February 2003
President’s Message
Three times a year C.A.R. hosts its statewide business meetings,
wherein Directors from 123 local associations gather to plan for the upcoming
year, receive updates on a variety of topics from C.A.R. legal staff, and vote
on a legislative agenda for the upcoming House and Assembly sessions.
This year’s first meeting included, among many items:
- Approval to develop a software program called the “Intelligent
Agent” that will establish a new standard for real estate information
transfers. The application will be designed to give REALTORS® cross-border,
real-time access to property data in different MLS databases. It will be based on RETS (Real Estate
Transactions Standard), which is a data exchange standard developed by NAR, and
provide the ability to access a wide range of real property data (not just the
listing) from various sources within a secure computing environment.
- Inauguration of the C.A.R. Housing Affordability Fund,
immediately raising $188,000 in donations off the assembly floor.
- An update from the Insurance Availability Task Force.
We voted to seek the availability of a fully bound, fairly priced
and fairly underwritten insurance policy within the time frame of a normal
escrow (fully bound means a 1 year commitment without the 60-day
right-to-cancel clause the insurance companies now have). We voted to negotiate with ChoicePoint, the
source of CLUE reports (Comprehensive Loss Underwriting Exchange), regarding
changes to claims reporting so that an insurer’s mere inquiry would not be
treated as an actual claim. We will also negotiate with the insurance industry
on issues such as new insurance products, expansion of the California FAIR
plan, insurance pricing and the application process.
In the legislative arena, we approved the motion to oppose
Assembly Bill 18 (Leon). This bill
would allow local government to adopt different (usually more stringent)
landlord/tenant laws. C.A.R. staff was also directed to seek repeal of the
3-1/3% withholding tax for California residents, when appropriate.
I hope you’ve had a chance to review the outstanding 2003 “C.A.R.
at a Glance” supplement to the January/February California Real Estate
magazine. It is packed with information concerning programs, resources, market
research, legal services, and business tools that can enhance your
professionalism and assist you in delivering the highest caliber of service to
your clients.
Your annual dues fund these extensive offerings. Each year when your annual dues statement
arrives, there is also a voluntary $49 political survival contribution. Your PAC contributions fund the extensive
legislative agenda voted on by the C.A.R. Directors and implemented by C.A.R.
staff and the Government Affairs team.
These legislative efforts affect you EVERY day in your real estate
business. Today, more than ever, we
must stand up for our industry and the rights of our clients. Please join me and invest in your career,
your clients and your community. Make
your $49 contribution TODAY. Better
yet, make the full $197 “True Cost of Doing Business” contribution. Remember, C.A.R. fights for you, as you
fight for your clients.
C.A.R. MISSION
STATEMENT
“The purpose of the
California Association of REALTORS® is to serve its membership in developing
and promoting programs and services that will enhance the members freedom and
ability to conduct their individual business successfully with integrity and
competency, and through collective action, to promote the preservation of real
property rights.”
Happy Valentine’s Day!
Ronnie Trubek
2003 President
Inside
- Broker Supervision - It’s
A Must
- New REALTOR® Members
- Affiliate Member Spotlight
- Negligent Misrepresentation Case Proceeds
- Bush Signs Retroactive
Flood Bill
- RPA-CA Training Tapes Available
- Consumer Confidence Falls 2 points
- VA Direct Financing Terminated
- HUD Removes Approval Requirement
- NAR to Cosponsor China Conference
- Court Nixes Higher Broker Commission
- SCAOR Calendar
Broker Supervision - It’s A
Must
DRE Bulletin, Winter
2002. Reprinted, in part, from June
2002 Mortgage Matters
When the quarterly Real Estate Bulletin arrives at your home or
office, you may look at the Disciplinary Action section to see if you know
anyone whose license has been disciplined by the DRE. Some of the most common reasons for disciplinary actions are
trust fund handling and record keeping violations, a topic covered in an
article entitled “Ten Most Common Violations Found in DRE Audits” which
appeared in a prior Real Estate Bulletin (Winter 2000), and is now available on
the DRE Web site www.dre.ca.gov (click on Licensees, then Complying with the
Real Estate Law, then Ten Most Common Violations Found in DRE Audits). However, a violation for which brokers are
often disciplined, and that receives less attention, involves the failure to
provide adequate and reasonable supervision of their salespeople.
Commissioner’s Regulation 2725 states, in part that “A broker
shall exercise reasonable supervision over the activities of his or her
salespersons.” “Reasonable supervision”
includes as appropriate, the establishment of policies, rules, procedures and
systems to review, oversee, inspect and manage numerous activities in which a
salesperson may be involved. These
activities include, but are not limited to, any transaction requiring a real
estate license, trust fund handling, and advertising any service for which a
license is required. The regulation
allows the number of salespersons employed and the number of branch offices to
be taken into consideration when determining the form and extent of such
policies, rules, procedures and systems.
