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May 2014 CAR Reports

PSAR sent 21 members to Sacramento to join REALTORS from around the state to lobby our elected officials on issues that impact private property rights, home ownership, and your business.  Following the legislative meetings, PSAR's CAR Directors meet with leaders from other associations around the state to make decisions about the future of organized real estate. These recent meetings took place between May 1st - May 3rd . Each report is a summary of key points brought to you by each Director.

Pat Russiano, Region 30 Chair

Century 21 Award
619-252-1199 
Pat@PatRussiano.com

Our recent trip to Sacramento, to hear updates on various legislation that is being considered, which could impact Real Estate issues for us as practitioners and all private property owners, was a success and very enlightening.

We took 10 Realtors that had never taken part in the process before, to take part in Legislative Day, Wednesday, April 30th.   Those Realtors also included the Key Contacts to the various legislators that represent the various areas in which our Region 30 (PSAR) lies.  These are Realtors that know particular lawmakers on a more personal level and our voices to them throughout the year.   As always, it is so enjoyable to see peers who get a glimpse of the bigger picture for the first time. 

The bigger picture that I speak of is learning what the legislative process is all about and how it impacts not only our business, but also impacts the rights of all private property owners.  The light comes on as to the role we play in that advocacy and the importance of our political contributions – It’s not just a “fee” it is the cost of doing business and keeping government out of the process of the buying and selling of private property as much as possible.   That in turn aids in keeping the cost of buying and selling down,  helping to keep home ownership more affordable. 

Governor Jerry Brown spoke to a crowd of Realtors of over 2100 on Wednesday, Legislative Day.  That is an impressive crowd - to him and to ourselves as well.  No matter your party affiliation, on this trip we are members of the Realtor Party and our legislators take notice.  Governor Brown is always an entertaining speaker but he “gets it”.  He gets the importance of private property rights.   Our State Leadership Team and chief lobbyists also brief us the issues at hand.   Soon after, the crowd walks the two blocks to the Capital and take part in visits to the various lawmakers to answer their questions and to provide them with our views on the pros and cons of various legislative bills that are in the “process”.  The reports of the Directors in our delegation will give you the highlights of process.  

The other days of the meetings we spend in various committees discussing current and future issues that are important to the various areas in the State.  Sharing of information at the end of each day in our caucus is the best way to see what lies in our future business and how we need to embrace or deal with it.  Friday afternoon and Saturday morning is the C.A.R. Board of Directors meeting.  There is sometimes long and passionate debate on the stance we want to take on political issues and this time, on the upcoming changes to our contracts and documents, most importantly our RPA.  Do stay tuned !!

The luncheon with C.A.R. CEO Joel Singer discussing  how affordability, new construction, demographics, and the role of the first-time home buyer will impact the future of housing, was very enlightening.  The slides of his power point presentation can be found at this link:http://www.car.org/marketdata/speeches/.     

It is an honor and privilege to serve the membership of PSAR  as chair of Region 30 which consists of our Association, PSAR.  If you ever have questions about these meetings, the outcomes, suggestions or an interest in getting involved yourself, please don’t hesitate to contact me, any of the other Directors or someone in the Association offices.


Bob Olivieri, Director and PSAR 2014 President


Coldwell Banker West
619-475-4040
bob@coldwellbanker.com

Local Government Key items:

1)      Housing affordability is hurting labor intensive businesses located in a lot of the more desirable communities in California. This is causing many companies to relocate elsewhere. 

2) View ordinance in Palos Verde was defeated by the local GAD sitting down with the mayor and putting political pressure on them to eliminate passage. 

3) Mercer County wants to impose a real estate fraud prevention fee of $3-$10 per recorded document. Fought by local association. 

4) South Lake Tahoe- fighting business tax on furnishings in vacation rentals. 

5) Emeryville fighting a $15/$1000 transfer tax. 

6) Pasadena has issue with paying business tax to several cities in the area for doing real estate sales. Has proposed business tax should be proportional to business done in a certain city. 

7) Fighting point of sale mandatory audit of energy and water use in landscaping. Seller or buyer would have to pay for changes to stay within certain limits of resource use. 

8) League of cities reported that infrastructure improvement is being pushed down to the local level from the state. Transportation and schools are the two main keys to attracting business to a community along with housing affordability. 

Global Real Estate Forum 

1) New tax laws being implemented in order to treat foreign buyers of US real estate the same as US citizens.


Jeff Campbell, Director PSAR Immediate Past President

Campbell & Associates
Pacific Growth Sales
619-344-0423
myfavoriterealtor@yahoo.com

Thank you for sending a select few PSAR members to anywhere from 9-15 CAR business meetings a year. We volunteer our time to represent our association in discussion, debate and rule for everything from our master MLS rules to what is incorporated in our contracts. From new real estate legislation endorsement or disapprovals to continuing education requirements and new CAlBRE rules, we are there to have a voice for PSAR. 

LEADERSHIP FORUM I have the pleasure of serving as Vice-Chair of President Forum and Leadership which seeks to help develop strong leaders in throughout California. President Bob and President-elect Carey, along with The other two SD County associations leaders are on this committee. Bob and Carey shared some of the success that PSAR has had with engaging our members in association activities and education.

As a body, the forum discussed the importance of the quality of membership vs. the quantity of membership. High quality means contributing members vs. complaining and never happy members. The association must adopt a positive and productive mindset. The attendees went on to ask how each association is keeping it fresh. Is there anything in your association that is becoming tired? Our focus was on how to maintain relevance. 

