take the
licensing exam. The other issue would be do you put a two-year
hurdle out there and make sure the person takes the exam.
MR. McNALL said he personally would like to see a two-year hurdle.
CHAIRMAN ROKEBERG said they're going to take the generic exam. He
said if there is the requirement that new people should be
licensed, grandfathered people should be licensed too.
MR. McNALL said, "I think in two years, as an owner of a business -
- that I'm truly going into this business and am planning on doing
a good job of making my living at it, and one of the things I have
to wind up being is a licensed -- or passing the brokers license --
that I'll make sure that I get there. I'll take the proper
classes, I'll get the proper experience because I really am looking
at this as an area in which I can make a living. If I can't get
there in two years, then maybe I shouldn't be doing this. And I
know that you can't pass a law that makes everything for everybody,
Norm, but I don't know that we need to. It seems to me that we
just have some folks out there that may not make that hurdle, but
that's why we have them there."
Number 1001
CHAIRMAN ROKEBERG said he thinks it is a little unfortunate because
it may push some of the people out of business that are in it now.
He said he would agree with Mr. McNall that if they can't pass that
exam, they shouldn't be in the business.
MR. McNALL said he doesn't see the exam as being that difficult.
You have to study for it, learn it and be able to apply it. It is
not designed to keep people out.
Number 1100
CHAIRMAN ROKEBERG said the homebuilders have recommended some
changes in the Alaska Common Ownership Act. He provided Mr. McNall
with information regarding the requested changes.
Number 1128
MR. JOHNSON referred to the memorandum and information from Grayce
Oakley of the Real Estate Commission and said on page 4, there is
a suggestion for some changes regarding listings and management
contracts. They want to take the personal service contract out and
call them listings. He said this would suggest looking more
towards putting some teeth in it. We have property management
contracts. He asked why we can't have property marketing
contracts. There would be more of a perception that it really is
a contract rather than an agreement that could be taken lightly.
Mr. Johnson said something he has a problem with is if the state
does an involuntary corporate dissolution, that in effect puts the
corporation out of business. However, the state will allow you to
voluntarily undo the dissolution by bringing your dues current. He
said he did one that was five years dissolved and the state let him
reinstate it. He noted he just did it to see what would happen.
If the corporation is dissolved, in fact, out of business then the
broker is terminated because he is working for a corporation that
is no longer in business. All the licensees working under that
broker that are attempting to get their two-year time frame to be
able to qualify for their associate broker, their time stops and
they get a break in their term. Mr. Johnson referred to when a
corporation decides to change the broker and the listings or market
agreements are owned by the broker, does there have to be a new
contract because the broker's name has changed. He asked, "Do we
want to address the brokerage as being the property or the holder -
- property owner of the listing agreements or marketing
agreements?" Mr. Johnson pointed out that there was a lawsuit
about two years ago as a cooperating broker was refusing to pay a
commission based on the fact that the corporation that the broker
was working for was in involuntary dissolution.
CHAIRMAN ROKEBERG indicated that is something he hasn't addressed,
but would check into it.
Number 1440
MR. JOHNSON referred to page 16, line 15, and said the word "agent"
is included. He suggested staying with the word "licensee."
CHAIRMAN ROKEBERG agreed with the suggestion.
Number 1528
REPRESENTATIVE COWDERY referred to page 3, line 20, Version H,
which relates to the release for publication and asked if it would
be appropriate to require that all the publications to be on the
Internet.
CHAIRMAN ROKEBERG said he didn't know if the Department of Commerce
or the Real Estate Commission has a home page.
AN UNIDENTIFIED speaker suggesting using "electronic media."
SHIRLEY ARMSTRONG, Legislative Assistant to Representative
Rokeberg, Alaska State Legislature, informed the committee members
that "electronic media" can cover television, radio, Internet, et
cetera.
CHAIRMAN ROKEBERG said he didn't want to create a fiscal note. A
radio ad would mean a fiscal note.
MS. ARMSTRONG said the bill will have a fiscal note because of the
addition of property managers to the bill.
