NEBRASKA REAL ESTATE COMMISSION

Chairperson Gale convened a meeting of the Nebraska Real Estate Commission at 9:04 a.m. on October 13, 2005, in the Goldenrod Room of the Ramada Limited South, located at 1511 Centerpark Road in Lincoln, Nebraska. All of the members of the Real Estate Commission were present. Also present were Director Les Tyrrell, Deputy Director for Education Teresa Hoffman, Deputy Director for Enforcement Terry Mayrose, and Administrative Assistant Monica Wade.  Jim Titus, Special Assistant Attorney General and Counsel to the Commission, was present for the ANo Contest/No Admission@ discussion.

 Item A Complaint # 2005-022

 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 the complaint be set for hearing. Motion carried with Grady, Griess, Johnson, Poskochil, Shepard, and Gale voting aye.

 Item B Complaint # 2005-030

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

 In early discussion, Deputy Director Mayrose indicated that complaints 2005-029 through 2005-033 were all filed by the same Complaintant and involved the same transaction. After being advised of the results of the investigation and discussion, a motion was made by Grady and seconded by Shepard that the complaints 2005-029 through 2005-033 be dismissed without prejudice. Motion failed with Grady and Shepard voting aye and Griess, Poskochil and Gale voting nay and Johnson not participating or voting, having recused himself, thereby nullifying any potential 
conflict of interest.

After further discussion a motion was made by Poskochil and seconded by Griess that the complaint be set for hearing on Neb Rev. Stat. '76-2418 (1) (b), (c), (iv) and Neb. Rev. Stat. '81-885.24 (29) Motion carried with Grady, Griess, Poskochil, Shepard, and Gale voting aye and Johnson not participating or voting, having recused himself, thereby nullifying any potential conflict of interest.

 Item C Complaint # 2005-029 - Michael Inzauro vs. Mary Launa Dinges

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 Grady and seconded by Gale that the complaint be dismissed without prejudice. Motion carried with Grady, Griess, Poskochil, Shepard, and Gale voting aye and Johnson not participating or voting, having recused himself, thereby nullifying any potential conflict of interest.

 Item D Complaint # 2005-031 - Michael Inzauro vs. Kenneth John Jansen

 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 Shepard that the complaint be dismissed without prejudice. Motion carried with Grady, Griess, Poskochil, Shepard, and Gale voting aye and Johnson not participating or voting, having recused himself, thereby nullifying any potential conflict of interest.

 Item E Complaint # 2005-032 - Michael Inzauro vs. Van Carl Deeb

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 Grady and seconded by Griess that the complaint be dismissed without prejudice. Motion carried with Grady, Griess, Poskochil, Shepard, and Gale voting aye and Johnson not participating or voting, having recused himself, thereby nullifying any potential conflict of interest.

 Item F Complaint # 2005-033 - Michael Inzauro vs. Nathan P Dodge 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 Poskochil and seconded by Grady that the complaint be dismissed without prejudice. Motion carried with Grady, Griess, Poskochil, Shepard, and Gale voting aye and Johnson not participating or voting, having recused himself, thereby nullifying any potential conflict of interest.

 Item G Complaint # 2005-036 - Jonathan Harvie vs. Jeanne Patrick

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 Shepard that the complaint be dismissed without prejudice. Motion carried with Grady, Griess, Poskochil, Shepard, and Gale voting aye and Johnson not participating or voting, having recused himself, thereby nullifying any potential conflict of interest.

 Item H - Investigative Matter

Deputy Director Mayrose presented the investigative matter 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 Johnson and seconded by Griess that a complaint be filed on the Commission=s own motion. Motion carried with Grady, Griess, Johnson, Poskochil, Shepard, and Gale voting aye.

 Complaint 2005-015,
Carmen D. Yusten vs. Charlotte Irene James

 Complaint 2005-014,
Donald Christopher Miller vs. Timothy Kuchta, Jr.

