December 18, 2001

Chairperson Gale 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 Gale asked that guests sign the guest list.

Commissioner Johnson noted that on page 9, Mr. Glenn=s date of licensure should be April 2001.

Item A Complaint #2001-032 - Joseph Valenti vs. Michael Louis Riedmann & Thomas David Myers

Prior to discussion of this matter, Commissioners Johnson and Nigro recused themselves, thereby nullifying any potential conflict of interest. Deputy Director Mayrose presented the alleged violations and investigative report to the Commission and, when necessary, answered questions on this matter.

After being advised of the results of the investigation and discussion, a motion was made by Shepard and seconded by Wiebusch that the Complaint be set for Hearing on the alleged violations of Neb. Rev. Stat. ' 81-885.24(2) and (22). Motion carried with Moline, Shepard, Wiebusch, and Gale voting aye, and with Johnson and Nigro not participating or voting, having recused themselves, thereby nullifying any potential conflict of interest.

Item B Complaint #2001-036 - Marty Burrier vs. Nan L. Mull

Deputy Director Mayrose presented the alleged violations and investigative report to the Commission and, when necessary, answered questions on this matter.

After being advised of the results of the investigation and discussion, a motion was made by Moline and seconded by Nigro that the Complaint be dismissed without prejudice. Motion carried with Johnson, Moline, Nigro, Shepard, Wiebusch, and Gale voting aye.

Item C Complaint #2001-038 - William J. & Cindy C. Sarraillon vs. Vincent Muniz, Jr.

Prior to discussion of this matter, Commissioner Johnson recused himself, thereby nullifying any potential conflict of interest. Deputy Director Mayrose presented the alleged violations and investigative report to the Commission and, when necessary, answered questions on this matter.

After being advised of the results of the investigation and discussion, a motion was made by Moline and seconded by Wiebusch that the Complaint be set for Hearing on the alleged violations of Neb. Rev. Stat. ' 76-2418(1)(b) and Neb. Rev. Stat. ' 81-885.24(22), and that the Commission amend the Complaint regarding Neb. Rev. Stat. ' 76-2419. Motion carried with Moline, Nigro, Shepard, Wiebusch, and Gale voting aye, and with Johnson not participating or voting, having recused himself, thereby nullifying any potential conflict of interest.

Item D Complaint #2001-039 - Tracy A. Lee vs. John Robert Miller

Deputy Director Mayrose presented the alleged violations and investigative report to the Commission and, when necessary, answered questions on this matter.

After being advised of the results of the investigation and discussion, a motion was made by Wiebusch and seconded by Nigro that the Complaint be set on the alleged violations of Neb. Rev. Stat. ' 81-885.24(24) and (29). Motion carried with Johnson, Moline, Nigro, Shepard, Wiebusch, and Gale voting aye.

Item E Complaint #2001-040 - John R. & Candace W. Spurzem vs. Michele Colleen Schafer

Deputy Director Mayrose presented the alleged violations and investigative report to the Commission and, when necessary, answered questions on this matter.

After being advised of the results of the investigation and discussion, a motion was made by Moline and seconded by Nigro that the Complaint be dismissed without prejudice. Motion carried with Moline, Nigro, Shepard, Wiebusch, and Gale voting aye, and with Johnson voting nay.

Item F Complaint #2001-042 - David S. & Jacqueline P. Hillman vs. John E. Wiedel & Dwight A. Thimgan

Deputy Director Mayrose presented the alleged violations and investigative report to the Commission and, when necessary, answered questions on this matter.

After being advised of the results of the investigation and discussion, a motion was made by Nigro and seconded by Johnson that the Complaint be set for Hearing on the alleged violations of Neb. Rev. Stat. ' 81-885.24(22) and (29). Motion carried with Johnson, Moline, Nigro, Shepard, Wiebusch, and Gale voting aye.

Item G Complaint #2001-033 - Beverly A. Moore vs. Debbie Lea Rerucha

Deputy Director Mayrose presented the additional information requested by the Commission and, when necessary, answered questions on this matter.

It was the consensus of the Commission to send a letter to the seller=s agent explaining that the agent=s disclosure needed to be attached to the Seller Property Condition Disclosure Statement in the future.

Counsel Widger presented a Combined Stipulation and Consent Order for Gary A. Barnard, and a Stipulation and Consent Order for Kerri Ann Barnard, in the matter of Complaints #2001-001 and 2001-029 against Gary A. Barnard and Complaint 2001-002 against Gary A. Barnard and Kerri Ann Barnard Swoboda. Copies of said Orders are attached to and made a part of these Minutes. Mr. Barnard, Ms. Barnard Swoboda, and their attorney Tom Fitchett were present.

