Chairperson Gale convened a meeting of the Nebraska Real Estate Commission at 9:01 a.m. on October 5, 2006, 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, with the exception of Commissioner Grady, who was absent and excused. Also present were Director Les Tyrrell, Deputy Director for Education Teresa Hoffman, Deputy Director for Enforcement Terry Mayrose, and Administrative Assistant Monica Wade. Neal Stenberg, Special Assistant Attorney General and Counsel to the Commission, was present for the Douglas Roy Dohse and Vincent W. Leisey hearing.

Chairperson Gale conducted a swearing-in ceremony for recently appointed Commissioner Vincent W. Leisey, presented him with his Commission pin, and welcomed him to the Commission.

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

Chairperson Gale pointed out to those in attendance that a public copy of the materials being used during the meeting and a copy of the Open Meetings Act were available to the public on the counsel table in the meeting room, and that the procedures followed were in accordance with the Open Meetings Act. Chairperson Gale asked that guests sign the guest list.

The minutes of the Commission meeting held on August 24, 2006, were considered.

Director Tyrrell presented the Receipts and Expenditures Report for August. A copy of said report is attached to and made a part of these minutes. Director Tyrrell noted that an explanation page was included in the report.

The cash fund balance as of August 31, 2006, was $786,005.80, which compared to a cash fund balance of $800,681.71 on August 31, 2005.

Specialized Registrations - none

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.

Director Tyrrell presented an exhibit which consisted of a proposed Reciprocal Memorandum of Understanding with New Mexico, a copy of which is attached to and made a part of these minutes.

Director Tyrrell noted that it was a fairly typical agreement, which would allow Nebraska licensees to obtain reciprocal New Mexico licenses based on their Nebraska license and allow the dual license holders to meet continuing education requirements in their resident jurisdiction only. He also noted that it was in draft form. Director Tyrrell recommended entering into the Memorandum of Understanding and should the final version not be as set forth in the draft, it would be brought back to the Commission.

After discussion, a motion was made by Bohrer and seconded by Poskochil to enter into the Reciprocal Memorandum of Understanding with New Mexico as set forth in the draft. Motion carried with Bohrer, Griess, Leisey, Poskochil, Shepard, and Gale voting aye, and with Grady not participating or voting, being absent and excused.

Examination Report - August

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

Commissioner Griess noted a reduced number of individuals taking the examination. Deputy Director Hoffman agreed but did not see this as a trend.

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.

After review of the three reports, a motion was made by Bohrer and seconded by Griess to ratify the reports. Motion carried with Bohrer, Griess, Leisey, Poskochil, Shepard and Gale voting aye, and with Grady 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.

No action was necessary on this report.

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

Item A Complaint # 2006-024 Edgar E. Cordel vs. Helga K. Withem

Item C Complaint # 2006-031

Item D Complaint # 2006-032

Item E Complaint # 2006-033 Max Beno vs. Belva Jean Brown

Item F Complaint # 2006-035 Elizabeth E. Hinrichs vs. Steven Lee Taylor

Item G Complaint # 2006-040

Item H Complaint # 2006-041 Michael Scott Sorensen vs. Gayle Gene Herbst

Item I Complaint # 2006-006 Nebraska Real Estate Commission vs. Terrance Bryan Hoffman

Complaint 2006-025,
Gary Cranmer and Patty Cranmer vs. Joan Elizabeth Kuehl

Deputy Director Mayrose presented a Stipulation and Consent Order in the matter of Complaint 2006-025, Gary Cranmer and Patty Cranmer vs. Joan Elizabeth Kuehl. 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 Ms. Kuehl. The Order specified a censure plus six hours of additional continuing education with three hours being in the area of Nebraska license law and three hours in the area of Nebraska agency law, to be completed within 90 days of the date of the Order.

A hearing was held on October 5, at 9:40 p.m., in the matter of Complaint #2006-016, Nancy S. and Alfred A. Chacon vs. Douglas Roy Dohse and Vincent W. Leisey. Neal Stenberg, Special Assistant Attorney General and Counsel to the Commission, appeared for the Complainant. Respondents Douglas Roy Dohse and Vincent W. Leisey were present and represented themselves.

After opening statements, Counsel Stenberg offered 6 exhibits, and Douglas Roy Dohse and Vincent W. Leisey offered 7 exhibits, all of which were received by Chairperson Gale.

After closing arguments had been presented, Chairperson Gale declared the hearing concluded and gathered the original exhibits.

Prior to any motion the following occurred. Commissioner Poskochil indicated that through the testimony, it was not evident that the licensees intentionally misled the consumers. Commissioner Poskochil noted his disappointment in the lack of notification of changes to the present owners of the condominiums. Commissioner Poskochil also felt some of the advertising tools could have been changed for clarification purposes. Commissioner Shepard concurred with Commissioner Poskochil and felt that in order for the licensees to be held responsible for their actions, the evidence needed to prove the licensees intentionally misled consumers up to the time of closing, which was not proven through the testimony given. Commissioner Shepard also felt the defendants were merely the messengers for the developer and relied on the information supplied to them by the developer.

