Legislature(2007 - 2008)CAPITOL 17
02/11/2008 03:00 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB357 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 357 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
February 11, 2008
3:03 p.m.
MEMBERS PRESENT
Representative Kurt Olson, Chair
Representative Mark Neuman, Vice Chair
Representative Carl Gatto
Representative Gabrielle LeDoux
Representative Jay Ramras
Representative Robert L. "Bob" Buch
Representative Berta Gardner
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 357
"An Act requiring errors and omissions insurance for real estate
licensees; renaming the real estate surety fund as the real
estate recovery fund and relating to that fund, and redefining
the procedures and criteria used by the Real Estate Commission
to make an award from the fund to a person suffering a loss
caused by certain misconduct of real estate licensees; requiring
a real estate licensee to maintain an office in the state; and
providing for an effective date."
- HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 357
SHORT TITLE: CLAIMS AGAINST REAL ESTATE LICENSEES
SPONSOR(s): LABOR & COMMERCE BY REQUEST
02/06/08 (H) READ THE FIRST TIME - REFERRALS
02/06/08 (H) L&C, FIN
02/11/08 (H) L&C AT 3:00 PM CAPITOL 17
WITNESS REGISTER
Eleanor Wolfe, Staff
to Representative Kurt Olson
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 357 on behalf of the prime
sponsor, Representative Kurt Olson.
DAVE FEEKAN, Legislative Chair
Alaska Association of Realtors
Kenai, Alaska
POSITION STATEMENT: Testified and answered questions on HB 357.
JENNIFER STRICKLER, Chief
Professional Licensing
Juneau Office
Division of Corporations, Business, and Professional Licensing
Department of Commerce, Community, & Economic Development
(DCCED)
Juneau, Alaska
POSITION STATEMENT: Testified and answered questions on HB 357.
JEFFREY TROUTT, Deputy Director
Juneau Office
Division of Insurance
Department of Commerce, Community, & Economic Development
(DCCED)
Juneau, Alaska
POSITION STATEMENT: Testified and answered questions on HB 357.
SHARON WALSH, Administrator
Real Estate Commission
Anchorage Office
Division of Corporations, Business, and Professional Licensing
Department of Commerce, Community, & Economic Development
(DCCED)
Anchorage, Alaska
POSITION STATEMENT: Answered questions on HB 357.
ACTION NARRATIVE
CHAIR KURT OLSON called the House Labor and Commerce Standing
Committee meeting to order at 3:03:45 PM. Representatives Buch,
Gardner, Neuman, and Olson were present at the call to order.
Representatives Gatto, LeDoux, and Ramras arrived as the meeting
was in progress.
HB 357-CLAIMS AGAINST REAL ESTATE LICENSEES
3:03:59 PM
CHAIR OLSON announced that the only order of business would be
HOUSE BILL NO. 357, "An Act requiring errors and omissions
insurance for real estate licensees; renaming the real estate
surety fund as the real estate recovery fund and relating to
that fund, and redefining the procedures and criteria used by
the Real Estate Commission to make an award from the fund to a
person suffering a loss caused by certain misconduct of real
estate licensees; requiring a real estate licensee to maintain
an office in the state; and providing for an effective date."
ELEANOR WOLFE, Staff to Representative Kurt Olson, Alaska State
Legislature, said that HB 357 was introduced at the request of
the Alaska Association of Realtors. She introduced Dave Feekan
of the Alaska Association of Realtors to present HB 357 in more
detail.
DAVE FEEKAN, Legislative Chair, Alaska Association of Realtors,
explained that HB 357 would enact mandatory errors and omissions
insurance (E&O) for all real estate licensees and brokers. This
bill would also change the current surety fund to a recovery
fund. The E&O insurance that would be required is similar to
professional liability insurance in that it covers clients in
the event of honest mistakes and negligent errors in a real
estate transaction. Currently, voluntary E&O coverage covers
licensees and brokers that have purchased insurance. In all
other cases, claims are made against the surety fund
administered by the Alaska Real Estate Commission (AREC). The
surety fund system has been in place for 25 years with little
modification, except that in 2004 the limit for claims increased
from $10,000 to $15,000. The real estate industry and the
Legislative Budget and Audit Division (LB&A) have analyzed how
the surety fund system works. The $15,000 limit needs to be
increased due to the cost of repairs that have risen along with
property values, he opined. Additionally, the high cost of
administrative hearings, along with legal expenses for brokers
and licensees, has resulted in many frivolous claims being
settled unnecessarily. The purpose of HB 357 is to help protect
the public by requiring every real estate transaction be
covered, not just those instances in which the agent has
voluntarily purchased E&O insurance.
