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.

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.

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 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.

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.

Specialized Registrations

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.

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

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.

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.

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.

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.

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.

Hearings

No Hearings were scheduled for this Meeting.

Informal Special Appearances

Galdino Guzman, Salesperson Applicant

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.

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 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.

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 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.

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 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.

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.

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 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.

Director Tyrrell said that there were 800-1200 actual transfers in each of the past two years.

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 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 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 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

Legislative Matters were addressed under Agenda Item 14, Finalize Amendments to Seller Property Condition Disclosure Statement, Agency Relationships, and Real Estate License Acts.

Information Matters

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

January 23-24, 2001 - Staybridge Suites, Lincoln
February 21-22, 2001 - Doubletree Hotel, Omaha
March 27-28, 2001 - Staybridge Suites, Lincoln
April 24-25, 2001 - TBA
May 22-23, 2001 - Staybridge Suites, Lincoln

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.

Respectfully submitted,
Les Tyrrell
Director

Guests Signing the Guest List