 Request to Consider ANo Contest/No Admission@ in Possible Stipulation and Consent Agreement

Counsel Titus opened discussion regarding Roberta Springer=s proposed no contest/no admission plea. He recommended the Commission not approve the request to consider the no contest/no admission clause in a stipulation and consent agreement.

 Mr. Pelster indicated that the hearing on this complaint was scheduled for the November Commission Meeting. He indicated that Ms. Springer would like to voluntarily surrender her Nebraska Real Estate License without an admission of guilt. Mr. Pelster and Mr. Titus reviewed Ms. Springer=s activities which resulted in the filing of the complaint.

Director Tyrrell presented the recommendations of the Commission's subcommittee regarding the requests made by the Nebraska REALTORS Association in it's August 3, 2005 letter. A copy of the letter and additional background information was also presented as an exhibit and is attached to and made a part of these Minutes.

 REALTORS Recommendation #1 concerning the manner in which Commissioners are appointed:

Director Tyrrell reported the subcommittee was neutral with regard to this recommendation. Director Tyrrell summarized from which cities past at-large appointees had been appointed.

Chairperson Gale discussed the differing positions on whether the citizens were best served by representation based upon geography or population. Commissioner Grady indicated that he was concerned that parts of Nebraska west of Grand Island were rarely represented. Commissioner Grady felt that Districts should be part of the consideration.

Commissioner Johnson confirmed that any such change would necessitate a change of statute. Commissioner Poskochil indicated that the Commission had benefitted from diversity on the Commission and that it helped to understand the standards of practice in various parts of the state. Commissioner Griess indicated that it was difficult to find people in some parts of the state who were willing to serve on the Commission and submit an application for consideration. Commissioner Grady felt that perhaps not enough effort had been made to seek these volunteers.

Henry Kammandel, Jr., President of the Nebraska REALTORS7 Association, requested that the Commission stay neutral if the REALTORS7 brought forth a bill relevant to this recommendation. He promoted the idea of one broker from each of the three districts and one at-large broker, one at-large salesperson, and one at-large public member. Chairperson Gale indicated that in that formula, as well as the current practice, there could be as many as four Commissioners from the same city. Mr. Kammandel said that the laws are the same throughout the state, he does not think it matters where the Commissioners are from.

 Commissioners Shepard and Poskochil sought to clarify that the subcommittee was neutral on this recommendation, that they had some concerns and that the Commission should consider it=s position carefully. Commissioner Shepard was concerned that without careful consideration of diversity on the Commission there may be instances where multiple Commissioners have to be recused in the same matter leaving the Commission unable to act.

 Past Commissioner Tom Dover reminded the Commission that their duty and that of the REALTORS Association was different. While he respects them both, he emphasized the Commission=s duty to represent the consumers of the state not the licensees. He felt that the Commission had operated effectively and fairly under its current structure and encouraged the Commission to take a position against the recommendation.

 Chairperson Gale indicated that if there were a formula where one broker came from each of the three congressional districts and that each of the three at-large appointments had to be made from a different district that this would guarantee two appointments from each district and might be a fairer representation than we have now.

Commissioner Johnson felt that this is an issue for the Legislature to decide and he felt that the REALTORS Association was the more appropriate group to pursue the legislation. He expressed a desire that the REALTORS Association might consult with the Commission along the way so that they did not come out opposed to one another. Perre Neilan with the REALTORS Association indicated that they would prefer not to be at odds during the short session of the Legislature.

Director Tyrrell asked that consideration in drafting the bill be given to staggering any transition so that there would not be a wholesale change of the Commission. Mr. Kammandel indicated that would be taken into consideration.

 Commissioner Grady indicated that the idea of having two appointments from each of three districts as Chairperson Gale had suggested was not a bad idea. Commissioner Shepard indicated that the practice of when to recuse oneself should be reviewed. Commissioner Poskochil indicated that he thought that If it wasn't broke don't fix it at was a good policy here. Commissioner Johnson agreed that it didn't seem to be a big problem.