3:06:42 PM
MR. FEEKAN explained that HB 357 would require the Alaska Real
Estate Commission (AREC) to make certain that E&O insurance is
available at a reasonable rate to all licensees. Licensees can
obtain their own insurance so long as the E&O insurance meets
the minimum threshold amount set by the commission. Errors and
omissions insurance does not provide protection against criminal
acts such as fraud or conversion of trust. Thus, HB 357 would
convert the existing surety fund to a recovery fund and require
claims be processed through the recovery fund. According to a
2004 National Association of Realtors study, 13 states have
already adopted mandatory E&O insurance with a 68 percent
approval by licensees and a 89 percent approval of regulators in
those states.
3:07:14 PM
MR. FEEKAN, in response to Representative Neuman, answered that
approximately 25 percent of the brokerage firms do not currently
have E&O insurance. The average cost of E&O insurance premiums
written on a per broker basis range from $1,000 to $2,000 per
licensee, he said. The reason some firms do not carry the E&O
insurance is because it is expensive. Of the 13 states that
require mandatory E&O insurance, most set limits for insurance
coverage at $100,000 with a $1,000 deductible. Premiums range
from $135 to $243 per year for a $100,000 policy. His brokerage
firm pays $2,000 for $1,000,000 insurance policy coverage for
its policy, which is comparable to paying $200 for $100,000 in
coverage, he noted. One company provides the E&O insurance to
all 13 states surveyed. Brokers can upgrade their policies to
provide coverage for other items such as protection from
discrimination suits. The primary goal of mandatory E&O
insurance is to ensure that all licensees are insured to provide
consumer protection.
3:10:27 PM
MR. FEEKAN, in response to Chair Olson, answered that adding
items to the E&O insurance policy generally increases the
deductible amount.
3:11:23 PM
MR. FEEKAN, in response to Representative Gardner, explained
that insurance is written to the broker. This bill would allow
licensees to form a group and purchase a group policy for E&O
insurance in order to reduce the premium. This bill still would
allow an individual licensee the option of purchasing his/her
own policy. In further response to Representative Gardner, Mr.
Feekan noted that the terminology has been changed from "agent"
to "licensee". This bill was patterned after Idaho's law. In
Idaho, 25 percent of the brokers have decided to maintain their
current E&O insurance policies, he noted. Under HB 357, brokers
could continue with their insurance and provide a certificate of
insurance for any licensee in the firm so that all licensees
within the brokerage firm are covered.
3:12:50 PM
REPRESENTATIVE GARDNER inquired as to whether HB 357 would shift
the burden to purchase and maintain insurance from the brokerage
firm to the individual licensee.
MR. FEEKAN said that currently, brokers acquire the E&O
insurance, but pass the cost on to the licensees as part of
their monthly realtor fees. He reported that most of the
brokers he polled advised they would not use the proposed AREC
E&O insurance unless the policy offers $1 million in insurance
coverage. He explained that the difference between a surety
fund and a recovery fund is that a surety fund does not cover
acts of crime such as fraud, deceit, or misrepresentation. The
most common conversion of trust claim is due to broker theft
from the trust account, he noted. The surety fund requires the
parties submit to an administrative hearing process. Alaska
currently has a high number of frivolous claims in the process
of administrative hearings. Other states have gone to a
recovery fund for similar reasons, he opined. Under HB 357, an
individual must have a court ordered judgment in order to make a
claim for reimbursement from the recovery fund which would
eliminate administrative hearings for those matters, he said.
The bill also requires that the judgment must be uncollectible,
which means the court found the action constituted a crime.
Finally, in order to qualify to use the recovery fund under HB
357, the person must be licensed by the board as a real estate
licensee, which means there was a license violation involved.
3:15:17 PM
REPRESENTATIVE LEDOUX noted her agreement that the $15,000 claim
limit is set too low in proposed AS 08.88.465(a). She inquired
as to whether the amount in the surety or recovery fund should
also be increased.
