Legislature(1995 - 1996)
04/09/1996 01:35 PM Senate L&C
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HB 478 REALTORS MAY PREPARE CERTAIN LEGAL DOCS
Number 001
CHAIRMAN KELLY called the Senate Labor and Commerce Committee
meeting to order at 1:35 p.m. and brought up HB 478 as the first
order of business before the committee. He called the prime
sponsor to testify.
Number 015
REPRESENTATIVE NORMAN ROKEBERG, prime sponsor of HB 478, informed
the committee that he has been a licensed real estate broker in the
State of Alaska for twenty-five years. Therefore, he is intimately
aware of the circumstance surrounding the necessity of this
legislation. He made it clear that he has an inherent conflict of
interest, because he could benefit by the bill. However, the bill
was introduced at the request of the Alaska Real Estate
Association, the Alaska Association of Realtors, and some local
real estate boards. He thanked the committee for developing a
senate committee substitute removing the words and concepts of
deeds of trust and mortgages. That is the only difference between
the bill passed by the house and the scs. He recommended that
language be removed due to recent conversations he's had with the
Real Estate Bar, which thinks that the administration of documents
performed by a real estate professional does not specifically
include deeds of trust and mortgages, which are more typically
drafted by counsel at the request of title companies or clients of
title companies for the conveyance and alienation of real property
interests. Real estate brokers do not normally draft, or even fill
in the blanks, of deeds of trust and mortgages.
SENATOR KELLY asked if all that is being accomplished by removing
deeds of trust and mortgages then is to keep the status quo.
REPRESENTATIVE ROKEBERG replied that is correct.
SENATOR KELLY asked, since that language was deleted, what is left?
REPRESENTATIVE ROKEBERG responded that what is left are the
documents normally prepared and used by real estate brokers,
associate brokers, and agents throughout the state. The reason for
the bill is that the Alaska Bar Association drafted a new bar rule,
33.3, that was transmitted last October to the Supreme Court. The
adoption of this new bar rule would redefine the scope of the
practice of law in the State of Alaska. He is concerned that the
new bar rule could affect members of the real estate industry. The
real estate industry has been concerned with this for the past five
years or so, because there is a feeling that there is no clear
demarcation between standard real estate practices and practices
conducted by members of the legal profession. This law is
necessary to keep from impeding the typical bargaining process. A
strict interpretation of the bar rule would require that all forms
of bargaining be approved by an attorney, which could mean that
even every counter-offer would have to be approved by an attorney.
The Alaska Bar Association denies this though, making HB 478
preemptory legislation.
Number 120
CHAIRMAN KELLY asked Representative Rokeberg if he is suggesting
the Alaska Bar Association's 2,000 members would try to stretch out
their ability to generate fees in the State of Alaska.
REPRESENTATIVE ROKEBERG replied he wouldn't suggest that; he would
be much more clear about that being probable. If this law is not
passed, real estate commerce could be impeded.
SENATOR KELLY commented there was a statement from the Alaska Bar
Association that indicated they weren't trying to do this.
REPRESENTATIVE ROKEBERG stated committee members have in their bill
packets a letter from the Alaska Bar Association counsel that is a
written response to information requested by Representative
Rokeberg. The letter indicates that sections 3-e and d of the bar
rule specifically exclude members of a profession from using legal
proceedings--documents that they prepare. But he draws committee
members' attention to section 3-d, which only addresses filling in
forms approved by the court system for use by non-attorneys, or
standardized forms prepared and reviewed by counsel. Every
document used by a real estate professional would have to be
approved on a pre-determined basis. He thinks that would even
include real estate leases. Real estate agents and brokers do not
practice law; that is not the intent here. All they are asking for
is to preserve the status quo and be able to perform their
profession with documentation that has customarily and
traditionally been used.
Number 205
CHAIRMAN KELLY asked if there were questions of the sponsor.
Hearing none, he called other witnesses to testify.
Number 210
JOAN SHEPPARD, realtor, testifying from Anchorage, stated she
advises clients to get legal advise. Realtors currently do not
practice law, they are just writing simple contracts negotiated
between buyers and sellers. If it was mandated that these
contracts be written by attorneys, it would be more expensive and
take more time to conduct real estate transactions. She agrees
with the deletion of language relating to deeds and mortgages from
the legislation. Ms. Sheppard supports passage of HB 478.
Number 230
CRAIG JOHNSON, realtor, testifying from Kodiak, stated he echoes
what has already been said. He hasn't heard any reasons for
opposing HB 478. The nation-wide trend has been to move away from
required attorney involvement. He asked that the committee release
HB 478.
CHAIRMAN KELLY asked if there are any questions. Hearing none, he
asked if there was a motion for the adoption of the Senate Labor &
Commerce Committee substitute.
Number 260
SENATOR TORGERSON made a motion to adopt the committee substitute
for HB 478.
CHAIRMAN KELLY, hearing no objection, stated the committee
substitute was adopted. He asked the pleasure of the committee.
SENATOR TORGERSON made a motion to discharge HB 478 from the Labor
& Commerce Committee with individual recommendations.
SENATOR KELLY, hearing no objections, stated HB 478 was discharged
from committee.
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