Value was a point that was stressed. What value propositions do you create for your members and what value can you bring to MLS members and other non-member licensees. Each association must go out and create more value. We must increase value by making the job easier for agents, which includes lobbying, and helping members make more money through education and new tools. Always strive to make membership enjoyable, interesting, educational and valuable.

There are over 30k California REALTORS who are NOT registered to vote! We must address this straight away! One idea is for PSAR is to give voter registration forms out at orientation!

Jerry G., NAR Senior Vice President Government Affairs, gave a report recommending our GA committees make friends before you need them. He spoke about the fight to redefine the republican party in the nation's capitol. This has been a big national conversation.

Bills over next three years will involve tax reform, a major overhaul of Fannie and Freddie, and flood insurance. The big FHA question is who gets to own a home in America and who gets to invest in real estate.

The Path Act has long been passed on a partisan vote which eliminates Fannie and Freddie in 5 years. Banks are against it yet silent and they are whispering, "You go REALTORS," as NAR opposes it.

The senate is working on a certain kind of FDIC type insurance for Mortgage backed securities. 

We passed the flood insurance and then we passed a bill to undo and the agency who didn’t do all the proper mapping so a there is a new bill whereby we have another 3 years to get the maps right.

Ways and means are working on a tax reform bill. Currently, real estate and home ownership have the most favorable tax incentives. The element to watch is the "New Tax Reform" which has the premise that if you want lower rates, you have to get rid of mortgage tax deduction. John Baynor said it is too controversial. It appears that new bills may cap mortgage interest rate deduction at $500k. Paul Ryan likes this approach and, he may be next chairman of this committee.

There are those in the House of Representatives who don't want to renew mortgage tax interest rate deduction. 

Proposed elimination of FHA prepayment penalty. They charge interest till the end of the month. Under Dodd frank, FHA must eliminate the prepayment penalty.

The park manager in a mobile home park may no longer be able to disapprove buyers. The Financial ability component will now be clear in law.

AB1513 takes on squatters rights or lack-there-of. The city of county must opt in to this. The city official must e-mail to jaspreet@asm.c.gov in order to opt-in.

TRANSACTION AND REGULATORY

A large section of sfr's are purchased in bulk and this is a loss opportunity for home owners. The committee is looking for a briefing paper to give owner occupant buyers a first look at these available properties prior to going to bulk sale. 

Team Names
CAL BRE has asked CAR to help rewrite legislation for TEAM NAME regulation. The problem is that consumers have not been able to discern who is the brokerage and who is the licensee. Licensees have been confused on regulations regarding what marketing pieces must include your CALBRE license number and what are the fictitious business name regulations. 

CAR sought to clarify AB2018 to state that team names and can be used as long as a minimum of 2 licensees are the team, a licensee who owns the team uses their full name or sir name in the team name, and that all marketing materials contain brokers full name and is the same prominence. Discussion clarified that a team name could be "The Jane Doe Team" and not "The Chula Vista Team." Prominence did not necessarily mean the same font size but clarity on who was the broker and who was the agent. Further discussion spoke about who owned the fictitious business name; the agent or the broker? Contractual agreements with the borker and agent could clear this up. The committee recommended that CALBRE allow the agent to own their own name, not requiring them to file a fictitious business name, 

A recommendation from our working group suggested that home inspectors adhere to CAR standards of care and ethics which would include membership in a professional organization and maintenance of errors and omissions insurance. 

The committee asked for a rewrite of this suggestion and that we tackle this in the Fall meeting. There will be a Q and A related to advising clients on how to choose a home inspector.

CALIFORNIA REAL ESTATE EXPERT WITNESS 

This meeting is conducted by one of California's top real estate litigation attorneys and rotate various firms each meeting.
Quotes from meeting:

-If a home gets 20 offers, the agent doesn’t know what they are doing, or if they always sell over asking price, do they know what they are doing?
-If you prequalify, why not pre-inspect.
-Should the buyers have an explanation of what “Buyers Ethics” are?
-Sharp ad are relative bids – "I will pay $1000 over the highest bid." 
-Buyer may be able to go back and get his liquidated damages back if the seller sells the property within a reasonable period of time as the seller wasn't damaged in the end.

PUBLIC POLICY

AUCTION.COM
Rick Sharga is the VP of auction.com and listened and took notes of all the REALTORS feedback. He believes that there are 15 more months of short sales for California, and, in the near future, most homes will be sold through the internet. He stressed that the banks hire his company, not the seller. He is working on the concern of CAR proposing that Auction and other third party participants in a transaction cannot indemnify themselves of all liability in the sales process. REALTORS brought up concern with minimum bids, shills and the auction company bidding at their own auction. Mr. Sharga stated what is standard and legal practice at all auctions has similarities to real estate auctions.

HOUSING AFFORDABILITY FUND
Fresno is involved in a First Look program incentivizing sellers to allow owner-occupants to look at their listing before investors do. There will be forthcoming information on how this program is working. The big news came from OCAR. They made a video to use for all associations to offer to members showing the importance of condominium associations to seek out FHA and VA loan approvals. PSAR is currently exploring a way to get this branded to PSAR and offer it to members.

Lupe Soto, Director, Region Vice Chair



McMillin Realty | A Corky McMillin Company
619-409-8704

Member of Real Estate Purchase Agreement Study Group and Regional Representative of Standard Forms Forum:
As a member of the RPA Study Group, I must tell you that our Residential Purchase Agreement (RPA) was again one of the hottest topics during our meetings.

