NEBRASKA REAL ESTATE COMMISSIONDecember 13, 2000
Staybridge Suites Staybridge Room Lincoln, NE
Chairperson Moore convened a Meeting of the Nebraska Real Estate Commission at 9:10 a.m. on December 13, 2000, in the Staybridge Room of the Staybridge Suites, located at 2701 Fletcher Avenue in Lincoln, Nebraska. All of the members of the Real Estate Commission were present. Also present were Director Les Tyrrell, Deputy Director Teresa Hoffman, Deputy Director for Enforcement Terry Mayrose, and Administrative Assistant Heidi Burklund. Abbie Widger, Special Assistant Attorney General and Counsel to the Commission, was present for the discussion on the proposed changes to the Seller Property Condition Disclosure, Agency Relationships, and License Law statutes; the clarification of the advertising matter; and the transfer fee change.
Notice of Meeting (Adopt Agenda)
Director Tyrrell presented a Public Notice and Proofs of Publication thereof relating to this Meeting, all of which are attached to and made a part of these Minutes. Chairperson Moore reported that all Commissioners had been notified of the Meeting simultaneously, in writing, and that a proposed Tentative Agenda accompanied the notification.
Chairperson Moore pointed out to those in attendance that aAPublic Copy@ of the materials being used during the Meeting was available to the public on the Counsel table in the Meeting Room, and that the procedures followed were in accordance with the Open Meetings Law. Chairperson Moore asked that guests sign the guest list.
Director Tyrrell noted that Item 5a had been added since the Tentative Agenda was mailed to the Commissioners.
After review of the Final Agenda, a motion was made by Nigro and seconded by Wiebusch to adopt the Final Agenda as presented. Motion carried with Fletcher, Johnson, Landow, Moline, Nigro, Wiebusch, and Moore voting aye.
Chairperson Moore introduced Mr. John Gale, who was appointed by Governor Johanns to replace Chairperson Moore as Secretary of State. Mr. Gale said he was looking forward to working with the Commission, and noted his background in real estate law. Chairperson Moore also introduced Mr. Tom Dover, a former Commissioner.
Minutes of November 15-16, 2000
The Minutes of the Commission Meeting held on November 15-16, 2000, were considered.
After review, a motion was made by Fletcher and seconded by Nigro to approve the Minutes as presented. Motion carried with Fletcher, Johnson, Landow, Moline, Nigro, Wiebusch, and Moore voting aye.
Receipts and Expenditures Reports for November
Director Tyrrell presented the Receipts and Expenditures Report for November 2000. A copy of said Report is attached to and made a part of these Minutes.
With regard to the November Report, Director Tyrrell noted the following: Total receipts were down about $20,000 from the budgeted amount for the month, but actual year-to-date receipts were over by approximately $40,000. Director Tyrrell reported that renewals came in sooner and were processed more quickly than in past years.
In Expenditure Category 4211, Postage Expense, expenditures were included for two months, which also included the renewal mailing; in Category 4212, Communication Expense, expenses will be shown in next month=s Report; in Category 4215, Publications and Printing, expenditures exceeded the budgeted amount due to printing the License Act and renewal forms; in Category 4219, Awards Expense, expenditures for the employee-of-the-year award for Monica Wade were included; Category 4222, Conference Registration Fee, included a $340 expenditure to send Ms. Wade to website training in January; Category 4491, Other Operating Expense, included the photographer bill for Commissioner Johnson=s swearing-in ceremony; in Category 4731, State-Owned Transportation, expenses will be shown in next month=s Report; and Category 4741, Personal Vehicle Mileage, expenses were due to a trust account examiner using his own vehicle.
The Cash Fund Balance as of November 30, 2000, was $549,889.55, which compared to a Cash Fund Balance of $462,404.83 on November 30, 1999.
After discussion, a motion was made by Fletcher and seconded by Johnson to file the November Receipts and Expenditures Report for audit. Motion carried with Fletcher, Johnson, Landow, Moline, Nigro, Wiebusch, and Moore voting aye.
Director Tyrrell presented a Renewal Report, which showed renewals as of December 12, 2000. A copy of said Report is attached to and made a part of these Minutes.
Director Tyrrell reported that renewals came in sooner and were processed more quickly than in past years. There were a few glitches with the new database, but things went smoothly for the most part. Pocket cards will be mailed in December, along with individual passwords to allow licensees to access their own continuing education information on-line. The passwords will also serve as the digital signature for on-line transactions, when that capability is available. Licensees need to keep their passwords, which will be printed on orange pieces of paper stapled to their pocket cards.
No action was necessary on this Report.
Amended Budget Items
Director Tyrrell presented an Exhibit which showed proposed amendments to the Commission=s Biennium Budget Request for Fiscal Year 2001-2003. A copy of said Exhibit is attached to and made a part of these Minutes.
Director Tyrrell reviewed the proposed amendments, and answered questions as necessary. Director Tyrrell noted that, with the action taken by the Commission last month regarding on-line transactions and credit cards, the budget request had to be amended.