MR. FEEKAN answered that the majority of claims are for property
conditions and not fraud, deceit, or conversion of trust so the
$100,000 limit is adequate to cover most claims. He related
that most claims average from $7,000-$10,000 for items such as a
leaky roof that had not been disclosed. The surety fund covers
issues of conversion of trust such as not refunding security
deposits, or theft from the trust account, which typically fall
well within the $15,000 limit. He offered that no acts of fraud
were discovered in his research, although there could be some
cases.
3:17:19 PM
REPRESENTATIVE LEDOUX posed a scenario in which a broker states
that a roof was inspected, but the buyer later discovers that
the roof leaks. She inquired as to whether that would
constitute fraud.
MR. FEEKAN answered that Representative LeDoux's scenario might
constitute a case of fraud against the licensee, but in real
estate transactions those types of claims constitute negligence,
which is covered under E&O insurance.
3:18:10 PM
REPRESENTATIVE LEDOUX maintained her concern that the
surety/recovery fund limits are set too low in HB 357.
MR. FEEKAN answered that the surety fund is funded from
licensees' fees. Thus, increasing the fund limits would also
increase the real estate licensees' fees to a threshold
potentially not affordable by a high percentage of them, he
opined.
CHAIR OLSON offered that typically a new program uses an average
cost as a starting point. He offered that in the case of the
recovery fund proposed in HB 357, the claims have generally been
considerably less than $15,000 for the surety fund. If that
amount isn't adequate to fund the recovery fund, [the
legislature] could increase the limit, he offered.
3:19:38 PM
MR. FEEKAN, in response to Representative LeDoux, answered that
the average surety fund claim has been substantially below
$10,000, but occasionally a claim might reach $15,000. He
further explained that a surety fund does not provide a form of
insurance for the licensee.
REPRESENTATIVE LEDOUX inquired as to whether a surety fund could
get insured if claims were to exceed $15,000.
CHAIR OLSON offered that HB 357 sets up an E&O insurance
program, but the recovery fund is a collateral program within
the bill.
REPRESENTATIVE LEDOUX maintained her concern that since $15,000
is currently not adequate to cover claims in the surety fund,
that HB 357 will not rectify the problem.
MR. FEEKAN opined that the insurance industry believes requiring
mandatory E&O insurance will remedy many of the issues facing it
since most claims are made against the E&O insurance. Thus,
requiring a minimum of $100,000 E&O insurance, as other states
have done, should remedy the matter. Another approach that the
insurance industry could take would be to increase license fees
in order to increase the surety/recovery fund. He opined that
raising the license fees would cost real estate licensees
considerably more than the proposed $200 premium annual fee
proposed in HB 357.
3:22:37 PM
REPRESENTATIVE NEUMAN referred to a committee packet handout
titled, "Mandated Program Chart as of January 1, 2008" and
inquired as to the amount projected for Alaska as compared to
the other states listed.
MR. FEEKAN reiterated the claim limit for most states is set at
$100,000 per claim. The aggregate claim amount varies from
$300,000 to $500,000, except that Kentucky's aggregate is set at
$1 million. Alaska's aggregate would likely be set at $300,000
to $500,000, he opined. He referred to the column labeled
"Deductible" and said that $1,000 damages means the deductible
is set at $1,000 and "0 defense" means there is a zero-dollar
defense. In further response to Representative Neuman, Mr.
Feekan pointed out that an individual licensee's premium would
cost approximately $200 per year and the broker's premiums would
cost $2,000 per year for $1 million of insurance policy
coverage.
REPRESENTATIVE NEUMAN offered his understanding that an agent
would pay a $200 annual premium to cover unexpected problems
that may arise in a real estate transaction. If an issue arose
that the agent did not know existed, the repair would be covered
under the agent's E&O insurance, he said.
MR. FEEKAN noted his agreement.
3:25:11 PM
REPRESENTATIVE GATTO inquired as to whether the agent is
responsible for repairs such as a cracked foundation if the
owner hires a home inspector whose report concludes that the
foundation is sound.
MR. FEEKAN answered that the licensee or broker would have to
have had knowledge of the cracked foundation. He noted that E&O
insurance covers items that the licensee is not aware or matters
that the licensee should have known. In further response to
Representative Gatto, Mr. Feekan noted that Alaska law does not
require real estate agents to perform discovery so it would not
be the agent's duty to find the cracked foundation.
CHAIR OLSON pointed out that generally an agent will refer
owners to a list of home inspectors and the owner can select one
to perform the work.