CAR and the  local association will start training for our new RPA starting August 2014.   You will find that the changes made will benefit our Sellers and Buyers.  As REALTORS, we will be faced with a learning curve to make sure we accurately represent the interest of our clients.  Below are some key points that will be of interest to you because they will impact your negotiations between Buyers and Sellers:

I. Finance Terms:
a) The paragraph that deal with the Initial Deposit is still pending the final decision as to whether we should continue to have the option to have a Buyer give the agent a check or to delete that option.  If so, then the option will be for the Buyer to take the check to escrow himself or herself or do an electronic wire transfer to escrow.  If you have a preference, please email me with your comments.  We will be reviewing all comments prior to finalizing the new RPA.
b) All Cash Offers- you can either attach the Buyer’s proof of funds with offer or within 3 days from the acceptance  (it is currently 7 days) deliver to Seller written verification of funds to close the transaction.
c) For FHA/VA transactions – the FHA/VA amendatory clause Form (FVAC) will be part of the transaction.
d) Loan Application – if not attached with the offer, then Buyer has 3 days  (it is currently 7 days) to deliver to Seller proof that Buyer has completed their loan application.
e) Loan Contingency – Note that if the Appraisal contingency was waived, then failure of the property to appraise at the purchase price does not entitle Buyer to exercise the cancellation right pursuant to the loan contingency if Buyer is otherwise qualified for the loan.
f) Loa Contingency Removal – Buyers will have 21 days (it is now 17 days) from acceptance to remove the Loan Contingency. Also note that in the new RPA, the removal of the loan contingency does not automatically remove the appraisal contingency.  They will be stand-alone contingencies in the new version of the RPA.
g) The option to keep the Loan Contingency in effect until the designated loans are funded will be eliminated. Below are some points that were considered in making the change:
1. At some point, the risk of failure to get a loan has to shift from Seller to Buyer.  Since the Buyer chooses the lender, many think it is more equitable for the Buyer to bear the burden of the lender’s failure than the Seller.
2. Often when the funding option is chosen it is done so in the hopes a Seller or Seller’s agent will not notice it.  Such a practice seems unseemly at best and deceptive at worst.  
3. Buyer swill still have the ability to write in a tie in the blank line that mirrors the length of time of the escrow.  When this is done, there is less chance the length of time of contingency will be inadvertently overlooked. 
4. If the extension of time to close escrow is given during escrow, the extension should be in writing, and the writing should include the loan contingency as well. A small burden for someone wanting to keep the contractual right to cancel up to the last minute.
5. Buyers have the ability to simply not remove the loan contingency upon expiration of the designated time.  If important to the Seller, the Seller will issue a Notice to Buyer to Perform. If not, the Buyer’s loan contingency remains in place.  The former will likely happen in a hot market but the problem is not contractual but rather market based.

II. Escrow and Title – A new line has been added to have the Buyer and Seller, within 5 days of receipt, sign and return Escrow Holder’s general provisions.  This will help every one.  We can all remember having a transaction where the Buyers or Sellers were turning in their paperwork last minute.

III. Other Cost – A new line has been added to have the option for the Buyer to waive the purchase of a home warranty policy.  Nevertheless, nothing in the paragraph precludes Buyer purchasing a home warranty policy during the term of the agreement.  This will save us from having to fill out a waiver form.

IV. Statutory and other Disclosures 
a) Note that the Seller Property Questionnaire will now be a default contractual agreement.  
b) New language has been added to clarify when the statutory disclosures are considered fully completed.  The time of “considered fully completed” is key to the when the time starts clicking for contingency removals.  Note that a Statutory Disclosure is considered 
Completed when both the Seller and the Listing Agent have completed their required duties.  The Transfer disclosure is only considered completed when the Seller completes and signs and when the Listing agent has competed its section or completed their Agent Visual Inspection Disclosure.  A TDS without the Agent Visual is considered incomplete.  The 3-day rescission period for the Buyer to have the right to cancel will start until BOTH the Seller and the Listing Agent has completed their sections. The language complies with the statutory requirement.

V. Allocation of Cost 
a) The Buyer or Seller to pay for an inspection and report for wood destroying pests and organisms, the septic or private sewage disposal systems and the domestic wells testing have all been removed from the contract.  The Natural Hazard zone disclosure will remain in the contract because it is a statutory requirement.  The Buyer and Seller can agree to any inspections.  The reason behind the decision was because we were currently singling out a few inspections.  It would be impossible to list all of the possible inspections that a buyer can order.
 
VI. Buyer’s Investigation of Property and Matters Affecting Property
a) The Language contained in the current Wood and Pest Control Addendum (WPA) has been added to this paragraph.
b) The intent is the new RPA is to treat Wood and Pest Control as any other inspection; therefore, the Wood and Pest Control Addendum will be eliminated from the ZipFormPlus library along with deleting it from the allocation of cost.  Termites are a repair item, like any other repairs that are requested from the Buyer.  In the current scenario, the Seller has been put in a position to sign a blank check for a repair item without having any idea if it will cost $300 or $15,000 or more.

VII. Time Periods – Note that language has been added for parity between the Buyer and Seller.  Buyer after first delivering to Seller a Notice to Seller to Perform (NSP) may cancel the Agreement if Seller has not Delivered the items within the time specified.

VIII. BROKERS Scope of Duty – The existing language found in the current Buyers Information Advisory has been added to this paragraph.  The new Buyer Inspection Advisory will be 1 page.

IX. Representative Capacity – This is a new paragraph to establish that if one or more party is signing the agreement in a representative capacity and not for him/herself as an individual.  A new form called Representative Capacity Signature Addendum (RCSA) has been added to the library.