CHAIRMAN ROKEBERG said it should be a positive fiscal note.
MS. ARMSTRONG indicated she would check into the issue.
Number 1839
REPRESENTATIVE COWDERY referred to page 4, line 2, (8), and
suggested including the wording "power of attorney."
CHAIRMAN ROKEBERG pointed out that the section has to do with a
legally incompetent person. He said, "There may an individual that
would be the personal representative of that particular individual
that may not be licensed properly or so forth."
Number 1932
REPRESENTATIVE COWDERY referred to page 5, line 13, subsection 4,
and asked if it should be compulsory.
CHAIRMAN ROKEBERG responded, "That's probably a good point. They
want to be able to charge, but there were certain instances where
they should have to be able to charge because they're using like
the surety fund for education. There is a `may.' Look up on line
4, `The commission also may recover all or a portion of the
expenses incurred under this subsection...'"
MS. ARMSTRONG indicated it makes it permissible and not mandatory.
Number 2048
REPRESENTATIVE COWDERY referred to page 4, line 31, "...must have
been approved by the commission or the commission's designee before
the course was conducted", and asked if a grandfather clause is
needed.
CHAIRMAN ROKEBERG explained that the courses can change. He said
it is a two-year biennial cycle and there are some that reoccur.
REPRESENTATIVE COWDERY indicated that some people could have passed
a course that is no longer in existence.
CHAIRMAN ROKEBERG said the way the regulations currently are, every
two years they have to go to the commission to get their courses
approved. He indicated there is a course called, "Case Law," but
if there has been some cases that changed after a two-year period,
you can't use the same course outline. It should be updated. He
referred to the wording, "commission's designee," and said they
want the ability to be able to contract that out to somebody so
they don't have to spend all their time going over it.
Number 2250
CHAIRMAN ROKEBERG said, "One other thing that has been brought to
my attention, there are some regulations that before they had the
30 days - got to be submitted 30 days prior - they increased it to
60 or 90 days which is causing some real heartburn because
sometimes there may be a nationally recognized guest speaker coming
up that they don't know about 90 days in advance, and they want to
be able to have it approved by the Real Estate Commission."
MS. ARMSTRONG said they don't want somebody going and taking a
course and then it's approved after the fact. It wasn't approved
before. She said some allowances are going to have to be made for
some of the national organizations because they're not going to
come to the Alaska Real Estate Commission. Ms. Armstrong said if
you happen to be near Harvard University and you drop in and take
a course on real estate, Harvard is not going to come to the Real
Estate Commission and get approval. She said criteria is going to
have to be established for the courses.
CHAIRMAN ROKEBERG said the commission needs a little bit of
flexibility. He said, "When you go out and take the course here
for the twenty hours, you get an hour per hour. I mean you take a
university course - it's a three-hour course - it's for a whole
semester. I mean how many hours do you have in there? How long is
a semester? It varies, three months say...."
MS. ARMSTRONG pointed out it is about 36 hours.
CHAIRMAN ROKEBERG said, "So you only get 36 hours for one college
course, so the commission should be able to have the right to
adjust that per hour."
Number 2713
REPRESENTATIVE RYAN said the commission has gotten themselves in a
position that a lot of people do who have altruistic ideas. They
said, "Well, you know, continuing education would be a good idea
and everybody else is doing it, so why don't we do it?' Well then
when they got in there, well they had to qualify what would be
continuing education so they had to take time from their schedule
to look through all these curriculums, decide if this meets that
and so forth. So the date from 30 days went to 60 days goes to 90
days. Now they're proposing in your legislation that they hire
somebody else to do that because it's getting to be a lot of work.