Under Expenditures, credit card swipe machine rental will be shown under Category 4251, Rent Expenses; Category 4414, Education Services, will include the smaller-than-expected increase in fees paid to the examination company; and Category 4421, Other Contractual Services, will reflect the new interagency agreement with the Records Board and Nebrask@ On-Line, as well as expected payments to First National Bank of Omaha, based on estimated usage and projected fees for on-line transactions.
Under Receipts, the budget documents will reflect today=s action which reduced the transfer fee from $25.00 to $15.00.
After discussion, a motion was made by Nigro and seconded by Moline to adopt the amendments to the Biennium Budget Request for FY 2001-2003 as modified to reflect the $15.00 transfer fee. Motion carried with Fletcher, Johnson, Landow, Moline, Nigro, Wiebusch, and Moore voting aye.
Director Tyrrell presented the Specialized Registrations Report, which listed one Time Share Registration for The Arboretum on Farnam Drive, Phase II. A copy of said Report is attached to and made a part of these Minutes.
Following discussion, a motion was made by Fletcher and seconded by Wiebusch to approve The Arboretum on Farnam Drive registration as presented. Motion carried with Fletcher, Johnson, Landow, Moline, Nigro, Wiebusch, and Moore voting aye.
Commissioner Moline asked for an update on the Pacific Springs Village situation. Director Tyrrell said the revisions were going well, and that it was clear the Commission=s message was received and was being heeded. Director Tyrrell anticipated that all required paperwork would be done by the end of December. Director Tyrrell confirmed with the Commissioners that they only wanted him to bring the matter back to them if Pacific Springs Village failed to comply with the Commission=s directives.
Non-Resident Licenses and Resident Licenses Issued to Persons Holding Licenses in Other States
This Report, a copy of which is attached to and made a part of these Minutes, was presented by Deputy Director Hoffman and reported to be in order.
After review, a motion was made by Nigro and seconded by Landow to ratify issuance of the licenses as set forth in the Report. Motion carried with Fletcher, Johnson, Landow, Moline, Nigro, Wiebusch, and Moore voting aye.
Examination Report - November
Deputy Director Hoffman presented a Report relating to the real estate examinations administered during November 2000. A copy of said Report is attached to and made a part of these Minutes.
After review, a motion was made by Fletcher and seconded by Johnson to ratify the November Report for the purpose of issuing licenses. Motion carried with Fletcher, Johnson, Landow, Moline, Nigro, Wiebusch, and Moore voting aye.
Real Estate Education Matters
Pre-License Education Instructor Approval
Deputy Director Hoffman presented for ratification the Pre-License Instructor Approval Report, which listed a temporary approval for one pre-license instructor. A copy of said Report is attached to and made a part of these Minutes.
Deputy Director Hoffman noted that the temporary instructor was a licensee, but had no secondary degree or professional designation. There were no other instructors available within a reasonable distance of the Lincoln area to teach the pre-license course. The temporary approval was for one year, while the instructor seeks a professional designation.
After discussion, a motion was made by Fletcher and seconded by Wiebusch to ratify the Report. Motion carried with Fletcher, Johnson, Landow, Moline, Nigro, Wiebusch, and Moore voting aye.
Continuing Education Activity Approval
Deputy Director Hoffman presented for ratification the Continuing Education Activity Approval Report, which listed approvals for four continuing education activities. A copy of said Report is attached to and made a part of these Minutes.
Deputy Director Hoffman asked the Commission for guidance regarding the Nebraska Realtors Association course entitled AGuess Who=s Coming to Dinner.@ Deputy Director Hoffman felt the
course title did not accurately reflect the content of the course, which included fair housing, the ADA, and the Civil Rights Act. Deputy Director Hoffman said the rule of thumb in the industry was to have course titles reflect content. Deputy Director Hoffman asked if the Commission wanted to approve the course as is, or request a title change. In the past, providers have been willing to change course titles.
Commissioner Nigro said she would hate to have the title be misleading. Deputy Director Hoffman noted that the movie of the same name addressed racial issues, but the course was much broader than that.
Commissioner Moline asked if an instructor was coming in from out of state to teach the course. Deputy Director Hoffman said yes. Commissioner Moline asked if the same title was used in other jurisdictions. Deputy Director Hoffman said she did not know, but that there was a subtitle for the course. She said the Commission could ask them to just use the subtitle, or request that they always include the subtitle when advertising the course. The subtitle was not included on the application form, but was provided with the course materials, and was something like AChanging Demographics and How They Affect Your Market.@
Commissioner Moline said he understood that providers wanted to get licensees= attention with a Acatchy@ title, but felt the title should not mislead licensees. Commissioner Landow said that nobody would come to the course if they did not know what it was about. Commissioner Fletcher noted that the course would be presented for free at the Nebraska Realtors Association convention.
