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NEBRASKA REAL ESTATE COMMISSION January 23, 2001Staybridge Suites Staybridge Room Lincoln, NE Opening Chairperson Gale convened a Meeting of the Nebraska Real Estate Commission at 9:10 a.m. on January 23, 2001, 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. Also present were Director Les Tyrrell, Deputy Director Teresa Hoffman, Deputy Director for Enforcement Terry Mayrose, and Administrative Assistant Heidi Burklund. Abbie Widger, Special Assistant Attorney General and Counsel to the Commission, was present for an investigative matter; the Stipulation and Consent Order; the Hearing; the discussion on earnest money disputes; the Legislative Matters; and clarification of the advertising matter. Notice of Meeting (Adopt Agenda) 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 APublic Copy@ of the materials being used during the Meeting was available to the public on the Counsel table in the Meeting Room, and that the procedures followed were in accordance with the Open Meetings Law. Chairperson Gale asked that guests sign the guest list.Director Tyrrell noted that Item 15j had been added, other updates were made to Item 15, and the dates were corrected to 2001 since the Tentative Agenda was mailed to the Commissioners. After review of the Final Agenda, a motion was made by Fletcher and seconded by Nigro to adopt the Final Agenda as presented. Motion carried with Fletcher, Johnson, Landow, Moline, Nigro, Wiebusch, and Gale voting aye. Commissioner Fletcher presented Chairperson Gale with his Commissioner pin, and welcomed him to the Commission. Chairperson Gale said it was an honor and a pleasure to serve on the Commission. Minutes of December 13, 2000 The Minutes of the Commission Meeting held on December 13, 2000, were considered. After review, a motion was made by Fletcher and seconded by Nigro to approve the Minutes as presented. Motion carried with Fletcher, Johnson, Landow, Moline, Nigro, Wiebusch, and Gale voting aye. Receipts and Expenditures Reports for December Director Tyrrell presented the Receipts and Expenditures Report for December 2000. A copy of said Report is attached to and made a part of these Minutes. With regard to the December Report, Director Tyrrell noted the following: in Receipts Category 7516, a salesperson had paid the renewal fee, then got a broker =s license, and paid the difference of $25.00; and Category 8441 reflected payment received for the Stueck and Beau hearing costs. Expenditure Categories 4100 and 4132 were over budget for the month, because the December Meeting was not budgeted; in Category 4219, Awards Expense, the amount shown was a miscode, and will be corrected to Category 4214, Data Processing Expense; and Category 4221, Dues and Subscriptions, was over budget for the month and the year because of REEA dues and a two-year subscription to the Real Estate Intelligence Report.The Cash Fund Balance as of December 31, 2000, was $706,539.55, which compared to a Cash Fund Balance of $624,008.28 on December 31, 1999. After discussion, a motion was made by Moline and seconded by Wiebusch to file the December Receipts and Expenditures Report for audit. Motion carried with Fletcher, Johnson, Landow, Moline, Nigro, Wiebusch, and Gale voting aye. Renewal Report Director Tyrrell presented a Renewal Report as of January 23, 2001. A copy of said Report is attached to and made a part of these Minutes. Director Tyrrell said the renewal numbers were comparable to last year, and were above the budgeted amount. No action was necessary on this Report. Specialized Registrations Director Tyrrell presented the Specialized Registrations Report, which listed one Time Share Registration for BlueWing Lodge. A copy of said Report is attached to and made a part of these Minutes. Following discussion, a motion was made by Fletcher and seconded by Nigro to approve the BlueWing Lodge registration as presented. Motion carried with Fletcher, Johnson, Landow, Moline, Nigro, Wiebusch, and Gale voting aye. Non-Resident Licenses and Resident Licenses Issued to Persons Holding Licenses in Other States This Report, a copy of which is attached to and made a part of these Minutes, was presented by Deputy Director Hoffman and reported to be in order. Deputy Director Hoffman said that the second name, Michelle Harris, would be corrected to show the middle initial I. After review, a motion was made by Moline and seconded by Nigro to ratify issuance of the licenses as set forth in the corrected Report. Motion carried with Johnson, Landow, Moline, Nigro, Wiebusch, and Gale voting aye, and with Fletcher abstaining. Examination Report - December Deputy Director Hoffman presented a Report relating to the real estate examinations administered during December 2000. A copy of said Report is attached to and made a part of these Minutes. After review, a motion was made by Fletcher and seconded by Nigro to ratify the December Report for the purpose of issuing licenses. Motion carried with