NEBRASKA REAL ESTATE COMMISSION

April 17, 2000

Crowne Plaza Old Mill                     Dodge Ballroom I                     Omaha, NE


Opening

Chairperson Moore convened a Meeting of the Nebraska Real Estate Commission at 9:00 a.m. on April 17, 2000, in the Dodge Ballroom I of the Crowne Plaza Old Mill, located at 655 North 108th Avenue in Omaha, Nebraska. All of the members of the Real Estate Commission were present except for Commissioner Paul Landow, who was absent and excused. 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 Hearing in Complaint #1999-041.

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 a APublic 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 there were no changes to the Final Agenda.

After review of the Final Agenda, a motion was made by Nigro and seconded by Hansen to adopt the Final Agenda as presented. Motion carried with Fletcher, Hansen, Moline, Nigro, Wiebusch, and Moore voting aye, with Landow not participating or voting, being absent and excused.

Minutes of March 21, 2000

The Minutes of the Commission Meeting held on March 21, 2000, were considered.

After review, a motion was made by Nigro and seconded by Wiebusch to approve the Minutes as presented. Motion carried with Fletcher, Hansen, Moline, Nigro, and Wiebusch voting aye, with Moore not voting, not having been present at the Meeting, and with Landow not participating or voting, being absent and excused.

Receipts and Expenditures Reports for March

Director Tyrrell presented the Receipts and Expenditures Report for March 2000. A copy of said Report is attached to and made a part of these Minutes.

With regard to the March Report, Director Tyrrell noted the following: There was nothing unusual to report in Receipts. In Expenditures: Category 4100, Personal Services, included two months of Commissioners= per diem; Category 4242, Rent-Buildings, included Commission Meeting room rental; Category 4311, Office Supplies, was over the monthly budgeted amount because staff stocked up on fax toner, paper, and labels; Category 4414, Education Services, showed no expenditure because the March examinations were not billed until April 3.

Commissioner Wiebusch asked about the budgeted amount in Category 4215, Publications and Printing. Director Tyrrell said that amount was budgeted for the License Manual revision and update, which are currently being printed but have not yet been billed.

The Cash Fund Balance as of March 31, 2000, was $575,101.25, which compared to a Cash Fund Balance of $465,602.17 on March 31, 1999.

Following discussion, a motion was made by Fletcher and seconded by Hansen to file the March Receipts and Expenditures Report for audit. Motion carried with Fletcher, Hansen, Moline, Nigro, Wiebusch, and Moore voting aye, with Landow not participating or voting, being absent and excused.

Specialized Registrations

Director Tyrrell presented the Specialized Registrations Report, which listed one Time Share Registration for Westgate Town Center. A copy of said Report is attached to and made a part of these Minutes.

Following discussion, a motion was made by Wiebusch and seconded by Nigro to approve the Westgate Town Center registration as presented. Motion carried with Fletcher, Hansen, Moline, Nigro, Wiebusch, and Moore voting aye, with Landow not participating or voting, being absent and excused.

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 Moline and seconded by Hansen to ratify issuance of the licenses as set forth in the Report. Motion carried with Fletcher, Hansen, Moline, Nigro, Wiebusch, and Moore voting aye, with Landow not participating or voting, being absent and excused.

License Recognition Agreement - Ohio

Deputy Director Hoffman presented a copy of the proposed License Recognition Agreement with Ohio. A copy of said Agreement is attached to and made a part of these Minutes.

Deputy Director Hoffman noted that the agreement will allow Nebraska licensees to obtain reciprocal Ohio licenses, and allow dual license holders to meet continuing education requirements in their resident jurisdiction only. Some additional requirements that the Ohio agreement dictated included: broker applicants must have been continuously licensed for the prior two-year period; salesperson applicants must have been continuously licensed for the prior one-year period; principal (employing) brokers must maintain an active place of business in the nonresident state, which must be a physical location, not just a PO Box; and applicants for Ohio licenses must take the state portion of the Ohio examination.

Director Tyrrell explained that the physical location could be an office suite situation, where someone is there to answer the telephone for several businesses, or a nonresident could work with a resident broker. This was a requirement of Ohio law, and their attorneys are still working to eliminate that requirement. Director Tyrrell noted that Ohio is not very active in ARELLO, and that Ohio had sent requests for reciprocal agreements to all ARELLO jurisdictions.

Deputy Director Hoffman said that the agreement was a significant improvement over the previous situation, because Ohio pre-license education had been virtually inaccessible to nonresidents.

Commissioner Nigro clarified that Ohio had approached Nebraska. Deputy Director Hoffman said yes, and Director Tyrrell noted that Nebraska had made initial contact several years ago.

Commissioner Moline asked how the physical location requirement would be removed from the agreement, when and if the time came. Director Tyrrell said that it would probably be presented to the Commission as an amendment to the agreement.

