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NEBRASKA REAL ESTATE COMMISSION January 24, 2002Staybridge Suites Staybridge Room Lincoln, NE Opening Chairperson Gale convened a Meeting of the Nebraska Real Estate Commission at 9:08 a.m. on January 24, 2002, in the Staybridge Room of the Staybridge Suites, located at 2701 Fletcher Avenue in Lincoln, Nebraska. All of the members of the Real Estate Commission were present, with the exception of Commissioner Moline, who was temporarily absent and excused. Also present were Director Les Tyrrell, Deputy Director for Education 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 the Stipulation and Consent Orders and the rule and regulation, legislative, and policy items. Swearing-In Ceremony - Commissioner James W. Strand Chairperson Gale conducted a swearing-in ceremony for recently-appointed Commissioner James W. Strand, presented him with his Commission pin, and welcomed him to the Commission. 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 Items 17b and 17c had been updated, and 17d and 18b had been added since the Tentative Agenda was mailed to the Commissioners. After review of the Final Agenda, a motion was made by Nigro and seconded by Johnson to adopt the Final Agenda as presented. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye. Minutes of December 18, 2001 The Minutes of the Commission Meeting held on December 18, 2001, were considered. After review, a motion was made by Wiebusch and seconded by Nigro to approve the Minutes as presented. Motion carried with Johnson, Nigro, Shepard, Wiebusch, and Gale voting aye, with Moline abstaining, and with Strand not participating or voting, not having been present at the Meeting. Receipts and Expenditures Report for December Director Tyrrell presented the Receipts and Expenditures Report for December. 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: there was nothing unusual to report in Receipts. Expenditure Categories 4100, Personal Services, and 4132, OASDI Expense, were over for the current month due to the retirement of Nancy Glaesemann, the Applications and Licensing Secretary. Director Tyrrell noted that it did not cause problems on the year-to-date budgeted amount. Category 4251, Rent-Office Equipment, reflected the $5 adjustment for the office swipe machine. Category 4271, Repair and Maintenance-Office Equipment, were over the monthly and year-to-date budgeted amounts due to anticipated maintenance on typewriters, plus an unanticipated fax machine problem. Category 4711, Board and Lodging, was over for the month because the examiners were still on the road due to the good weather. The Cash Fund Balance as of December 31, 2001, was $750,358.50, which compared to a Cash Fund Balance of $706,539.55 on December 31, 2000. Commissioner Moline asked if the Cash Fund Balance was an actual balance in an account. Director Tyrrell noted that it sits in an investment account. Commissioner Moline asked if it was considered reserves that the Governor could take. Director Tyrrell said no, it was not a reserve account, it was a cash fund account. The Commission tried to keep 4-6 months of operating expenses in it. Commissioner Moline asked if the Governor could appropriate the money. Director Tyrrell said there was no statutory authority for the Governor to take it at this time, and the Legislature would have to pass a law to allow it. Chairperson Gale noted that Category 4411, Legal Services, was reasonable. Director Tyrrell said it was due to not having hearings, and noted the two Stipulation and Consent Orders on the Agenda. Chairperson Gale asked if the Commission had ever held a retreat, and noted that other boards on which he had served held them every year. Director Tyrrell said the Commission had not, in his 20 years with the Commission. Chairperson Gale asked if there was a budget category for it. Director Tyrrell said that the categories usually earmarked for travel and meetings could be used. If more than three Commissioners were scheduled to attend, there would have to be a public notice for the meeting. Chairperson Gale said he did not know how the other Commissioners felt about the idea, and that he did not have a big picture for it, but he wanted to put it on the table. Chairperson Gale said he would prefer no formal agenda, just discussion. Director Tyrrell said the Commission could do it that way, or do it at a regular meeting and use the scheduled second day. Chairperson Gale said they may want a presentation or to bring in a consultant, just something informal. Director Tyrrell asked if he should place it on the Agenda for the next meeting. Chairperson Gale said yes, and the Commission might want to schedule it for the end of the year. Commissioner Johnson said that, if most of the Commissioners attended an ARELLO meeting, the Commission could do a breakout session there, because there was time built into the schedule for state meetings. Chairperson Gale said it might be harder to get as many people there than to a local meeting. Commissioner Moline said an ARELLO meeting would be a nice place to do it. Counsel Widger said the Commission could notice the meeting out of state. After discussion, a motion was made by Moline and seconded by Nigro to file the December Receipts and Expenditures Report for audit. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye. Renewal Report Director Tyrrell noted that renewals were down by 2% overall. Broker renewals were down by approximately $10,000, but salesperson renewals made up for it in the budgeted amounts. Director Tyrrell said there did not appear to be a problem. Specialized Registrations Time-Share Registration - The Fairways of Palm Aire Director Tyrrell presented a Time-Share Registration for The Fairways of Palm Aire. A copy of said Report is attached to and made a part of these Minutes. Following discussion, a motion was made by Moline and seconded by Wiebusch to approve The Fairways of Palm Aire registration as presented. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye. Non-Resident Licenses and Resident Licenses Issued to Persons Holding Licenses in Other States Report Deputy Director Hoffman presented for ratification the Non-Resident Licenses and Resident Licenses Issued to Persons Holding Licenses in Other States Report, a copy of which is attached to and made a part of these Minutes. After review, a motion was made by Moline and seconded by Johnson to ratify issuance of the licenses as set forth in the Report. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye. Examination Report for December Deputy Director Hoffman presented for ratification the Examination Report for December, a copy of which is attached to and made a part of these Minutes. After review, a motion was made by Nigro and seconded by Wiebusch to ratify the December Report for the purpose of issuing licenses. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye. Real Estate Education Matters Pre-License Education Instructor Approval Deputy Director Hoffman presented for ratification the Pre-License Education Instructor Approval Report, a copy of which is attached to and made a part of these Minutes. After discussion, a motion was made by Nigro and seconded by Wiebusch to ratify the Report. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye. Continuing Education Activity Approval Deputy Director Hoffman presented for ratification the Continuing Education Activity Approval Report, a copy of which is attached to and made a part of these Minutes. After discussion, a motion was made by Moline and seconded by Nigro to ratify the Report. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye. Continuing Education Instructor Approval Deputy Director Hoffman presented for ratification the Continuing Education Instructor Approval Report, a copy of which is attached to and made a part of these Minutes. After discussion, a motion was made by Wiebusch and seconded by Johnson to ratify the Report. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye. 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. No action was necessary on this Report. The following Sworn Complaints and Investigative Matters were presented to the Commission: Complaint #2001-034 - Theodore F. Matteson Jr. & Robert E. VandenBosch vs. John Anthony Suarez & Lisa Marie Czerwinski 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 Moline and seconded by Nigro that the Complaint be dismissed without prejudice, and that Director Tyrrell send a letter of admonishment to John Czerwinski for not disclosing that he was a licensee and had an interest in the property. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye. Item B Complaint #2001-044 - Jane Ann Moreland vs. Leslie E. Smith & Tonda K. McGarr 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 Moline and seconded by Wiebusch that the Complaint be dismissed without prejudice against Respondent Smith, and the Complaint as it related to Tonda McGarr be held in abeyance. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye. Item C Complaint #2001-047 - Keith L. & Jeri J. Pobanz vs. Alvin A. Avery, Max Allen Bachman, & Melanie Sue Bachman Prior to discussion of this matter, Commissioner Moline recused himself, thereby nullifying any potential conflict of interest. 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 Johnson that the Complaint be dismissed without prejudice. Motion carried with Johnson, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye, and with Moline not participating or voting, having recused himself, thereby nullifying any potential conflict of interest. Item D Complaint #2001-048 - Lori J. Aurit vs. James Linde O =DellDeputy 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 Moline and seconded by Nigro that the Complaint be dismissed without prejudice. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye. Item E Complaint #2001-049 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 Moline and seconded by Nigro that the Complaint be held in abeyance, and that the Commission file a complaint on its own motion on the violation alleged in the report conclusion. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye. After the Investigative Reports were presented, the Commission discussed whether to continue including the written staff recommendation at the end of the Investigative Reports. After discussion, a motion was made by Nigro and seconded by Shepard to continue including the recommendations. Motion carried with Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye, and with Johnson voting nay. Presentation of Stipulation and Consent Orders Complaint #2001-039 - Tracy A. Lee vs John Robert Miller Deputy Director Mayrose presented a Stipulation and Consent Order in the matter of Complaint #2001-039, Tracy A. Lee vs John Robert Miller. A copy of said Order is attached to and made a part of these Minutes. Deputy Director Mayrose reviewed the circumstances involved and noted the provisions of the Order, which had been signed by the Respondent. The Order specified a thirty-day suspension, and six hours of additional continuing education in the areas of contracts and license law 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 Johnson, Moline, Shepard, Strand, Wiebusch, and Gale voting aye, and with Nigro voting nay. Complaint #2001-046 - Commission vs Kenneth Lloyd Kirkeby and Melvin R. Dreyer Deputy Director Mayrose presented two Stipulation and Consent Orders in the matter of Complaint #2001-046, Commission vs Kenneth Lloyd Kirkeby and Melvin R. Dreyer. Copies of said Orders are attached to and made a part of these Minutes. Deputy Director Mayrose reviewed the circumstances involved and noted the provisions of the Orders, which had been signed by the Respondents. The Kirkeby Order specified a thirty-day suspension, and nine hours of additional continuing education in the areas of agency, license law, and disclosure to be completed within six months. The Dreyer Order specified a sixty-day suspension, and nine hours of additional continuing education in the areas of agency, license law, and disclosure to be completed within six months. After discussion, a motion was made by Moline and seconded by Nigro to enter into the Orders as presented. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye. Hearings January 24, 9:30 a.m. - Rule Hearing on Title 299, Chapters 1, 2, 3, 5, and 7 At 9:35 a.m. on January 24, Chairperson Gale called to order the Public Hearing on the Proposed Amendments to Title 299, Chapters 1, 2, 3, 5, and 7, of the Commission =s Rules and Regulations. Chairperson Gale explained that the Hearing would be conducted in accordance with the Administrative Procedure Act, and explained how testimony would be given.Director Tyrrell presented four Exhibits, which included: 1) a copy of the Notice of Meeting, which was published in two newspapers and filed with the Secretary of State, the Executive Board of the Legislative Council, and the Governor =s Policy Research Office; 2) a copy of the Lincoln Journal-Star proof of publication of the Meeting Notice; 3) a copy of the Omaha Daily Record proof of publication of the Meeting Notice; and 4) a copy of the proposed amendments to Title 299, Chapters 1, 2, 3, 5, and 7, in legislative style. Exhibit 4 (marked as Item 11a in the Commissioner packets) is attached to and made a part of these Minutes.Director Tyrrell noted that no comments had been received verbally or in writing regarding the rule changes, but he had received a few inquiries for additional information. Director Tyrrell reviewed the amendments set out in Title 299, Chapter 1. Jerry Ahlvers, representing the Nebraska Realtors 7 Association, testified that the Association appreciated the opportunities the Commission had given them to participate in the rule change process and provide input, and supported the changes.It was moved by Moline and seconded by Wiebusch that the Commission adopt Title 299, Chapter 1, as presented. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye. Director Tyrrell reviewed the amendments set out in Title 299, Chapter 2. Jerry Ahlvers testified that the Nebraska Realtors 7 Association supported the changes.It was moved by Nigro and seconded by Johnson that the Commission adopt Title 299, Chapter 2, as presented. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye. Director Tyrrell reviewed the amendments set out in Title 299, Chapter 3. Jerry Ahlvers testified that the Nebraska Realtors 7 Association supported the changes.It was moved by Johnson and seconded by Moline that the Commission adopt Title 299, Chapter 3, as presented. Commissioner Nigro noted she had received several calls from brokers objecting to the proposed change which would allow licensees 72 hours to deposit trust funds, instead of 48 hours as currently required. Director Tyrrell noted that was the provision which generated the inquiries he had received. At Chairperson Gale =s request, Director Tyrrell reviewed the Commission discussion which resulted in the proposed change. Commissioner Johnson said he received a call from someone concerned about the method of receipting earnest money sent directly to the title company, and the caller also felt that 72 hours was too long a period to allow because other licensees would not know the property was off the market. Commissioner Moline noted that depositing earnest money had nothing to do with updating the MLS.Chairperson Gale asked Mr. Ahlvers to comment. Mr. Ahlvers said the proposed change was to allow for actual, everyday practices. He thought that deposits were usually made within 48 hours, but 72 hours would allow for circumstances like long weekends. Commissioner Strand asked about the language regarding Athe end of the next banking day@ and how it would work. Counsel Widger said the interpretation, with allowing 48 hours, was that funds would be deposited by the end of the next banking day unless it was a weekend.Commissioner Moline and Commissioner Shepard asked for clarification on the hearing procedure, which Director Tyrrell provided. Commissioner Moline said he did not have strong feelings either way, with allowing 48 hours or 72 hours. Commissioner Nigro said the language should read differently. Chairperson Gale asked if putting a comma after 72 hours would clarify it sufficiently, if it was not considered a substantive change. Counsel Widger said it was not a substantive change which would require re-notice, just a grammatical change to clarify the language. Director Tyrrell proposed that the comma be added in a different place, to read Anext banking day, after an offer is accepted.@A motion was made by Wiebusch and seconded by Shepard to amend the motion, to insert a comma after Aday@ in the fifth line of Section 006. The amendment to the motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye. A vote was then taken on the amended motion, which carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye.Director Tyrrell reviewed the amendments set out in Title 299, Chapter 5. Jerry Ahlvers testified that the Nebraska Realtors 7 Association supported the changes.Beth Lube, of Re/Max Real Estate, asked if the Commission =s intent was that the licensee could not write in the date. Chairperson Gale said it was his understanding that the signer either dated the document, or accepted the date already filled in. This provision was intended to specify that it was not acceptable to fill in the date later. Ms. Lube said that made sense, but by her reading, the other party had to fill in the date. Chairperson Gale said that, in his years as an attorney, it was usual to have the date filled in, and the signature indicated that the party accepted the date as correct. Counsel Widger agreed that it was acceptable to fill in the date before it was signed, and that the provision would ensure that the date was not filled in later without the signer=s knowledge.Director Tyrrell suggested that on page 4, section 003.14, in the second line, a comma be added to read Anext banking day, after an offer is accepted@ to keep the language consistent.It was moved by Nigro and seconded by Wiebusch that the Commission adopt Title 299, Chapter 5, as presented. Commissioner Johnson asked if section 003.10 on page 3 was clear enough regarding agricultural property. Director Tyrrell noted that agricultural property was defined later in the section. Commissioner Johnson asked if it meant a statement of estimated closing costs was not required if a home was on agricultural property. Director Tyrrell noted that the provision stated that if the property was zoned or assessed as agricultural property, licensees were not required to prepare a statement of estimated closing costs. Director