Consensus of the Commission was to have the Nebraska Realtors Association include the subtitle when referencing the course. Deputy Director Hoffman said she would amend the Minutes copy of the Exhibit to include the subtitle.
After discussion, a motion was made by Moline and seconded by Landow to ratify the Report as amended. Motion carried with Fletcher, Johnson, Landow, Moline, Nigro, Wiebusch, and Moore voting aye.
Continuing Education Instructor Approval
Deputy Director Hoffman presented for ratification the Continuing Education Instructor Approval Report, which listed approvals for four continuing education instructors. A copy of said Report is attached to and made a part of these Minutes.
After discussion, a motion was made by Fletcher and seconded by Johnson to ratify the Report. Motion carried with Fletcher, Johnson, Landow, Moline, Nigro, Wiebusch, and Moore voting aye.
Pending Sworn Complaints and Investigative Matters
Director Tyrrell presented a Summary Report of the pending complaints, which included a list of licensees presently under disciplinary action or on appeal. A copy of said Report is attached to and made a part of these Minutes.
In reference to the Report, Director Tyrrell noted that if people did not renew their licenses, the Nebraska Real Estate Commission would lose jurisdiction over them. The complaint information would remain in the licensee file, in case the licensee chooses to pursue a real estate license in the future.
No action was necessary on this Report.
There were no Sworn Complaints and Investigative Matters presented to the Commission.
Presentation of Stipulation and Consent Orders
Complaint #2000-020, Marilyn and Jeff Pankoke vs. Jerome Henry Haase
Deputy Director for Enforcement Mayrose presented a Stipulation and Consent Order in the matter of Complaint #2000-020, Marilyn and Jeff Pankoke vs. Jerome Henry Haase. A copy of said Order is attached to and made a part of these Minutes.
Deputy Director Mayrose reviewed the circumstances involved and noted the provisions of the Order, which had been signed by Mr. Haase. Deputy Director Mayrose also noted that the Commission had dismissed the other respondent from the Complaint in an action taken at a previous Meeting.
After discussion, a motion was made by Landow and seconded by Nigro to enter into the Order as presented. Motion carried with Fletcher, Johnson, Landow, Moline, Nigro, Wiebusch, and Moore voting aye.
No Hearings were scheduled for this Meeting.
Informal Special Appearances
Galdino Guzman, Salesperson Applicant
At 11:00 a.m., Director Tyrrell presented an Exhibit which included a letter regarding the Special Appearance, Mr. Guzman=s application, and a letter detailing Mr. Guzman=s criminal history. A copy of said Exhibit is attached to and made a part of these Minutes.
Chairperson Moore introduced the members of the Commission to Mr. Guzman, and explained the process for the Special Appearance.
Mr. Guzman distributed copies of an Exhibit which included three letters of recommendation, his marriage license, his mortgage statement, and completion certificates for two income tax preparation courses and one computer course. A copy of said Exhibit is attached to and made a part of these Minutes, denoted as Exhibit 12b.
Mr. Guzman said he is committed to changing his conduct. He noted that he officially had only two convictions for driving under the influence of alcohol (DUI), because his second offense was reduced to reckless driving. Chairperson Moore asked Mr. Guzman if he still drinks. Mr. Guzman said that, at home, he might drink one or two beers in an evening. He does not go out anymore, since he got married in 1998 and bought a house.
Chairperson Moore asked Mr. Guzman if he currently possessed a valid driver=s license. Mr. Guzman said yes. Commissioner Moline asked what penalty Mr. Guzman would face for another conviction. Chairperson Moore said that a driver=s license would be suspended for 15 years after conviction of a third offense DUI, but the license can be reinstated after 72 years. Mr. Guzman reiterated that his second DUI was reduced to reckless driving, so he only had two DUI convictions on his record in Nebraska. Commissioner Moline asked if Mr. Guzman had convictions in any other states. Mr. Guzman said no, just in Nebraska and Iowa.
Commissioner Landow asked Mr. Guzman if he had stopped drinking since 1998. Mr. Guzman said he was not going to lie, that he had not stopped 100%, but had stopped approximately 95%. Commissioner Landow asked when Mr. Guzman got married. Mr. Guzman said it was on May 3, 1998. Commissioner Nigro asked if Mr. Guzman participated in any alcoholic counseling. Mr. Guzman said he had, about three years ago. Commissioner Nigro asked if Mr. Guzman was currently going to meetings, and Mr. Guzman said no.
Commissioner Fletcher noted that the recommendation letter from Ms. King stated that Mr. Guzman was employed full time, but Mr. Guzman=s application materials stated he had been unemployed since July. Mr. Guzman said that Ms. King did not know everything in his life, and that right now he was unemployed. Mr. Guzman said he had worked for IBP for years, and that during tax season he prepared taxes. Commissioner Wiebusch noted that tax preparation was not referenced in Mr. Guzman=s application materials. Mr. Guzman said he had been doing tax preparation from his house for the past two years, and had not included it in his application. Chairperson Moore asked if a license was needed to prepare taxes for others. Mr. Guzman said no, not to do income taxes, but he had obtained a permit for his home business.