Fletcher, Johnson, Landow, Moline, Nigro, Wiebusch, and Gale voting aye. Real Estate Education Matters Pre-License Education Instructor Approval Deputy Director Hoffman presented for ratification the Pre-License Instructor Approval Report, which listed approvals for three pre-license instructors. A copy of said Report is attached to and made a part of these Minutes. After discussion, a motion was made by Fletcher and seconded by Nigro to ratify the Report. Motion carried with Fletcher, Johnson, Moline, Nigro, Wiebusch, and Gale voting aye, with Landow not voting, being absent and excused. Continuing Education Activity Approval Deputy Director Hoffman presented for ratification the Continuing Education Activity Approval Report, which listed approvals for four continuing education activities. A copy of said Report is attached to and made a part of these Minutes. After discussion, a motion was made by Fletcher and seconded by Wiebusch to ratify the Report. Motion carried with Fletcher, Johnson, Moline, Nigro, Wiebusch, and Gale voting aye, with Landow not voting, being absent and excused. Continuing Education Instructor Approval Deputy Director Hoffman presented for ratification the Continuing Education Instructor Approval Report, which listed approvals for four continuing education instructors. A copy of said Report is attached to and made a part of these Minutes. After discussion, a motion was made by Fletcher and seconded by Nigro to ratify the Report. Motion carried with Fletcher, Johnson, Moline, Nigro, Wiebusch, and Gale voting aye, with Landow not voting, being absent and excused. Pending Sworn Complaints and Investigative Matters 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. Director Tyrrell noted that there were two complaints and one disciplinary action pending against licensees who did not renew. Their files will be flagged, in case the licensees renew late or reapply in the future. No action was necessary on this Report. The following Sworn Complaints and Investigative Matters were presented to the Commission: Complaint #2000-038 - John W. & Sharon K. Paterson vs. Mary Elizabeth Schon Deputy Director Mayrose presented the alleged violations and investigative report to the Commission and, when necessary, answered questions on this matter. After being advised of the results of the investigation and discussion, a motion was made by Fletcher and seconded by Wiebusch that the Complaint be dismissed. Motion carried with Fletcher, Johnson, Landow, Moline, Nigro, Wiebusch, and Gale voting aye. Item B Complaint #2000-040 - Phillip Glass vs. Louis B. Sully Deputy Director Mayrose presented the alleged violations and investigative report to the Commission and, when necessary, answered questions on this matter. After being advised of the results of the investigation and discussion, a motion was made by Nigro and seconded by Wiebusch that the Complaint be dismissed. Motion carried with Fletcher, Johnson, Landow, Moline, Nigro, Wiebusch, and Gale voting aye. Item C Complaint #2000-041 - Richard C. & Connie J. Troutner vs. James E. Haggard & Travis James Haggard Deputy Director Mayrose presented the alleged violations and investigative report to the Commission and, when necessary, answered questions on this matter. After being advised of the results of the investigation and discussion, a motion was made by Wiebusch and seconded by Fletcher that the Complaint be dismissed. Motion carried with Fletcher, Landow, Moline, Nigro, Wiebusch, and Gale voting aye, and Johnson abstained. Item D Complaint #2000-042 - Michael G. & Judith K. Metz vs. Earl Jeffrey Allen Deputy Director Mayrose presented the alleged violations and investigative report to the Commission and, when necessary, answered questions on this matter. After being advised of the results of the investigation and discussion, a motion was made by Landow and seconded by Nigro that the Complaint be set for Hearing. Motion carried with Fletcher, Johnson, Landow, Moline, Nigro, Wiebusch, and Gale voting aye. =s broker application until the Complaint and all civil and/or criminal action are resolved. Motion carried with Fletcher, Johnson, Landow, Moline, Nigro, and Wiebusch voting aye, with Gale abstaining. Presentation of Stipulation and Consent Orders Complaint #2000-046, Commission vs. Robert Joseph Quartoroli Prior to discussion of this matter, Commissioner Nigro recused herself, thereby nullifying any potential conflict of interest. Counsel Widger presented a Stipulation and Consent Order in the matter of Complaint #2000-046, Commission vs. Robert Joseph Quartoroli. A copy of said Order is attached to and made a part of these Minutes. Mr. Quartoroli, his employing broker Joe Valenti, and his attorney Doug Ruge were present. Counsel Widger reviewed the circumstances involved and noted the provisions of the Order, which had been signed by Mr. Quartoroli. The Order specified a censure plus six hours of additional continuing education, consisting of 3 hours in ethics and 3 in disclosure, to be completed within six months. After