Chairperson Gale convened a meeting of the Nebraska Real Estate Commission at 9:03 a.m. on December 14, 2006, 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 Commissioners Bohrer and Poskochil, who were absent and excused. Also present were Director Les Tyrrell, Deputy Director for Education and Licensing Teresa Hoffman, Deputy Director for Enforcement Terry Mayrose, and Administrative Assistant Monica Wade. Chris Heinrich, Special Assistant Attorney General and Counsel to the Commission, was present for the presentation of the proposed fee schedule.

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.

Director Tyrrell noted that agenda item 10c had been added since the tentative agenda was mailed to the Commissioners.

The minutes of the Commission meeting held on November 2, 2006, were considered.

The cash fund balance as of October 31, 2006, was $791,380.28, which compared to a cash fund balance of $821,335.97 on October 31, 2005.

The cash fund balance as of November 30, 2006, was $893,888.57, which compared to a cash fund balance of $947,581.78 on November 30, 2005.

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

No action was necessary on this report.

Director Tyrrell presented a specialized registrations report which included the registration of a time-share registration for Oceanside Pier Resort. A copy of said report is attached to and made a part of these minutes.

A motion was made by Leisey and seconded by Grady to approve the registration as presented. Motion carried with Grady, Griess, Leisey, Shepard, and Gale voting aye, with Bohrer and Poskochil not participating or voting, being absent and excused.

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 said report is attached to and made a part of these minutes.

Deputy Director Hoffman presented for ratification the October and November Examination Reports, copies of which are 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, a motion was made by Leisey and seconded by Grady to ratify the two reports. Motion carried with Grady, Griess, Leisey, Shepard, and Gale voting aye, with Bohrer and Poskochil 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:

Deputy Director Mayrose presented a Stipulation and Consent Order in the matter of Complaint 2006-019, Melvin H. Willems vs. Thomas Eugene Dover, Jr. 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 Mr. Dover, Jr.. The Order specified a two year suspension, with the entire two-year period served on probation, plus 12 hours of additional continuing education with three hours being in the area of license law, three hours in the area of trust accounts, three hours in the area of agency, and three hours in the area of contracts, to be completed within 120 days of the date of the Order.

After discussion, motion carried with Grady, Griess, Leisey, Shepard, and Gale voting aye, with Bohrer and Poskochil not participating or voting, being absent and excused.

Deputy Director Mayrose presented a Stipulation and Consent Order in the matter of Complaint 2006-066, Commission vs. Georgianna Vint. 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. Vint. The Order specified a censure plus three hours of additional continuing education in the area of license law, to be completed within 90 days of the date of the Order.

Deputy Director Mayrose presented a Stipulation and Consent Order in the matter of Complaint 2006-043, Dwain Luhr vs. Robert L. Hupp. 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 Mr. Hupp. The Order specified a six-month suspension, with the first two weeks served on suspension with the remainder served on probation; plus 9 hours of additional continuing education with three hours being in the area of license law, three hours in the area of contracts, and three hours in the area of ethics, to be completed within 120 days of the date of the Order; to submit to the Secretary of State - Notary Division a description of the events surrounding the notarization of a signature when the person did not appear before him; and to submit to the Real Estate Commission a certification from the Secretary of State= s Office of his admission of the act and of the penalty imposed by the Secretary of State= s Office.

After further discussion, a motion was made by Leisey and seconded by Shepard to accept the Stipulation and Consent Order if Mr. Hupp will agree to a six-month suspension with the first 30 days served on suspension and the remaining five months served on probation and all other provisions remaining the same as they appeared in the exhibit. Motion carried with Grady, Griess, Leisey, Shepard, and Gale voting aye, with Bohrer and Poskochil not participating or voting, being absent and excused.

At 9:33 a.m. on December 14, Chairperson Gale called to order the Public Hearing on the Proposed Amendments to 299 NAC 5-003.18 of the Commission= s Rules and Regulations. Chairperson Gale explained that the Hearing would be conducted in accordance with the Administrative Procedure Act, and explained how testimony would be given.

Director Tyrrell noted that no comments had been received verbally or in writing regarding the proposed rule amendment.

Director Tyrrell reviewed the amendment as set out in the exhibit.