Commissioner Landow asked how the Commission would address future legal problems, if Mr. Guzman was allowed to sit for the examination. Director Tyrrell said that future legal problems would be reported on annual renewal forms, except for traffic tickets, small claims court, and domestic disputes. Director Tyrrell said that, if the Commission wanted information submitted immediately should another DUI occur, that provision could be noted in office records, and he could be required to appear before the Commission if he was arrested again.
Chairperson Moore asked whether Mr. Guzman would report violations. Director Tyrrell said if he did not fully report violations on his renewal form, he could be found guilty of filing a false renewal application. Director Tyrrell said the Commission could make it a restriction on his license that he immediately report any future convictions.
A motion was made by Landow and seconded by Fletcher to allow Mr. Guzman to sit for the examination, and to require Mr. Guzman to report any further alcohol offenses to the Commission office immediately upon conviction.
Commissioner Johnson asked Mr. Guzman if he had talked to a broker yet. Mr. Guzman said he had been offered a job by a broker who needed a Spanish-speaking agent. Commissioner Johnson asked if the broker currently employed any other Spanish-speaking agents. Mr. Guzman said he thought so.
Commissioner Nigro said she wanted to give every chance to someone trying to turn their life around, but she felt Mr. Guzman could benefit from additional alcohol counseling and attending meetings. Mr. Guzman said he had taken counseling because of his last arrest in January 1998, and had no problems with the police at all since then. Chairperson Moore asked if Mr. Guzman had to complete the counseling in order to get his license back. Mr. Guzman said yes, and that he had changed since he got married.
A vote was taken on the pending motion. Motion carried with Fletcher, Johnson, Landow, Moline, Nigro, Wiebusch, and Moore voting aye.
Request for Clarification on Advertising - The Noel Co. - Findings Report
Director Tyrrell reported that, as the Commission had requested at the November Meeting, he had investigated similar newsletter advertising targeted at neighborhoods. Director Tyrrell had contacted non-Commission-related brokers in Omaha, Lincoln, Grand Island, North Platte, Scottsbluff, and Norfolk, and asked them if not being allowed to include properties unless the listing company name was also included would cause a problem with information obtained from Multiple Listing Service (MLS). After extensive discussion with each broker, the only potential problem identified was with one piece of information from the Lincoln MLS, which does not show the listing company name. Director Tyrrell introduced Gene Ward, President of the Realtors Association of Lincoln, to discuss practices in Lincoln.
Mr. Ward distributed copies of an Exhibit which included examples of what can be printed and distributed from The MLS. A copy of said Exhibit is attached to and made a part of these Minutes, denoted as Exhibit 13. Mr. Ward said two basic types of printouts are used extensively. The first is the customer listing synopsis, which shows information on the property appropriate for distribution to customers, and can be printed with any agent=s contact information. The second is the agent listing synopsis, which may include additional information intended only for other agents such as showing instructions, and is only printed with the listing agent=s contact information. It is commonplace within the Lincoln marketplace to print out several customer listing synopses and send them to a customer/client, with the buyer=s agent name and address shown as the contact person. Mr. Ward felt this practice was not unique in the national marketplace, but may be in Nebraska. Mr. Ward said that broker reciprocity may be coming to Nebraska soon, which would allow advertising other agents= listings on web sites.
Commissioner Wiebusch said that if she were a customer receiving the customer listing synopsis, her assumption would be that the contact person had the listing. She noted that it contained no reference to the listing agent. Mr. Ward said that was correct. Director Tyrrell reiterated that Lincoln was only place this was a problem. Other Boards allow licensees to advertise properties listed by other agents, but require them to get consent from the listing brokers, so this was not an issue. Specific permission is not required by the Realtors Association of Lincoln.
Commissioner Wiebusch asked Mr. Ward what he felt made this practice acceptable. Mr. Ward noted that all agents have access to and are familiar with this MLS feature, and since all are aware, that was considered giving consent. Mr. Ward was not aware of any formal consent being given, just that all agents were aware of what is available through The MLS. Mr. Ward said this was probably the most commonly used feature of The MLS.
Commissioner Landow said that, in this form, the practice seemed perfectly reasonable to him, because a buyer would want all available information on listings in a particular neighborhood. Commissioner Landow asked why there was not a standardized way to obtain blanket consent from all participating agents, if the bottom line issue was advertising another person=s listing without their consent. Director Tyrrell said the issue was raised because one agent for one company told Mr. Nicholls to stop advertising that person=s listings. Commissioner Landow asked if this had to be addressed through the Real Estate Commission, since it was an agreement among real estate companies. Director Tyrrell referenced the statute which prohibited offering real estate for sale without the consent of the listing broker, and noted that Mr. Nicholls had been doing newsletters for 14-15 years with no problems, and just wanted clarification on whether he was violating the law.