A motion was made by Shepard that Complaint #2006-016 be dismissed without prejudice. The motion died for lack of a second.

Chairperson Gale noted the lack of evidence received to conclude that the licensees recklessly misled people. Commissioner Griess felt the evidence provided was difficult to sort out, however, the outcome of case needed to be determined based on the licensees having knowledge of the intentional misrepresentation and believed the evidence did not prove the licensees had this knowledge. Commissioner Griess noted that the respondents appeared to disclose correctly to the buyers. Commissioner Bohrer concurred with previous discussions, however, felt the licensees should have met the duty of care for the buyers. Commissioner Poskochil felt changing the advertising or adding a general disclosure to the advertising would have been advisable .

Chairperson Gale noted that at the point of sale of the condominium at issue in this complaint, the licensees believed there was going to be a rooftop deck on the top of the building and there was no evidence at the point of sale that it was actually going to be on the second level. Commissioner Bohrer noted that since the testimony was given in the current time frame, it was easy to forget the respondents dealt with the developer and that the knowledge of the rooftop location changing at the time of this sale may not have been known.

A motion made by Shepard and seconded by Poskochil to dismiss charges. Motion carried with Bohrer, Griess, Poskochil, Shepard, and Gale voting aye, with Leisey not participating or voting, having recused himself, and with Grady not participating or voting, being absent and excused.

Respondents had no objection to Counsel Stenberg assisting the Chairperson in the preparation of the Order.

The hearing was adjourned at 1:50 p.m.

Director Tyrrell presented exhibits which included correspondence regarding Ms. McKoy= s special appearance, Ms. McKoy= s salesperson application and information regarding Ms. McKoy= s criminal history and previous special appearance. A copy of said exhibit is attached to and made a part of these minutes. Ms. McKoy was present.

Chairperson Gale reviewed the procedure for informal special appearances.

Ms. McKoy noted that this was her second special appearance before the Commission. Ms. McKoy noted that she was previously denied by the Commission to sit for the examination. Ms. McKoy also noted that she had been clean of drugs for three years, would like to go forward with her life to be able to provide for her son, and believed she would be successful as a real estate licensee since she liked to help people and also enjoyed the architectural aspect of the industry.

Chairperson Gale explained to Ms. McKoy that she would be licensed and would be representing the State of Nebraska and the public would need to be able to trust and rely on her. Commissioner Gale asked Ms. McKoy if she had interest in having her license placed with a broker. Ms. McKoy noted she had been doing an internship with a broker in order to gain experience in the field of real estate and also was working on obtaining a degree, but currently was taking a break from college.

Chairperson Gale asked Ms. McKoy about the drug charges in June of 2005 and how this was resolved. Ms. McKoy explained that she attended a drug treatment program and now felt better about life. Chairperson Gale asked Ms. McKoy if she was currently on probation. Ms. McKoy indicated she was not currently on probation. Chairperson Gale noted that she said she was going to do a business plan and asked if it had been completed. Ms. McKoy noted that she had completed the business plan and that she was going to college to get her associate= s degree which would be completed in approximately one year. Commissioner Leisey noted the suspension of her driver= s license in 2005 and asked for clarification. Ms. McKoy explained that there was a $2.65 late fee for a ticket she had paid and was not made aware of the fee or the suspension of her license until she was pulled over in November of 2005. Commissioner Shepard reviewed the letters of reference received and noted they appeared to show she had good character. Commissioner Shepard also noted there appeared to be no drug use for three years. Chairperson Gale asked Ms. McKoy for clarification on the child abuse/neglect charge in 2004 which was noted on the Omaha Police Department, criminal history report. Ms. McKoy explained that the charges had been dropped. Commissioner Shepard noted Ms. McKoy= s progress to be considerable within the past three years.

Director Tyrrell presented exhibits which included correspondence regarding Ms. Bussey= s special appearance and Ms. Bussey= s email correspondence regarding her criminal history along with letters of reference. A copy of said exhibit is attached to and made a part of these minutes. Ms. Bussey was present.

Chairperson Gale reviewed the procedure for informal special appearances.

Ms. Bussey explained that she was currently attending Northeast Community College in Norfolk, has three children, was a methamphetamine addict for four years, and was incarcerated for possession of methamphetamine for one year in the Nebraska Correction Center for Women and was released on April 29, 2006. Ms. Bussey explained to the Commission that her involvement with methamphetamine was the stupidest thing she had ever done in her life. Ms. Bussey also indicated that she no longer had involvement with others who use methamphetamine. Ms. Bussey noted she currently was not employed.