X. Acceptance of Offer 
a) Language was added to clarify that “Seller’s Acceptance” is Subject to attached Counter Offer.
b) To accommodate the Representative Capacity Signatures, a new line item was added.
c)  In the Confirmation of Acceptance paragraph, language was added to clarify that you are NOT to initial this paragraph if you have a counter offer. This was added: (Do not Initial if making a Counter Offer)
XI. For Brokers/Managers or File Reviewers - After reviewing the documents, the “reviewed by” box has been removed from individual pages and only at the end of the document will you find the box to initial.  It will be a great time saver.
It is my hope that the above gives you a general idea of some of the changes.  

Defense Strategy Advisory Committee
a) President, Thomas Henry from Real Care Insurance Marketing gave an update regarding          E&O Insurance options.  If you are looking for coverage, contact CAR for details.  
b) Below are 2 important cases that can directly affect how we do business:
1) Bararsani v. Coldwell Banker.   CAR’s trustees authorized funding for outside specialty class action counsel to assist CAR, should it become necessary, as this class action case alleging salesperson are employees and not independent contracts progresses.   The judge in the case has suggested that the statute is vague, and he is unwilling to take direction about what the legislature meant by the existing law unless language is actually in statue.  

To address the concern about the statue being vague, CAR is for SPONSORING AB 2169 (Cooley) to clarify existing law allowing broker and real estate agents to decide for themselves whether an agent is an independent contractor or an employee.  It is strictly a business decision between the broker and the agent as to their status.  There are 3 key requirements for you to be considered an Independent Contractor:
1. You have a written agreement – which we do
2. You are compensated through a commission agreement – we do
3. You are licensed – we are
It is clear that we are in compliance with the 3 requirements.  The question as to whether we should wait for the lawsuit to be resolved has been brought up.  The answer is NO, because the rule needs to be clarified now, and not wait on the pending lawsuit, or there will be uncertainty for years and expensive copycat lawsuits will be filed.
I want to take this opportunity to also bring up the relationship that Agents have with their licensed/unlicensed assistants.  Again, there are definite requirements as to how you are to pay your assistants.  Our ZipForm Plus library has the Broker/Associate-Licensee/Assistant Three –Party Agreement  (TPA) and the Personal Assistant Contract (Between Associate-Licensee and Licensed or Unlicensed Assistant (PAC).  Consult with your tax advisor about how you pay your assistant.  If they have a schedule to follow, a list of task that you give then to do and so on, makes them you employee.  An employee is an individual that gets compensated and at the end of the year receives a W-2.  You are also required to carry Workers Compensation Insurance for your employee.  In case of an audit, you the salesperson can have some significant penalties from the IRS on how you have been paying them and giving them a 1099 at the end of the year.

2) Horiike v. Coldwell Banker Residential Brokerage.  This is Square Footage dispute.   CAR’s trustees authorized a brief to support the petition for hearing to the California Supreme Court after a published decision held that a listing salesperson for a broker and a fiduciary duty to the Buyer who was represented by a different salesperson under the same broker.  The Buyer’s Salesperson was not names in the lawsuit.
We all know that Dual Agency is constantly under attack, nevertheless, this published case along with HUD’s position on dual agency is definitely a concern for our business practices in California.  

Thank you for the opportunity to serve you as a CAR director and your Assistant Regional Representative.  The 3-½ days in Sacramento were intense because there are so many issues that impact homeownership, our daily business practice and our standard of care.

Nikki Coppa, Director



Guardian Agents
619-274-1426
nikki@callnikki.com

Three times a year, your Directors attend C.A.R. Business Meetings. We listen, we discuss, we debate, and then we take action on behalf of Realtors® throughout the state of California. Meetings occur simultaneously throughout the first three days, so our Region is spread out to cover our assignments and report back to the group and our members.

The unique thing about the Sacramento session is that we are able to communicate directly with our legislators. Over 2,000 Realtors® marched on the Capitol at the end of April to discuss the issues currently in play that would harm private property rights. Many travelers from all parts of the state were able to attend Legislative Day and further understand what it truly means to be a Realtor®.   

Coupled with the legislative agenda are the regular business meetings. My 2014 committee assignments are as follows:

·         C.A.R. Director

·         Regional Representative Legislative Committee

·         Alternate Member Nominating Committee

·         Regional Liaison Strategic Planning & Finance Committee

·         Member Standard Forms Advisory Committee

Legislative Committee highlights –

·         Aaron Kerper covered this meeting in Sacramento, as I was sequestered in the Nominating Committee interviews. Please see his report for all of the details.

Nominating Committee highlights –

·         This is the committee that vets the candidates for volunteer leadership at C.A.R. Our meetings are strictly confidential so we can do the best possible job of determining the right people to represent our state.