Where is the money going to come to pay those guys. Well, it comes
out of the surety fund or fee increase from members that
participate - the licensees. And it's another case where I really
want to do the right thing, but I didn't realize it took this much
time and so it's going to cost some more and well who is going to
foot the bill? Well, I'm certainly not, I'll just pass it on to
the next guy." Representative Ryan indicated that the bill is sort
of the same kind of thing. He informed the committee that he feels
when he has a problem with someone, it is always a good thing to
first talk to them to try and establish some common ground. He
said he tried to call the members of the Real Estate Commission,
but wasn't able to get a hold of anybody and left messages for them
to return the calls. He said since he never received any return
calls, he figured that nobody on the Real Estate Commission wanted
to talk to him. Representative Ryan said, "So necessarily I could
take an adversarial position and feel fully justified because you
guys didn't want to talk to me. Now if I don't go along with your
programs or are very critical of you, I can be justified." He said
it is his understanding that the instructor qualifying his program
gets a contribution from the Real Estate Commission to help that
instructor qualify their program and that money comes from the dues
or surety fund for which he pays....
CHAIRMAN ROKEBERG asked what he means by the commission is paying
the instructors.
REPRESENTATIVE RYAN said money will be paid to the instructors to
develop a course curriculum and course outline for a program the
instructor wants to put on for which it would charge members
(indisc.) a fee.
CHAIRMAN ROKEBERG said he hasn't heard that the commission would
pay the fee to the instructor.
REPRESENTATIVE RYAN said that is what he was told. He said, "We
pay these dues and we pay the surety fund deal, and the commission
decides to use the money for that purpose -- and then the guy
that's running the course comes back and whacks us for $240 or
$250. It's a nice business, you know, when your development costs
get paid, or a great portion of them, and then you turn around and
other then renting a hall and providing a little coffee, it's a
nice margin business."
REPRESENTATIVE RYAN said then there are national organizations that
are recognized throughout the industry as being the experts, who
can come up and put on a course, but a person won't get any credit.
They don't get credit because they didn't come 90 days in advance.
He said he is really beginning to wonder whether the tail is really
wagging the dog. The regulations are getting very critical on the
disclosure. Mr. Ryan said in his opinion, the Real Estate
Commission is acting like the state government does with his money.
They're doing what they think is a good idea and sending him the
bill. Representative Ryan indicated concern in that he tried to
contact people on the commission to ask questions and didn't even
receive a return phone call.
Number 3241
CHAIRMAN ROKEBERG referred to the cost of the surety fund and asked
Representative Ryan if he was in attendance when he suggested a
LB&A audit. He said he would also like to look into it further.
REPRESENTATIVE RYAN informed Chairman Rokeberg that a
representative from the Board of Realtors told him earlier in the
year that there was a $2,500 claim last year against the surety
fund.
REPRESENTATIVE RYAN explained he has been an airline transport
pilot and was in navigation for 40 years, which has considerable
risks, and he didn't have to go through anywhere near the kind of
stuff he had to go through to get a real estate license.
CHAIRMAN ROKEBERG said he would admit that they are regulating
another aspect of the business on the part of consumer protection.
He noted it is his goal to simplify some of the activities and make
it more equitable by pursuing with the legislation.
Number 3623
REPRESENTATIVE RYAN said, "If you look at the surety fund,
basically what are being told - all the people that participate in
this business are being asked to be responsible for the actions,
whether they're civil or criminal actions of certain individuals,
those individuals should be criminally or civilly held liable for
their own actions and the rest of the people who are not engaging
in that kind of activities shouldn't have to be financially
responsible."
Number 3651
REPRESENTATIVE COWDERY referred to wording on page 6, line 29, "(3)
collect rent for the use of real estate;" and said he believes that
is broad. He said he thinks that kids do it for their parents all
the time and tellers at banks collect money for banks. He said he
thinks that area should be tightened up.
TAPE 97-60, SIDE B
Number 0655
REPRESENTATIVE COWDERY referred to wording page 7, line 2, "assist
in..." and questioned whether "assist" is too broad. He also
referred to page 7, line 15, "attempt or offer to do..." and asked
if that might be too broad also.
REPRESENTATIVE COWDERY referred to page 7, line 20, "In addition to
penalties prescribed by any other provision of law," and said he
wonders if the penalties should be applied current licensees now.