discussion, a motion was made by Moline and seconded by Johnson to enter into the Order as presented. Motion carried with Fletcher, Johnson, Landow, Moline, Wiebusch, and Gale voting aye, and with Nigro not participating or voting, having recused herself, thereby nullifying any potential conflict of interest. Hearings January 23, 9:30 a.m. - Complaint #2000-010, Ken & Diane Weber vs. Jillian Ann Currie A Hearing was held on January 23, at 9:32 a.m., in the matter of Complaint #2000-010, Ken & Diane Weber vs. Jillian Ann Currie. Abbie Widger, Special Assistant Attorney General and Counsel to the Commission, appeared for the Complainant. Respondent Jillian Ann Currie was present and represented by Counsel David D. Ernst of Omaha. After Opening Statements, Counsel Widger presented a Joint Stipulation of Facts which included five Exhibits, plus one additional Exhibit during testimony, all of which were offered and received by Chairperson Gale. Counsel Widger called one witnesses, Diane Weber. Counsel Widger noted that, among all the allegations made in the Complaint, the investigation revealed that the only license law violation to be addressed was that there was no fixed date of expiration in the third listing agreement. That agreement specified that the Webers could handle the sale as a AFor Sale By Owner,@ and Ms. Currie would perform certain duties for a flat fee of $995.00.Counsel Ernst said that Ms. Currie acknowledged that there was no expiration date in the agreement in question, and that it was her mistake. Ms. Currie took responsibility for the mistake, will revise the agreement form, and will include a fixed expiration date in all future agreements. Counsel Ernst noted that Ms. Currie is always willing to renegotiate or cancel a contract if her client is unhappy with her services. Counsel Ernst agreed that there was a violation, but asked that the Commission take all the facts into consideration when determining the sanction. Counsel Ernst presented one Exhibit, which was offered and received by Chairperson Gale. Counsel Ernst called one witness, Ms. Currie. After closing arguments had been presented, Chairperson Gale declared the Hearing concluded at 10:44 a.m. A motion was made by Landow and seconded by Moline that Ms. Currie be found guilty of the violation alleged in the Complaint. Motion carried with Fletcher, Johnson, Landow, Moline, Nigro, Wiebusch, and Gale voting aye. Chairperson Gale then opened the disciplinary envelope. One prior disciplinary action was on file, which had resulted in a Stipulation and Consent Order which specified a license suspension of 45 days, plus six hours of additional continuing education on trust accounts and disclosures. A motion was made by Moline and seconded by Wiebusch to censure Ms. Currie =s license and require three additional hours of continuing education in contracts, to be completed within six months.Commissioner Moline noted that trust account examiners frequently find mistakes like this failure to include an expiration date in a contract. These errors are unfortunate, and the Commission expects the broker to correct the affiliated licensee responsible. Commissioner Moline said the agreement was on a poorly written form, and felt that education may help in writing future contracts. Commissioner Moline also recommended that Ms. Currie have an attorney review any forms used. Commissioner Wiebusch made a friendly amendment that Ms. Currie also be required to provide the Commission with a copy of the revised agreement form, and Commissioner Moline accepted the amendment. Commissioner Landow noted that the 1997 disciplinary action addressed more serious issues that the current case, but that both were of concern because they resulted from poor attention to details in business practices which are designed to protect the public. Commissioner Landow said he would go along with the motion, but said that Ms. Currie must take steps to get those details under control, in order to avoid seeing the Commission again. Commissioner Nigro said she would vote against the motion. She said the Commission =s role was to protect the public, and that when she, a licensee, was confused regarding dates and agreements in this situation, that was not protecting the public. Commissioner Nigro said that licensees needed to be careful to get things in writing, and to make sure the public knows the status of their agreements.A vote was taken on the pending motion as amended by the friendly amendment. Motion carried with Fletcher, Johnson, Landow, Moline, Wiebusch, and Gale voting aye, and with Nigro voting nay. Chairperson Gale notified the Respondent that the costs incurred for the court reporter and any witness fees would be billed to the Respondent, as provided for in 305 NAC Chapter 4, and that the Respondent would have thirty days from the date of the Order to reimburse the Commission for said costs. With the consent of the Respondent, Chairperson Gale directed Counsel Widger to prepare the Order. Chairperson Gale announced that all