Following discussion, a motion was made by Grady and seconded by Leisey to adopt the amendment to Title 299, Chapter 5, Section 003.18 as set forth in the exhibit. Motion carried with Grady, Griess, Leisey, Shepard, and Gale voting aye, with Bohrer and Poskochil not participating or voting, being absent and excused.

A motion was then made by Grady and seconded by Leisey that the Commission adopt Title 299, Chapter 5, as amended, and direct staff to complete the filing process for the proposed rule amendment. Motion carried with Grady, Griess, Leisey, Shepard, and Gale voting aye, with Bohrer and Poskochil not participating or voting, being absent and excused.

Chairperson Gale declared the Rule Hearing concluded at 9:55 a.m.

Director Tyrrell presented an exhibit which included: correspondence regarding Mr. Newson= s situation and the special appearance. A copy of said exhibit is attached to and made a part of these minutes. Mr. Newson was present.

Chairperson Gale reviewed the procedure for informal special appearances.

Mr. Newson reviewed the circumstances surrounding the reason for his special appearance which involved felony conviction on a drug related charge. Mr. Newson explained that he had been in the construction industry as an owner prior to the drug related charges and was currently involved in the project management process of the construction industry. Mr. Newson explained that he was not easily employable and had experienced some severe downturns in construction, and therefore felt by obtaining a real estate license, it would help broaden his horizons.

Mr. Newson explained that his father had owned a construction company which suffered a downfall in the early 1990's. Mr. Newson made attempts to sell his real estate and the business, but was unsuccessful. An individual had made Mr. Newson an offer for the real estate and business and informed him the money was from illegal activities. Mr. Newson explained that they had a deal and he just wanted to get paid, and did not care where the money came from. The conversations between the individual and Mr. Newson were recorded and he was then introduced to the undercover officer. Mr. Newson did not realize he had been participating in a drug conspiracy. Mr. Newson explained that he had given-up ten years of his life for this lapse of judgement and had tried to put it in the past. However, felonies do not go away. Mr. Newson also explained that even though he was educated, he was not as marketable with a felony on his record.

Chairperson Gale asked if Mr. Newson entered into a lesser plea. Mr. Newson indicated that he entered into a lesser plea which resulted in a sentence of five years in prison and five years of probation. Mr. Newson explained the judge indicated that since he was educated, he should have known better and wanted to make him an example. Chairperson Gale asked if Mr. Newson had been a drug dealer or user. Mr. Newson explained that he was neither, but with the conspiracy charge he faced 10 years to life. Chairperson Gale noted that from Mr. Newson= s description of the case, it appeared to be a severe penalty. Mr. Newson explained that he had just got into concrete pumping and needed to put money into the business in order to purchase another concrete pump. The bank had instructed Mr. Newson that he needed to infuse money into the business. Mr. Newson explained that his father had invested all of his money in the business. Chairperson Gale asked what happened to the business. Mr. Newson indicated that he received no proceeds from the sale and was not allowed to confront the current business owners. Commissioner Shepard asked if Mr. Newson had any other offenses on his record. Mr. Newson indicated that nothing else was on his record, except for some traffic violations. Commissioner Shepard asked if Mr. Newson= s probation was completed in 2002. Mr. Newson indicated that it was completed in either 2002 or 2003.

Commissioner Grady indicated that in the emails sent to the Commission, a reference was made that ConAgra refused to pay the family-owned company 1.4 million dollars. Mr. Newson explained that the project manager for this particular project was his father who clashed with an employee of ConAgra who found problems with the construction. The problems turned into litigation and his father= s company did not get paid, but the subcontractors did. Chairperson Gale explained to Mr. Newson that since this was a significant crime, letters of recommendation, a letter from his probation officer, his attorney and employers would be helpful. Commissioner Leisey indicated that reference letters and character letters would help him decide if Mr. Newson could sit for the examination.

Commissioner Grady indicated that he felt Mr. Newson had over simplified this matter. The verbal information given by Mr. Newson was that the family business was for sale and the money to be received was from drug sales. Commissioner Grady was confused by Mr. Newson= s comment that he did not know this activity was illegal since drugs were illegal. Mr. Newson indicated that he was eager to receive the money, even at a discounted price, and had not paid attention to the details. Mr. Newson agreed he had made a number of errors, which took his family= s wealth, and he would be happy to provide the letters as requested. However, he hoped that answering questions would be the preferred method of giving information to the Commission. Commissioner Gale indicated that letters from his attorney and probation officer would give the Commission more information to review. Commissioner Leisey indicated that Mr. Newson could also get reference letters from the boards or committees to which he belongs. Commissioner Shepard indicated that a résumé would also be helpful. Mr. Newson agreed to get the letters and résumé as requested. Chairperson Gale asked if Mr. Newson would be able to gather the letters by the January Commission Meeting. Director Tyrrell indicated that he would be in contact with Mr. Newson and could work with him on the date.