Commissioner Nigro told Commissioner Landow that if he were to call her and ask for everything in a certain area, she had three ways to give him that information. This is a common practice that goes on every day, and the Commission should not be worrying about it.
Commissioner Moline said he had asked people at his company about this situation. Some felt the newsletter practice might violate the National Realtors Association Code of Ethics, but did not think it was a Commission issue. Commissioner Moline felt the difference was that the MLS printout was in answer to a customer=s specific request, but the newsletter was broadcast to a number of people. Commissioner Moline said the author should simply get permission for newsletter listings, and that would meet the current requirement. Director Tyrrell clarified that the consent must come from the designated broker. Mr. Ward said that consent was implied in MLS listings.
Commissioner Wiebusch also felt there was a difference between information sent to a specific client and general advertising, and that getting permission would solve the problem. Commissioner Johnson said Mr. Nicholls could just leave out that one broker=s listings. Commissioner Landow noted that designated brokers could give permission with a blanket letter, which would end the discussion. Commissioner Wiebusch agreed.
Chairperson Moore asked Counsel Widger if there was a legal difference between general advertising and information provided to a specific customer. Counsel Widger said no, because by definition, both were considered advertising. Counsel Widger noted that the regulations contained broad definitions.
Commissioner Wiebusch said that if the designated broker wished to give permission, it should include all forms of advertising to broaden the scope.
Commissioner Fletcher asked which synopsis would be in the brochure box. Mr. Ward said listing agents would use the customer listing synopsis for the brochure box. Mr. Ward said the agent listing synopsis was not appropriate for customers, because it contained information on whether the property was vacant, showing instructions, etc.
Commissioner Johnson said the customer listing synopsis should just sayAcall Pat Ward,@ not state that the agent is Pat Ward. He felt it was confusing to say AAgent: Pat Ward.@
Commissioner Landow proposed simply having Director Tyrrell write Mr. Nicholls a letter indicating the Commission=s recommendation to get permission from designated brokers. Commissioner Landow asked if that would cause Mr. Nicholls a problem. Commissioner Nigro said she did not think so, because Mr. Nicholls could just delete the listings for which he could not get permission. Commissioner Moline asked if the permission letter could say that any MLS listing could be used. Commissioner Landow said yes, it could be a blanket form letter. Director Tyrrell said there would be no problem if he got permission, and that there was not much difference between the customer listing synopsis and the newsletter farming tool.
Commissioner Landow recommended putting a reminder article in the Commission Comment that the statute requiring permission applies to all forms of advertising. Commissioner Nigro noted that the requirement might eliminate advertising of some listings, but would not affect buyer agency. Commissioner Landow said there may be no difference in the statutory language, but he thought there was a big difference between the newsletter and the MLS information.
Counsel Widger said that since the newsletters were a generally accepted custom and practice in the real estate industry, and had been going on for so long, licensees may have expressed knowledge and consent. The consent may be implied by not objecting. If brokers do not want to give consent, it would be their obligation to come forward and say so. Counsel Widger cautioned that she had not researched this particular issue, but it would seem logical in light of similar case law. Commissioner Nigro noted that this was the first person who raised the issue in 15 years. Director Tyrrell agreed, and said if someone said they do not want their listings in Mr. Nicholls= newsletter, he could just remove their listings until he gets their permission.
Commissioner Moline asked if agent branding would also require permission, since Mr. Nicholls needed to obtain permission for newsletter listings. Counsel Widger said that Mr. Nicholls= situation involved custom and practice, so he would not need to obtain advance permission, but would need to pull listings if a broker complained. Counsel Widger thought the principle might apply to both instances. Commissioner Nigro noted that other licensees do newsletters too. Commissioner Moline said that obtaining permission would provide a safe harbor.
After discussion, a motion was made by Landow and seconded by Nigro to have Director Tyrrell put an article in the Commission Comment clarifying permission requirements, with the caveat on custom and practice if supported in case law. Motion carried with Fletcher, Johnson, Landow, Moline, Nigro, Wiebusch, and Moore voting aye.
Finalize Amendments to Seller Property Condition Disclosure Statement, Agency Relationships, and Real Estate License Acts
Counsel Widger presented Exhibits which included proposed changes to the Seller Property Condition Disclosure, Agency Relationships, and License Law statutes. A copy of said Exhibits are attached to and made a part of these Minutes, denoted as 14a, 14b, and 14c respectively.
Counsel Widger reviewed the Exhibits in detail. The changes included the items discussed at the previous Meeting regarding additional disclosure exceptions, transfer fees, and restrictions on branch managers. Counsel Widger noted that the language was the consensus achieved between staff, the Nebraska Realtors Association, and the Legislature=s bill drafter.
Director Tyrrell noted two additional changes that needed to be made regarding agency disclosure exemptions, to referenceAindustrial@ rather than Aindustry,@ and to reference Adisclosures required by this section.@ Director Tyrrell said there may be other technical changes needed as well, for spelling, punctuation, etc.