A motion was made by Grady and seconded by Johnson to request the subcommittee work with the REALTORS7 Association to figure out representation. Motion failed with Grady and Johnson voting aye and with Griess, Shepard, Poskochil, and Gale voting nay.

A motion was made by Griess and seconded by Poskochil for the Commission to take a neutral position. Motion carried with Griess, Johnson, Poskochil, Shepard and Gale voting aye and Grady voting nay.

REALTORS Recommendation #2 to consider allowing candidates for licensing the ability to take the licensing examination prior to the completion of the fingerprint background check:

Director Tyrrell reported the subcommittee=s recommendation that the Commission continue to monitor the efficiency of the criminal background report process and to not make any changes at this time.

 Chairperson Gale asked what the drawback would be to allowing the examination prior to the background check. Director Tyrrell indicated that currently when a candidate=s background check is problematic the potential applicant can address this matter prior to submitting the application and examination fees. This may protect them from forfeiting the fees.

 Henry Kammandel expressed concern with the State Patrol=s capability to maintain the current level of service. Deputy Director Hoffman related a conversation she had with personnel at the Patrol. They feel that their upgrades in equipment and their increase in staffing will allow them to continue the current service into the foreseeable future, even given the increase in demand they know may be coming.

 Chairperson Gale was concerned that candidates for the examination may have trouble with the examination if there is a delay between their education and the examination. Director Tyrrell indicated that with the schools emphasizing the proper sequence of submissions, staff was not hearing any complaints from applicants.

 A motion was made by Griess and seconded by Grady to accept the recommendation of the subcommittee. Motion carried with Grady, Griess, Johnson, Poskochil, Shepard, and Gale voting aye.

REALTORS Recommendation #3 to require licensees from other states, as a condition of licensing, to take a three hour class specific to Nebraska License Law:

Director Tyrrell reported the subcommittee=s recommendation that the Commission not make this a requirement.

 Director Tyrrell explained that Nebraska had a long history of supporting license recognition. Director Tyrrell said that all of these licensees had to sign an affidavit that they had read and agreed to abide by our Law. He cautioned that other jurisdictions relied on reciprocal agreements which generally recognize only that which is reciprocated back. It is highly likely that if a three hour course is imposed on licensees from other states seeking a Nebraska license that Nebraska licensees seeking licensure elsewhere will be required to do the same.

Commissioner Johnson noted that we enjoyed recognition of almost every state. He indicated that the Commission has not seen a problem by way of complaints against this group of licensees. Commissioner Shepard asked why we should change the law if there is no indicated problem.

Commissioner Griess felt that it was difficult to believe that a license would be granted to people without at least trying to educate them to our laws. She thought our Agency law was quite unique. Commissioner Johnson asked if there really was so much difference between the laws of various jurisdictions. He felt that they are all quite similar. Commissioner Griess expressed that it is the Commission=s duty to emphasize the importance of the law and that if laws are important we should require this study. It is for the licensee=s own good. She did not see it as an obstacle to licensing.

 Chairperson Gale stated that he is always in favor of education and an affidavit did not mean much, but neither did a short three-hour course.

Commissioner Johnson indicated that he, too, favors education, but that he does not want to see reciprocity for Nebraska licensees threatened. Commissioner Grady felt that most licensees would read the law before they became engaged in a transaction in another state. He did not wish to lose Nebraskan=s recognition elsewhere, either.

Motion was made by Grady, seconded by Shepard to accept the recommendation of the subcommittee. Motion carried with Grady, Johnson, Shepard, and Poskochil voting aye, and Griess and Gale voting nay.

