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May 2003 Newsletter
Federal Legislative Updates from NARUS Patriot Act and Money Laundering Proposal On April 10, 2003, the Treasury Department issued an advance Notice of Proposed Rulemaking seeking comments on a provision of the US Patriot Act that requires financial institutions to establish money laundering programs. Included in the definition of financial institutions are "persons involved in real estate closings and settlements." The ANPR is seeking answers to a range of questions including whether such persons should be exempt from this requirement.. NAR believes real estate licensees should not be considered a "financial institution". Other than holding earnest money, real estate licensees do not receive or distribute money on behalf of the parties to a real estate transaction. Thus, the burden of compliance by licensees would likely outweigh any benefit in terms of detecting money laundering schemes. NAR met with Treasury Department officials last year to express our concerns about this issue and will be meeting with them during this comment period. The comment period closes on June 9, 2003. Financial Services Subcommittee Holds Hearings on Insurance The Financial Services Subcommittee on Capital Markets, Insurance and Government Sponsored Enterprises held a hearing on "The Effectiveness of State Regulation: Why Some Consumers Can't Get Insurance" on Thursday, April 10th. The hearing featured one panel of insurance regulators, insurance industry representatives and one business representative. Witnesses included Dr. Robert P. Hartwig, Senior Vice President & Chief Economist, Insurance Information Institute; Mr. John J. Marchioni, Vice Chairman, New Jersey Coalition for Auto Insurance Competition and VP with Selective Insurance Company; The Honorable Ernst Csiszar, Director, South Carolina Department Of Insurance; Mr. Nathaniel Shapo, Partner, Sonnenschein Nath & Rosenthal, former Director, Illinois Department of Insurance and Mr. Dan Juneau, President, Louisiana Association of Business & Industry, a constituent of Chairman Richard Baker. The focus of the hearing was the role that insurance regulation plays in determining whether or not insurance is available and affordable in the auto and commercial property markets. Illinois and South Carolina were cited as examples of deregulated markets that are enjoying healthy insurance markets. Louisiana and New Jersey were the examples of heavily regulated markets that don't work. The hearing was the first in what is expected to be a number of hearings on the performance of insurance marketplace House Subcommittee Holds Flood Insurance Hearing The Housing and Community Opportunity Subcommittee of the House Financial Services Committee held a hearing on the National Flood Insurance Program and related repetitive flood loss bills. Testimony focused on the strengths of and challenges to the program, including a discussion of the newly-funded initiative to modernize the floodplain maps. NAR supports the imposition of full actuarial insurance rates for repeatedly flooded properties but opposes such imposition on second homes and rental properties. Senate Affordable Housing Credit Introduced Senators John Kerry (D-MA) and Rick Santorum (R-PA) have introduced S. 875, a companion to H.R. 839, the Portman-Cardin-Bonilla affordable housing tax credit. The Senate bill has bipartisan support. These two bills will be a centerpiece of NAR advocacy during the upcoming Midyear meetings as part of NAR's ongoing Housing Opportunity program. The legislation creates a new tax credit that would be available to developers and investors who construct or rehabilitate affordable housing for below-median income individuals and families to purchase. For more information on pending federal legislation that affect REALTORS®, go to www.realtor.org. There you will see how NAR uses your RPAC contributions to fight for your industry!
Maryland State Legislative Update from MARMAR has helped defeat several onerous bills that would have serious negative implications upon our membership. These bills range in issue of concern from septic, to cellphone usage, to sewer sludge disclosure, and, lastly, Don't Call List legislation.Yes, this year's septic bill, HB321, is DEAD! Unlike last year's bill, HB321 met an early demise and was flushed out by the Environmental Matters Committee. The hearing for the bill was February 22nd with only two proponents testifying — both were makers of the technology — and there were no environmentalist proponents present. Many thanks to those MAR members who were requested, on short notice, to make calls to committee members urging them not to support the bill — your calls made a difference! HB 89, the cellphone bill that would have prohibited the use of hand-held cellphones while driving, was reported out unfavorably by the House Commerce and Government Matters Committee. This legislation would have impeded much of our membership's productivity who find it extremely helpful to conduct business while traveling — but always remaining attentive to the road, mind you. SB 526, was reported out unfavorably by the Judicial Proceedings Committee. This bill would have created more regulation that would have required the property owner to provide written disclosure of whether or not sewer sludge had ever been used on the property. Lastly, SB 641 was defeated, which, in effect, would have created a Do Not Call List in the Attorney General's Office preventing anyone from calling citizens on that list. Passage of this legislation would have required Realtors to purchase the list/database and comply with the calling restriction. Making a call to someone on that list would have been in direct violation with the Act and would entitle the call recipient to recovery of certain damages and fees and possible further legal action. Obviously, MAR was very concerned with this legislation given the nature of the business and the voluminous calling that correlates with it. The defeat of this legislation defeats yet another mandate that would have imposed more regulatory compliance and the possible award of damages and/or legal fees for non-compliance.
A Message from your President — Ron AndersonI have received numerous requests for the "speech" I gave at my installation dinner. The requests have come from people who were not there, so I guess my words (or the general ideas) were taken from that dinner and passed on. I spoke from an outline and "filled" it in. I will try recreate the "fill-in" so you get the general idea.I had publicly wished people would keep one of my friends who had been under the weather in their thoughts. I then quoted a past President of the United States: Quote: Nothing in the world can take the place of persistence. Talent will not; nothing is more common than unsuccessful men & women with talent. Genius will not; un-rewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent. End Quote. Calvin Coolidge I said, with tongue firmly planted in my cheek, that Realtors are either the luckiest people, the most pessimistic people, or the most unbelieving people around. This is according to other Realtors. My point was, you have to keep after "it". Being available, picking up the telephone when it rings, doing those things that build a client base that can be depended on to provide you with the success to be called "Lucky". The hard work you put into your profession, listening to your mentor and sifting through the good advice given to you to tailor to your business needs is certainly what makes you "Lucky"! I wrapped my "speech" up with: Everything you need to know you have learned from Noah's Ark.