Exhibits related to this Hearing would be retained in the Commission Office. The Hearing was adjourned at 10:57 a.m. Informal Special Appearances Kenneth LaVern Tranel, Potential Applicant At 2:00 p.m. on January 23, Director Tyrrell presented an Exhibit which included letters regarding the Special Appearance, letters of recommendation, and materials detailing Mr. Tranel =s criminal history. A copy of said Exhibit is attached to and made a part of these Minutes.Mr. Tranel =s attorney, John Doyle, reported that Mr. Tranel had a medical problem which prevented him from traveling at this time, but that he would like to meet with the Commission at a later date.A motion was made by Landow and seconded by Wiebusch to continue this matter until Mr. Tranel could appear before the Commission. Motion carried with Fletcher, Johnson, Landow, Moline, Nigro, Wiebusch, and Gale voting aye. Review of Title 299, NAC 3-007 - Earnest Money Disputes Director Tyrrell presented an Exhibit which included Title 299, NAC 3-007. A copy of said Exhibit is attached to and made a part of these Minutes. Director Tyrrell noted that Commissioner Landow had requested that this issue be placed on the Agenda for discussion. Commissioner Landow had received a letter from the buyers in a transaction which did not go to closing, apparently through no fault of their own. The seller had objected to returning their earnest money deposit, and they were unable to get their money back. In discussions with Deputy Director for Enforcement Mayrose and Counsel Widger, Commissioner Landow discovered that essentially there are no rules for the return of earnest money. If the seller objected for any reason, the buyer was stuck. Deputy Director for Enforcement Mayrose said these cases usually end up in small claims court, but Commissioner Landow felt a buyer should not have to hire an attorney or go to court to get earnest money back. Commissioner Moline said there was a letter on his desk from an attorney regarding Woods Brothers returning disputed earnest money. When he contacted the attorney, he was quoted the law regarding civil liability for the broker even if the broker no longer had the earnest money. Director Tyrrell said that he tells people that the broker, when there is a dispute and no civil action pending, can make a good faith decision whether the money should be returned and not have to worry about Commission disciplinary action, if the broker is holding the earnest money. If the earnest money was transferred to an escrow company, that is where the dispute must be resolved. Each situation depends on the contract involved. Usually, title insurance companies use the same procedure delineated in our law. The real issue is civil liability. Most attorneys require releases from the parties involved even if there is no dispute. Commissioner Moline said he was told that staff emphasize civil liability. Director Tyrrell said that both aspects are covered, but that some people quit listening before staff are done explaining. Commissioner Landow said that, for the average person involved in a typical good faith sale, they would not be willing to risk their money if they knew in advance that the seller could hold up their money for any or no reason, and that they could only get it back with an attorney. Regular people do not have $1000-2000 to lose when they make an offer on a house. Commissioner Landow said the Commission should consider suggesting legislation to address this issue. He felt it was blatantly unfair, and just plain wrong, that this could happen. In this instance, the seller just did not feel like giving the earnest money back. Commissioner Johnson asked if the buyers got their money back in small claims court. Commissioner Landow said he did not know. Commissioner Johnson said this happened in maybe half of one percent of all transactions. Commissioner Nigro said this situation sounded like the seller did not meet the contract, the seller just refused to give the earnest money back, and the buyers could not make another offer because their earnest money was tied up. Commissioner Moline noted that brokers would also like to get the situation addressed, because they are stuck with the disputed earnest money. Commissioner Landow proposed that Counsel Widger and Deputy Director for Enforcement Mayrose develop possible solutions regarding proposed regulations or legislation for the Commission to discuss at a future meeting. Director Tyrrell said they may want to work in conjunction with the Bar Association and the Department of Insurance, to address title insurance and closing companies. Director Tyrrell said that, in the majority of transactions, the closing company has the money. Commissioner Nigro said she was glad Commissioner Landow had raised the issue. Counsel Widger noted that it would also answer a lot of broker questions. Commissioner Moline said that these disputes go back to common law. Counsel Widger said that part of the problem was the contract involved, and noted that standard purchase