·         The following appointments and designations were recommended to the Board of Directors and approved

o   State Allocated NAR Directors (2015-2017)
1. Robert Bailey, Santa Cruz County, Region 10
2. Kevin Brown, Bay East, Region 6
3. Cynthia Carley, Rim O’ The World, Region 15
4. Jared Martin, Fresno, Region 12
5. Geoff McIntosh, Pacific West, Region 23
6. Beth L. Peerce, Southland Regional, Region 18
7. Jeanne Radsick, Bakersfield, Region 12
8. Tamara Suminski, South Bay, Region 21
9. Michael Teer, Pacific West, Region 23
10. Rick Violett, Pacific West, Region 23
11. 
Pat "Ziggy" Zicarelli, Southland Regional, Region 18

1. Robert Bailey, Santa Cruz County, Region 10

2. Kevin Brown, Bay East, Region 6

3. Cynthia Carley, Rim O’ The World, Region 15

4. Jared Martin, Fresno, Region 12

5. Geoff McIntosh, Pacific West, Region 23

6. Beth L. Peerce, Southland Regional, Region 18

7. Jeanne Radsick, Bakersfield, Region 12

8. Tamara Suminski, South Bay, Region 21

9. Michael Teer, Pacific West, Region 23

10. Rick Violett, Pacific West, Region 23

11. Pat "Ziggy" Zicarelli, Southland Regional, Region 18

o   Alternates in Priority Order (2015)
1. John Yen Wong, San Francisco, Region 8
2. Jim Hamilton, Silicon Valley, Region 9
3. Jennifer Branchini, Bay East, Region 6
4. Heather Ozur, California Desert, Region 28
5. Melanie Barker, Yosemite Gateway, Region 12
6. Suzanne Yost, Silicon Valley, Region 9
7. Marion Proffitt, Tri-Counties, Region 23
8. Patricia Hicks, East Valley, Region 15

1. John Yen Wong, San Francisco, Region 8

2. Jim Hamilton, Silicon Valley, Region 9

3. Jennifer Branchini, Bay East, Region 6

4. Heather Ozur, California Desert, Region 28

5. Melanie Barker, Yosemite Gateway, Region 12

6. Suzanne Yost, Silicon Valley, Region 9

7. Marion Proffitt, Tri-Counties, Region 23

8. Patricia Hicks, East Valley, Region 15

o   2. That the following individuals be nominated as Directors For Life:

§  Phyllis Carmichael, Silicon Valley, Region 9

§  Gregory Pawlik, Beverly Hills/Greater Los Angeles, Region 17

§  Jeff Sposito, Contra Costa, Region 5

o   3. That Joel S. Singer be elected as Chief Executive Officer/State Secretary for the year 2015. 

o   4. That Pat “Ziggy” Zicarelli be elected as President-Elect for the year 2015.

o   5. It was reported for information only that Geoff McIntosh will continue to serve as Treasurer for the year 2015. 

o   6. It was reported for information only that Chris Kutzkey will become President for the year 2015.

Strategic Planning & Finance Committee highlights –

·         This committee meeting conflicted with the Standard Forms committee meeting. Rich D’Ascoli is a member of the committee and has the information regarding the meetings.

Standard Forms Committee highlights-

·         Although other items were discussed, hours were dedicated to feedback, suggestions, questions and concerns about the new RPA-CA that is slated for release in November. This committee reviews “comments” then consults with legal counsel to take action on the forms. So much time was spent on the discussion of deleting the WPA from the library that much work went unfinished.

·         Please go to the website, review the draft and leave your comments ASAP.

o   Target finish date for new RPA-CA is June 2014

o   Training for new RPA-CA should begin in August

o   PSAR is committed to providing local training on the new RPA-CA

o   New RPA-CA should roll out in the November forms release

o   WPA will be deleted from the forms library when the new RPA-CA is released

·         The committee has already scheduled multiple conference calls this month to address the long list of concerns and suggestions for the RPA-CA

There are always things going on in our communities. Your Directors serve as your voice to notify C.A.R. and get their help or guidance when needed. If you have questions or concerns that you feel should be addressed, you need to let us know so we can take action. Please visit the C.A.R. website to review meeting materials and agendas for each meeting and contact a C.A.R. Director with your comments prior to the meeting


Norma Scantlin, Director



Parkway Real Estate
619-518-8270
nscantlin@aol.com

NOMINATING COMMITTEE

This year I have had the honored of representing PSAR on the State Nominating Committee for the upcoming officers for the 2015 California Association of Realtors.  It was a total of three days of closed meetings.   I am proud to announce that next year’s President for CAR is Chris Kutzkey,  President  Elect is Pat  “ Ziggy” Zicarelli, and Treasurer Geoff Mcintosh.    

PUBLIC POLICY FORUM

The Public Policy Forum sponsored an informational panel regarding Auction.Com. The panelist member from Auction.Com was Rick Sharga, Executive Vice President. Hubzu was also invited to be a panelist but did not attend.  It was a 2½ hour forum allowing fellow realtors to ask questions of Auction.com.   Action.Com is currently in 48 states and is planning on expanding in California.   These companies are in our business and  there will be more discussion in the months to come.  Auction.com and like companies are a main topic of discussion in most of the committees t CAR along with the forum held by the Bureau of Real Estate.  

TAXATION AND GOVERNMENT FINANCE COMMITTEE

The Taxation and Government Finance Committee had on the agenda many Position Papers for discussion.  Some of the issues were Election Ballot Proposition 41 (Veterans Housing and Homeless Prevention Bond Act, Mortgage Finance Reform Risk Sharing Proposal, Private Transfer Fee Recording Statute, Business License Tax, Home Inspectors being licensed, Parcel Taxes Are not Voted on by Property Owners, and Team Names for Real Estate.  All of the topics were discussed in great lengths.    CAR is “SUPPORTING” Proposition 41 being voted on in the June 2014 Primary Election.  

BUREAU OF REAL ESTATE

At this Forum, the Bureau discussed the Contractors Licensing Board, and Enforcement and Fines.  They also reported that as of March 31, 2014 there were 403,842 licensees in the State o California.

You may also review all the information regarding the April/May meetings at CAR.org.  If you have any questions, please contact me.   

I enjoyed representing PSAR at the Spring 2014 Business Meeting for the California Association of Realtors.


