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.