Number 0907
REPRESENTATIVE RYAN said, "Think about what this thing says. We
are allowing the Real Estate Commission to levy a civil penalty
which is basically what a court does." Representative Ryan pointed
out that the Real Estate Commission is strictly a regulatory agency
that has no judicial authority whatsoever. He asked why they would
want to give that kind of power to them. Representative Ryan said,
"With civil penalties you usually go to court. You get whacked
with a civil and/or criminal penalty. Now we're going to let
administrative or actually a regulatory agency whacking people with
civil penalties. We already have a remedy under law."
CHAIRMAN ROKEBERG stated there is a provision for an appeal to
superior court.
Number 1011
MS. ARMSTRONG pointed out that the section will add a big fiscal
note to the bill.
CHAIRMAN ROKEBERG said the rational for the enforcement provisions
is that they can't get the Department of Law to do anything.
Number 1049
REPRESENTATIVE COWDERY questioned the bonding requirement on page
14, lines 13 through 21.
CHAIRMAN ROKEBERG indicated that section will be deleted.
Number 1132
REPRESENTATIVE COWDERY referred the committee to the section
titled, "Exceptions" on page 22, line 30.
CHAIRMAN ROKEBERG interrupted by saying that Section 36 will also
be deleted.
REPRESENTATIVE COWDERY questioned whether under the "Exceptions"
section, the provision, "a person who is not licensed under this
chapter..." was pertinent. He questioned the meaning of the
wording, "(4) a public official in the conduct of official duties;"
on page 23, line 10.
CHAIRMAN ROKEBERG said it means that you can auction off a
foreclosed house. He said he assumes that is what the intent is.
Number 1312
REPRESENTATIVE RYAN read from (9), subparagraph (A), on page 23,
"as a vocation;".
CHAIRMAN ROKEBERG said the exemption under this permit does not
apply to a person who performs a vocation. He said it is sort of
a double negative.
Number 1512
CHAIRMAN ROKEBERG said, "What we should do is delete that one
portion under 161, that front one on page 6 about collecting rent.
Go back and look at collecting rent under what property management
- how that's defined. And then put the exemption in there for the
employee or the debt collector."
MS. ARMSTRONG said it would be an employee of the licensee.
CHAIRMAN ROKEBERG agreed and said, "and/or a..."
REPRESENTATIVE RYAN said to collect somebody else's debt, you have
to be licensed.
Number 1607
REPRESENTATIVE COWDERY referred to wording page 24, line 12, "a
resident manager", and asked if it is redundant with page 23, line
28.
CHAIRMAN ROKEBERG said it looks like it to him.
Number 1730
REPRESENTATIVE COWDERY referred to page 24, line 13, relating to
discrimination against stepchildren.
CHAIRMAN ROKEBERG interrupted and asked if the committee agrees it
should be included.
REPRESENTATIVE COWDERY asked how you can list all relatives.
CHAIRMAN ROKEBERG said he thinks niece, nephew, aunts and uncle
should be deleted and add stepchildren.
REPRESENTATIVE COWDERY said it should be family related.
CHAIRMAN ROKEBERG asked if aunts and uncles should be included.
REPRESENTATIVE COWDERY asked if he could manage for his great
granddaughter.
CHAIRMAN ROKEBERG said Representative Cowdery could deed it to his
great granddaughter and manage for her. He asked if nephews and
nieces goes too far.
AN UNIDENTIFIED SPEAKER suggested they be included.
REPRESENTATIVE COWDERY agreed.
Number 1206
REPRESENTATIVE RYAN suggested using the wording "extended family."
CHAIRMAN ROKEBERG said Ms. Armstrong handed him a note and, for the
record, that the committee did take out nieces, nephews, et cetera.
REPRESENTATIVE RYAN suggested using "extended family to a second
generation."
MS. ARMSTRONG suggested using "and step relationships," which would
cover the whole family.