Sarah Heck, Director


SDH PROCESSING
Coldwell Banker West
619-295-9520
sarah.sdhprocessing@gmail.com


Legislative Day 2014 was a success!  Over 2000 Realtors gathered to lobby our state legislators and fight for homeowners rights.  We know not all Realtors can take the time to attend these meetings, so we are bringing the meetings back to you via these C.A.R. Director reports!  Please take the time to read these reports and share the information with your office.  It is important that ALL Realtors stay informed.   Please help us spread the word!
Hot topics:
The Mortgage Interest Deduction is on the chopping block.  Your C.A.R. Lobbyist’s are working hard to protect mortgage interest deduction.   If the Federal Government were to do away with the mortgage interest deduction, it would be detrimental.  The loss of this deduction would give potential home buyers less incentive to own vs. rent.  Additionally, buyers may not qualify for as high of a purchase price as they would if they were able to take the deduction each year.  Please be on the lookout for a “Call to Action” or “Red Alert” regarding this issue.  We may need your voice to be heard in order to keep this deduction!

New flood insurance mandates are causing huge issues across the nation.   The flood zone maps FEMA provided are being disputed by many homeowners.  Because of the new maps, many homeowners whose homes were NOT previously in a flood zone, are now subject to increased flood insurance rates.  Homeowners who feel that their property is incorrectly zoned, are now being forced to pay for land surveys to prove it.  The costs are extensive but the alternative can be even more expensive.  Don’t disregard this as a problem that only occurs in other states…it is happening throughout California!

Water conservation efforts are a success!  At the January C.A.R. meetings, someone suggested that we start a proactive campaign to promote water conservation.  By reminding people about the 2017 retrofit mandate for low flow toilets and water fixtures, C.A.R. is hoping to get homeowners to install the low flow fixtures now, thus saving water today!  The Governor’s office was so impressed with our efforts, that they will be using some of our marketing ideas to get the entire state to conserve water.

 Going once, going twice, SOLD…by Auction.com-  C.A.R. invited some of the largest Auction companies to participate in a forum, so that we could address concerns our industry has with the emerging auction market.  Of all 3 companies invited, Auction.com was the only one who accepted the invitation.  Although they were able to address some of our concerns, there are still a lot of unknowns.  It was clear that the future goal of Auction.com is to try to convert all Real Estate transactions to their on-line platform.  So what does that mean for us as the Realtors?  It means that we need to continue to prove the value in our service.  We need to strive to connect with all parties in a transaction so that they can see the human element is necessary.  We need to stay relevant and fight to keep our role in the transaction!

Pocket Listings- Pocket listings have been a hot topic over the last year.  It is a serious issue and it has the attention of the banks and investors in the distressed property market.  That is why the banks have started inserting auction companies into the transactions.  They don’t trust that Reatlors are trying to get the highest price possible, so they feel the auction companies are better serving their interests.  Agents who aren’t fairly marketing their listings to drive the highest and best offer, are jeopardizing their own license and tarnishing the Realtor reputation.  Regardless of the type of sale (distressed or traditional), listing agents should be marketing the property to the masses.  At the end of the day, the seller has the right to choose whichever offer they want.  However, the listing agent has a fiduciary responsibly to present all offers, and advise with honesty.  

Lack of Affordable Housing- C.A.R. Economist Joel Singer hosted a luncheon where he discussed our Real Estate Market (past, present and future).  In his opinion, lack of affordable housing in CA will be our biggest problem for years to come.  We need affordable housing in order to grow the 1st time home buyer market.  After all, it is 1st time homebuyers who become move up buyers, investment buyers and eventually downsize buyers.  If we miss the boat on getting them into the market now, they won’t be there to support the future markets. 

 YPN Focuses on Ethics and Professionalism -  YPN is always an invigorating meeting to attend.  The energy, ideas and focus are unsurpassed.  This session had a slightly different (quite serious) tone as we discussed the importance of Ethics and Professionalism.  YPN strives to blend new ideas with proven techniques, in an effort to grow everyone’s business.  There is definitely a focus on  grooming the younger generation of Realtors via the mentorship of those who have more experience.  Eithcs and professionalism play such a huge role in the sustainability of our industry.  It is importance that all Realtors work by the code of ethics and conduct themselves in a professional manner.  Some tips provided:

-Be honest
-Answer your phone
-Stay true to your fiduciary responsibility
-NO POCKET LISTINGS!!!!


Aaron Kerper, Director


Realty One Group
(619) 742-1877
akerperre@aol.com

Legislative Day began with a morning briefing at the convention center.  The purpose of this meeting was to update members on key legislative issues, and to provide general instructions and protocols for meetings with elected officials that were to take place later in the day.  

There were five “Hot Issues” reviewed during the briefing, which was lead by C.A.R. Legislative Advocate and Senior Vice President of Governmental Affairs Alex Creel.  It should be noted that there are often several potentially “Hot Issues” that are resolved in the days (and even hours) prior to the start of the C.A.R. meetings.  This is largely due to the fact that state legislators know that the REALTORS® are coming up, and that they(the legislators) are about to be held accountable!

The first of the day’s issues was SB 1439(Leno).  C.A.R. is OPPOSING SB 1439 (Leno) which forces landlords to stay in business for at least 5 years. C.A.R. opposes this bill because it is an outrageous attack on private property rights and because they will discourage homeownership.

Issue Background

In 1985, C.A.R. successfully sponsored the “Ellis Act” which prevented local governments from passing laws restricting the ability of landlords to go out business. The Ellis Act currently provides protections in terms of advance notice to tenants, relocation assistance and extended notice protections for seniors and the disabled when a landlord elects to go out of the rental business.

