Legislature(2003 - 2004)

04/27/2004 01:32 PM Senate L&C

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
     CSSSHB 29(L&C) - REAL PROPERTY TRANSACTIONS/LICENSEES                                                                    
                                                                                                                                
CHAIR CON BUNDE announced SCS SSCSHB 29(L&C) to be up for                                                                       
consideration. He noted that Amendment 1 (that was held over                                                                    
from a discussion on April 15) was up for consideration again.                                                                  
                                                                                                                                
                                                   23-LS0189\BA.4                                                               
                                                        Bannister                                                               
                                                                                                                                
                      A M E N D M E N T  1                                                                                    
                                                                                                                                
OFFERED IN THE SENATE                                                                                                           
     TO:  CSSSHB 29(JUD) am                                                                                                     
     Page 5, line 11:                                                                                                           
     Delete all material.                                                                                                       
     Insert "to imply a duty to                                                                                                 
               (1)  investigate                                                                                                 
                    (A)  a matter that the licensee has not                                                                     
          agreed to investigate; or                                                                                             
                    (B)  a matter that is not known by the                                                                      
          seller, prospective buyer, lessor, prospective lessee,                                                                
          or licensee; or                                                                                                       
               (2)  disclose, unless otherwise provided by law,                                                                 
     events that have occurred on the real estate that might                                                                    
     affect whether a person wants to buy or lease the real                                                                     
     estate."                                                                                                                   
                                                                                                                                
REPRESENTATIVE NORM ROKEBERG explained Amendment 1.                                                                             
                                                                                                                                
                                                                                                                                
     Amendment 1  amends the  language on  page 5,  line 11,                                                                    
     clarifying the duties of a  licensee as to whether they                                                                    
     have  a duty  to investigate.  The amendment  indicates                                                                    
     that  there's no  implied duty  to investigate  matters                                                                    
     that  the licensee  has not  agreed  to investigate  or                                                                    
     matters  not  known  by  the  licensee  or  the  buyer,                                                                    
     etc.....                                                                                                                   
                                                                                                                                
     The  subsection  (2)  provisions within  the  amendment                                                                    
     indicate  that  there's  no duty  to  disclose,  unless                                                                    
     otherwise  provided by  law, events  such  as [in  the]                                                                    
     disclosure  form, which  every seller  of real  estate,                                                                    
     whether they are represented by  a licensee or not, has                                                                    
     to make....                                                                                                                
                                                                                                                                
REPRESENTATIVE  ROKEBERG  said  this concerns  the  psychological                                                               
impairment section and can include  such things as illnesses like                                                               
AIDS or HIV, which is proscribed by federal law.                                                                                
                                                                                                                                
CHAIR BUNDE asked if a methamphetamine lab has to be disclosed.                                                                 
                                                                                                                                
REPRESENTATIVE  ROKEBERG  answered  that   it  does  have  to  be                                                               
disclosed.                                                                                                                      
                                                                                                                                
CHAIR BUNDE  said the duty  to disclose as otherwise  provided by                                                               
law applies to physical problems  or limitations to the property.                                                               
He asked if Amendment 1 addresses psychological issues.                                                                         
                                                                                                                                
REPRESENTATIVE  ROKEBERG  replied  yes.  In  the  instance  of  a                                                               
haunted house,  one would have the  duty to disclose that  if one                                                               
knows about it, but one wouldn't  have a duty to investigate that                                                               
issue in order to disclose it.                                                                                                  
                                                                                                                                
MS.  PEGGY  ANN  MCCONNOCHIE,  Alaska  Association  of  Realtors,                                                               
commented:                                                                                                                      
                                                                                                                                
     For the question  of if there's a ghost in  the house -                                                                    
     how do you investigate whether  or not there is a ghost                                                                    
     or  not?....  There were  suspicions  told  to me  that                                                                    
     there was  a ghost in  the house and  I felt it  was my                                                                    
     duty to disclose. Whether or  not you believe in ghosts                                                                    
     is not material. If you don't  know that, how do you go                                                                    
     out  and  investigate whether  there  is  or is  not  a                                                                    
     ghost?                                                                                                                     
                                                                                                                                
CHAIR  BUNDE asked  a more  practical question  - when  there has                                                               
been  a  suicide  in  the  house and  you're  aware  of  it,  you                                                               
disclose, but  you don't have  a duty to research  whether anyone                                                               
had taken his life in that home - unless it's common knowledge.                                                                 
                                                                                                                                
MS. MCCONNOCHIE agreed  with that. The issue is how  one would go                                                               
about an investigation  like that. Right now  Realtors don't know                                                               
what to do, but want to deal with it in this amendment.                                                                         
                                                                                                                                
