Acting Chairperson Wiebusch convened a meeting of the Nebraska Real Estate Commission at 9:04 a.m. on August 20, 2003, 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, with the exception of Chairperson Gale, who was absent and excused. Also present were Director Les Tyrrell, Deputy Director for Education Teresa Hoffman, Deputy Director for Enforcement Terry Mayrose, Administrative Assistant Heidi Burklund, and Trust Account Examiner John Clark. Jim Titus, Special Assistant Attorney General and Counsel to the Commission, was present for the discussion of proposed changes to the Time Share Act and the rules affecting retirement communities and subdivisions.

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. Acting Chairperson Wiebusch reported that all Commissioners had been notified of the meeting simultaneously, in writing, and that a proposed tentative agenda accompanied the notification.

Acting Chairperson Wiebusch pointed out to those in attendance that a public 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. Acting Chairperson Wiebusch asked that guests sign the guest list.

Director Tyrrell noted that no agenda items had been added since the tentative agenda was mailed to the Commissioners.

After review of the final agenda, a motion was made by Strand and seconded by Shepard to adopt the final agenda as presented. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, and Wiebusch voting aye, and with Gale not participating or voting, being absent and excused.

The minutes of the Commission meeting held on July 16, 2003, were considered.

After review, a motion was made by Moline and seconded by Strand to approve the minutes as presented. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, and Wiebusch voting aye, and with Gale not participating or voting, being absent and excused.

Director Tyrrell presented the Receipts and Expenditures Report for July. A copy of said report is attached to and made a part of these minutes.

Director Tyrrell noted that a new monthly budget spread will be presented at the next meeting, which will show approximately $19,000.00 in encumbrances for expenses incurred during the 2002-2003 fiscal year.

The cash fund balance as of July 31, 2003, was $631,139.81, which compared to a cash fund balance of $538,368.28 on July 31, 2002.

After discussion, a motion was made by Johnson and seconded by Moline to file the July Receipts and Expenditures Report for audit. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, and Wiebusch voting aye, and with Gale not participating or voting, being absent and excused.

There were no specialized registrations to report.

Deputy Director Hoffman presented for ratification the Non-Resident Licenses and Resident Licenses Issued to Persons Holding Licenses in Other Jurisdictions Report, a copy of which is attached to and made a part of these minutes.

After review, a motion was made by Moline and seconded by Shepard to ratify issuance of the licenses as set forth in the report. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, and Wiebusch voting aye, and with Gale not participating or voting, being absent and excused.

Deputy Director Hoffman presented for ratification the July Examination Report, a copy of which is attached to and made a part of these minutes.

After review, a motion was made by Moline and seconded by Strand to ratify the July Examination Report for the purpose of issuing licenses. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, and Wiebusch voting aye, and with Gale not participating or voting, being absent and excused.

Commissioner Moline asked how often the Lincoln testing site was inspected. Deputy Director Hoffman said it was usually done once a year, and she was planning to check it before her October meeting with AMP. Commissioner Moline said he had gotten reports that it was very crowded, close, and hot. Deputy Director Hoffman said it was the smallest of the testing sites, and had 4 computers in it. AMP had previously addressed the air circulation problem, but were then told it was too noisy. Deputy Director Hoffman said she would talk to AMP and review candidate comments at the October 6 meeting. AMP continues to monitor the situation and work toward solutions.

Deputy Director Hoffman presented for ratification the Pre-License Education Instructor Approval Report, a copy of which is attached to and made a part of these minutes.

Deputy Director Hoffman presented for ratification the Continuing Education Activity Approval Report, a copy of which is attached to and made a part of these minutes.

Deputy Director Hoffman presented for ratification the Continuing Education Instructor Approval Report, a copy of which is attached to and made a part of these minutes.

Deputy Director Hoffman presented for ratification the Continuing Education Activity Significant Change Report, a copy of which is attached to and made a part of these minutes.

After discussion, a motion was made by Moline and seconded by Johnson to ratify the reports. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, and Wiebusch voting aye, and with Gale not participating or voting, being absent and excused.

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.

Commissioner Moline asked if Mr. White had reapplied for his license since his disciplinary action was concluded. Director Tyrrell said yes, he is now an associate broker with his previous firm. Director Tyrrell also noted that Mr. Pelshaw had appealed his censure, so staff were following that procedure. Mr. Pelshaw had to pay his own costs, and the Commission paid for its attorney.

No action was necessary on this report.

The following sworn complaints and investigative matters were presented to the Commission:

Item A Complaint #2003-008 - Steven Buchanan vs. Michael Patrick Earl & John Francis Lund, Jr.

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 Shepard that the complaint be set for hearing on the alleged violations of Neb. Rev. Stat. Section 76-2422(4) and 81-885.24(29) against both respondents. Motion carried with Moline, Poskochil, Shepard, Strand, and Wiebusch voting aye, with Johnson voting nay, and with Gale not participating or voting, being absent and excused.