After discussion, the Commission determined by consensus that this issue should be discussed at a future meeting after Mr. Newson could gather the requested documentation.

Director Tyrrell presented an exhibit which included: correspondence regarding Mr. Eich= s special appearance; a follow-up letter of Mr. Eich= s DUI arrest; correspondence regarding Mr. Eich= s situation; and letters of reference. A copy of said exhibit is attached to and made a part of these minutes. Mr. Eich was present.

Chairperson Gale reviewed the procedure for informal special appearances.

Mr. Eich reviewed the circumstances surrounding his special appearance which involved not realizing the consequences of his actions as a teenager, and being young and impressionable. At the age of 17 he was arrested on two counts related to cocaine, to which he plead to a lesser charge and was sentenced at the age of 18 to three years of probation. Mr. Eich explained that he did not realize the severity of being on probation when seven months later he was at a friend= s house and got picked up for DUI. Mr. Eich indicated that the judge gave him a big break by not sending him to the penitentiary. Mr. Eich noted that he had successfully completed all probation and since had been employed at Omaha Steaks. Mr. Eich noted he received a job with PayPal during which time he paid his way through college and is currently one to three credits short of getting his college degree in communications.

Chairperson Gale indicated that drugs and alcohol are a bad mix, however, Mr. Eich appeared to be doing an excellent job at recovering. Chairperson Gale asked if Mr. Eich attended Alcoholics Anonymous and if there were any lifetime issues. Mr. Eich did not note any lifetime issues but indicated he did attend Alcoholics Anonymous. Commissioner Shepard asked Mr. Eich if he had spoken to any brokers regarding employment. Mr. Eich indicated that he had an idea of who he would like to work for, but had not yet contacted a broker. Commissioner Griess asked Mr. Eich why he was interested in selling real estate. Mr. Eich explained that he found fulfillment in feeding people while employed at Omaha Steaks, and would like to find fulfillment in real estate by helping people find a home. Chairperson Gale asked Mr. Eich if he had finished the required pre-license education. Mr. Eich indicated that he was waiting until after the special appearance but was willing to do what it took to get his real estate license.

Commissioner Grady asked what his current position was at PayPal. Mr. Eich indicated that he currently took telephone calls regarding international fraud, stolen credit card information, stolen identity and helped inform people on how to protect themselves from fraud and identity theft.

Director Tyrrell presented an exhibit which included: correspondence regarding Mr. Hoffman= s special appearance; an excerpt from the October 5, 2006 Commission Meeting Minutes; Mr. Hoffman= s 2006 Reciprocal Salesperson Renewal; a letter of explanation of Mr. Hoffman= s DUI as reported on the 2006 Reciprocal Salesperson Renewal; a copy of the Judgement and Order suspending imposition of sentence; a letter from Mr. Hoffman= s attorney; a copy of the Order of Dismissal and Discharge; and a copy of the criminal background check. A copy of said exhibit is attached to and made a part of these minutes. Mr. Hoffman was present.

Chairperson Gale reviewed the procedure for informal special appearances.

Director Tyrrell explained that Mr. Hoffman was currently licensed and was asked to appear after reporting to the Commission on his 2006 Reciprocal Salesperson Renewal that he had a charge pending against him for a third driving under the influence offense.

Commissioner Griess asked if the charge had been dismissed. Mr. Hoffman indicated it had been dismissed. Chairperson Gale indicated that in Nebraska, driving convictions are not expunged and become more onerous as offenses occur. Chairperson Gale felt that this was difficult to ignore and Mr. Hoffman should feel lucky he resided in South Dakota instead of Nebraska. Mr. Hoffman indicated he had a work permit for his drivers license. Mr. Hoffman noted he continues to attend Alcoholics Anonymous as directed by the courts, and would like to continue to sell real estate. Commissioner Griess asked how long Mr. Hoffman had been licensed. Mr. Hoffman indicated that he had been licensed in Nebraska since 1998 and since he lives on the border of South Dakota, Iowa, and Nebraska he needed all three licenses.