After discussion, a motion was made by Fletcher and seconded by Nigro to use Exhibits 14a, 14b, and 14c to introduce legislation in the 2001 Legislative Session, as amended with the changes noted by Director Tyrrell and any technical changes needed. Motion carried with Fletcher, Johnson, Landow, Moline, Nigro, Wiebusch, and Moore voting aye.
Director Tyrrell said that the legislation drafts, as amended, will be posted to the website as soon as possible. When the drafts are available from the Clerk of the Legislature=s office, a link to the Clerk=s web site will be added to the Commission=s web site so people can get updated information from the official source.
Consider Transfer Fee Change
Director Tyrrell noted that there was no Exhibit for this Agenda Item. The Commission had indicated it wanted to discuss changing the transfer fee. The transfer fee is currently $25.00, and the range allowed by statute is $1.00-$50.00.
A motion was made by Moline and seconded by Wiebusch to change the transfer fee to $10.00.
Chairperson Moore asked how the change would affect the revenue stream. Director Tyrrell said it would reduce transfer revenue by approximately 60%. Commissioner Moline asked how many transfers were completed per year. Director Tyrrell said that 720 were estimated for budget planning for this year.
Chairperson Moore noted that, since the amount budgeted was approximately $18,000.00, the income for a full year would be down to approximately $7200.00.
Director Tyrrell noted that the Commission had already received and processed several transfers with an effective date of January 1, 2001. Commissioner Moline amended his motion to make the transfer fee change effective on January 15, 2001. Commissioner Wiebusch accepted the amendment.
Commissioner Moline said that when the employing broker of a firm changes, the firm takes an awfully big hit for transferring all the affiliated licensees at one time. This cost is above and beyond the normal budget. Commissioner Moline asked if the Commission=s cash fund balance was above the budgeted amount. Director Tyrrell said the cash fund balance was up by about $80,000.00. Commissioner Moline said it would be a windfall for the Commission if a big broker transferred.
Director Tyrrell said that there were 800-1200 actual transfers in each of the past two years.
Commissioner Landow asked if the Commission could lower the fee if more than a certain number of transfers were involved. Chairperson Moore said the Attorney General=s office had determined that a stairstep plan would not be approved. Commissioner Moline said it seemed easier to lower it across the board for all transfers, and that it would not affect the Commission=s overall budget in a major way. Director Tyrrell noted that a stairstep plan could also create a political situation between large and small companies. Chairperson Moore said it would be a break for big companies that would not be available to small companies. Commissioner Landow asked if the transfer fee only affected licensees when a company changed brokers. Commissioner Nigro said no, it also affected individuals changing employers.
Commissioner Nigro asked why Commissioner Moline proposed that the fee be $10.00. Commissioner Moline said he had considered proposing either $10.00 or $15.00; that he thought it would be nice to give individual licensees a break; and that the license renewal fees should cover the entire cost to run the Commission office, so that licensees are not hit for additional fees at every turn. Commissioner Landow said it seemed that it would only be a significant impact on large company transfers, and that the difference between $25.00 and $10.00 would not significantly impact individuals. Commissioner Landow thought the proposal was designed for the benefit of 2-3 large companies. Commissioner Moline disagreed, and said it would also benefit each individual licensee. Commissioner Moline noted that if Commissioner
Fletcher were to change careers, each person working for him would take a hit. Commissioner Landow said it would also cost licensees if their employing broker died.
Commissioner Nigro clarified that CBSHOME paid the fees for that company=s transfers. Director Tyrrell said yes, the company had paid approximately $9000.00. Commissioner Moline said the employing broker would usually pay those fees. Commissioner Wiebusch said that, if a company made a decision which affects its employees, the employing broker would pay the fees, and that would be a hit regardless of the size of the company or the fee.
Chairperson Moore asked if total revenue was $868,000.00 for the past year. Director Tyrrell said yes. Total anticipated revenue for year for budget purposes was $797,000.00. Commissioner Landow asked what expenditures were. Director Tyrrell said the budgeted amount was $873,709.00, plus $98,000 carryover from the previous year. Commissioner Moline said that was Astate math,@ that there was actual income of $868,640.00 last year, and the cash fund balance was up. If there was an eventual shortfall, the cost should be on all licensees, not just those who changed brokers. Chairperson Moore noted that the transfer fee change would lead to a potential decrease in income of approximately $12,000.00, and there would be an additional decrease of $5-10,000.00 with online transactions. Chairperson Moore also noted that the Commission usually spent approximately 95% of its budget. Director Tyrrell agreed. Chairperson Moore also recognized the benefit to licensees of lowering fees and making things more convenient for them.
Commissioner Landow said that, if Commissioner Moline=s logic was followed across the board and all costs were paid by renewals, the Commission could lower the transfer fee to the lowest statutorily allowed fee of $1.00. Commissioner Moline said that was fine with him. Chairperson Moore noted that there are costs associated with transfers, which may be hard to track. Director Tyrrell clarified that transfer costs for 1998-1999 were approximately $24,500.00, with revenue of approximately $30,600.00, which included a large company transfer; and transfer costs for 1999-2000 were approximately $22,900.00, with revenue of approximately $20,500.00. Commissioner Landow said, based on that, the Commission should not lower the fee at all, or maybe just lower it to $24.00.