Tyrrell noted that some form of estimated closing costs was usually given anyway, but this provision merely exempted licensees from having to retain the statement of estimated closing costs for Commission review. A motion was made by Moline and seconded by Wiebusch to amend the motion, to insert a comma after Aday@ in the second line of section 003.14. The amendment to the motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye. A vote was then taken on the amended motion, which carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye.Director Tyrrell reviewed the amendments set out in Title 299, Chapter 7. Chairperson Gale asked if section 006 was a circular process because the Commission denied an application, then reviewed the decision if requested. Director Tyrrell said that was the standard appeal process. Chairperson Gale asked if it was a staff decision to deny an application, which was then appealed to the Commission. Director Tyrrell said that new courses were brought to the Commission for approval. If staff made a delegated decision on behalf of the Commission, it was still considered a decision of the Commission. Counsel Widger noted that the language tracked the statute. Chairperson Gale said it sounded redundant to deny an application, then review the denial. Counsel Widger said he should think of it as a reconsideration process. The appeal review was a more full examination of the course, where the Commission reviewed the course material and had a face-to-face discussion of the course between the provider, staff, and the Commission. Initial approval was done by staff based on a paper review, and the Commission approved or denied courses based on the application. Chairperson Gale asked if the Commission could change the word Areview@ to Areconsideration@ during this hearing. Counsel Widger said no, because notice had not been given that the section would be changed. Chairperson Gale stated that it was now on the record that this was the Commission interpretation, that the review was actually a reconsideration of the course.Jerry Ahlvers testified that the Nebraska Realtors 7 Association supported the changes, and again thanked the Commission for the dialogue during the revision process, and their willingness to work together and to see both sides. Mr. Ahlvers said he thought that approach was better for licensees and the public.It was moved by Johnson and seconded by Shepard that the Commission adopt Title 299, Chapter 7, as presented. Commissioner Nigro asked about a possible conflict between section 002.04A, which said the Commission shall accept continuing education activities approved by other jurisdictions and taken outside the state of Nebraska, and 002.04C, which says the Commission can reject continuing education activities otherwise considered acceptable under this subsection. Director Tyrrell said that courses, if approved by another jurisdiction, would meet Commission requirements. The provision in 002.04C was being added to allow rejection by the Commission if a course was previously identified as unacceptable, for future course offerings. A rejected course would be on record as unacceptable. Commissioner Nigro asked if licensees would get credit for courses not previously identified as unacceptable. Director Tyrrell said yes, and noted that the Commission had never taken credit from the attendees after the fact during his tenure with the Commission. Licensees were given credit for courses taken before the courses were identified as unacceptable, but approval was pulled for future offerings of unacceptable courses. Chairperson Gale maintained that the Commission would not have the authority to retroactively deny credit. Counsel Widger agreed, and noted that it had never been done. Director Tyrrell said the provision applied to courses offered in other jurisdictions, because the Commission would deny credit if a course offered in Nebraska was not preapproved. A vote was taken on the pending motion. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye. Following discussion and review, it was moved by Wiebusch and seconded by Moline that the Commission adopt Title 299, Chapters 1, 2, 3, 5, and 7, as amended, to direct staff complete the filing process for the proposed rule changes, and to allow grammatical changes without changing the meaning. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye. Chairperson Gale thanked the Commission members, staff, and the Nebraska Realtors 7 Association for working together in making the changes. Chairperson Gale said he thought the Commission had a good final product.Chairperson Gale declared the Rule Hearing concluded at 10:55 a.m. Informal Special Appearances There were no Informal Special Appearances scheduled for this Meeting. Consider Revisions to ABrokerage Relationships in Real Estate Transactions@ BrochureDirector Tyrrell presented an Exhibit which included the current proposed revisions to the ABrokerage Relationships in Real Estate Transactions@ brochure. A copy of said Exhibit is attached to and made a part of these Minutes. Director Tyrrell noted that a committee consisting of Commissioner Wiebusch, Commissioner Moline, staff, and members of the Nebraska Realtors7 Association had worked together to revise the cover page and the acknowledgement page.Director Tyrrell noted that the Commission seal would be screened under the wording on both cover pages, as on the current brochure. Director Tyrrell noted the new language as shown, and said the Commission would need to select an effective date in the future, to give brokers time to incorporate the new brochures. Director Tyrrell reviewed the acknowledgment page changes. Director Tyrrell noted that licensees were down to checking only two blanks. The committee had decided that the wording Awill be@ covered Aoffering to act@ and Awill act.