MR. FEEKAN noted his agreement and added that brokers and
licensees often recommend home inspectors and engineers be
consulted to provide their expertise to the buyer or seller.
3:27:27 PM
REPRESENTATIVE GARDNER inquired as to whether the shift to a
recovery fund, which would require consumers that have been
defrauded to seek a court judgment, will also create additional
expenses for the consumer.
MR. FEEKAN answered that a consumer is not required to go to
court. However, the real estate licensee is required under the
E&O policy to notify the E&O insurance company when a client has
a problem. The process used is that the client will notify the
broker when he/she discovers a problem and the broker notifies
the E&O company. The E&O investigator would then investigate
the claim. However, the insurance company will often attempt to
settle the claim outside of court. In further response to
Representative Gardner, Mr. Feekan noted that most E&O claims
that consumers consider to be fraud are actually considered
negligence in the real estate industry and are covered under the
E&O policy. "Fraud is something extremely difficult to prove",
he said.
CHAIR OLSON offered that oftentimes it is easier for an
insurance company to settle nuisance claims out of court rather
than incur legal expenses.
3:29:59 PM
REPRESENTATIVE GARDNER offered her understanding that the
difference between the surety fund and the proposed recovery
fund is that a recovery fund requires an uncollectible court
judgment that has not been covered by E&O insurance.
MR. FEEKAN responded that many claims allege that a criminal act
like fraud has been committed in order to get the claim heard
before an administrative law judge. The broker prevails most of
the time when they oppose the claim, he opined. He further
opined that the surety fund rarely pays out. Thus, to require
claims to be uncollectible judgments tends to eliminate
frivolous lawsuits.
REPRESENTATIVE GARDNER asked whether the proposed solution would
add cost and delay to the consumer with a legitimate claim.
MR. FEEKAN answered that the claim process that the E&O company
uses is to first investigate the case and determine that the
claim is not covered by the policy since the act constitutes
fraud.
3:31:53 PM
MR. FEEKAN, in response to Representative Gardner, advised that
the consumer is made aware from the outset that E&O insurance
does not cover claims based on fraud. In further response to
Representative Gardner, Mr. Feekan reaffirmed his understanding
that the consumer would get a copy of the denial. He offered
that the E&O insurance company could decide to pay the claim and
then attempt to collect the claim from the licensee.
CHAIR OLSON confirmed that the consumer would receive a copy of
the denial in writing from the E&O insurance company because it
would constitute bad faith on the part of the insurance company
if it did not do so.
MR. FEEKAN noted his agreement that all parties would be
notified of the outcome on a claim.
3:33:03 PM
MR. FEEKAN, in response to Representative Neuman, answered that
the findings and recommendations from the Division of
Legislative Budget and Audit (LB&A) from the audit of the AREC
were incorporated into HB 357. In further response to
Representative Neuman, Mr. Feekan offered that the last audit
conducted by LB&A in 2004 on the AREC made recommendations which
were carried forward to the most recent audit of the AREC.
Therefore, the industry is attempting to address the issues
raised by LB&A in HB 357.
3:34:10 PM
REPRESENTATIVE LEDOUX expressed concern that a jury trial
process would take longer to complete than an administrative
hearing.
MR. FEEKAN answered that a claim against the surety fund uses
the same process of hiring attorneys in an administrative
hearing as a jury trial would.
REPRESENTATIVE LEDOUX maintained her concern, based on her
experience, that a trial would take longer from inception to
judgment than an administrative hearing. She inquired as to the
length of time for an administrative hearing involving a surety
fund dispute.
MR. FEEKAN responded that the process is required to be
completed in 120 days.
REPRESENTATIVE LEDOUX opined that 120 days is a "drop in the
bucket" in terms of a jury trial.
MR. FEEKAN noted that attorneys he polled who practice real
estate law said the reason that they do not use the surety fund
as a remedy is due to the limit of $15,000 coverage; the damages
are generally higher than the limit and there is no settlement
process. The purpose of the surety fund is for fraud and
deceit, he noted. He further opined that most attorneys prefer
to file an E&O insurance claim since legitimate claims generally
settle out of court.