agreements do not provide as much protection for the buyer as for the seller. Approval of Travel to 2001 Regularly-Attended Meetings Deputy Director Hoffman presented an Exhibit regarding the estimated expenses for 2001 ARELLO meetings which Commissioners and staff usually attend. A copy of said Exhibit is attached to and made a part of these Minutes. Deputy Director Hoffman noted that the Exhibit was intended to give the Commission an estimate of the per-attendee cost for each meeting, with the specific attendees to be determined closer to each meeting. Chairperson Gale asked how Commissioners decided which meetings to attend, and when program information was available. Director Tyrrell said that program information comes out closer to the meeting time. All Commissioners could attend every meeting, or just a few, depending on their schedule and interests. Commissioners are encouraged to go, because the information gained from interacting with other jurisdictions was valuable. Director Tyrrell said that a good first-time meeting for Chairperson Gale might be the Denver District Meeting. After discussion, a motion was made by Wiebusch and seconded by Nigro to approve expenditures for the 2001 ARELLO Meetings. Motion carried with Fletcher, Johnson, Nigro, Wiebusch, and Gale voting aye, with Moline abstaining, and with Landow not participating or voting, being absent and excused. Legislative Matters Director Tyrrell reviewed the status of various Legislative Bills of interest to the Commission, and asked for guidance on how the Commission wanted him to testify at Committee Hearings. Discussion ensued on the Commission=s role regarding pending legislation. Commissioner Moline said that not getting involved in the legislative process was discussed in December, with Chairperson Moore. Commissioner Moline questioned whether the Commission wanted to change that, or if the Commission could just give information on bills. Director Tyrrell noted that, in the past, the Commission had opposed bills of which it did not approve. If the Commission does not testify on a bill, the Committee assumes acquiescence. Director Tyrrell said he would appear in any role as directed by the Commission. Commissioner Landow said that Chairperson Moore had addressed the separation of powers issue, but felt it was well within the Commission=s charge to oppose or support legislation. Chairperson Gale agreed that the Commission=s role was to protect the public interest, and that if the Commission did not testify on pending legislation, the Committee would not get an objective view of the public interest. Commissioner Nigro agreed. A motion was made by Fletcher and seconded by Wiebusch to oppose LB 527 in committee, and have Director Tyrrell testify on behalf of the Commission. Motion carried with Fletcher, Johnson, Landow, Nigro, Wiebusch, and Gale voting aye, and with Moline voting nay. Director Tyrrell reviewed the provisions of LB 551, and noted that the amendments were sponsored by the Nebraska Realtors Association. A motion was made by Fletcher and seconded by Landow to oppose pages 11 and 18 of LB 511 in committee, and have Director Tyrrell testify on behalf of the Commission. Commissioner Moline made a friendly amendment that the Commission also oppose the cap on transfer fees proposed on page 13, and remain neutral on the balance of the bill. The friendly amendment was accepted by Fletcher and Landow. Commissioner Nigro said there were additional issues to be addressed. Commissioner Johnson suggested opposing removal of the word Anegligence@ on page 17. Commissioner Wiebusch questioned page 9 as well. Chairperson Gale asked if the Commission wanted to go through the bill item by item. Commissioner Moline said he felt the Commission had agreed to let the Legislature decide on the other issues in the bill, and wanted to vote on the pending motion as is. He said that, if all those items were revisited, it would be a contentious discussion, and there were no representatives present from the Nebraska Realtors Association to provide input. Commissioner Johnson said that the Commission should go over the items, and Director Tyrrell should represent the Commission=s stand on those items. Commissioner Johnson agreed with Commissioner Moline that the Legislature makes the final decision, but noted that the Commission would then have to regulate the new laws. Commissioner Johnson had no problem with the Nebraska Realtors Association not being in attendance en masse, because the Commission needed to decide the items on which to testify. Chairperson Gale asked Commissioners Fletcher and Landow if they wanted to withdraw the pending motion, then decide positions item by item. Commissioner Landow noted that, on all these issues, the Commission disagreed with the Nebraska Realtors Association. Commissioner Landow said the Commission never made any agreement with the Nebraska Realtors Association regarding their bill, and had preserved the option of opposing it. Director Tyrrell noted that the Commission