Have faith in your ability to get the job done. Thank you!
You be the JudgeCase #12-7: REALTOR® Advertising Free Market Analysis (Reaffirmed Case #19-9 May, 1988. Transferred to Article 12 November, 1994. Revised November, 2001.) REALTOR® A advertised in the local newspaper as follows: "Free Market Analysis With No Obligation." REALTOR® A also distributed certificates reading, "This will entitle the bearer of this certificate to one (1) FREE Market Analysis with no obligation to bearer." The certificate included the name of REALTOR® A and his firm. A property owner complained about "being the victim of a come-on scheme" to solicit the listing of his property which the Grievance Committee referred for a hearing before a Hearing Panel of the Professional Standards Committee. At the hearing the property owner testified he had called REALTOR® A to have him prepare a market analysis of his residential property, "... with no obligation..." as claimed in REALTOR® A's ads. However, the property owner said that when REALTOR® A came to his home, he explained that he would be glad to provide the market analysis but said, "I presume you understand that when we provide this service, we also expect that if you list your property, you will permit us to serve you." The property owner testified that REALTOR® A did not press the matter at the time and did provide a market analysis. The property owner told the panel that for the next three weeks REALTOR® A or one of his representatives called "practically every single day" soliciting the listing of his home. The property owner testified that on several occasions, someone from REALTOR® A's office reminded him that REALTOR® A had provided a "valuable free service and we feel that you owe us the listing of the property." REALTOR® A responded that he had provided the "free market analysis" as represented in his advertising, and had provided it "... with no obligation." He stated that he had neither asked for nor received a fee for the market analysis. He could not understand why he was required to appear before a Hearing Panel in connection with allegations of a violation of Article 12 of the Code of Ethics. The Hearing Panel noted that offering premiums or prizes as inducements, or the advertising of anything described as "free" is not prohibited by the Code of Ethics nor can such advertising be prohibited by a Board of REALTORS® unless it presents other than a "true picture" as required by Article 12. The Hearing Panel concluded that although REALTOR® A was free to advertise "free market analysis with no obligation," such a representation was not a "true picture" if all of the terms governing availability are not clearly disclosed in the ad or representation. The Hearing Panel noted that the statement by REALTOR® A when he provided the "free market analysis" that it was "presumed" the property owner would list with REALTOR® A if the property was offered for sale, and the subsequent "reminders" by sales representatives of REALTOR® A about the "expectation" made the representation less than a "true picture." The panel concluded that REALTOR® A was in violation of Article 12.
Information about Prince Georges CountyNow that Prince George's County, the Greater Capital Area, Howard County (excluding those with MARS keys) and the Coastal Association have switched to the e-key/Display key, and Frederick County will be switching soon, AACAR and the MARS region have a very difficult decision to make. Our contract with Supra for the current SuperKey will be ending soon, as will the contract MARS has with Supra. This should take place at the end of the year. Our Board of Directors and our CEO Tom Quattlebaum, along with the representatives from the MARS region and the Greater Baltimore Board of REALTORS®, have been weighing our options and trying to choose the option that would best benefit our members. We currently have two choices - to continue doing business with Supra and upgrade to the e-key/Display key, or go to a less expensive, easier to operate, new key system — Risco. The benefits of staying with Supra would be that we could maintain reciprocity with the surrounding areas such as Prince George and Montgomery counties. The lockboxes we use now will stay as they are (as the e-key and Display key work with them.) The downside of switching to Supra seems to be the cost of the equipment and the fact that the new keys are somewhat more difficult to operate and need to be placed in a "cradle" every night in order to update them. Instead of being the "operator" of the system, AACAR and MARS would become the liaisons between you and Supra. To switch to Risco, you would benefit by receiving a new key and boxes with a 3-digit code, and the association would maintain ownership of the key service. You would be purchasing your key vs. leasing it from Supra. The downside is that you would not be able to open boxes in any other area but MARS (who will stay with AACAR) unless you lease a Supra key from a participating association. Their agents would not be able to open our boxes without purchasing a Risco key from us. We would have to change lockboxes at the time of the key exchange. So far, the majority of agents we have talked to would prefer to stay with Supra to continue the reciprocal access. We want you to be informed and aware of your choices, and now you will have an opportunity to find out more about at least one of your options. Representatives from Supra will be at the 5th Annual Real Estate Now Convention trade show on June 4th at the Anne Arundel Community College. Unfortunately, Risco representatives are unable to attend, and I do not know when or if we will be able to have access to their representatives for our members. If you have questions about the e-key/Display key, stop by Supra's booth at the convention, and you can get answers from the source. You will be able to see the keys, and how they operate. The registration form for the Convention can be found on page 4 of this newsletter. We will keep you informed, and would like to hear from you. Remember, having to switch keys again is NOT something AACAR wanted to do — we HAVE to do it because Supra is discontinuing the Superkey. AACAR wants your input, so please e-mail me at marta@aacar.com, or comments can be faxed to 410-647-5102, or mailed to Marta Jones, AACAR, 555 Benfield Rd., Severna Park, MD 21146.
New Members compiled by Carole DavisAffiliate Members Jane Williams, The Washington Savings Bank, Bowie REALTOR® Members
Bryant Allam, Long & Foster, Pasadena
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