REALTORS Recommendation #4 to establish a 30 hour class approved for prelicensing purposes to cover the Nebraska Real Estate License Act:

Director Tyrrell reported the subcommittee's recommendation that the Commission consider increasing the state portion of the examination from 32 items to 50 items. The subcommittee further recommends that the Commission request staff to review pre-license curriculum to consider including greater emphasis on state-specific legal issues.

Deputy Director Hoffman reported that the REALTORS concerns that more people failed the state portion of the examination than the national portion prompted a look at the state examination. It was thought that 32 items is minimal and had a deterrent effect on the passing score because one missed item counts approximately three percentage points against the score. It is also thought that a 50 item examination would improve upon this and also improve the reliability of the outcome. A consultation with the examination company had indicated that no more time would be required to take the examination, this change could be implemented within two months, and at most it would increase the cost of the examination by two dollars each.

Director Tyrrell further indicated that as a result of the subcommittee=s meeting with the REALTORS7 Association it was also decided that the current pre-licensing curriculum should be reviewed with the thought of including information on Nebraska License Laws and related legal issues.

Mr. Kammandal indicated that the REALTORS would like to see this course mandated. Director Tyrrell indicated that he did not know if that could be done without statute or rule change but that including such subject matter in the existing curriculum was a possibility.

Chairperson Gale asked if this would require additional hours of education. Director Tyrrell indicated that courses would be kept to their 30-hour format.

Commissioner Johnson thought that these measures could strengthen the performance on the state portion of the examination. Chairperson Gale thought it would allow more preparation for the state portion. Director Tyrrell indicated that the staff was prepared to study the curriculum and to include instructors in this study.

 Motion was made by Shepard and seconded by Grady to accept the recommendation of the subcommittee. Motion carried with Grady, Griess, Shepard, Johnson, Poskochil and Gale voting aye.

REALTORS Recommendation #5 to allow applicants the opportunity to retake only the failed portion of the examination:

Director Tyrrell reported the subcommittee=s recommendation that the Commission request staff study this suggestion and its impact on the functioning of the examination and the measurement of competency.

Deputy Director Hoffman reported that she had consulted Larry Fabrey, Program Director with Applied Measurement Professionals (AMP), with regard to some specific questions the subcommittee had. When asked how this practice had affected other jurisdictions regarding their passing ratios and impact on measurement he had said that the comparison was not possible as there were too many variables between jurisdictions. He indicated that he felt Nebraska=s performance on the examination was very strong. He said that instituting this proposed practice would quite certainly increase the passing rate. The difficulty of the items would not automatically be adjusted. Deputy Director Hoffman quoted Mr. Fabrey when she relayed his concern that, Amy belief is that allowing candidates to carry forward a passing score could lead to a higher probability of an incompetent candidate to obtain a license.

Chairperson Gale indicated that a limit could be placed on applicants that they had one opportunity to pass the separate parts within 30 or 60 days of one another. Commissioner Johnson asked if we could require that a higher passing score be imposed in some circumstances. Deputy Director Hoffman replied that she did not know, but expected that requiring a high score under some circumstances could very well affect AMP=s administration of the examinations and statistics.

 Commissioner Johnson thought that some jurisdictions were requiring a higher score in some circumstances. Director Tyrrell indicated that it appeared that Mississippi requires a passing score of 75% for salespersons and a score of 80% for brokers.

 Commissioner Griess asked if it could be requested that applicants review the questions they got wrong and be shown the correct answer. Deputy Director Hoffman indicated that none of the four examination companies would do this. The feeling is that this compromises the integrity of the examination Bit is a security issue. Commissioner Griess said that people question the accuracy of items on the examination when they are not allowed to review them. Deputy Director Hoffman indicated that is why performance statistics are done on each item each time it is used to be certain that the item is not flawed. It is also why the examination company gives the score report broken down by category so that students can identify their areas of weakness.

Commissioner Shepard indicated that he felt strongly that we should not be lowering the bar. He thought that the examination companies are the experts in measuring competence and that we should let them do what we hire them to do. It is his thought that our applicants seem to be consistently meeting our expectations.