Brokers who have many salespersons and/or many branch office locations
will need to demonstrate a much more sophisticated system for ensuring
supervision than a broker with only a few salespersons and/or doing business
from one location. An example of
aspects of a supervisory system include written policies and procedures,
regularly scheduled training, branch office visits and regular reports of
salespersons’ activities. A broker may
also use the services of other brokers or salespersons employed by the broker
to assist in the supervision, as long as the broker does not relinquish overall
responsibility for that supervision.
Many of the more serious violations committed by salesperson
(mishandling of trust funds, unlawfully collecting advance fees,
misrepresentations and dishonest dealings with consumers) can occur due to the
lack of proper supervision. When the
Department receives a complaint against a licensee and initiates an
investigation, one aspect of that investigation may include whether or not the
broker is providing the required supervision.
Brokers who fail to supervise their employees are not only inviting
possible disciplinary action against the salesperson for various violations of
the Real Estate Law and regulations, but are also potentially exposing
themselves to discipline by the DRE for failure to supervise that
employee. The Commissioner can suspend
or revoke a broker’s license under Business and Professions code Section
10177(h) which states “As a broker licensee, failed to exercise reasonable
supervision over the activities of his or her salespersons, or, as the officer
designated by a corporate broker licensee, failed to exercise reasonable
supervision and control of the activities of the corporation for which a real
estate license is required.”
Brokers should review their policies and procedures in light of
Commissioner’s Regulation 2725 to ensure they are properly supervising their
salespeople. By doing so, you can
better ensure that the actions of your salespeople are in the best interests of
your clients. The Business and Professions
Code and Commissioner’s Regulations are located in the Real Estate Law book and
can also be accessed on the DRE Web site www.dre.ca.gov
(click on Regulations). Questions may
also be directed to the Mortgage Loan Activities Unit by calling (916)
227-0770.
NEW REALTOR® MEMBERS
Bevin Bischoff
Century 21 Showcase
REALTORS®
Jackie Davis
Century 21 Showcase
REALTORS®
Rick Holland
Century 21 Showcase
REALTORS®
John Jeffs
Century 21 Lad Realty
Vickie Lopez
Bailey Properties, Inc.
Cort Snyder
David Lyng & Associates
Joelle Truett
Century 21 Award Real Estate
Laura Grenyo
Coldwell Banker Jackson
& Mann
Debra Allen-Nattrass
Real Estate Center
Nancy Eriksen
David Lyng & Associates
Sherwin Kaplan
Thunderbird Real Estate
Connie Landes
Coldwell Banker Jackson and
Mann
Renee McDonald
Bailey Properties, Inc.
Rhonda Prunella
Coldwell Banker Carl Conelly
Mimi Freeman
David Lyng & Associates
Johanna Dodds
Bailey Properties, Inc.
Josh Thomas
Network Alliance Real Estate
Comments about an
applicant’s admittance should be submitted in writing to the Santa Cruz
Association of REALTORS®, 2525 Main St., Soquel, CA 95073.
Affiliate Member Spotlight
Accurate Home Inspections
Contact: Chris McGee
322 Flora Lane
Scott’s Valley, CA 95066
Phone: (831) 438-1138
Cell: (831) 295-3595
- Accurate reports completed and presented on-site
- Color photos of findings included
- Client receives free 200-page maintenance and repair
book
- Agent’s copies condensed for quick comprehension
- Exceeds all inspection association standards of
practice
- The most comprehensive report system yet to be devised
Your clients will love our
work! Competitive Price: 2,500 sq. ft.
or less - $250. Certified & Insured
Negligent Misrepresentation
Case on Lead Issue to Proceed
A listing broker who failed to disclose the presence of
lead-based paint in a house that sold must defend against negligent
misrepresentation allegations by the buyer, the U.S. District Court, Northern
District of Illinois, has ruled. The broker argued he didn't know of the
lead-based paint and so it didn't constitute a defect requiring disclosure. But
the court said that the broker had a duty under state law to disclose latent
defects that it knew about or should have known about, and the presence of
lead-based paint was a latent defect that arguably the broker could be expected
to know about. To read a summary of this case in the Letter of the Law, NAR's online
legal newsletter, Go to: http://www.realtor.org/letterlw.nsf/pages/0103flowers2
President Signs Retroactive
Flood Insurance Bill
President Bush on Monday signed legislation retroactively
reauthorizing the Federal Emergency Management Agency’s national flood
insurance program, which provides more than 90 percent of the nation’s flood
insurance. The program expired Dec. 31, when Congress failed to reauthorize it
before adjourning in November. The legislation makes the program retroactive to
January 1, 2003. The flood insurance program is critical for REALTORS® who sell
property located in a floodplain, as lenders require flood insurance prior to
closing on such properties.
For more information, visit:
http://www.realtor.org/rmodaily.nsf/pages/News2003011401?OpenDocument
New RPA-CA Seminar Tapes
Available
Audio and video-tapes of the new Residential Purchase Agreement
(RPA-CA) training seminars featuring C.A.R. Assistant General Counsel Gov
Hutchinson are now available and may be ordered online. The seminars were conducted at the California
REALTOR® EXPO 2002 in Long Beach. To order online, go to the link below, click
on the EXPO 2002 log, choose “General Sessions” and then scroll down to the
last session. Cost is $12 for audio-tapes or $30 for video. For more information: http://www.vwtapes.com
Consumer Confidence Falls
Two Points
The Consumer Confidence Index dipped nearly two points in January
and now stands at 79.0 (1985=100), down from 80.7 in December, according to the
most recent Conference Board report.”