Commissioner Johnson noted that lots of licensees do not transfer for 20 years, and asked why they should pay for those who transfer frequently. Commissioner Johnson also noted that lots of organizations consider the transaction cost when setting fees. Commissioner Johnson would not be in favor of a $1.00 transfer fee, but was OK with $10.00. Commissioner Landow said that if a transfer cost a certain amount to administer, the Commission should collect that amount. No business would charge fees that did not cover costs. Commissioner Landow still felt that lowering the transfer fee was only designed to help the really big companies. He agreed that all things are relative, and the fee affected all licensees, but noted that there was substantially less impact on small companies. Commissioner Landow did not know how the Commission could justify not covering costs.
Chairperson Moore asked when on-line transactions would be available. Director Tyrrell said that may be in February or March, and that transfers would be among the first transactions implemented. Chairperson Moore asked if on-line transactions would decrease paperwork in the office. Director Tyrrell said it might, if the transaction was done completely on-line, and payment was made by credit card. Director Tyrrell said that staff would also need to get the pocket card back, and there was no way to do that on-line. Chairperson Moore asked if it would decrease keystrokes done by staff. Director Tyrrell said there would be a charge to get the information into the office database. Chairperson Moore asked, if licensees do the data entry for us, would it decrease the work done by office staff. Director Tyrrell said it would help as far as data input, but staff would still have to get the pocket card from the licensee, and the wall certificate from the broker. The old pocket card would be filed, the wall certificate would be requested, and when it came in, it would be mailed to the new broker along with the new pocket card. Chairperson Moore asked how difficult it was to create the new pocket card. Director Tyrrell said the database would automatically create the new pocket card, and that the wall certificate would not change. On-line savings would be data entry, which the staff person would review prior to importing the information into the database.
Commissioner Wiebusch asked for the administrative expense per transfer. Chairperson Moore estimated it at approximately $24.00. Director Tyrrell said the 98-99 cost was $21.00 per transfer, which included revenue from the big transfer that year. Without that big transfer, the cost was $27.84 per transfer.
Commissioner Moline asked what would happen if nobody transferred, and whether the Commission would go under. Director Tyrrell said the Commission would not go under if there were no transfers. Commissioner Moline asked if an employee would be let go. Director Tyrrell said not after just six months, but maybe after a year or so if the position was no longer needed. Commissioner Moline maintained that renewal fees funded the basic workings of the Real Estate Commission. Director Tyrrell noted that over 50% of the Commission=s operating capital came from renewals, which funded services without associated fees. Chairperson Moore asked if the Commission had 1 FTE (full-time employee) for transfers. Director Tyrrell said that approximately 50% FTE was for transfers, and the rest of the job involved license issuance and other duties. Chairperson Moore asked if approximately half of the person=s time was spent on transfers, and half on license issuance. Director Tyrrell said he did not have the exact figures with him, but that was approximately correct, and that the actual figure may be 60/40 or 70/30.
Commissioner Wiebusch said that Commissioner Landow influenced her thoughts. She felt it came down to whether the Commission wanted the transfer fee to cover the cost of a particular transfer, or whether to have renewals cover all administrative costs.
Commissioner Moline asked what other costs did not have associated fees. Director Tyrrell said enforcement had no associated fees, because there was no fee to file a complaint or to have a trust account examined. Education was another area, because there was no fee to have a course approved. Commissioner Moline noted that ARELLO charged for course certification. He said it was a matter of which things you put a fee on, and which do you not.
Commissioner Fletcher asked if the Commission would be allowed to set different fees for on- line versus hands-on transactions. Counsel Widger said that, without further research, she thought that could be allowed, because staff could justify a workload difference. Director Tyrrell noted that there would not be much difference until staff can import information submitted on-line into the database.
Commissioner Landow agreed with Commissioner Moline that the Commission does not charge a fee for everything, and asked what are fees charged, and why. Commissioner Landow asked if it was based on tradition. Director Tyrrell said that was part of it, and some fees are statutory. Counsel Widger noted that the Commission is required by statute to charge fees for certain transactions. Counsel Widger said that the Commission had no authority to charge a fee if it was not in statute.
Commissioner Nigro said she thought the Commission was addressing the situation too soon, and should wait until they knew what on-line transactions actually cost. Commissioner Moline said the State Association may go to the Legislature and request a lower transfer fee, or try to take it away from the Commission altogether. Director Tyrrell said that if the Legislature got rid of Aup to@ fees and went with set amounts specified in statute, the Commission would have no authority to set fees without changing the statute.