Chairperson Gale indicated that the Commission= s duty was to protect the public interest and a third offense driving under the influence cannot be ignored. Mr. Hoffman explained that the DUI= s happened after he got divorced, lost his son, and his daughter went into a home and the Job Corps, not that the events were to blame, but they happened and could not be changed. Mr. Hoffman indicated that he had been selling real estate for eight years and would like to finish out his life selling real estate. Chairperson Gale asked if the State of Iowa had taken any action against his real estate license. Mr. Hoffman indicated that the State of Iowa was not taking any action against his license at this time and it would only be reviewed if there was another DUI on his record. Commissioner Grady asked which license had a work-release restriction. Mr. Hoffman indicated that his drivers license had been put on a work-release status until April 30, 2007. Chairperson Gale indicated that he would like to impose a condition such as advising the Commission of any further convictions or violations. Chairperson Gale felt the courts were too permissive with the drunk driving charges, innocent people are getting killed due to drunk driving, and although Alcoholics Anonymous was a good start, he believed Mr. Hoffman was a dangerous person. Director Tyrrell indicated that such a restriction could be imposed on Mr. Hoffman= s license and a hearing would need to be scheduled before taking action against Mr. Hoffman= s license. Chairperson Gale indicated that he would be in favor of renewing Mr. Hoffman= s real estate license for 2007, but for the next year, Mr. Hoffman should be required to notify the Commission of any other problems.

Commissioner Leisey asked Counsel Heinrich if the proposed rate increases would be locked in for another two-year period. Counsel Heinrich explained that the rates for services are reviewed by their office each year in November, usually there was a cost of living increase each year, therefore, he would most likely appear each year to ask for a rate increase. Commissioner Griess asked if the Commission had a contract with Counsel Heinrich. Director Tyrrell indicated the Commission had a Memorandum of Understanding. Commissioner Griess asked if the Memorandum of Understanding had a time limit. Director Tyrrell indicated that there was no time limit on the Memorandum of Understanding since the Attorney General= s Office appointed the attorneys to the Commission. Chairperson Gale asked if the proposed fee schedule was submitted to the Attorney General= s Office. Counsel Heinrich explained that the proposed fee schedule was not submitted to the Attorney General= s Office and there is no direct conversation between the Attorney General= s Office and the appointed attorneys on this issue. Chairperson Gale asked if the Attorney General= s Office had a schedule to be followed. Counsel Heinrich noted there were no schedules provided by the Attorney General= s Office and they did not want involvement. Director Tyrrell explained that the fees were negotiated between the Commission and the appointed attorneys. Counsel Heinrich indicated that the effective date would be January 1, 2007.

A motion was made by Shepard and seconded by Grady to approve the new fee schedule as presented to become effective January 1, 2007. Motion carried with Grady, Griess, Leisey, Shepard, and Gale voting aye, with Bohrer and Poskochil not participating or voting, being absent and excused.

Deputy Director Hoffman presented an exhibit regarding the estimated costs of Commissioners and staff participating in regularly-attended meetings in 2007. A copy of said exhibit is attached to and made a part of these minutes.

After discussion, a motion was made by Shepard and seconded by Grady to approve the expenditures for Commissioners and staff who attend the meetings set forth in the exhibit. Motion carried with Grady, Griess, Leisey, Shepard, and Gale voting aye, with Bohrer and Poskochil not participating or voting, being absent and excused.

Director Tyrrell indicated that legal counsel had recommended the deletion of the obsolete language. Commissioner Grady asked if a newspaper promoting web services for current listings would be in violation of present law. Commissioner Leisey indicated that the newspapers appear to be A hooking-up@ with other websites and brokers who participate would need the permission of the seller to advertise the seller= s property. Director Tyrrell also indicated that newspapers had always been exempt, since communication between the buyer and the seller did not go through the newspaper only between the buyer and the seller. Director Tyrrell noted it did not appear there were any licensing problems with the situation Commissioners Grady and Leisey described.

Director Tyrrell indicated courts have been declaring similar provisions unconstitutional and legal counsel thought our provision was unenforceable. Other provisions of the License Act could be used to assure that such publications and/or websites were not in violation of the Act by conducting licensed activity without a license.