told the Nebraska Realtors Association that they wanted to see the proposed amendments in writing before deciding what position to take, and this was the first opportunity the Commission had to review the amendments. Commissioner Landow said it was now perfectly appropriate to review the language, and decide whether to oppose or stay neutral on any or all of it. Commissioner Moline said that the three amendments addressed in the motion had not previously been addressed by the Commission. The other items were not voted on by the full Commission. Commissioner Moline said the Commission could do whatever it wanted, but the Nebraska Realtors Association would be losing faith. Chairperson Gale asked if the Commission had told the Nebraska Realtors Association that they were free to address those issues with the Legislature. Commissioner Moline said yes, and that the Commission told them it would stay neutral. Commissioner Moline said he could support taking action on the items not previously discussed with the Commission. Perre Neilan, representing the Nebraska Realtors Association, said that the Association was under the assumption that the Commission would not testify on their legislation, or at least would testify in a neutral position. Commissioner Landow asked why the Association was under that assumption, based on what specific discussion. Mr. Neilan said that, in the discussion regarding scaling back to only technical, noncontroversial changes, Chairperson Moore had said it was not the place of the Commission to seek changes, just to administer those changes. Commissioner Landow asked, if it was not the role of the Commission to seek policy changes, why would the Commission have spent countless hours discussing the changes, and why would the Association engage the Commission in that goal? Mr. Neilan said the Association was seeking the changes with the Commission and with Chairperson Moore. Commissioner Landow said the Association could not expect support on some issues, and not risk opposition on others. Mr. Neilan said the Commission had engaged the Association to address those issues, then scaled back the proposed changes. Commissioner Johnson said the Association could have interpreted Chairperson Moore=s statements as meaning the Commission would not fight against them, but that did not mean that the Commission would not oppose what it chose to oppose. Director Tyrrell read an excerpt of the discussion from the November Commission Meeting Minutes, as follows:
Commissioner Moline asked if Chairperson Moore=s speech was also in the Minutes. Director Tyrrell said he could not find it exactly, but that the gist was that Chairperson Moore said it was not the Commission=s job to make policy changes, but to enforce the laws established by the Legislature. Chairperson Gale said the Commission needed to decide whether to have Director Tyrrell appear at the Hearing, and whether his testimony should be neutral, oppose, or support the bill. Chairperson Gale said that each amendment should be brought up item by item, and the Commission=s position should be decided. Chairperson Gale noted it would take four votes to take a position on an amendment. Commissioner Fletcher asked if he should withdraw the pending motion. Chairperson Gale noted that some items are liability issues and some are policy issues, and that the Commission needed to address each policy issue. Commissioner Moline asked whether the Commission was in compliance with the Open Meetings Law, since the Commission had held hearings on those issues, and at the last hearing had decided not to address those issues. Counsel Widger noted that the Commission had not held rule and regulation hearings, but had several days of discussion. Counsel Widger said the Commission could make substantial changes in this case, if it chose to do so. Chairperson Gale said he would begin with the changes on page 1 of LB 551, and that Commissioners could propose a motion if they felt one was needed, and those motions would be noted and voted upon. Commissioner Fletcher withdrew his original motion, and Commissioner Landow withdrew his second of the motion. Chairperson Gale addressed each proposed amendment, and asked for any motions. The motions made and subsequent votes are as follows:
Information Matters Tentative ARELLO Committee Assignments Director Tyrrell presented an Exhibit which detailed ARELLO committee assignments for 2001. A copy of said Exhibit is attached to and made a part of these Minutes. Director Tyrrell said to let him know if Commissioners wanted to participate on any working groups not already specified for them. No action was necessary on this Report. ARELLO Meeting - Sarasota, Florida - January 11-14 - Report of Attendees Director Tyrrell reported that he hoped Craig Cheatham would give the same informative presentation for new members at every district meeting, because it covered what ARELLO was about, what programs are available, etc. The proposed database with the National Association of Realtors (NAR) should be up soon, because the NAR met all of ARELLO=s demands. There will probably be a demonstration at the Baltimore meeting. The agreement specified that NAR can discontinue its participation after two years, and turn the database over to ARELLO. The bylaws are being reviewed regarding the criteria for membership, and how to encourage associate members to become full members. ARELLO is also making decisions regarding sponsorships of breaks and receptions at meetings. The 75th anniversary meeting in 2005 will be held in Montreal, which was the site of the first meeting. Commissioner Nigro said that the Fair Housing Training Board had been set up so well by the prior chair, she could have coasted for a year. The Board was really attacking issues, and was in the process of setting up workshops and seminars across the country. Deputy Director Hoffman reported that the Distance Education Council had been invited to make a presentation to the National Association of Insurance Commissioners regarding its certification program. Deputy Director Hoffman said she was chairing the Communication Committee this year, which was a new committee under the recent reorganization. Request for Clarification on Advertising - The Noel Co. - Findings Report Counsel Widger reviewed the previous Commission discussion regarding Mr. Nicholl=s request for clarification on advertising, and the ensuing issue of proper use of Multiple Listing Service (MLS) materials. Counsel Widger said she had researched custom and practice in the industry, to see what was applicable to these situations. Counsel Widger said it had been the custom and practice in the real estate industry that the MLS information was used to sell property. The purpose was to allow a broker to reach a broad market area, to achieve a faster sale at a higher price. The MLS is a marketing tool in and of itself. Standard exclusive listing agreements contain an MLS clause; the Great Plains MLS contract states that any member is allowed to sell property listed by any other member; and the MLS agreement authorizes other brokers to show the properties listed. The owners involved gave permission to list their property in the MLS, and acknowledged that a cooperating broker may be involved in the transaction. Therefore, because all the information in both situations was obtained from the MLS, Counsel Widger would not recommend prosecution for either the newsletter advertising or the use of customer listing synopses. Commissioner Landow asked for clarification on whether the customer listing synopsis was a technical violation. Counsel Widger said it was most likely not even a technical violation. In researching action taken in other jurisdictions, the only cases brought were situations where either there was no listing agreement and the owner did not know the property was being offered for sale, or a land contract was involved where the occupant did not have the right to sell the property. According to her research, that was how the statute had been applied in other jurisdictions. Chairperson Gale said it seemed like misrepresentation to use the customer listing synopsis, if the broker with the exclusive listing agreement was not noted on it. Commissioner Moline said that, when a broker joins the MLS, the MLS contract allows those uses. Commissioner Moline said he felt there was a difference between working with one person, versus mailing a newsletter to an entire neighborhood. Counsel Widger said there was no such distinction made in any of the cases in any other jurisdiction. All those cases involved people who did not know their property was being offered for sale. Director Tyrrell noted that, at last month=s Meeting, it was his understanding of what Gene Ward indicated that the Lincoln Board felt there was implied consensual action in joining the MLS. Also, the newsletter was vastly different than including other brokers= listings in the company=s Sunday newspaper ad, for instance. Director Tyrrell concluded that Counsel Widger=s research supported the position the Commission had taken on these issues, that newsletter editors should get consent from designated brokers, and if anyone says no, their listings should not be included in the newsletter. The custom and practice in the industry gave safe harbor for implied consent. Counsel Widger clarified that, in the context of custom and practice, newsletter editors could proceed as they had, with presumed consent. If a designated broker objected, the newsletter editor must not include their listings. Commissioner Wiebusch said that using the customer listing synopsis might be a tradition in Lincoln and Omaha, but it was not in Greater Nebraska. Eliminating the names of the designated broker and listing agent, putting in one=s own picture, and distributing it as if it was your own listing would not be tolerated. Commissioner Wiebusch thought the practice was confusing to the consumer, and muddled the agency situation. Commissioner Moline said that MLS participants knew this printable