3:37:11 PM
REPRESENTATIVE LEDOUX noted that there is a difference between
legitimate claims and small claims actions. She pointed out
that it is possible to be defrauded for an amount ranging from
$5,000 to $10,000, which may appear to be a nuisance suit, but
actually is legitimate, but of a small nature. She opined that
a court case ranging from $5,000 to $10,000 could take up to two
years to obtain a judgment. Once the court action is completed,
the parties would still need to file with the surety fund.
3:37:56 PM
REPRESENTATIVE GARDNER pointed out that the proposed statute
requires that a case must be filed within two years of the
knowledge of the fraud.
MR. FEEKAN noted his agreement that the surety fund or recovery
fund both would have a two-year statute of limitations. He said
he could not recollect any instance in which a broker took a
case to small claims court. Instead, these cases are claims
brought against the E&O insurance company, he specified.
3:38:48 PM
MR. FEEKAN, in response to Representative LeDoux, agreed that
there are numerous cases brought against the surety fund that
claim fraud. However, the majority of these cases stem from
problems with the property that were not disclosed by the
seller.
3:39:47 PM
JENNIFER STRICKLER, Chief, Professional Licensing, Division of
Corporations, Business, and Professional Licensing, Juneau
Office, Department of Commerce, Community, & Economic
Development (DCCED), said that the division generally supports
reform of the surety fund and concurs with the recommendation of
the September 7, 2007, LB&A audit that the AREC should be
extended until 2016. The division also agrees that certain
aspects of the surety fund should be changed. This bill, as
currently drafted, would establish mandatory E&O insurance for
all real estate licensees. The Division of Corporations,
Business, and Professional Licensing has worked with the
Division of Insurance on the issues of requiring mandatory E&O
coverage for real estate licensees and recommends that HB 357 be
amended.
MS. STRICKLER referred to proposed AS 08.88.071(a)(11), which
read:
establish the minimum terms and conditions of errors
and omissions coverage required by licensees to comply
with the insurance requirements of AS 08.88.172,
including coverage requirements, limits of coverage,
deductible amounts, and limitations on cancellation
terms;
MS. STRICKLER expressed concern that AREC is a regulatory
licensing entity not equipped to establish insurance coverage.
Instead, she offered that the Division of Insurance would be a
more appropriate entity. Other professional licensing programs
that require insurance coverage have parameters identified in
statute, such as construction contractors. Ms. Strickler
pointed out that proposed AS 08.88.071(a)(12) would require the
AREC to procure and make available E&O insurance policies to
licensees through the bidding process. However, the AREC may
not be the appropriate entity to procure and administer coverage
and the AREC should not be engaged in promoting the sales of
insurance. Proposed AS 08.88.172(c) would allow an individual
to independently obtain E&O insurance coverage that the division
deems is appropriate. However, the licensees E&O insurance
coverage should not be subject to the parameters established by
AREC. She pointed out that HB 357 does not provide any
alternative for licensees who are unable to obtain E&O
insurance. Further, she questioned whether the recovery fund
should be made available to those unable to obtain E&O
insurance. She acknowledged that this type of system is
currently used by other states. Thus, the division has
contacted Idaho with respect to the program. She offered to
work with industry and the legislature to address the concerns
the division has with HB 357. In response to a request by
Representative Gardner, Ms. Strickler offered to make her
written testimony available to committee members.
3:43:30 PM
JEFFREY TROUTT, Deputy Director, Juneau Office, Division of
Insurance, Department of Commerce, Community, & Economic
Development (DCCED), for the record, disclosed that he is
married to a realtor. He related that the division has no
objection to mandatory E&O for licensees. However, the division
is concerned that mandatory E&O insurance may not be available
at the rate stated for premiums of $200 annually. The division
would like the opportunity to examine E&O policy rates and
whether the proposed policy limit of $100,000 is set too low.
He noted that the remedy for repairs such as a cracked
foundation may be more costly than the limit. The division has
concern about the availability of an insurance carrier to
provide affordable E&O insurance. Even if a company were to
offer E&O insurance, the division is concerned whether that
company will always do business in the state. He pointed out
that the division can solicit for companies to provide the E&O
insurance, but the division cannot force a company to provide
E&O insurance to all licensees. If mandatory E&O insurance
isn't affordable, a real estate licensee may not be able to
renew his/her real estate license. He offered his understanding
that an amendment may be under consideration that will address
that issue. He questioned whether the AREC would also need to
obtain a license in order to procure insurance. He closed by
noting the division's intent to perform due diligence and garner
enough information to provide answers to some of the issues the
division currently has with HB 357.