Director Tyrrell indicated that Nebraska REALTORS7 Association had asked the Commission to postpone discussion on this issue until its December Meeting, so as to further research this issue and had, since that request, sent a second letter requesting the Commission not introduce the legislation in the 2007 session as the issue needed further consideration. A letter had also been received from Larry Melichar of CBSHome opposing the proposed legislation. Director Tyrrell indicated that based on the survey he conducted, which survey was discussed at the November Commission Meeting, no other jurisdiction prohibits a licensee being a dual agent and principal in a transaction. Most jurisdictions had taken the same position that the Commission had taken - require licensees to disclose and to review each case on its own merits.

Chairperson Gale asked Tammy Brookhouser from the Nebraska REALTORS7 Association if a study group had been formed. Ms. Brookhouser indicated that a study group would not be formed unless the Commission decided to go forward with this issue.

Commissioner Griess indicated that the problem was that a dual agent cannot reveal confidential information. She was not sure the proposed language solved that problem. Chairperson Gale indicated that more brokers were getting in trouble with this issue, and he was concerned with protecting the public interest. Chairperson Gale also expressed concern of A over-regulating@ the licensees, however, he believed both the broker and the licensee needed to be held liable. Chairperson Gale requested the Nebraska REALTORS7 Association study how to maintain the confidential information received from the seller. Commissioner Leisey did not favor the way the proposed legislation was written.

Commissioner Griess indicated that there should be specific requirements or disclosures to consumers to obtain legal counsel and these options should be explored. Commissioner Leisey indicated that a person should seek legal advice if they do not understand and that licensees need to be held to a higher standard.

Chairperson Gale indicated that a subcommittee should be created to have discussions on this issue and work with the study group formed by the Nebraska REALTORS7 Association. Chairperson Gale also indicated that additional education was needed due to the increased number of complaints. Commissioner Griess was in favor of joining with the Nebraska REALTORS7 Association to research this issue. Commissioner Shepard indicated that by working with the Nebraska REALTORS7 Association more licensees could be reached. Commissioner Shepard noted that there was not always confidential information given to the licensee, however, the wording used in the proposed legislation would not allow this type of activity. Commissioner Griess indicated that an example of not having confidential information would be new construction. Commissioner Leisey explained that the motivating factor could be the confidential information. Commissioner Grady agreed that further study would be needed prior to approving the proposed legislation. Commissioner Grady explained that it was virtually impossible to be a dual agent if you owned the property or had an interest in the property. Commissioner Leisey indicated that a licensee should not represent the buyer if the licensee was selling his or her own home.

Deputy Director Mayrose said the Investigator Workshop had approximately 50 attendees. Deputy Director Mayrose indicated that it was interesting to see how other jurisdictions conduct their investigations and report on their investigations. Commissioner Grady asked if Nebraska appeared to be on the cutting edge compared to other jurisdictions. Deputy Director Mayrose indicated that it did appear Nebraska was on the cutting edge and, from reading the reports of other jurisdictions, Nebraska appeared to have a better process for investigating complaints. Deputy Director Mayrose indicated it was a very good session overall.

No action was necessary on this report.

January 25-26, 2007 - Villager Courtyard & Gardens, Lincoln
February 20-21, 2007 - Staybridge Suites, Lincoln
March 29-30, 2007 - Staybridge Suites, Lincoln
May 24-25, 2007 - Staybridge Suites, Lincoln
June 28-29, 2007 - Settle Inn & Suites, Lincoln
August 23-24, 2007 - Staybridge Suites, Lincoln

Recesses and Adjournment

At 9:30 a.m., Chairperson Gale declared a brief recess, and reconvened the meeting at 9:33 a.m.

At 9:55 a.m., Chairperson Gale declared a brief recess, and reconvened the meeting at 10:03 a.m.

At 11:20 a.m., Chairperson Gale declared a brief recess, and reconvened the meeting at 11:35 a.m.

Chairperson Gale was briefly excused from the meeting at 1:21 p.m., and rejoined the meeting at 1:24 p.m.

I, Les Tyrrell, Director of the Nebraska Real Estate Commission, do hereby certify that the foregoing minutes of the December 14, 2006, meeting of the Nebraska Real Estate Commission were available for inspection on December 27, 2006, in compliance with Section 84-1413(5) R.R.S. 1943, of Nebraska.

Respectfully submitted,
Les Tyrrell
Director