Counsel Widger reviewed the circumstances involved and noted the provisions of the Orders, which had been signed by the Respondents. Mr. Barnard=s Order specified a one-year suspension of his broker=s license, with one month served on suspension and the remainder served on probation, and 12 hours of additional continuing education in the areas of disclosure, agency, and property exchanges. Ms. Barnard Swoboda=s Order specified a censure of her broker=s license, and six hours of additional continuing education in the area of agency.

Counsel Widger noted that there was a lot of information in the Orders. Mr. Barnard=s Order involved multiple separate transactions, all of which happened within a relatively short time period after he acquired the real estate company. The majority of the problems involved details. Subsequent examinations show improvements had been made in office procedures. Mr. Barnard=s trust account balanced, and there were no allegations of misuse of funds. Counsel Widger said that Mr. Barnard=s completion of paperwork had improved substantially in the two years since the complaints were filed.

Mr. Fitchett stated that Ms. Barnard Swoboda had been a new licensee at the time of the complaints, and had made some minor errors which were technical violations. If the incidents were looked at separately, they would not look as bad. Little things had added up to something of consequence. Mr. Fitchett said he thought corrections had been made. Her father, Mr. Barnard, had his broker=s license for less than a year when he purchased the business in January 1999. At that time, it was anticipated that the former designated broker would assist in running the business, but Mr. Barnard was left on his own. Mr. Fitchett noted that did not excuse the errors. All the violations took place between April and August, but involved serious matters, so they felt suspension was a proper remedy given the facts and circumstances of case. Mr. Fitchett noted that Mr. Barnard could not conduct licensed activity for 30 days, and would be on probation for the remaining 11 months. During the initial month, Ms. Barnard Swoboda would be able to carry on the business because she had a broker=s license.

Mr. Fitchett said that Ms. Barnard Swoboda=s violations would not be considered major violations, and would not have resulted in a complaint against her, if complaints had not been filed against Mr. Barnard.

After discussion, a motion was made by Nigro and seconded by Wiebusch to enter into Ms. Barnard Swoboda=s Order as presented. Motion carried with Johnson, Nigro, Shepard, Wiebusch, and Gale voting aye, and with Moline not participating or voting, having recused himself, thereby nullifying any potential conflict of interest.

After discussion, a motion was made by Wiebusch and seconded by Johnson to enter into Mr. Barnard=s Order as presented. Motion carried with Johnson, Nigro, Shepard, Wiebusch, and Gale voting aye, and with Moline not participating or voting, having recused himself, thereby nullifying any potential conflict of interest.

Consider Revisions to ABrokerage Relationships in Real Estate Transactions@ Brochure

Jerry Ahlvers of the Nebraska Realtors7 Association presented an Exhibit which included the current proposed revisions to the ABrokerage Relationships in Real Estate Transactions@ brochure, as discussed at the previous Meeting. A copy of said Exhibit is attached to and made a part of these Minutes.

Mr. Ahlvers said that the Nebraska Realtors7 Association wanted separate brochures due to confusion. Most licensees work with either buyers and sellers or tenants and landlords. Mr. Ahlvers said there should probably still be a logo of some kind on the front, like the current brochure. Mr. Ahlvers began to review each proposed change and the reasoning behind them. Director Tyrrell noted that the Commission went through all the changes at last month=s Meeting, and proposed that Mr. Ahlvers just review the changes since then. Director Tyrrell also proposed that an article be placed in the March 2002 Commission Comment to let brokers know about the new brochures, but make the effective date May 2002 and allow brokers to use the new brochures earlier if desired. Chairperson Gale asked if it should be an issuance date or an approval date. Director Tyrrell said it would be good to allow a transition period, as the Commission had in the past, so that copies could be distributed to all brokers and an article could be placed in the Commission Comment. The Commission could make the effective date May 1, and that would be the deadline for brokers to begin using the revised brochures. Chairperson Gale said the Commission could come back to it.

Commissioner Moline noted that, on the old brochure, it said Aapproved by the Nebraska Real Estate Commission@ at the top. The blanks were left for the brokers to show which specific services would be offered, and brokers had leeway in completing them. Commissioner Moline thought the brochure should say Athis disclosure is required by the Nebraska Real Estate Commission,@ since the Nebraska Real Estate Commission was not responsible for filling in the blanks. Mr. Ahlvers said he had no problem with that. Chairperson Gale asked if the Commission should strike the Nebraska Real Estate Commission reference. Commissioner Moline noted that this disclosure was required by the Nebraska Real Estate Commission. Counsel Widger suggested that the reference be moved down, and state that Athe information contained in this disclosure is required by the Nebraska Real Estate Commission.@ Mr. Ahlvers said the language placement should be at the top, since the brochure was distributed at the first substantial contact, so the public would know it was not a contract.