Commissioner Landow asked when on-line costs would be known. Chairperson Moore said a contract was signed on Monday to allow provision of the services involved. Commissioner Landow asked if the issue could be tabled until on-line transactions were actually being done. Chairperson Moore said it could.
Chairperson Moore said it was hard to argue that a fee was not fair if that was what it cost to administer the transaction. Commissioner Moline said you could, based on what you have to do in the office to get it done. Commissioner Landow said that was a fair point, and that obviously costs like rent would not decrease if the transactions were not being done.
A motion was made by Moline and seconded by Wiebusch to amend the motion to lower the transfer fee to $15.00, instead of lowering it to $10.00 as originally moved.
Commissioner Moline said the Commission could address changing the fee after on-line transactions were being done, to maybe $25.00 if done in the office, and $10.00 if done on-line. Chairperson Moore said it would not be wise to lower, then raise the fee. Chairperson Moore also noted that the Commission was voting on an approximately $8000.00 revenue reduction per year.
A vote was taken on the pending motion to amend the original motion, to change the proposed transfer fee to $15.00 instead of to $10.00. Motion carried with Fletcher, Johnson, Moline, Wiebusch, and Moore voting aye, and with Landow and Nigro voting nay.
A vote was then taking on the pending motion as amended, to lower the transfer fee to $15.00 effective January 15, 2001. Motion carried with Fletcher, Johnson, Moline, Wiebusch, and Moore voting aye, and with Landow and Nigro voting nay.
Finalize Errors and Omissions Request for Proposals (RFP)
Director Tyrrell presented an Exhibit which consisted of the Request for Proposals regarding the Errors and Omissions Insurance Contract. A copy of said Exhibit is attached to and made a part of these Minutes.
Director Tyrrell noted that forms and attachments had been updated since the November Meeting, and that Attachments A and B would also be updated prior to sending out the RFP. Director Tyrrell reviewed the timeline for the RFP process.
After discussion, a motion was made by Landow and seconded by Fletcher to proceed with the RFP as outlined in the Exhibit, with the updated Attachments.
Commissioner Moline asked about the broker requirement for five years of experience, and whether that had to be five years with the same firm. Director Tyrrell said he thought it required five years of experience regardless of the firm, but that determination would have to be made by the State Risk Manager.
A vote was taken on the pending motion. Motion carried with Fletcher, Johnson, Landow, Moline, Nigro, Wiebusch, and Moore voting aye.
Affirm Approval of Travel to ARELLO Special Meeting - January 11-14, 2001 - Sarasota, Florida
Director Tyrrell presented information regarding the ARELLO Special Meeting, which will be held January 11-14, 2001, in Sarasota, Florida. Director Tyrrell noted that he had gotten approval from six of the Commissioners by telephone, but wanted an official vote on the expenditures.
After discussion, a motion was made by Wiebusch and seconded by Landow to approve expenditures for the ARELLO Special Meeting. Motion carried with Fletcher, Johnson, Landow, Moline, Nigro, Wiebusch, and Moore voting aye.
Legislative Matters were addressed under Agenda Item 14, Finalize Amendments to Seller Property Condition Disclosure Statement, Agency Relationships, and Real Estate License Acts.
ARELLO Annual Meeting Dates
Director Tyrrell reported that the ARELLO Annual Meeting Dates were changed to October 13-16, 2001.
No action was necessary on this Report
Database Inquiry Demonstration
By consensus of the Commission, the database inquiry demonstration was not done. Director Tyrrell said members of the public will be able to search the licensee database by town, name, zip code, company name, or almost any criteria in the database. Information available will include the licensee=s employer, contact address, and license expiration date. The database will be updated every day, so information will be current. Continuing education and errors and omissions insurance for each licensee are password protected, and passwords will be mailed with each licensee=s pocket card. The database will be up at 5:00 p.m. on Monday, December 18th, in Chairperson Moore=s honor.
Future Meeting Dates
January 23-24, 2001 - Staybridge Suites, Lincoln
Commissioner Wiebusch said it had been a pleasure to serve on the Commission with Chairperson Moore, and that he will be missed. Chairperson Moore said he was impressed by the dedication Commissioners showed in doing the people=s work, and that Commissioners make a sacrifice to serve. Chairperson Moore invited everyone to stop by his retirement party tonight.
Recesses and Adjournment
At 10:15 a.m. on December 13, Chairperson Moore declared a brief recess, and reconvened the Meeting at 10:27 a.m.
At 11:45 a.m. on December 13, a motion was made by Landow and seconded by Wiebusch that the Meeting adjourn. Motion carried with Fletcher, Johnson, Landow, Moline, Nigro, Wiebusch, and Moore voting aye.
I, Les Tyrrell, Director of the Nebraska Real Estate Commission, do hereby certify that the foregoing Minutes of the December 13, 2000, Meeting of the Nebraska Real Estate Commission were available for inspection on December 28, 2000, in compliance with Section 84-1413(5) R.R.S. 1943, of Nebraska.
Guests Signing the Guest List
John A. Gale, Secretary of State=s