@Jerry Ahlvers, representing the Nebraska Realtors 7 Association, said the committee had spent several hours on the revisions. The Association was in full agreement on the cover page revisions. On the acknowledgment page, changes were made to make it simpler and less confusing to the public and licensees, and the Association was in agreement. Mr. Ahlvers said the Nebraska Realtors7 Association would prefer to have just these two brochures, rather than three brochures. Chairperson Gale asked what time frame would allow brokers to use up their current supply of brochures. Mr. Ahlvers said the Association supported whatever would be proper.Commissioner Moline asked if the Spanish and Vietnamese translations were helpful. Mr. Ahlvers said that had not been addressed during Association discussions, but he thought they were probably used in some areas of the state. Commissioner Moline asked for clarification on the Association =s request for just these two formats. Mr. Ahlvers said yes, the Association wanted just these two formats, and wanted to discontinue the current format.Chairperson Gale said that, as a citizen looking at the brochure, it would be much easier if the brochure was printed in a larger font. Director Tyrrell noted that this Exhibit was done in a smaller font, in legislative style, to show the changes and deletions. When the brochures were printed, it would be bigger print, because there would be more space without the deletions. Director Tyrrell asked that the Commission consider approving the current brochure and the two new brochures for usage. Director Tyrrell noted that there was 86-90% compliance with the current brochure. For brokers who had used the current brochure for three years and had their licensees trained in proper usage, the Commission might not want to require them to use the split brochures. Adopting only the two new brochures would require everybody to change, and it should be the broker =s decision. Director Tyrrell would prefer to give brokers the option of using either the current brochure or these two brochures, because they may not want to change brochures, and they may do both kinds of transactions and want to use only one brochure.Chairperson Gale agreed that retraining affiliated licensees might be a problem, but felt the new brochures might be clearer for licensees and the public, so they should be used exclusively. Commissioner Moline suggested a compromise, to approve the new brochures and the current brochure, then evaluate which are being used after six months or a year. Commissioner Shepard asked how the brochure would be checked after a listing presentation, when the licensee did not have the listing. Director Tyrrell said the brochure stated the licensee Awill be acting as,@ then a written agreement would take it to the step of actually acting. The licensee would check Alimited seller=s agent@ and Aclient, representing me/us.@ AWill be@ meant the licensee was proposing to act as an agent. Commissioner Shepard said that made sense.Harding Collis from NP Dodge said the new brochures were very simple and straightforward, so training would be much easier now. Currently each affiliated licensee had to make the decisions at the time of completion, because his company did not mark boxes in advance. With the new brochures, licensees would probably not have an option, because the company would supply new brochures to licensees. Director Tyrrell noted that designated brokers make the decision on which brochure to use and how to complete it, not affiliated licensees. Director Tyrrell suggested that, if the Commission decided to only approve the two brochures for usage, that the Commission set an effective date of May or June 2002. The Commission could make it clear that it was acceptable to use the new brochures any time prior to that date, but only the two new brochures were approved after the effective date. If the Commission wanted to allow licensees to continue using the old brochure as well, they could make the motion that the new brochures were approved for use as soon as they were available. Staff could put an article in the March Commission Comment that the new brochures would be made available after the first of March, but brokers could continue using the old brochure if desired. If the Commission wanted to approve all three for a limited period of time, then evaluate usage, the motion could state that they were all approved through July 1, 2003, and staff could bring back a report in May or June of 2003 on which forms were being used. Mr. Ahlvers said the Association wanted only the two new brochures to be approved for long-term usage, and did not want to leave all three in effect forever. Commissioner Moline asked if there were provisions in LB 863 that would affect the brochures. Director Tyrrell said it would require written consent to dual agency, but he did not know whether it would change the written description. Commissioner Moline said he did not want to have to reprint the brochures if changes were required. Director Tyrrell said staff could hold off printing until the legislative session ended, but go ahead with the Commission Comment article. The Commission could give staff the authority to make applicable changes before printing the camera-ready copies for distribution, or staff could bring it back to the Commission after making the changes required if LB 863 passed. Director Tyrrell noted that LB 863 would be effective July 15, if it passed. The Commission could wait and make the new brochures effective July 15, which would give staff time to make the changes and promote the new brochures. Mr. Ahlvers said that was no problem, that the Association wanted it to comply with the law, and that it made sense to have the new brochures go into effect when LB 863 went into effect. Director Tyrrell said staff could put an article in the March Commission Comment, then insert a camera-ready copies in the June Commission Comment. A motion was made by Moline and seconded by Johnson to approve the two new brochures for use effective July 15; that Commission staff be given the authority to make changes required by LB 863, if it passed; to put an article in the March Commission Comment that the new brochures were coming, and would be distributed in the June Commission Comment; to allow usage of the current brochure also; that staff report to the Commission on usage at the June 2003 Meeting; and that the Commission make a decision at that time whether to disallow the current brochure. Moline then offered a friendly amendment that the effective date be the same as LB 863, and Johnson accepted the friendly