Overall readings continue to reflect the country’s lackluster economic
activity,” said Lynn Franco, director of the Conference Board’s Consumer
Research Center.” Now, with the threat
of war looming, consumers have grown increasingly cautious about the short-term
outlook.” Consumers’ expectations for
the next six months are less optimistic than at year-end, according to the
report. Those anticipating business
conditions to sour over the next six months rose to 14.0% from 11.0%. Those anticipating an improvement in the
economy declined to 17.7% from 21.1%.
The employment outlook was also less favorable. Those
anticipating an increase in their incomes decreased to 18.4% from 19.6% in
December. Consumers’ assessment of current conditions has improved, but still
remains soft. More info: http://www.conference-board.org/
Survey Establishes VA Direct
Financing Terminated
The Veterans Administration announced last week that it will no
longer provide direct financing (vendee financing) to purchase VA repossessed
properties, effective for all listings dated on or after Jan. 31, 2003. As of
that date you can purchase these properties only with upfront cash or with
outside financing. Offers can still be submitted with vendee financing on
properties listed before January 31 if the bid period extends beyond January
31. To see the notice, go to: http://www.homeloans.va.gov/new.htm For more information, contact: Peter Morgan,
202/383-1233, or on-line: pmorgan@realtors.org
HUD Removes Approval
Requirement Prior to Issuance of Insurance
HUD issued a mortgagee letter last week eliminating the
requirement of HUD approval before issuing FHA insurance on a property located
within a Planned Unit Development. For a full copy of the letter, visit: http://www.hud.gov/offices/hsg/mltrmenu.cfm,
select 2003 Letters and click on letter 03-2.
NAR to Cosponsor Real Estate
Conference with China
NAR will cosponsor the 2003 International Real Estate Conference
and Exposition with the Chinese Real Estate Association (CREA), June 13-16 in
Beijing. The conference will be the
largest real estate event in Asia, with more than 100,000 estimated
visitors.
For more information: http://www.realtor.org/publicaffairsweb.nsf/Pages/NarCosponREChina
Court Nixes Higher Broker
Commission
A broker cannot claim commission amount greater than the 6%
commission outlined in the purchase contract between the buyer and the seller,
and thus she couldn’t claim the 10% commission that was included in the listing
agreement that she entered into with the seller, the Missouri Court of Appeals,
Eastern Division, ruled, reversing a jury verdict. The seller successfully
argued that awarding a higher commission amount conflicted with Missouri Real
Estate Commission rules. Since nowhere within the closing documents was the
higher amount described, and the rules required the broker to verify the
accuracy of the closing documents, it would violate public policy to base the
commission on an amount not stated in the purchase agreement. To read a summary
of this case in the Letter of the Law, NAR’s online legal newsletter, Go to: http://www.realtor.org/letterlw.nsf/pages/0103kuchner
Graduate, REALTOR® Institute
GRI – 102 - Trust Fund
Management
GRI – 104 - Fair Housing
Friday, February 14, 2003 at
the Santa Cruz Association of REALTORS®.
Please call 888/785-4800 for more information
Women’s Council of REALTORS®
Red Tags and Navigating
through the County Process.
Local Land Consultant will
share his expertise and answer questions.
Presented by Stephen Graves,
Land Use Consultant
Wednesday, February 19,
2003, 11:30 a.m. - 1:30 p.m.
$23/Members $28/Nonmembers Westcoast Santa Cruz
Hotel. R.S.V.P. to Jennifer Walker by
Friday, February 10th, wcrsantacruz@yahoo.com or 831/345-3675
FREQUENTLY USED PHONE
NUMBERS
RE Infolink
Local………………..(408) 874-0200
Toll-Free ……………(800)
546-5657
Fax …………………(408) 341-8900
FaxLink ....………….(408)
874-0225
Supra - SuperKey
Update Key………….(800)
481-3778
Field Support Line…. (800)
842-8269
C.A.R.
Main………………..(213) 739-8200
Legal Hotline………(213)
739-8282
Department of Real Estate
Sacramento…………(916) 227-0931
Oakland…………….(510) 622-2552
WinForms
Technical Support.…(800)
228-9466
Legal Outreach
RPA-CA Training
Four More Sessions Added!
Monday, March 3, 2003, 9:00
- 10:30 a.m. & 1:00 - 2:30 p.m & Monday, March 24, 2003, 9:00 - 10:30
a.m. & 1:00 - 2:30 p.m - Gov Hutchinson, C.A.R. Legal Counsel -This session
will provide an overview to the changes made to the California Residential
Purchase Agreement., Reservations required, please contact Leslie Flint at
831/464-2000 or lflint@scaor.org