3:48:33 PM
REPRESENTATIVE GARDNER inquired as to why a real estate broker
or licensee is required to have a principal office in the state.
CHAIR OLSON answered that the provision is in HB 357 so that
out-of-state firms will not obtain licensure in the state simply
as it would cost less to set up a real estate business or
because the agents can no longer work in their home state [due
to disciplinary action taken].
REPRESENTATIVE GARDNER further inquired as to whether a real
estate licensee must work under a broker since the requirement
for licensure is mandatory insurance.
MR. TROUTT answered that under the bill, a real estate agent
would be required to obtain E&O insurance. He related that the
prospective realtor could begin work in a brokerage firm to
become familiar with the real estate laws. He/she could
concurrently apply for E&O insurance while his/her real estate
application is processed.
3:51:07 PM
REPRESENTATIVE GARDNER expressed concern that a person would be
prevented from selling real estate if he/she was denied the E&O
insurance.
MR. TROUTT noted his agreement. He offered that the Division of
Insurance shares the same concern with HB 357.
3:51:37 PM
REPRESENTATIVE GATTO offered his understanding that mobile homes
are considered personal property, but not real property. The
LB&A audit findings and recommendations suggested mobile home
transactions should be eligible under the Real Estate Surety
Fund (RESF).
MS. STRICKLER related that the AREC discussed that specific LB&A
recommendation. The AREC maintains that mobile homes are
personal property. She acknowledged that the AREC and division
are at odds with that specific LB&A recommendation.
3:52:23 PM
SHARON WALSH, Administrator, AREC Anchorage Office, Division of
Corporations, Business, and Professional Licensing, Department
of Commerce, Community, & Economic Development (DCCED), said
that the AREC maintains its position that mobile homes are
personal property and disagrees with the LBA recommendation that
mobile homes be subject to RESF claims and be considered real
property.
REPRESENTATIVE GATTO noted his agreement that mobile homes are
personal property. However, he pointed out that the LB&A audit
recommends amending statutes to specify mobile home transactions
be subject to RESF claims.
MR. TROUTT inquired as to whether a mobile home attached to a
foundation is considered real property.
MR. FEEKAN answered that mobile home transactions do not require
the involvement of licensed real estate agents unless the sale
includes real property.
REPRESENTATIVE NEUMAN agreed that sometimes mobile homes are
located on a parcel of land connected to water and sewer.
3:55:35 PM
REPRESENTATIVE LEDOUX inquired as to whether an office with no
staff constitutes a principal office.
MR. TROUTT opined that a principal office for real estate is not
in operation unless there is staff.
REPRESENTATIVE LEDOUX further inquired as to the rationale
behind requiring a physical office in the state. She pointed
out that a Washington lawyer is eligible to practice in Alaska
so long as he/she passes the bar examination and meets the other
requirements for licensure.
MR. FEEKAN answered that a real estate broker must have a
physical office in the state and not a cyber office. The AREC
has established requirements for recordkeeping, trust accounts,
and most statutes [for other professions] require a physical
office in the state in order to operate, he offered. In further
response to Representative LeDoux, Mr. Feekan answered that an
office provides a physical place for the public to meet with the
licensed broker or realtor.
REPRESENTATIVE GATTO pointed out that otherwise someone could be
offering a real estate transaction, but be physically located in
other countries such as Pakistan.
3:58:31 PM
CHAIR OLSON, in response to Representative LeDoux, offered that
one added protection to the public is that lawyers must be
admitted to the bar.
MR. FEEKAN specified that real estate brokers that employ
licensees must have a "brick and stone facility" in the state in
order for the broker to operate, the public to visit, and the
AREC to inspect records.
3:59:54 PM
MR. TROUTT speculated that an attorney is subject to the
jurisdiction of the court in Alaska, but single real estate
transactions may not require enough personal contact to warrant
personal jurisdiction. However, a building would provide a more
solid jurisdictional foundation.
REPRESENTATIVE LEDOUX maintained her concern with the
requirement in HB 357 for a broker to maintain a physical office
in the state.
MR. FEEKAN, in response to Representative Gardner, answered that
a person could obtain a loan on a mobile home, but could not
obtain a mortgage on a mobile home unless the transaction was
for real property.
[HB 357 was held over.]
4:01:33 PM
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
4:01 p.m.
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