amendment. Commissioner Wiebusch noted that the committee had discussed changing the brochure format, for licensees to give an entire copy of the brochure to the client and keep the signature part for their records. Mr. Ahlvers noted that all licensees needed was a receipt for the broker. Counsel Widger said that, depending on what the broker added to the brochure, the tearoff would not be needed by the client. Commissioner Moline noted that some companies had licensees complete two brochures. Commissioner Wiebusch said the licensee would give the tearoff to the broker, and the public would get the rest of the brochure. The public did not need to be given a copy by law. Director Tyrrell noted that there was discussion about adjusting the common law agency panel, but that adding another panel would not work because of the paper size. Commissioner Moline noted that Woods Bros. currently did two brochures, but would now tell licensees that the tearoff was for the agent to keep. Licensees could still do two brochures if the public wanted a full copy. Director Tyrrell said that licensees could circle the applicable areas on the remainder of the brochure. Commissioner Wiebusch said she had gone 180 degrees on approving all three brochures. She noted that the current one was working, but if the new brochures were adopted, she supported eliminating the current brochure. Commissioner Wiebusch thought disallowing the current brochure by the end of this year would allow brokers to use up their supply. Commissioner Johnson said he was thinking the same thing, but July 2003 would be here before you know it. Commissioner Wiebusch said motion was to look at it next July, and it could be eliminated then. Commissioner Johnson agreed that the Commission could vote to eliminate it then. Commissioner Moline said he would be happy to change the motion, if needed. A motion was made by Wiebusch and seconded by Shepard to amend the motion, to disallow usage of the current brochure effective 1-1-03. Commissioner Wiebusch asked if that was pushing too fast to eliminate the old brochure. Commissioner Moline noted that the Commission would need time to make changes if a mistake had been made on the two new brochures. Counsel Widger said the brochures would be ready to use as soon as LB 863 went into effect, so that was not an issue. Counsel Widger said the Commissioners knew better than staff how long it would take for brokers to train their affiliated licensees, and to use up their current stock. Director Tyrrell agreed. Commissioner Moline said he was more concerned that additional changes may be needed to the new brochures. Chairperson Gale noted that the Commission was able to change the brochures as needed, because it was not in rule. Chairperson Gale said it seemed like a double standard to have multiple versions of the brochure approved, and agreed that one set was better. Chairperson Gale said the new brochures provided real clarification, but it did concern him a little bit that the tearoff design would not provide the signer with a copy of the signed contract, and they would no longer be in possession of a complete copy. Counsel Widger clarified that the brochure was not a contract. Chairperson Gale said that, whatever it may be, it did have a signature which indicated acknowledgment of understanding. Counsel Widger said the signature page was only so the licensee could show that disclosure was made as required by statute, and was only for licensee protection. Consumer protection was contained in the balance of the brochure. Commissioner Moline noted that agency disclosure was all set out again when a listing agreement was signed. He agreed it would be nice to let signers have a complete copy, but was coming around that completing two brochures was overkill. Commissioner Nigro said she always made a copy for the signer. Commissioner Johnson said it would be good if the licensee circled and initialed what was being provided on the remainder of the brochure, but he did not know if licensees would do it properly. Commissioner Moline said that should be left up to the designated brokers. Commissioner Moline called the question on the amendment to the motion. The amendment to the motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye. A vote was then taken on the amended motion, which carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye. Consider Revisions to Title 302 Director Tyrrell presented an Exhibit which included proposed revisions to Title 302. A copy of said Exhibit is attached to and made a part of these Minutes. Director Tyrrell noted that a committee consisting of Commissioner Wiebusch, Commissioner Moline, staff, and members of the Nebraska Realtors 7 Association had worked together on the current revisions, which he then reviewed.Commissioner Moline said there had been problems with EIFS, which was synthetic stucco, and asked if that should be added in brackets on page 7. Mr. Ahlvers noted that EIFS was a particular type or brand of synthetic stucco, and the committee felt synthetic stucco covered all types. Regarding page 7, Commissioner Nigro noted that asking if Aimprovements@ are connected to a public sewer/water system would confuse people. Commissioner Moline said the current wording was better than just saying Aimprovements,@ which the committee was trying to clarify. Commissioner Nigro said the items should just read Adwelling,@ not Aand improvements.@ Commissioner Wiebusch noted there may be a shop or a garage with a restroom on the property. Commissioner Moline asked if there should be two lines for each, so the seller could answer separately for the dwelling and improvements. Commissioner Nigro said yes. Commissioner Strand said it could not hurt.A motion was made by Nigro and seconded by Wiebusch to have separate lines for Adwelling@ and Aimprovements@ for questions 1-5 on page 7. Chairperson Gale noted that the Commission would also have to put Ais the system operational?