Following discussion, a motion was made by Wiebusch and seconded by Fletcher to give Director Tyrrell the authority to enter into the License Recognition Agreement with Ohio. Motion carried with Fletcher, Hansen, Moline, Nigro, Wiebusch, and Moore voting aye, with Landow not participating or voting, being absent and excused.

Examination Report - March

Deputy Director Hoffman presented a Report relating to the Real Estate Examinations administered during March 2000. A copy of said Report is attached to and made a part of these Minutes.

Deputy Director Hoffman noted that another graph had been added to show the passing rate percentage fluctuations, as requested by the Commission at the March Meeting. Deputy Director Hoffman said that Ms. Burklund had created the tables and graphs. Commissioner Wiebusch thanked Ms. Burklund, and said they were very interesting.

After review, a motion was made by Fletcher and seconded by Nigro to ratify the March Report for the purpose of issuing licenses. Motion carried with Fletcher, Hansen, Moline, Nigro, Wiebusch, and Moore voting aye, with Landow not participating or voting, being absent and excused.

Real Estate Education Matters

Continuing Education Activity Approval

Deputy Director Hoffman presented for ratification the Continuing Education Activity Approval Report, which listed approvals for three continuing education activities. A copy of said Report is attached to and made a part of these Minutes.

After discussion, a motion was made by Moline and seconded by Nigro to ratify the Report. Motion carried with Fletcher, Hansen, Moline, Nigro, Wiebusch, and Moore voting aye, with Landow not participating or voting, being absent and excused.

Continuing Education Instructor Approval

Deputy Director Hoffman presented for ratification the Continuing Education Instructor Approval Report, which listed approvals for thirteen 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 Wiebusch and seconded by Moline to ratify the Report. Motion carried with Fletcher, Hansen, Moline, Nigro, Wiebusch, and Moore voting aye, with Landow not participating or voting, being absent and excused.

During discussion, Commissioner Wiebusch asked whether Deputy Director Hoffman reviews the feedback sheets from continuing education courses. Deputy Director Hoffman said it is not automatically done for all courses, but that providers keep them and provide them to Commission staff upon request. Such requests are routinely made at random, or when the Commission has received critical comments. Deputy Director Hoffman asked Commissioners to stress the importance of completing evaluation forms. Discussion ensued regarding the challenge of administering continuing education, using examples from the recent Nebraska Realtors Association Convention. Deputy Director Hoffman noted that Lisa Betts, the Education Director for the Association, was eager to comply with continuing education regulations. Deputy Director Hoffman noted that convention settings are particularly challenging, with large classes in heavily trafficked areas. Deputy Director Hoffman reported that she had supported the Association=s compliance measures at the meeting and in follow-up inquiries. Deputy Director Hoffman also cautioned that evaluations are less reliable when those in attendance are there for matters of convenience or price rather than subject matter and pertinence.

Director Tyrrell informed the Commission that there was a possibility that Deputy Director Hoffman may be asked to run for President-Elect of ARELLO in 2000, instead of in 2002 as previously discussed. In general, the Commission felt it would be an honor for Nebraska, for the Commission, and especially for Deputy Director Hoffman.

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.

No action was necessary on this Report.

No Sworn Complaints and Investigative Matters were presented to the Commission.

Hearings

10:00 a.m. April 17 - Complaint #1999-041,

James P. & Cindy A. Ervin vs. David Joseph Egan

A Hearing was held on April 17, at 10:00 a.m., in the matter of Complaint #1999-041. Abbie Widger, Special Assistant Attorney General and Counsel to the Commission, appeared for the Complainant. Respondent David Joseph Egan was present and represented by Counsel John G. Liakos of Omaha.

After Opening Statements, Counsel Widger presented Exhibits which included a Joint Stipulation of Facts, an Acknowledgment of Disclosure form from NP Dodge, and the Commission-prepared Brokerage Relationships brochure. All Exhibits were offered and received by Chairperson Moore. Counsel Widger noted that the Complainants, who had originally intended to appear as witnesses, decided not to attend the Hearing. Counsel Widger called one witness, Director Les Tyrrell.

Counsel Widger said that the applicable disclosure statute was very clear, and stated specifically that if a seller was not represented by a designated broker, disclosure must be made in writing. Counsel Widger maintained it was not logical to exempt attorneys from the disclosure requirement, and noted the long list of others who were exempt from the Act, but not from the disclosure requirement.

Counsel Liakos presented one Exhibit, which consisted of a course completion certificate for Mr. Egan. The Exhibit was offered and received by Chairperson Moore. Counsel Liakos called three witnesses: Rick A. Hall, an attorney in Omaha; Harding Collis of NP Dodge in Omaha; and Mr. Egan.

Counsel Liakos noted that attorneys were exempt from the Real Estate License Act, and maintained that in the disclosure statute, Adesignated broker@ was synonymous with Aattorney.@ Counsel Liakos maintained that custom and practice in the Omaha area was that, when sellers were represented by attorneys, disclosure forms did not need to be completed. Counsel Liakos also maintained that Mr. Egan made disclosure when he identified himself verbally and presented a business card to the Ervins. Counsel Liakos stated that Mr. Egan had acted in good faith, and had not completed a disclosure form in this transaction because he thought he was not required to do so.