Number 2315
REPRESENTATIVE COWDERY referred to page 25, line 6, subsection (4),
and said it talks about contiguous property owned by the same
owner. He said, "Say I'm a resident manger for property on `B'
street where I live, does this bar me from -- I think it does, also
managing property for the same owner on `L' street."
CHAIRMAN ROKEBERG said he wouldn't be a resident manager and would
be barred from doing that. He said there should be another
resident manager. Chairman Rokeberg said if there was a ten-plex
on one side of the street and a ten-plex on the other side of the
street, they wouldn't be contiguous. Chairman Rokeberg said the
way the bill is drafted, he couldn't do it.
Number 2532
MS. ARMSTRONG said, "A resident manager means a person who resides
on rented or leased property or on contiguous property owned by the
same owner, manages the property for their benefit and is either
employed by the owner or contracts with him."
CHAIRMAN ROKEBERG said there is a definition of "adjacent" under
the state procurement code where you actually have a building
across the street from another building. He informed the committee
the definition of "resident manager" is being expanded.
MS. ARMSTRONG said they are actually fine tuning it. It doesn't
change anything.
REPRESENTATIVE RYAN asked a question regarding community
associations. [Note: The question was indiscernible as
Representative Ryan was not close to the microphone.]
Number 2742
CHAIRMAN ROKEBERG said a resident manager does not manage a
community association. He noted "property management" is defined
on page 25, line 21. "Community association management" is defined
on page 25, line 12. He said "real estate transaction" is defined
on page 25, line 28.
Number 2847
MS. ARMSTRONG said property management is managing property - an
off-site manager. A resident manager is a manager who is on-site.
CHAIRMAN ROKEBERG said he can see a situation where there is one
building on one side of the street and one building on the other
side of the street and there would be one resident manager.
MS. ARMSTRONG said if you have a complex that covers a whole area,
the new definition allows the person to be able to manage the whole
complex even though there is a street in between.
Number 2933
CHAIRMAN ROKEBERG said he would either delete "contiguous property"
or add "adjacent."
MS. ARMSTRONG indicated she would have the drafter of the bill
check into what it means.
Number 3113
CHAIRMAN ROKEBERG referred to page 4 of the information from Ms.
Oakley regarding listings and management contracts and said there
was an agency task force that was trying to create a whole new
scheme called, "personal service contracts." He said the term
"personal service contracts" raised ire within the real estate
community that they wanted to delete the term and insert
"listings," which is already defined in statute. He said Mr.
Johnson brought up the problem with the term "listing," but it is
just wordsmithing.
CHAIRMAN ROKEBERG said, "What a lot of this has to do with, very
briefly, is a whole -- the state Real Estate Commission passed a
regulation this summer about the disclosure of parties to
compensation in a transaction. And I've looked into this deeply
and concluded that the commission made a grievous error in the
structure of that. However, what they were trying to accomplish is
something needed and I think it's needed in statute -- and what
that has to do with -- it has nothing to do with the refrigerator
and making a deal or a deal between a broker and a broker or a
broker and a seller or buyer -- what it has to do with is the
relocation companies and the extortion there of and the requirement
by relocation companies of real estate agents and brokers to pay
substantial dollars which have gone from a low of 10 percent,
historically, up to as much as 35 plus percent. And also what's
called the affinity kickbacks and the referral fees paid to
nonlicensed consumers which are members of affinity groups. This
is a national phenomenon."
Number 3620
REPRESENTATIVE RYAN referred to page 2, line 2, of the memorandum
and said the word "salesman" has been deleted and "salesperson" was
inserted. He said he had some business cards printed specifically
to say "real estate salesman." He asked why he would have to
become salesperson.
CHAIRMAN ROKEBERG indicated he would like to change the word to
"licensee."
Number 3935
CHAIRMAN ROKEBERG thanked the committee members for their
participation. He indicated the bill would be heard again at a
later date.
ADJOURNMENT
Number 3940
CHAIRMAN ROKEBERG adjourned the House Labor and Commerce Committee
meeting at 3:52 p.m.
| Document Name | Date/Time | Subjects |
|---|