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