report was available, and would not give it a second thought, because everyone universally uses each others= listings. With Abranding@ now common in Internet services, when people are looking at listings on a web site, Commissioner Moline did not know how to get the genie back in the bottle, or if it should be back in the bottle. Commissioner Wiebusch maintained that it was extremely confusing to the consumer. Commissioner Moline said that, in Lincoln, the brochures were commonly given out, but that there was always a sign in the yard with the listing broker=s name, so it had not been a problem. Commissioner Landow said the bottom line was it was not your listing. He thought it would be easy to figure out whose listing it was at the appropriate point in the transaction, which would at least be at closing. Commissioner Wiebusch asked why a listing would be represented as such. Commissioner Landow said listings were a matter of public record, and would come out. Commissioner Moline noted it was almost more difficult to show one=s own listing, because you would have to give the dual agency brochure. Commissioner Wiebusch said that all hell would break loose if she tried that at home. Director Tyrrell said that custom and tradition obviously varied by region, which might make it difficult to write a Commission Comment article. The article might bring the practice into an area where it had not previously occurred. Commissioner Wiebusch noted that the Commission was making decisions regarding enforcement for the whole state, based on custom and tradition in two locations. Director Tyrrell indicated that the Noel issue only applied to the Omaha area. Commissioner Wiebusch asked Commissioner Moline when the practice began. Chairperson Gale noted that the discussion had gone beyond the scope of the original agenda item, and asked if the Commission wanted to form a subcommittee or task force on the subject. Director Tyrrell noted that staff had looked into the issue as requested, and that Counsel Widger had concluded that the action taken at last month=s meeting was supported by custom and practice in the industry. Director Tyrrell also noted the issue had not been a problem, and that Mr. Nicholls had requested clarification. Chairperson Gale asked if Mr. Nicholls was being held to a higher standard. Director Tyrrell said no, that he would tell anyone else to follow the same guidelines. Commissioner Moline said that obtaining advance consent would move Mr. Nicholls into a safe harbor, and noted that Mr. Nicholls had been doing newsletters for years. Chairperson Gale said the discussion seemed to eliminate the entire consent issue. Director Tyrrell noted that the question was raised by an affiliated licensee of a broker who had requested that Mr. Nicholls not include her listings, and that there was no complaint involved. Chairperson Gale asked if the issue should be tabled for further discussion. Commissioner Wiebusch said that she would like input from the Nebraska Realtors Association on the MLS issue, particularly the customer listing synopsis. Chairperson Gale directed Director Tyrrell discuss the issue with the Nebraska Realtors Association, and report to the Commission at an upcoming meeting. Director Tyrrell said his report would probably be after April or May. Mr. Neilan said the appropriate Nebraska Realtors Association committee would meet at the March convention. No action was necessary on this Report. Future Meeting Dates February 22, 2001 - Doubletree Hotel, Omaha Recesses and Adjournment At 9:20 a.m. on January 23, Chairperson Gale declared a brief recess, and reconvened the Meeting at 9:32 a.m. At 10:57 a.m. on January 23, Chairperson Gale declared a brief recess, and reconvened the Meeting at 11:15 a.m. At 12:15 p.m. on January 23, Chairperson Gale declared a recess for lunch. At 1:40 p.m. on January 23, Chairperson Gale reconvened the Meeting. Commissioner Wiebusch was excused from the Meeting from 1:40 p.m. to 1:44 p.m. At 2:57 p.m. on January 23, Chairperson Gale declared a brief recess, and Acting Chairperson Fletcher reconvened the Meeting at 3:05 p.m. Chairperson Gale was excused from the Meeting from 3:05 p.m. to 3:20 p.m. Commissioner Landow was excused from the remainder of the Meeting at 3:58 p.m. At 4:25 p.m. on January 23, there being no further business to come before the Commission, a motion was made by Moline and seconded by Fletcher that the Meeting adjourn. Motion carried with Fletcher, Johnson, Moline, Nigro, Wiebusch, and Gale voting aye, and with Landow not participating or voting, having been excused from the remainder of the Meeting. I, Les Tyrrell, Director of the Nebraska Real Estate Commission, do hereby certify that the foregoing Minutes of the January 23, 2001, Meeting of the Nebraska Real Estate Commission were available for inspection on February 6, 2001, in compliance with Section 84-1413(5) R.R.S. 1943, of Nebraska. Respectfully submitted, Guests Signing the Guest List Perre Neilan, Nebraska Realtors Association, Lincoln |