 Commissioner Poskochil was concerned that applicants would focus on one portion of the examination and then focus on the other and perhaps never focus on the whole knowledge. He is concerned that if the examination becomes too easy it doesn=t indicate anything.

 Commissioner Johnson indicated that this appeared to be a case where intelligent people could disagree. He noted that reputable states had opposite practices in this area. Chairperson Gale thought that allowing partial retakes did not have to compromise competency.

 Commissioner Griess felt that many people were frustrated by failing the examination by only a slight margin. She felt that many people gave up. She indicated that if she could see a correlation with level of competency, she would not be in favor of this request, but she could not. She would like to see more people be able to enter the industry, but that the opportunity to retake portions should only be available in the first 30 daysBshe is not in favor of licensing people who are not worthy.

 Commissioner Shepard indicated that he was in favor of the subcommittee=s recommendation to study the matter. He is not in favor of lowering the bar, this would affect a lot of people and it needs to be studied.

 Motion was made by Shepard and seconded by Grady to accept the recommendation of the subcommittee. Motion carried with Grady, Griess, Shepard, Johnson, Poskochil and Gale voting aye.

REALTORS Recommendation #6 to no longer require an attorney to teach real estate law and to require Commission approval of Community College courses and instructors:

Director Tyrrell reported the subcommittee=s recommendation that the Commission not support this change. Director Tyrrell further reported that Community College courses and instructors have always been approved by the Commission so no change is indicated there either.

Commissioner Johnson noted that Nebraska was fortunate in that there did not have to be an attorney present at every closing so he thought that licensees should learn about the law from an attorney. He indicated that the subcommittee had determined that rarely were attorneys not available to teach these courses and that when there was a problem, guidelines allowed accommodation.

 A motion was made by Grady and seconded by Poskochil to accept the recommendation of the subcommittee. Motion carried with Grady, Griess, Shepard, Johnson, Poskochil and Gale voting aye.

 The subcommittee presented recommendations regarding recommendations on other Legislative or Rule and Regulation suggestions which are attached to and made a part of these Minutes. Commissioner Johnson asked Director Tyrrell to summarize the subcommittee meeting and present the recommendations.

 Recommendation #1 regarding the continued use of pocket cards:

 Director Tyrrell reported the subcommittee=s recommendation to utilize the pocket card as a receipt only in the transfer process. During the transfer process pocket cards would be issued but not collected. Director Tyrrell discussed the possible language changes in Neb. Rev. Stat. '81-885.19, '81-885.20 and Title 299, Chapter 1, Section 007. He also indicated the auditors had no problem using it as a receipt but not requesting it back during the transfer process. Director Tyrrell noted that it should just be eliminated in the transfer process but would still need to be returned upon a licensee getting suspended or revoked.

 After discussion, a motion was made by Griess and seconded by Grady to approve the subcommittee=s recommendation. Motion carried with Grady, Griess, Johnson, Poskochil, Shepard, and Gale voting aye.

Recommendation #2 the disclosure of multiple trade names:

Director Tyrrell reported the subcommittee=s recommendation to make no changes at this time but to monitor the use of multiple trade names and the affect on the public of this practice.

 Director Tyrrell indicated that a broadcast email was sent to Association of Real Estate License Law Officials (ARELLO) members and out of the few jurisdictions which responded none required the disclosure of multiple trade names.

 It was the concensus of the Commission to accept the subcommittee=s recommendation.

Recommendation #3 the estimated closing cost exemption:

Director Tyrrell reported the subcommittee=s recommendation to support the exemption and that language similar to the following be used in Title 299, Chapter 5, Section 003.11: A...land or a lot or lots to an entity or individual portraying itself, himself, or herself as a builder or developer...@

 Commissioner Shepard asked for clarification of what was changed and Director Tyrrell reviewed the change and indicated that legal counsel will review the language and the issue will be discussed as a preliminary rule hearing at a future Commission meeting.

