Legislature(2005 - 2006)HOUSE FINANCE 519
04/13/2005 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB32 | |
| HB54 | |
| HB182 | |
| HB169 | |
| HB54 | |
| HB98 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 182 | TELECONFERENCED | |
| + | HB 169 | TELECONFERENCED | |
| + | HB 98 | TELECONFERENCED | |
| + | HB 27 | TELECONFERENCED | |
| = | HB 32 | ||
| + | HB 54 | TELECONFERENCED | |
HOUSE BILL NO. 169
"An Act relating to the educational requirements for
certain real estate brokers, associate brokers, and
salespersons with new or suspended licenses; and
allowing real estate brokers to hire certain experts to
review real estate transactions; and providing for an
effective date."
Representative Rokeberg related that HB 169 provides for 20
hours of post-licensing education for realtors. It also
provides that lawyers may assist brokers in supervising all
transactions.
2:47:20 PM
PEGGY ANN MCCONNOCHIE, ALASKA ASSOCIATION OF REALTORS,
explained that 18 states currently require post-licensing
education. This bill would reduce the number of claims to
the real estate commission. She explained that realtor
associations are in favor of this bill. It will provide
additional consumer protection by having well-trained
realtors. The effective date is timely.
Ms. McConnochie explained that the supervision aspect of the
bill is aimed at the larger brokers in the state who
supervise many transactions per month. They need to be away
to make sure that documents are properly filed prior to
closing. This provision allows a broker to hire a real
estate attorney to review transactions and will help to
better serve the public. She reported that this aspect is
missing from HB 29.
Representative Croft commented that the continuing education
portion of the bill is fine. He voiced concerns about
Section 14, the review of transactions. Ms. McConnochie
replied that this section makes it clear that a large broker
can employ an attorney and have no conflict in statute.
Representative Croft asked who the attorney represents. Ms.
McConnochie replied the broker, who is ultimately
responsible for all decisions. Representative Croft worried
that there is a sense that the attorney is looking out for
the buyer's interests when he or she is only looking out for
the broker's interests. Ms. McConnochie replied that there
would not be the opportunity to have that false perception
because the attorneys would never meet the buyers.
Representative Croft maintained that the broker always has
an ability to hire an attorney to look at the documents. He
opined that the attorney is only looking after the broker's
interests. Ms. McConnochie restated the purpose of the
review. There is no implication that the lawyer is partial
to the buyer, seller, landlord, or tenant.
2:53:13 PM
Representative Foster inquired if the post-licensing
education would require a realtor in Nome to buy an airplane
ticket to the class. Ms. McConnochie replied that that
person could take the class by correspondence.
2:54:11 PM
BRAD FLEUTSCH, ALASKA REAL ESTATE COMMISSION, stated support
for the continuing education elements of the bill. He noted
that there is a problem with Section 14. There is no
requirement in the bill that the attorney be licensed in
Alaska or have knowledge of real estate law. The Alaska
Real Estate Commission has no ability to supervise such a
position. He explained that the completed file has all of
the forms and legal requirements, and it is the last
responsibility the broker has to the client. He requested
to have Section 14 dropped or fixed.
2:57:08 PM
Representative Hawker recalled that he has often sought a
non-Alaskan lawyer with good results. Mr. Fleutsch stressed
that it is Alaska real estate law that is being reviewed.
Representative Hawker asked if an attorney practicing in
Alaska has to be licensed to practice real estate law. Mr.
Fleutsch suggested amending Section 14 to say "licensed
Alaska attorney". Representative Hawker said that is
inherent in statute. Mr. Fleutsch offered that it should
not be limited to attorneys, but accountants could also be
included. The purpose of this aspect of HB 169 is just to
review the file, which the Real Estate Commission feels is
very important.
Representative Kelly asked if the attorney does anything
that a broker does not do. Mr. Fleutsch replied that he
does not know. Representative Kelly suggested language that
would include an associate broker or an attorney acting as
an associate broker. He shared concerns similar to
Representative Croft's.
Representative Croft suggested that the broker could hire an
accountant or other professionals. He questioned the need
for this part of the bill. He said that Section 14 is
either unnecessary or unclear.
3:02:11 PM
Representative Hawker read from Section 14, "The broker may
pay the attorney or associated broker from a fee,
commission, or other compensation received by the broker in
a real estate transaction payment." He asked if that is
prohibited in statute, as covered in Section 15.
Representative Rokeberg replied that is true. He opined
that this provision is needed in statute for clarification.