Chairperson Gale asked if Ms. Bussey was going to Northeast Community College to receive an associate= s degree or exclusively for real estate courses. Ms. Bussey explained she was currently taking the real estate courses and should be completed with the courses in January 2007. Chairperson Gale noted that since her release in April, she appeared to be doing well for herself and on the right track to get her life back together, however, it had not been very long since she had been released from the Nebraska Correctional Center for Women. Commissioner Shepard expressed concern about the short time period since she was incarcerated, but also felt she was working toward a better life and doing a good job. Chairperson Gale noted that in January 2007, Ms. Bussey would be finished with the real estate classes and it would be close to one year from when she was released and that would be better circumstances to grant her permission to sit for the real estate examination. Chairperson Gale explained to Ms. Bussey that in the mean time she could make contact with a real estate broker to gain experience in the field of real estate.

The Commission agreed by consensus to have Ms. Bussey appear before the Commission in January 2007 after the real estate courses had been completed.

Deputy Director Hoffman presented an exhibit of the proposed Request for Proposals for Licensing Examinations. A copy of said exhibit is attached to and made a part of these Minutes.

Deputy Director Hoffman noted the Request for Proposals (RFP) form and the process are prescribed by the State of Nebraska= s Department of Administrative Services Purchasing Division. It was explained that the exhibit had been reviewed by the Purchasing Division and its legal counsel and was found to be in compliance. While the Commissioners could suggest changes these too would have to be approved by the Purchasing Division and its legal counsel before proceeding with the process. Deputy Director Hoffman reviewed the chronology of the Request for Proposals process and discussed the date of the RFP and the necessity of restricting contact with potential vendors beyond this date. The development of an evaluation tool which will be used to evaluate each proposal was also discussed. Director Tyrrell noted that oral presentations could be scheduled at the Commission Meeting in January 2007. Deputy Director Hoffman also reviewed the specifications required in the RFP.

Director Tyrrell presented an exhibit regarding the proposed 2006-2007 objectives of the Commission. A copy of said exhibit is attached to and made a part of these minutes.

Commissioner Griess asked Director Tyrrell for clarification on how the objectives were developed. Director Tyrrell explained that the objectives were established based on projects needed to be done by staff. The draft document was brought to the Commissioner= s for inclusion of any additional projects the Commissioners wanted completed. He also indicated that any projects which were established during the year were added as they were approved.

Director Tyrrell presented an exhibit of an email received from Dick Schumacher, a licensee, which suggested legislative changes regarding multiple offers. A copy of said exhibit is attached to and made a part of these minutes.

After discussion, the Commission determined by consensus that the current law appropriately addressed Mr. Schumacher= s concern and additional legislation would not need to be drafted.

Director Tyrrell presented an exhibit setting forth a proposed new subsection to Neb. Rev. Stat. ' 81-885.24. A copy of said exhibit is attached to and made a part of these minutes.

Director Tyrrell explained that this new language, which was requested by the Commission at a previous meeting, would prohibit a designated broker from paying any compensation or consideration to a third party creditor of an affiliated salesperson or associate broker. Commissioner Griess asked how this would be affect garnishments. Chairperson Gale explained that the garnishment is court ordered and would not be considered a third-party payment. Director Tyrrell explained that the language presented was the language in Ohio statutes that was upheld by the court= s in Ohio with regard to this issue. Director Tyrrell asked if this proposed legislation was to protect the public or the licensee? Chairperson Gale indicated the proposed legislation would be to protect both, the licensee from perhaps getting into debt and the public by making sure the licensee follows through with his or her duties until the transaction closed. Commissioner Leisey asked how this advance payment was different than that given by a broker to a licensee. Director Tyrrell indicated that, as he understood it, the broker would not be a A third-party@ creditor. Commissioner Bohrer asked what would give the broker authority to assign the money to a third party and why would the broker be involved if the contract was between the loan organization and the licensee. Chairperson Gale explained that it would be a legal assignment and could be enforceable since the licensee is an independent contractor.

Director Tyrrell presented an exhibit setting forth proposed new language to Neb. Rev. Stat. ' 76-2419(5). A copy of said exhibit is attached to and made a part of these minutes.

Director Tyrrell explained the proposal was presented in response to a letter received from Shannon Harner with respect to a licensee acting as a principal and a dual agent in the same transaction. Ms. Harner, who was present, explained that it was not practical to act as a dual agent and to represent yourself. She also pointed out that most of the time the licensee= s errors and omissions insurance would not cover this practice. Commissioner Leisey asked for clarification if an agent becomes interested in a property after signing the listing agreement and about A guaranteed sales.@ Director Tyrrell explained that, with regard to the first question, the licensee would have to terminate the agency relationship and in the A guaranteed sales@ situation, it was a contractual agreement between the seller and the broker and he did not believe that dual agency was in play. Commissioner Shepard noted that some jurisdictions do not allow dual agency, but use a facilitator or transaction broker. Commissioner Griess noted that some jurisdictions do not allow this at all. Chairperson Gale suggested drafting the legislation conditionally.