At 11:05 a.m., Chairperson Moore declared a brief recess, and reconvened the Hearing at 11:15 a.m.

At 11:40, after closing arguments had been presented, Chairperson Moore declared the Hearing concluded.

A motion was made by Fletcher and seconded by Hansen that the Complaint be dismissed.

Commissioner Fletcher concurred that Mr. Egan had acted in good faith, and noted that custom and practice in the area needed work. Commissioner Fletcher felt that clarification was needed on the issue, possibly in the form of a rule hearing.

Commissioner Hansen concurred with Commissioner Fletcher. In Commissioner Hansen=s experience, representation by an attorney was the same as representation by a broker. He felt that Mr. Egan had acted in good faith, had disclosed to the sellers that he was a real estate agent, and had assumed that he had no further obligation for disclosure.

Commissioner Wiebusch concurred, and said that clarification was needed to address current practices.

Commissioner Nigro said that she found it disquieting that Mr. Egan had direct contact with the sellers, even though he knew they were represented, and noted that contact should have only been made through the attorney.

Chairperson Moore felt there was a gray area, and that without discussion with the sellers, it was difficult to know the level of representation. Chairperson Moore thought the law was very clear that attorneys were exempted.

A roll call vote was taken on the motion to dismiss the Complaint. Motion carried with Fletcher, Hansen, Moline, Nigro, Wiebusch, and Moore voting aye, with Landow not participating or voting, being absent and excused.

Chairperson Moore announced that all Exhibits related to this Hearing would be retained in the Commission Office.

Counsel Widger asked how the Commission wanted to address current custom and practice. Chairperson Moore said that a discussion on the topic of the attorney=s role in buyer/seller disclosure should be an agenda item at the next Meeting, so that all interested parties could attend and participate.

The Hearing was adjourned at 11:47 a.m.

Informal Special Appearances

1:30 p.m. April 17 - Rhonda R. Sprau, Potential Salesperson Applicant

Director Tyrrell presented an Exhibit which included correspondence regarding Ms. Sprau=s Special Appearance, and letters and documentation regarding Ms. Sprau=s criminal history and treatment program. A copy of said Exhibit is attached to and made a part of these Minutes.

The Commissioners assembled at 1:25 p.m. for the Special Appearance, and waited until 1:45 p.m. for Ms. Sprau to appear. Ms. Sprau failed to appear at the Meeting, so no action was taken.

Legislative Matters - Final Report

Director Tyrrell presented a final report on legislation considered during the 2000 Legislative Session, and its impact on the Real Estate Commission.

No action was necessary on this report.

Information Matters

Trust Account Examinations Quarterly Progress Report

Deputy Director for Enforcement Mayrose presented the Trust Account Examinations Quarterly Progress Report. A copy of said Report is attached to and made a part of these Minutes.

Director Tyrrell noted that Examiner Bob Arterburn was ill during a large portion of the quarter.

No action was necessary on this Report.

Future Meeting Dates

The following dates are scheduled:

May 31-June 1, 2000 - Ramada Inn Airport, Lincoln
July 25-26, 2000 - TBA
August 23-24, 2000 - TBA
October 2-3, 2000 - TBA

Recesses and Adjournment

At 9:45 a.m. on April 17, Chairperson Moore declared a brief recess, and reconvened the Meeting at 10:00 a.m.

At 11:05 a.m. on April 17, Chairperson Moore declared a brief recess, and reconvened the Meeting at 11:15 a.m.

At 11:47 a.m. on April 17, Chairperson Moore declared a recess for lunch, and excused himself and Commissioner Nigro from the remainder of the Meeting.

At 1:45 p.m. on April 17, Acting Chairperson Hansen reconvened the Meeting.

At 1:45 p.m. on April 17, there being no further business to come before the Commission, a motion was made by Moline and seconded by Fletcher that the Meeting adjourn. Motion carried with Fletcher, Moline, Wiebusch, and Hansen voting aye, with Landow, Nigro, and Moore not participating or voting, being absent and excused.

I, Les Tyrrell, Director of the Nebraska Real Estate Commission, do hereby certify that the foregoing Minutes of the April 17, 2000, Meeting of the Nebraska Real Estate Commission were available for inspection on April 24, 2000, in compliance with Section 84-1413(5) R.R.S. 1943, of Nebraska.

Respectfully submitted,

Les Tyrrell

Director

Guests Signing the Guest List

Marla Payant, Nebraska Realtors Association, Lincoln
Jerry Ahlvers, Nebraska Realtors Association/Personal, Omaha
Harding Collis, NP Dodge, Omaha
John Liakos, Dave Egan, Omaha
Dave Egan, NP Dodge, Omaha
Harold Johnson, NP Dodge, Omaha
Rick A. Hall, self, Omaha