Currently under Chapter 8, lawyers can sell real estate. He
pointed out that the Real Estate Commission has no power to
discipline attorneys, and emphasized that the broker is
still responsible for all transactions. There are no
restrictions on a large brokerage house or a commercial real
estate brokerage house to not use an attorney to supervise
the actual documents of a transaction. That needs to be
clear. He emphasized that the bill should be passed in its
current state.
3:06:44 PM
BARBARA RAMSEY, CHAIR, ALASKA REAL ESTATE COMMISSION,
ANCHORAGE, (via teleconference) testified in support of the
legislation, but expressed concern with page 8, lines 19-24.
She recommended the deletion of Section 14. She stressed
that the Commission does not want to regulate attorneys.
3:10:01 PM
Representative Kelly asked if Ms. Ramsey is saying that the
current statute provides that a broker could hire assistant
brokers and retain attorneys to help review these files, and
those costs are permitted to be taken by the broker from
transaction fees.
Ms. Ramsey clarified that an associate broker is already
allowed in regulations - 12AAC.64.125, Section B. She
pointed out that the provision regarding attorneys is not
currently allowed. She opined that they should be paid as a
business expense, as an employee.
3:11:59 PM
Representative Rokeberg spoke in support of retaining
Section 14.
3:13:38 PM
Representative Croft noted concerns by the Real Estate
Commission. He argued that any profession could be hired to
look up documents, but its different when they get a portion
of the fee because then they have an interest in the
transaction. That is why real estate law is so specific
about who gets the fee.
3:14:44 PM
Representative Rokeberg maintained that Amendment 1 would
conform the legislation. There is no intent for a "kick
back".
Co-Chair Meyer MOVED to ADOPT Amendment 1:
Page 9, line 26, following "date":
Insert "of secs. 1-11 and 16"
Page 9, line 29, following "date":
Insert "of secs. 1-11 and 16"
Page 10, line 1, following "date":
Insert "of secs. 1-11 and 16"
Co-Chair Chenault OBJECTED for the purpose of discussion.
Ms. Nobrega explained that the amendment would conform the
effective dates to the appropriate sections.
Co-Chair Chenault REMOVED his OBJECTION to adopt Amendment
1. There being NO OBJECTION, Amendment 1 was adopted.
3:17:54 PM
Representative Croft MOVED to ADOPT Conceptual Amendment 2:
Delete section 14, page 8, lines 14 - 25.
Representative Rokeberg noted that some members of the
Commission disagree with the concern over section 14. The
issue is whether the Commission can properly supervise the
lawyers. He did not agree with these concerns. He
maintained that there is no formal position of the
Commission.
3:18:32 PM
Representative Hawker OBJECTED for the purpose of
discussion. He referred to Ms. Ramsey's letter and disputed
her concerns. He concluded that her objections were
irrelevant to the issue at hand.
Representative Kelly questioned if the broker alone is
punished for infractions.
3:22:45 PM
Representative Rokeberg replied that is correct. The broker
is ultimately responsible.
Representative Croft responded that there ought to be some
power over the person that receives the fee. He concluded
that the Commission should have control over the lawyers or
the fee should be removed. He argued that the compensation
should not be based on "their saying yes".
3:25:36 PM
Representative Rokeberg directed the committee to page 8,
line 23, "received by the broker". He explained that the
broker receives the money and then allocates it to the
attorney or associate broker. Direct compensation from
commissions is not being given to the lawyer.
3:26:47 PM
Representative Weyhrauch questioned why Section 14 would be
necessary. The real estate broker may contract with and pay
an attorney to assist the broker in real estate
transactions. He observed applications of malpractice.
3:28:51 PM
Representative Croft pointed out that the attorney's pay
would be dependent on receiving a percentage of the broker's
commission. He reiterated his concerns.
Representative Weyhrauch maintained that attorneys would not
base their pay on a commission. Ms. Nobrega noted that
associate brokers and brokers are also dependent on receipt
of the commission.
Representative Weyhrauch stressed the importance of the
public's trust of attorneys.
3:31:12 PM
Ms. Ramsey agreed with remarks by Representative Croft. She
noted that the Real Estate Commission approved the pursuit
of legislation for post-licensing in March 4,2004. On
February 8, 2005, she received the first draft of HB 169.
She observed that the issue was first discussed on March
thth
15. On the 24 of March she sent a letter addressing
concerns to Representative Rokeberg. On April 4, she spoke
with Representative Rokeberg about her concerns. The state
association did not discuss the issue with the Commission,
the entity that must enforce the provision.
3:34:11 PM
Representative Rokeberg took exception to the objections.
Representative Kelly suggested that the last sentence be
dropped.
3:35:33 PM
Representative Croft WITHDREW Conceptual Amendment 2.
HB 169 was HELD for further consideration.
3:36:54 PM
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