SENATOR  HOLLIS  FRENCH asked  where  exactly  in the  disclosure                                                               
document a  realtor tells  a perspective buyer  that there  was a                                                               
double homicide in the house.                                                                                                   
                                                                                                                                
MS. MCCONNOCHIE  said there is  no specific question on  the form                                                               
that asks  that, because  there is  no statutory  requirement for                                                               
it. If this bill passes, Realtors would use an amended form.                                                                    
                                                                                                                                
SENATOR FRENCH said he understands  the amendment would foreclose                                                               
that disclosure.                                                                                                                
                                                                                                                                
REPRESENTATIVE ROKEBERG said this  bill doesn't affect the nature                                                               
of  the disclosure  statement, which  applies to  all sellers  of                                                               
real estate, whether  they are represented by a  licensee or not.                                                               
HB 29  only regulates  the activities of  licensees. He  does not                                                               
want  to  create  a  legal  duty  to  disclose  a  homicide,  for                                                               
instance. The reason  he is addressing the issue  is because case                                                               
law in the  State of Alaska hasn't addressed it  yet and, "It's a                                                               
field day for lawyers."                                                                                                         
                                                                                                                                
SENATOR  FRENCH  agreed  with  Representative  Rokeberg  and  Ms.                                                               
McConnochie that someone shouldn't have  to hunt down the history                                                               
of a property, but if a  double homicide was committed there last                                                               
week and  someone just came  to town  and didn't know  about, "If                                                               
everyone in  town knows about  it except  for this poor  buyer, I                                                               
think someone  should tell  the buyer." He  was trying  to figure                                                               
out where that is addressed.                                                                                                    
                                                                                                                                
REPRESENTATIVE  ROKEBERG responded  that it  isn't written  down.                                                               
Disclosure is an implied duty, but  he didn't want to put that in                                                               
statute.                                                                                                                        
                                                                                                                                
SENATOR FRENCH  asked what happens if  a person buys a  place and                                                               
then finds  out there  was a  double homicide  in it  and doesn't                                                               
want to  live there anymore.  "Can they  go after the  seller and                                                               
say, 'Hey, you should have told me?' I think this bill says no."                                                                
                                                                                                                                
MS.  MCCONNOCHIE responded  that  is a  material  fact about  the                                                               
house that the seller has  to disclose. The question becomes does                                                               
a double homicide three houses away need to be disclosed, also.                                                                 
                                                                                                                                
     That's what  we need direction  on. How far away  is no                                                                    
     longer  reasonable....  Keep  in  mind  that  it  is  a                                                                    
     material fact in  some cultures that they  cannot buy a                                                                    
     home in which a murder  has occurred. That's a material                                                                    
     fact of that culture, but not to everyone.                                                                                 
                                                                                                                                
SENATOR FRENCH said  he would support "near, but not  on the real                                                               
estate".                                                                                                                        
                                                                                                                                
MS. MCCONNOCHIE said the Real  Estate Commission needs to be able                                                               
to  write the  regulations  to support  the  statement. She  said                                                               
Realtors in Anchorage and Juneau view disclosures differently.                                                                  
                                                                                                                                
SENATOR  SEEKINS  said,  "What  is not  required  should  not  be                                                               
implied. I think this is saying  you can't imply some duty beyond                                                               
what we  have statutorily or  on a regulatory basis  required for                                                               
disclosure...."                                                                                                                 
                                                                                                                                
MS. MCCONNOCHIE chimed in, "Bingo!"                                                                                             
                                                                                                                                
SENATOR FRENCH said the law has very narrow requirements.                                                                       
                                                                                                                                
REPRESENTATIVE ROKEBERG agreed with Senator Seekins' statement.                                                                 
                                                                                                                                
CHAIR BUNDE asked  for a roll call vote on  Amendment 1. Senators                                                               
Gary  Stevens,  Ralph Seekins  and  Chair  Con Bunde  voted  yea;                                                               
Senator Hollis French voted nay; and Amendment 1 was adopted.                                                                   
                                                                                                                                
CHAIR BUNDE noted  that people with further  issues could discuss                                                               
the bill in its next committee of referral, Judiciary.                                                                          
                                                                                                                                
SENATOR  SEEKINS moved  SCS CSSSHB  29(L&C)  from committee  with                                                               
attached  fiscal  note.  Senators Hollis  French,  Gary  Stevens,                                                               
Ralph  Seekins and  Chair Con  Bunde  voted yea;  and SCS  CSSSHB
29(L&C) moved from committee.                                                                                                   

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