Item B Complaint #2003-022

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 Poskochil and seconded by Johnson that Complaint #2003-022 be held in abeyance, and that the Commission file a new complaint on its own motion on the violations alleged in the conclusion of the report. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, and Wiebusch voting aye, and with Gale not participating or voting, being absent and excused.

Item C Complaint #2003-029 - Paul & Carman Pacaj vs. Robert S. Vosik

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 Poskochil that the complaint be dismissed without prejudice. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, and Wiebusch voting aye, and with Gale not participating or voting, being absent and excused.

Item D Complaint #2003-030 - Edward E. Day II vs. Danny Lee Berg & Nancy Heim-Berg

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 Strand and seconded by Moline that the complaint be dismissed without prejudice. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, and Wiebusch voting aye, and with Gale not participating or voting, being absent and excused.

Item E Complaint #2003-019 was not presented so that further investigation could be done.

Item F Investigative Matter

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 Johnson that the complaint be filed and set for hearing on the violations alleged in the report. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, and Wiebusch voting aye, and with Gale not participating or voting, being absent and excused.

Commissioner Moline asked if the examiners could educate brokers specifically about reconciliation. Director Tyrrell said staff would develop 2-3 questions on it to be asked during every examination.

Item G Complaint #2003-027 - Richard L. & Sharon L. Herzberg vs. Kevin Dean Irish

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 Poskochil and seconded by Strand that the complaint be dismissed without prejudice. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, and Wiebusch voting aye, and with Gale not participating or voting, being absent and excused.

Deputy Director Mayrose presented a stipulation and consent order in the matter of Complaint #2003-021, Commission vs. Gary W. Smith. A copy of said order is attached to and made a part of these minutes. Mr. Smith was not present.

Deputy Director Mayrose reviewed the circumstances involved and noted the provisions of the order, which had been signed by Mr. Smith. The order specified suspension of his salesperson license for six months, with the first 15 days served on actual suspension and the remainder served on probation, and six hours of additional continuing education, with three of the hours in agency and three in license law, to be completed within six months.

After discussion, a motion was made by Moline and seconded by Strand to enter into the order as presented. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, and Wiebusch voting aye, and with Gale not participating or voting, being absent and excused.

A motion was made by Moline and seconded by Johnson to dismiss Complaint #2002-039, which was held in abeyance pending the outcome of Complaint #2003-021. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, and Wiebusch voting aye, and with Gale not participating or voting, being absent and excused.

Deputy Director Mayrose presented a stipulation and consent order in the matter of Complaint #2003-026, Russell E. Kirkpatrick vs. Ronald J. Abboud. A copy of said order is attached to and made a part of these minutes. Mr. Abboud was not present.

Deputy Director Mayrose reviewed the circumstances involved and noted the provisions of the order, which had been signed by Mr. Abboud. The order specified a censure of his broker license and six hours of additional continuing education, with three of the hours in trust accounts and three in license law, to be completed within ninety days.

After discussion, a motion was made by Moline and seconded by Strand to enter into the order as presented. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, and Wiebusch voting aye, and with Gale not participating or voting, being absent and excused.

The hearing scheduled for this meeting was continued, pending presentation of a stipulation and consent order.

Acting Chairperson Wiebusch reviewed the procedure for informal special appearances.

Mr. Wilson said that the situation was all set out in the forms he had submitted. There was a dispute, man to man, which he let get in the way of the legal process. He felt his friend had taken advantage of him and his free legal work, and he felt the friend should pay for the legal work once they were no longer friends.

Commissioner Moline asked if the license to practice law would be reinstated in September. Director Tyrrell said he had verified the date with the Supreme Court.

After discussion, a motion was made by Moline and seconded by Shepard to allow Mr. Wilson to sit for the salesperson examination and, upon passing, to have a license issued on or after September 29, 2003.

A vote was taken on the pending motion. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, and Wiebusch voting aye, and with Gale not participating or voting, being absent and excused.

No action was necessary on this report.

John Clark, Trust Account Examiner, presented an exhibit regarding the trust account examination procedures and cycle. A copy of said exhibit is attached to and made a part of these minutes.

Mr. Clark noted that the examiners were on schedule to complete all examinations within a year. Feedback from brokers had been positive, and they seemed to appreciate the focus on education. A few brokers missed the paperwork compliance chart. There had been no decline in finding serious infractions. Director Tyrrell gave Commissioners a copy of the previously-approved procedures, and Mr. Clark reviewed them with the Commission.

Mr. Clark indicated that invoices for payments and the resulting checks were not reviewed as a part of the past or current process. Director Tyrrell expressed his concern with this issue, of which he had been made aware the previous afternoon. Commissioner Moline said examiners should check the invoice and the check. Commissioner Moline felt it should be up to the discretion of the examiner how many to check. If a statistical sample checked out OK, then no further checking was needed, but if errors were discovered, a more thorough check should be made. Commissioner Poskochil agreed that examiners should do a random check, and delve deeper if needed. Mr. Clark noted that brokers were required to maintain invoices for examination.