C.A.R. has successfully opposed a number of attempts to weaken the Ellis Act. SB 1439 unreasonably and unnecessarily restricts the ability of landlords to go out of business. This bill is offensive to fundamental private property rights; property owners should not be forced by government to stay in the rental housing business.

SB 1439 will empower local government to restrict the ability of landlords to take rental units off the market unless every owner of that rental property has owned the property for at least FIVE consecutive years. This effectively forces landlords to remain in the rental housing business making it impossible for these owners and their families to occupy their own property.

Additionally, under SB 1439, if an owner submits a notice to take rental units off the market, that owner cannot submit a notice on any other property they subsequently purchase. While SB 1439 only applies to the City and County of San Francisco (a “district” bill), it sets a very dangerous precedent. SB 1439 sets the stage for this effort to spread throughout the state limiting and restricting the rights of private property owners to buy and occupy their own property.

This bill restrains and effectively prohibits the free use of private property in rent control jurisdictions, provides no exceptions or relief for property owners who have personal or financial hardships, and is fundamentally offensive to the notion of private property rights.

C.A.R. asked Assembly Members and Senators to oppose SB 1439
 
The second issue was AB 2416 (Stone).  C.A.R. is OPPOSING AB 2416 (Stone), a bill that creates a new super-lien for wage claim disputes. C.A.R. opposes AB 2416 because it threatens the availability of mortgage finance, denies due process to the owner of the property, and unnecessarily clouds title.


Issue Background 

Under existing law, trades people and others who have conducted work to improve a property have the right to record a mechanics lien against the property for payment for that work. Additionally, if an employee has a wage dispute with their employer there are multiple legal remedies available to them to seek fair compensation. 

AB 2416 seeks to expand the mechanics lien concept so that an employee may record a lien against any property owned by the employer, even property that has NO connection to the dispute. And this isn’t a standard lien right either. 

AB 2416 creates a super-lien for the first $50,000 of the claim. This super-lien would be paid before any other lien except tax and government liens, purchase money mortgages and mechanics liens.

C.A.R. asked Assembly Members and Senators to oppose AB 2416.

The third issue was AB 2039 (Muratsuchi).  C.A.R. is SPONSORING AB 2039 (Muratsuchi) to prevent real estate auction companies from shifting liability for their mistakes to sellers and listing agents when the lender sends short sale properties to auction to validate their value. 
 
Issue Background

A new practice has arisen where some lenders require homes in a short sale transaction to be put up for auction typically run by a third party auction company chosen by the lender. If the bids come in under the original offer, then the offer is accepted. If, however, a higher bid is submitted, then that bidder can purchase the home.

The lender, of course, has complete control over the auction contract.  As a condition of approving the short sale and absent legislation to the contrary, the lender can include a provision in the contract requiring the homeowner to agree to defend, indemnify, and hold harmless the auction company from any costs, liabilities, and damages arising in connection with any claim resulting from the auction company’s actions.

These provisions only exclude cases of gross negligence, willful misconduct, bad faith, an unlawful act or fraud. In other words, the auction company is held harmless for mistakes it makes in the regular course of business.

C.A.R. asked Assembly Members and Senators to vote YES on AB 2039

The fourth issue was SB 391(DeSaulnier).  C.A.R. continues to OPPOSE SB 391, which will impose a $75 tax on the recording of all non-sale documents, including refinances. C.A.R. opposes SB 391 because it unfairly singles out one segment of society to pay for something that should be the responsibility of all Californians.

Issue Background

C.A.R. is OPPOSING SB 391 (DeSaulnier) which imposes a recording TAX to generate funds for affordable housing programs. SB 391 creates a $75 per document recording TAX to fund the affordable housing trust.  C.A.R. is opposing this measure because it unfairly adds to the cost of recording real estate documents. C.A.R. is an aggressive advocate for affordable housing, but believes it is bad policy to fund affordable housing at the expense of homeowners who need to record real estate documents. The real issue is that this TAX is imposed only on real estate document recordings.  Affordable housing programs should be funded by the broadest base possible of California's citizens. 

C.A.R. opposed the bill’s predecessor, SB 1220, last year until the bill was amended to exempt recordings that were part of a sales transaction.  Afterward, C.A.R. supported the measure, but it was defeated. Don't be misled by allegations that C.A.R. "changed its position" on SB 391.  C.A.R.'s Board of Directors considered SB 391 for the first time in May of this year; prior to that, C.A.R. did not take a position on SB 391.  The sponsors were advised of this process well before the bill was introduced. In May, the Board of Directors voted to oppose SB 391.

C.A.R. asked Assembly Members and Senators to oppose SB 391.

The final issue was AB 2169(Cooley). This was a last minute addition to the Hot Issues. Existing business practice and current law specifically permit brokers and the salespeople they supervise to select they type of business relationship (employee or independent contractor) they have. Concerns have been raised that the existing law is ambiguous and can be interpreted to say that salespersons are in fact employees. AB 2169 will clarify that the independent contractor status within existing law remains a legal option. This need to clarify the existing law is largely born of the case of Bararsani v. Coldwell Banker. Furthermore, C.A.R. Legal Action Fund Trustees have authorized funding for outside specialty class action counsel, should it become necessary, as this class action case alleging salespersons are employees and not independent contractors’ progresses. 
C.A.R. asked Assembly Members and Senators to vote YES on AB 2169
During the afternoon, Region 30 representatives went to the Capitol to attending meetings with Members of both the State Assembly and State Senate, or their staff.  Due to the number of legislators in San Diego County, members of PSAR were, at times, divided into groups to assure adequate representation at each meeting.
Sometimes you get 20-30 minutes with your legislator in their office, other times you get 5 minutes in the hallway. Our meeting list included the following legislators: Senator Marty Block (39th District); Senator Joel Anderson (36th District); Senator Ben Hueso (40th District); Assemblywoman Shirley Weber (79th District); Assemblywoman Lorena Gonzalez (80th District); and Assemblyman Brian Jones (71st District).