Commissioner Moline asked if it should explain that the brochure was required at the first substantial contact at the top. Commissioner Wiebusch said she did not know how many people saw the front of the brochure, but they definitely saw the disclosure statement blanks. Mr. Ahlvers said the Nebraska Realtors7 Association was trying to keep it simpler for the public to understand. Mr. Ahlvers said that, for most people at the first meeting, asking them to sign something is like asking them to make a commitment.

Commissioner Wiebusch asked if there was a statement above the blank spaces that explained what was there. Mr. Ahlvers said each company should put an explanation there. Commissioner Wiebusch asked why it was not in the original. Director Tyrrell noted that the instructions to brokers on completing the brochure regarding services offered explained what information should be added. The wording Awill or will not provide the following services@ came from the law. Mr. Ahlvers said the Commission would not want generic language added to the form, because it was up to each broker which services to provide. Commissioner Moline noted that brokers have to use a different type face to show which language had been added. Mr. Ahlvers noted that a section was only filled in if the broker offered it, and putting in generic language would be more confusing to the public.

Chairperson Gale asked for clarification that each broker added what they wanted to offer in the form=s blanks. Mr. Ahlvers said that was right. Brokers could not change the form, they could just add what they would offer. Chairperson Gale asked if the form was in rule and regulation. Director Tyrrell said no, that the law charged the Commission to prepare a form for use by licensees. It was not in rule and regulation on purpose, so that it could be changed quickly if needed, as an agenda item. Chairperson Gale asked if the form must be used by every broker, once it was approved. Director Tyrrell said that was correct, as of whatever effective date the Commission chose.

Mr. Ahlvers said that, inside the first page of the brochure, in the acknowledgement section, the blank for the name of the company was stricken, and he did not know why. He felt the Commission needed to put the name of the company back in. The Commission should also make sure the licensee name is printed as well as signed, and the Nebraska Realtors7 Association proposed putting it in at the bottom of the acknowledgement page.

Commissioner Moline asked if two brochures would be required for each person. Mr. Ahlvers said yes. Commissioner Moline said there used to be an option to check one easy box for a listing presentation, and asked what was the thought process for the change. Mr. Ahlvers said the brochure was basically to tell if a licensee was going to represent or not represent a person. If a licensee visited with someone, that was different than showing or measuring property. This change was based on comments from the Nebraska Realtors7 Association committee to make it simpler for the public. Mr. Ahlvers said he could see what Commissioner Moline meant.

Commissioner Moline asked if the licensee=s telephone number should be included, if the name of the licensee and the name of the company were included. Mr. Ahlvers said that was not brought up in committee, but the individual would have the licensee=s business card.

Mr. Ahlvers said licensees were just trying to comply with the law, and he did not know if buyers or sellers really understood the brochure at the first initial contact. The Nebraska Realtors7 Association was trying to simplify it, but every time you read it and thought it was laid out, the simplicity went away. Chairperson Gale said it was a move toward clarity by separating the different types of transactions. The Commission was not trying to rewrite it for the industry, but was trying to not confuse the public. Chairperson Gale said it was hard to anticipate confusion, and noted that the Commission could change it at any time.

Mr. Ahlvers asked why there would be a separate box for client or customer if a licensee was a limited seller=s agent. Commissioner Moline said he had no clue. Director Tyrrell said it was required by law. Mr. Ahlvers said it did not have it before. Director Tyrrell read the wording on the current brochure, and noted that the Nebraska Realtors7 Association changes eliminated Box 1. Director Tyrrell reported that there was 90% compliance on the current brochure last summer. Director Tyrrell said the Commission could leave the current brochure as is, so people who were comfortable with it could still use it, and the Commission could just make these two available for use also. Director Tyrrell said he did not know if the changes made the brochure simpler or more confusing.

Jerry Ahlvers, representing the Nebraska Realtors7 Association, presented an Exhibit which included proposed revisions to Title 302. A copy of said Exhibit is attached to and made a part of these Minutes.