After further discussion, the Commission agreed by consensus to bring drafted legislation to the next Commission Meeting.

Director Tyrrell pointed out that Neb. Rev. Stat. ' 81-885.02 had a provision which required a person to be licensed if they charged an advance fee to promote the sale of real estate in a publication primarily used for such purpose or for the referral of such information to brokers. Websites were now appearing which offer the same information and service as the paper publications. Newspapers were exempt because they promoted the sale of various items, not primarily real estate. Problems have arisen as lawsuits challenging the constitutionality of similar provisions in other real estate jurisdictions have prevailed. Our legal counsel had reviewed the matter and discussed various options with staff to resolve this issue. They are: (1) to amend the statute so the statute does not discriminate; (2) enforce the statute as written (This would probably result in costly litigation.); or (3) repeal the provision.

After discussion, the Commission directed Director Tyrrell to survey other jurisdictions with regard to this issue and report back with a recommendation.

Director Tyrrell presented an exhibit setting forth proposed new language to 299 NAC 5-003.18. A copy of said exhibit is attached to and made a part of these minutes.

Director Tyrrell explained the proposed new language was presented as a result of a letter from Shannon Harner regarding when a licensee must reduce an offer to writing when such request was made by a prospective purchaser. The wording proposed would clarify that a licensee must reduce an offer to writing and submit it only when certain agency relationships exist prior to the request from the prospective purchaser. Ms. Harner, who was present, explained that, under current language, it could be construed that any licensee of whom such request was made would have to reduce the offer to writing and submit it. Under the Agency Relationships Statute, that licensee would become a limited buyer= s agent whether the licensee wanted such a relationship or not. Ms. Harner indicated that she did not believe that this was the intention of this rule.

A motion was made by Leisey to amend 299 NAC 5-003.18 as presented. Motion died for lack of a second.

Discussion centered on clarifying the language of the proposed amendment and its relationship to the Realtor Code of Ethics. After considerable discussion, it was decided that the language specifying the types of agents required to submit an offer should be placed at the end of the current language as opposed to in the middle of the current language.

Director Tyrrell presented an exhibit showing the history of purchasing Commissioner lapel pins and the proposed price for purchasing additional pins. A copy of said exhibit is attached to and made a part of these minutes.

Director Tyrrell noted that Commissioners Bohrer, Griess, Grady, and Shepard and Deputy Director Hoffman attended the ARELLO Annual Meeting.

Commissioner Shepard discussed deliberating disciplinary actions in closed sessions as done in other jurisdictions. Director Tyrrell indicated that the Nebraska Real Estate Commission was probably the only jurisdiction which deliberated disciplinary actions in open session. He indicated that the Commission had been deliberating in open session since it was recommended by a previous legal counsel to assure compliance with Nebraska law as interpreted by the Supreme Court. Commissioner Griess stated that in the Commissioner College offered by ARELLO, it was advised not to deliberate in open session, so the Commissioners could discuss more freely. Chairperson Gale indicated that open sessions give the public more information and is more beneficial to the process.

It was determined that to get a full report, this ARELLO Meeting-Report of Attendees should be placed on the November Meeting Agenda when more of the Attendees were present.

November 2-3, 2006 - Villager Courtyard & Gardens, Lincoln

December 14, 2006 - Staybridge Suites, Lincoln

At 9:05 a.m., Chairperson Gale declared a brief recess after the Swearing-In Ceremony, and reconvened the meeting at 9:15 a.m.

At 9:32 a.m., Chairperson Gale declared a brief recess to set up for the Hearing, and reconvened the meeting at 9:40 a.m.

At 11:20 a.m., Chairperson Gale declared a brief recess, and reconvened the meeting at 11:28 a.m.

At 1:15 p.m., Chairperson Gale declared a brief recess, and reconvened the meeting at 1:22 p.m.

At 1:50 p.m., Commissioner Poskochil was excused from the meeting.

At 1:50 p.m., Chairperson Gale declared a brief recess, and reconvened the meeting at 1:55 p.m.

At 2:20 p.m., Chairperson Gale declared a recess for lunch, and reconvened the meeting at 3:00 p.m.

At 4:55 p.m., Chairperson Gale declared a brief recess, and reconvened the meeting at 5:00 p.m.

I, Les Tyrrell, Director of the Nebraska Real Estate Commission, do hereby certify that the foregoing minutes of the October 5, 2006, meeting of the Nebraska Real Estate Commission were available for inspection on October 17, 2006, in compliance with Section 84-1413(5) R.R.S. 1943, of Nebraska.

Respectfully submitted,
Les Tyrrell
Director