 After discussion, a motion was made by Grady and seconded by Johnson to support subcommittee=s recommendation. Motion carried with Grady, Griess, Johnson, Poskochil, Shepard and Gale voting aye.

Information Matters

 ARELLO Annual Meeting - September 28-October 2, 2005 - Toronto, Canada - Report of Attendees

 Commissioner Grady reported on the topic of the licensing of auctioneers. The activities that raised this concern was personal property auctions and the difference between absolute auctions and reserved auctions. Commissioner Grady questioned if there was a need for a standard for, or regulation of, auctioneers in the State of Nebraska. Director Tyrrell indicated that requiring a license for auctioneers had been attempted in the State of Nebraska a couple of times but had not been successful. Commissioner Grady reported that the National Auctioneer=s Association is developing a model License Law for states to use.

 Commissioner Griess asked who the governing body is in other jurisdictions? Commissioner Grady indicated that in other jurisdictions they have their own Commission. It is not regulated by the Real Estate Commission.

 Director Tyrrell indicated he did not believe there was a law in Nebraska regulating personal property auctions. It is his understanding that some local political subdivisions require the auctioneers to be registered but this is not a State Law. Chairperson Gale asked if the use of an auction was popular in selling a house. Commissioner Grady indicated that it is a good alternative and is successful. Chairperson Gale asked Commissioner Grady to bring a copy of the model License Law to the Commission for review when it is available.

 Commissioner Shepard discussed the problems with unlicensed activities occurring across state lines, mostly with commercial properties. The portability of real estate licenses has been addressed at ARELLO meetings and how a real estate license could be used in the same manner as a driver=s license. Director Tyrrell indicated that ARELLO=s position was to issue a license on a Alicense-for-license@ basis rather than portability.

 No action was necessary on this report.

 Preliminary Discussion of the Future Use of Consent Agenda Motions

 Commissioner Grady introduced the idea of having a consent agenda to help speed up the meetings. Commissioner Grady indicated that Missouri had commission meetings that would last two days and by adopting a consent agenda it has shortened it up to half a day. Director Tyrrell said he would have to look into it. Director Tyrrell indicated that he would also have to check with the Attorney General and/or have legal counsel review the matter.

 Future Meeting Dates

 November 16-17, 2005 - Ramada Limited South, Lincoln

January 18-19, 2006 - Staybridge Suites, Lincoln

 Recesses and Adjournment

 At 10:15 a.m., Chairperson Gale declared a brief recess, and reconvened the meeting at 10:28 a.m.

 At 12:30 p.m., Chairperson Gale declared a brief recess, and reconvened the meeting at 12:43 p.m.

At 2:10 p.m., there being no further business to come before the Commission, a motion was made by Grady and seconded by Johnson that the meeting adjourn. Motion carried with Grady, Griess, Johnson, Poskochil, Shepard, and Gale voting aye.

 I, Les Tyrrell, Director of the Nebraska Real Estate Commission, do hereby certify that the foregoing minutes of the October 13, 2005, meeting of the Nebraska Real Estate Commission were available for inspection on October 21, 2005, in compliance with Section 84-1413(5) R.R.S. 1943, of Nebraska.

Respectfully submitted,

Les Tyrrell
Director

 Perre Neilan, Nebraska REALTORS Association, Lincoln
Rod Faubion, NP Dodge Real Estate, Omaha
Mary Sears, CBSHOME Real Estate, Omaha
Charlotte James, James Realty & Insurance, Crete
Jim Titus, Nebraska Real Estate Commission, Lincoln
Martin Pelster, Roberta Springer, Omaha
Thomas E. Dover, Norfolk
Henry Kammandel, Jr., Nebraska REALTORS Association, Lincoln
Tammy Brookhouser, Nebraska REALTORS Association, Lincoln