Commissioner Moline noted that some of the items proposed to be deleted may be there to make buyers think of them, and find out about them before they bought a property. Commissioner Moline noted that having a sump pump discharge to a public sewer was illegal, and that exposed wiring was frequently found in older homes, and was dangerous. Since the Ado not know@ option was allowed, Commissioner Moline questioned why those items should be eliminated. Mr. Ahlvers said he could see keeping the items that were illegal, but asked where you would draw the line. Mr. Ahlvers questioned whether it was necessary to say how many vents were included in the heating system. Commissioner Moline noted that some items protected licensees, even if it was a hassle to fill out. Mr. Ahlvers said the Association had no problem one way or the other, and that they were just trying to keep it simple. Mr. Ahlvers noted that whether certain items were deleted or not was up to the Commission.

Director Tyrrell noted that #9 on page 5 referred to any window which leaked, and only to thermopanes regarding broken seals. With the Association changes, it only referenced insulated windows, not all windows. Mr. Ahlvers said the committee felt the question addressed only insulated windows, and that thermopane was actually a brand name. Commissioner Johnson said the item should state Aany windows which leak, or any insulated windows with broken seals.@

Mr. Ahlvers noted that the Association wanted to eliminate #8 in Section B on page 6 because the list of hazardous substances may be extensive, and would include White-Out. Director Tyrrell said that, in the Commission=s previous discussion of that item, the intent was to identify the EPA as the authority on hazardous material. Director Tyrrell thought that the EPA had since given the Department on Environmental Quality the authority to designate a list of hazardous substances for Nebraska.

In #1-5 on page 7, Commissioner Wiebusch agreed that most people did not understand the term Aimprovements,@ but asked if other buildings on the property should be included.

Commissioner Moline suggested that the wording for #14 on page 8 be changed because it would not include the kid=s cat, which was not owned by the property owner, or boarded animals. Discussion ensued on the fact that this item was a major consideration for some buyers. It was the consensus of the Commission to change the wording. Commissioner Nigro asked if an item on smokers should be added. Mr. Ahlvers said that a buyer could readily tell if a heavy smoker had lived in a home.

Director Tyrrell noted that Abelief and knowledge@ in the Seller=s Certification was statutory language.

Mr. Ahlvers noted that, in the Buyer=s Acknowledgement section, #5 was an addition and 3 items were explaining the document to them. Director Tyrrell noted that, in general, it seemed the Association had attempted to turn the Seller Property Condition Disclosure form into an agreement. Director Tyrrell noted that it said they agreed to do this or that, or relied on this or that, and asked if it should say Asee an attorney before you agree to these terms.@ Counsel Widger said the acknowledgement should just acknowledge that the buyer received a copy of the form and read it. Counsel Widger said the Commission could add #5, to relieve the licensee of notification liability, but items 2, 3, and 4 could establish a contract, and could lead to more licensee civil liability and more litigation. Counsel Widger noted that these forms were laying around at all open houses, and were not always presented at the time of the offer.

Mr. Ahlvers said he would work with staff on the Commission=s concerns, but wanted to leave in #5. Director Tyrrell said he would work with the Nebraska Realtors7 Association to settle the issues raised during the Commission=s discussion. Commissioner Wiebusch and Commissioner Moline volunteered to help staff and the Nebraska Realtors7 Association to resolve the issues. A revised Exhibit will be brought back to the Commission.

Perre Neilan, representing the Nebraska Realtors7 Association, presented an Exhibit which consisted of a proposed draft of a legislative bill. A copy of said Exhibit is attached to and made a part of these Minutes. Mr. Neilan also distributed an Exhibit entitled AMain Components of REQ 1519 From the Nebraska Realtors7 Association.@ A copy of said Exhibit is attached to and made a part of these Minutes, denoted as Exhibit 15a.

Director Tyrrell noted that the provisions in Exhibit 15 were exactly the same as the bill drafted in the Banking Committee during last year=s Legislative Session, without the two amendments on sexual orientation.

Jerry Ahlvers, Nebraska Realtors7 Association, Omaha
Perre Neilan, Nebraska Realtors7 Association, Lincoln
Joe Gehrki, Omaha
Beth Lube, Re/Max Real Estate, Omaha
Harding Collis, NP Dodge, Omaha
Gary Davis, Coldwell Banker, Omaha
Kerri Ann Barnard Swoboda, Gateway Realty Resource Company Inc., Beatrice
Gary A. Barnard, Gateway Realty Resource Company Inc., Beatrice
Tom Fitchett, for Gary Barnard and Kerri Ann Barnard Swoboda, Lincoln
Joe Valenti, CBSHOME, Omaha
Doug Ruge, CBSHOME, Omaha
John Liakos, for Michael Riedmann and Thomas Myers, Omaha
Michael Matukewicz, for Michael Riedmann and Thomas Myers, Omaha
Jimmy Dean Newman, Bellevue