As the C.A.R. Legislative Key Contact to Senator Block, I made sure that he and his staff received the C.A.R. Legislative information, designed to inform our elected officials of C.A.R.’s positions on the aforementioned issues. 

The day ended with a Capital reception, during which members throughout the state had the opportunity to network with elected officials as well as one another. In effect, the real Capitol meetings

 May 1, 2014 – C.A.R. Business Meetings

Professional Standards Committee
There was one action item brought before the Committee, which passed. The item read as follows:

1. That C.A.R. adopt the amended Citation Policy, subject to approval by NAR, to (a) use Citations for progressive discipline; (b) limit the maximum number of Citations to three (3) in a three (3) year period; (c) add Standards of Practice 12-8, 12-9, 12-10, 12-11, 12-12 and 12-13 to the Citation Schedule; and (d) delete Articles 4 and 5 and Standard of Practice 12-4 from the Citation Schedule.
2. It was reported for information only that C.A.R. will amend the California Code of Ethics and Arbitration Manual to recommend that local Associations retain ethics hearing files for seven (7) years. 

MLS Policy Committee
There were no action items coming from this committee. Once again, data sharing with sites such as Zillow, Trulia, and Redfin, as well as Off-MLS listings dominated the discussion. 

Legislative Committee
There were two action items here, both which passed: 
1) That C.A.R. adopt the following position on Proposition 41 for the June 3, 2014 state ballot entitled Veterans Housing and Homeless Prevention Bond Act of 2014: Veterans Housing and Homeless Prevention Act of 2014.  "FOR" 
2. That C.A.R. "SUPPORT" AB 2108 (Eggman), which pertains to flood management in the Sacramento - San Joaquin Valley.
 
The day’s committee meetings were followed by the Region 30 Caucus Meetings, followed by a Candidates Reception for the 2015 C.A.R. leadership team, followed by a joint region dinner with Region 29(North San Diego County Association of REALTORS®).
May 2, 2014 – C.A.R. Business Meetings

REALTOR® Risk Management and Consumer Protection Forum
The forum began with an update from Cathy Spencer, Broker/Owner of Gateway Professional Insurance Services, on changes in practices by those companies issuing flood insurance in California. She noted significant increases in premiums, as well as a new system of rating and pricing based on owner occupancy. Her best (and often repeated) advice to those obtaining flood insurance was to make sure to “get an elevation certificate”. 
Following the reports from other affiliates (pest control, home warranty, home inspection, etc.), came the region reports for the 32 regions statewide. Again, the overriding issue appeared to be Off MLS listings, and other sharp practices.

The session ended with a legal update from Gov Hutchinson, Assistant General Counsel at C.A.R., who highlighted several major cases that C.A.R. was either tracking, or participating in, as well as upcoming changes to California law.

Public Policy Forum & REALTOR® Risk Management and Consumer Protection Joint Forum

The purpose of this joint forum was to discuss emerging trends related to online auction companies and their future in real estate. Several companies were invited to participate including Auction.com, Hubzu, Williams and Williams, and Kennedy Wilson. Of these, only Auction.com chose to attend, sending Executive Vice President Rick Sharga to speak at the forum.

Though the majority of the forum was conducted as a question and answer session, led by Legislative Committee Chair Art Nellessen, Mr. Sharga was permitted a few minutes at the outset for opening remarks. Some of his more interesting (and possibly controversial) statements were as follows:

“We are a dispositional platform, and are very good at three things 1) marketing, 2) auctions, and 3) closing”. It was interesting to note that he was not willing to elaborate on what he meant by “closing”.

“There are a lot of misperceptions about us that I would like to clear up. Of the transactions that pass through Auction.com, 90% have a real estate professional involved.” Once again, non-specific as to the meaning of “involved”.

“Short sales represent a very small portion of our business. Less than 10%. Of the 35,000 sales done by Auction.com last year, only 2000-3000 were short sales.”

“Yes, on the bank owned auctions, our contract allows us participate in the placing of bids on behalf of the seller. This is done in an attempt to reach minimum reserve levels, and no, we do not disclose this to other prospective bidders during the auction.”

“It is inevitable that one day most real estate transactions will be done online. This may or may not involve a REALTOR®.”

May 3, 2014 – Board of Director’s 540th Session

All previously mentioned motions were presented and passed at this meeting. 

As a report only item, Chris Kutzkey will become President for the year 2015.

As a report only item, Geoff McIntosh will continue to serve as Treasurer for the year 2015.

 In addition, the Nominating Committee made the following recommendations, all of which passed:

1. That Joel S. Singer be elected as Chief Executive Officer/State Secretary for the year 2015. 

2. That Pat “Ziggy” Zicarelli be elected as President-Elect for the year 2015.

The next C.A.R. Business Meetings are in Anaheim from October 8th through 11th 2014, and will take place alongside the C.A.R. Expo. Please make sure that you are aware of the upcoming business issues at http://www.car.org/. Additionally, please take time to reach out to your CAR Directors with any issues or concerns.  



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