It was the consensus of the Commission to have examiners check a sample of invoices against the resulting checks, and delve deeper if problems were discovered.

Acting Chairperson Wiebusch asked how many followup examinations were being conducted. Mr. Clark said he had conducted 15-20 in the past 6 months, which was down significantly because they were no longer done for compliance issues, just on money issues. Commissioner Moline said that was appropriate, because his concern was that the money got to the appropriate person. Commissioner Moline congratulated the examiners on making the new procedures work.

Counsel Titus presented an exhibit which detailed proposed rule changes to Title 300. A copy of said exhibit is attached to and made a part of these minutes.

Commissioner Strand asked if the applicable forms had been updated. Director Tyrrell said they had been updated and were ready to go when the changes took effect. Director Tyrrell said he would bring the revised forms to the September meeting.

After discussion, a motion was made by Johnson and seconded by Shepard to proceed with the public hearing on the proposed changes to Title 300. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, and Wiebusch voting aye, and with Gale not participating or voting, being absent and excused.

Counsel Titus presented an exhibit which detailed a proposed amendment to the Nebraska Time-Share Act. A copy of said exhibit is attached to and made a part of these minutes.

Counsel Titus noted that the proposed change would cap the annual renewal fee at $1500.00 per registration. The change was being proposed due to a change in how time shares were marketed and sold. Companies were going to a system of selling bid points so that people could bid on all locations within the time share company, rather than buying a time share at a single location. Director Tyrrell noted that the projected income would cover the costs of reviewing and storing time share registrations. In his research, it appeared that Nebraska was the only state without a renewal fee cap, and some states did not charge a renewal fee. This change may open up new time share opportunities for Nebraska citizens.

After discussion, a motion was made by Moline and seconded by Strand to have the proposed amendment introduced in the 2004 Legislature. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, and Wiebusch voting aye, and with Gale not participating or voting, being absent and excused.

Director Tyrrell presented an exhibit on per diems paid by other state boards and commissions. A copy of said exhibit is attached to and made a part of these minutes.

It was the consensus of the Commission to address the issue at the September meeting, since Chairperson Gale had raised the issue but was not in attendance.

Director Tyrrell presented an exhibit regarding renewal of the errors and omissions contract. A copy of said exhibit is attached to and made a part of these minutes.

Commissioner Moline noted that appropriate settlements were necessary to maintain low fees. Director Tyrrell said licensees needed to use common sense in completing paperwork and making statements and representations. Commissioner Moline asked if staff could publish an article in the Commission Comment which explained why our errors and omissions plan was so much better than other states, after checking with counsel. Commissioner Johnson suggested the information could come from the underwriter as to what causes problems and claims against licensees. Director Tyrrell said he would check to see what would be appropriate.

After discussion, a motion was made by Moline and seconded by Johnson to authorize staff to renew the errors and omissions contract with Williams Underwriting Group, Inc., for calendar year 2004, if the premium was $100.00 or less. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, and Wiebusch voting aye, and with Gale not participating or voting, being absent and excused.

Deputy Director Mayrose reported that excellent information was presented at the ARELLO Advanced Investigator Seminar. The FBI session was particularly interesting and, as always, networking and finding out what was going on in other jurisdictions were the most valuable.

No action was necessary on this report.

Director Tyrrell noted that the ARELLO Annual Meeting was scheduled for October 25-28, 2003, in Portland, Oregon. Director Tyrrell noted that Commissioners Strand, Shepard, and Wiebusch were already registered, and that registrations could be done on the ARELLO website. Deputy Director Hoffman noted that there would be a good program.

No action was necessary on this report.

Director Tyrrell presented the Trust Account Examination Evaluation Report - Second Quarter 2003. A copy of said report is attached to and made a part of these minutes.

Director Tyrrell reported that comments were again very positive. He reviewed some of the comments received, and how the situations were handled.

Commissioner Shepard asked if examiners would return to a business for the exit interview if a broker was not there on the day of the examination. Mr. Clark said it would depend on the location, but the examiner would either discuss the examination in person or over the telephone with the broker.

No action was necessary on this report.

September 24-25, 2003 - Staybridge Suites, Lincoln
November 12-13, 2003 - Days Hotel Carlisle, Omaha
December 10-11, 2003 - Staybridge Suites, Lincoln
January 21-22, 2004 - Staybridge Suites, Lincoln

Recesses and Adjournment

At 10:08 a.m., Acting Chairperson Wiebusch declared a brief recess, and reconvened the meeting at 10:20 a.m.

At 11:17 a.m., there being no further business to come before the Commission, a motion was made by Moline and seconded by Shepard that the meeting adjourn. Motion carried with Johnson, Moline, Poskochil, Shepard, Strand, and Wiebusch voting aye, and with Gale 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 August 20, 2003, meeting of the Nebraska Real Estate Commission were available for inspection on September 2, 2003, in compliance with Section 84-1413(5) R.R.S. 1943, of Nebraska.

Respectfully submitted,
Les Tyrrell
Director