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Reports from California Association of REALTORS® Board of Directors Meetings January 16-19, 2018

posted Feb 5, 2018, 4:49 PM by Joyce Evans   [ updated Apr 30, 2018, 12:23 PM ]

Jeff Campbell, 
C.A.R. Director, Past PSAR President, 
Former C.A.R. Executive Committee Member, 
Region 30 Chairman

Dear Fellow REALTORS®, I proudly represent you, along with my esteemed team, as a voting director at the California Association of REALTORS®. I am honored to be chairman of this talented, and accomplished group that represents you. 
 Lupe Soto, who has been appointed to a 5-year seat as a Legal Action Fund Trustee and currently serves as their Vice-chairman, will explain some of the legal issues other agents are contending with. Lupe was Past Board President of the Southeast Association of REALTORS® which covered West L.A., Cerritos, Bellflower, Long Beach and other areas. She currently serves as manager of Sotheby’s Pacific Beach and La Jolla offices and is Director of their International Division. As former Realtor of the Year, Manager of the Year, and Business Woman of the Year, she brings exceptional experience to our Region.

Bob Olivieri is a past PSAR president and is an experienced C.A.R. Director.  He manages the South County office for Coldwell Banker. He is our former Regional Chairman and currently serves on the CAR Nominating committee, and he is charged with vetting the candidates for leadership.  This is a committee that sequesters and keeps the sanctity of background checks and personal information on the candidates close at hand. They inform the rest of the body as to whether a candidate is qualified or not qualified. Bob holds an MBA and brings a trough of experience to the region.
Should your office like a CAR Statewide update, please notify us and we will be happy to have a director come to your meeting to offer a brief rundown of issues at hand.

Lupe L. Soto, 
C.A.R. Director, 
Former C.A.R. Executive Committee Member

Legal Action Fund Trustees and Defense Strategy Advisory Committee
Case Update:
  1. There have been at least 6 class action lawsuits involving real estate licensees challenging the independent contractor status in the last several years:
    1) Barasani v. Coldwell Banker Residential (settled for $xx)
    2) Redfin (3 employee, 3 independent contractor – started in 2014; most moved to arbitration, one settled, one remains in court as a PAGA claim):                       
            a.  Galen v. Redfin, Badivian v. Redfin, Sandoval v. Redfin, Cruz v. Redfin, and two others.
    3) Stratulat v. Nationwide Real Estate Executives (filed 2016, presumably settled): misclassification, meal breaks, rest periods, overtime, business expenses, wage statements, and others

    Other non-class action independent contractor cases against brokers in California include NLRB v. Strategic Sales and Marketing (NLRB failed to pursue due to lack of interstate commerce). There have been others challenging arbitration clauses pre-Barasani (Century 21 v. Wherry), or miscellaneous ones challenging the risk management fees after termination.

    In 2015, C.A.R. released the long form arbitration independent contractor agreement ICA. Rodeo was not using it but is seeking their salespersons sign it now. For those who sign, this will shrink the class size of existing salespersons but will not cover prior salespersons.

  2. The Del Monte Properties & Investments v. Margarett Dolan (late fee challenge on C.A.R. Lease form) A motion was filed to transfer the case to the 1st District Appellate Court in San Francisco. The Trustees were notified that the First District Court of Appeal declined to order transfer of the case. Trustees agreed to place this case on the watch list. 

    Summary of this Case:
    The parties had entered into a residential lease using the C.A.R. form Residential Lease, in which the parties agreed a $50 late fee for late payment of rent. Landlord served a 3-day notice to pay rent or quit on its tenant Margarett Dolan (defendant/appellant) for $600 delinquent rent, to which landlord applied an additional $50 late fee pursuant to the terms of the lease. Dolan failed to pay the outstanding rent and late fee and failed to quit the property, thus landlord filed an unlawful detainer suit. Dolan challenged the legality of the late fee appended to the outstanding rent in the notice to pay rent or quit. The Humboldt County superior court held that the late fee was legal pursuant to California Civil Code section 1671 and ruled in favor of landlord Del Monte on all counts. Dolan appealed the unlawful detainer judgment.
The Trustees recommended to the Standard Forms Advisory committee to revise the default option of electronic funds transfer due to the challenges that our industry is facing from wire fraud.  The request was denied by the committee because the problems that we are facing are at with the money needed to close the transaction and not with the initial deposit.  They did remind us that The Wire Fraud Advisory form was revised in December 2017 to include language giving the Buyer options on how they can deposit their initial deposit.  

Legal Affairs Forum 
Shannon B Jones, Attorney at Law highlighted some of the current issues that are affecting the real estate professional.  Below are the issues:
  1. Disclosures
    A. Granny Units – How are you presenting the usage is the issue
    B. Creeks
    C. Water Intrusion and Drainage Issues
    D. Roots – Is the seller aware? Did the agent recommend further investigation?
    E. Flipping of properties – what is their duty to disclosure and property being sold and then listed by the same brokerage.  Are you providing a copy of the reports received at the time of the purchase?
    F. Buyer Material Facts – Are we complying with our fiduciary duties and disclosing all we know

  2.  Agent Trouble Areas
    A. Buyers purchasing properties sight unseen
    B. Deposit disputes
    C. Verifying buyer’s ability to purchase
    D. Parties signing for each other – especially via DocuSign
    E. Transmitting Key Documents by DocuSign
    F. Handling Emails and text
    G. Burglaries during showings
    H. Social media
    I. Security Cameras
    J. Fire Coverage due to many disasters

Bob Olivieri, 
Past Board President 
C.A.R. Director

I was looking forward to C.A.R. in Monterey for a few reasons this year and I was not disappointed. Besides enjoying the usual great camaraderie between Region 30 directors, I was curious to see the realtor reactions to the proposed property tax portability and the newly proposed tax reform.

The tax portability proposal is gathering steam, but I was surprised how misunderstood the workings of that initiative really are. We need as REALTORS® to understand it ourselves, so we can explain it accurately.

The Federal Tax “overhaul” discussions were very interesting also. Although there were things in the bill that will hurt our industry, there were some bright spots. How agents will be taxed on their own income compared to the old code is one. The other is that the state, right now, will not follow the new deductibility limits on mortgages or on local taxes which is to our advantage. Yes, we will feel some pain due to Federal Tax Reform, but it could have been a lot worse. Lobbying by our local, state and national associations was successful in defeating key provisions that would have huge negative effects on our industry. This highlighted to me the importance of all of us contributing to Realtor Action Fund and supporting these efforts