@ after each line.Commissioner Johnson said he understood that some improvements were possible, but asked how many would be expected. He noted that the Commission had eliminated some very rare items in this revision, and wondered how important the improvement questions were. Counsel Widger said that was discussed in the committee, but the statute required information on improvements. Mr. Ahlvers said he was glad Counsel Widger brought up that point. The Association had proposed Adwelling@ to clarify the question, but the statute required information on the condition of the property and any improvements on the real property.Harding Collis of NP Dodge proposed keeping it on one line, and wording it Adwelling and/or improvements@ or Adwelling/improvements.@ Commissioner Nigro said that may work, but it was not worded right now. Commissioner Shepard said that, if two lines were used, they were back to the original problem of the public not understanding Aimprovements.@ Commissioner Shepard did not want to add more lines, and said Adwelling/improvements@ would be the best solution. Chairperson Gale agreed. Commissioner Nigro asked if that would meet the legal requirements. Counsel Widger said she thought so. Just Adwelling@ excluded lots of things, but Adwelling/improvements@ would work. Mr. Ahlvers said the Association wanted to keep it simple, but someone could always bring up an exception. There could be some confusion, but it was the same issue with the public misunderstanding Aimprovements.@ The licensee would have to explain what it meant, but the form was to be filled out by the seller, not the agent.Commissioner Strand asked if there could be a yes/no blank after Adwelling,@ and after Aimprovements.@ Mr. Ahlvers suggested that Aimprovements@ be followed by examples in parentheses, such as outbuildings, garages, etc. Chairperson Gale said it should also include worksheds and barns. Chairperson Gale noted that maybe the house was connected to the public water system, but an outbuilding was not. Counsel Widger said staff should be able to do two columns, for dwelling and improvements. Commissioner Moline raised the question of whether a swimming pool was also considered an improvement. It was the consensus of the Commission was that a swimming pool was considered an improvement. Commissioner Wiebusch suggested that the heading of Section D state that Aexamples of improvements include, but are not limited to, barns, garages, swimming pools, etc.@Director Tyrrell said there was another possible problem with the stem of Section D, where it said if yes, explain. Explanation would not be needed except for questions 6, 7, possibly 8, and 10. Director Tyrrell suggested that the Commission allow staff to rearrange the questions so that only those which required comment were subject to the explanation requirement. Chairperson Gale said he would rather send the Exhibit back to the committee for additional revision. The pending motion was withdrawn by the mover and the seconder. A motion was made by Wiebusch and seconded by Johnson to return the Exhibit to the committee for further revision, to be presented at the next meeting. Commissioner Johnson noted that California and Texas were adding mold questions on their Seller Property Condition Disclosure forms, and asked if question 8 on page 5 would cover that. Commissioner Moline noted that he had the same concern after a health department meeting on mold spores. He thought it should be included, but noted that no one in Nebraska could check Ano@ due to the nature of mold, and the fact that it is in all buildings. Commissioner Moline suggested that the Commission leave it alone for now. Chairperson Gale said the question may become more necessary as allergists determine which molds are hazardous. Chairperson Gale did not think it was covered by question 8. A vote was taken on the pending motion. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye. Consider Guidelines for Original Applicants with History of Disciplinary Action in Another Regulatory Jurisdiction and Criminal Convictions Counsel Widger presented an Exhibit which included subcommittee proposals for guidelines for original applicants with history of disciplinary action in another regulatory jurisdiction and criminal convictions, and a regulatory change to require criminal history background checks. A copy of said Exhibit is attached to and made a part of these Minutes. Regarding Exhibit 15c, Counsel Widger noted that the regulatory change was required for the Commission to have the statutory authority to require criminal history background checks. Counsel Widger noted that the subcommittee had discussed how far back the checks should be made, and suggested that the full Commission discuss that topic. Regarding Exhibit 15a, Commissioner Moline asked why Aother than a censure@ was included in the 5th line. Counsel Widger said that it was the subcommittee=s intent to not require a Special Appearance for censures at all, and to not require a Special Appearance if more severe disciplinary action had been taken and completed and the licensee was back in good standing with the home jurisdiction. Counsel Widger said the phrase should have been deleted during revision. Commissioner Moline proposed that Aother than a censure@ be removed from the 5thline of Exhibit 15a, and the Commission agreed by consensus. A motion was made by Moline and seconded by Wiebusch to adopt Exhibit 15a as amended as policy of the Commission. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye. Regarding Exhibit 15b, Counsel Widger said the subcommittee=s intent was to require a Special Appearance for any felony conviction, and to allow Special Appearances by methods other than a personal appearance, i.e. in writing or by telephone. Director Tyrrell noted that the provision to allow other than personal Special Appearances would probably also apply to Exhibit 15a. Director Tyrrell proposed that revised language be added to both Exhibits, and the Commission agreed by consensus. Commissioner Moline asked that paragraphs 1 and 2 on page 1 be changed to read Aapplication to sit,@ and the Commission agreed by consensus. A motion was made by Moline and seconded by Wiebusch to adopt Exhibit 15b as amended as policy of the Commission. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye. A motion was made by Moline and seconded by Wiebusch to amend Exhibit 15a as discussed, and adopt it as further amended as policy of the Commission. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye. Regarding Exhibit 15c, Counsel Widger said the Commission needed to answer the philosophical question of how far back to check. Commissioner Johnson said he did not think it was a bad idea to require criminal history background checks, but noted that it had not been a real problem over the years. He noted that, during his tenure on the Commission, applicants who had made special appearances due to criminal histories were now all out of the business. Commissioner Moline said he had struggled with this issue. He was not sure that the Commission had experienced enough problems to justify requiring all applicants to provide background checks. Commissioner Strand inquired about the need for statutory authority. Counsel Widger said she believed the Commission needed to change the regulation to require applicants to get background checks and submit them with their applications. Commissioner Strand asked if the Commission just needed to change a regulation, or if it would require legislation. Counsel Widger said a regulation change would be required, rather than legislation. The subcommittee thought this was a way to verify application information. Commissioner Shepard asked how much a background check cost. Counsel Widger said it was $10 for a Nebraska State Patrol background check, and she did not know the cost for other states. Chairperson Gale noted that private detectives were required to provide background checks. Chairperson Gale did not know the cost, but it seemed routine. Commissioner Shepard said it did not seem like a big additional cost. Director Tyrrell noted that it would have to be supplied with the application. Commissioner Moline said he was concerned about turnaround time for obtaining the checks, but it seemed fairly quick. He asked if they were available from all state patrol offices. Deputy Director Mayrose said he would find out. Chairperson Gale said the Commission needed to decide whether to set the regulation change for public hearing, and whether it was worthwhile. Chairperson Gale noted that there was a high degree of public trust placed in licensees, and that they handled other people=s money. Chairperson Gale questioned what would happen if an applicant did not disclose his or her criminal history, and something terrible happened. Commissioner Shepard noted that convictions not reported on applications would show up on the background search. Commissioner Wiebusch asked if a public hearing was required to make the change. Counsel Widger said yes. A motion was made by Moline and seconded by Johnson to put Exhibit 15c on the April agenda to garner public comment, but not as a formal public hearing. Director Tyrrell proposed that staff put an article in the March Commission Comment to invite comment, and the Commission agreed by consensus. Chairperson Gale asked that staff find out how many other states require a criminal history background check, and Director Tyrrell said he would. A vote was taken on the pending motion. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye. Approve Travel to 2002 Regularly-Attended Meetings Director Tyrrell presented an Exhibit regarding 2002 travel to regularly-attended meetings of ARELLO and REEA. A copy of said Exhibit is attached to and made a part of these Minutes. Director Tyrrell noted mileage corrections for Rapid City. A corrected copy will be placed in the Minutes Book. Commissioner Moline asked if the ground transportation estimates assumed that all Commissioners were driving separately. Director Tyrrell said that was assumed only to figure individual attendance cost estimates, and would not preclude Commissioners traveling together. After discussion, a motion was made by Moline and seconded by Nigro to approve the expenditures as presented. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye. Legislative Matters Director Tyrrell said that LB 1049 seemed targeted at a specific agency, and would mean that disciplinary hearing appeals would be tried in District Court, instead of having the Court review the records from the initial hearing. This would greatly increase the Commission=s legal costs. He requested that staff be allowed to testify on the bill, to express any concerns the Commission may have. Counsel Widger said that disciplinary hearings were currently appealed by forwarding the hearing transcript and all exhibits to the District Court, which then reviewed the hearing record. This change would mean that the District Court would try the case without a jury. In reviewing the bill, Counsel Widger thought drafters had omitted Aon the record of the agency,@ but found out the intent was to have a whole new proceeding at the District Court level, and have agency- level hearings be more informal and work to resolve issues. Counsel Widger thought people would be more apt to appeal, because they could re-try the case in court. The change would double the Commission=s attorney fees. Commissioner Johnson asked what was the impetus for the bill. Director Tyrrell said there were possibly 1-2 agencies which did not conduct hearings with the thoroughness that we and others did during disciplinary actions. Director Tyrrell said he would find out at the legislative hearing. Counsel Widger said that the District Court Judges Association was in favor of the bill, because of the poor quality of records received from some of the agencies. Counsel Widger told the bill sponsor=s staff about our procedure, which was a huge difference from the records received from some agencies. She said maybe everyone could learn how to conduct hearings properly. Director Tyrrell noted that the Commission had adopted the Attorney General=s model rules for proceedings, but other agencies must not have. Counsel Widger said that some agencies had a wide variety of regulatory supervision, and some of their records were not in good shape. She did not think the judges knew what they were getting themselves into. Chairperson Gale said there were usually too many cases on the docket. Counsel Widger said the sponsor might just want better records from administrative agencies. Counsel Widger asked if the Commission wanted Director Tyrrell to testify, because trying cases twice would double the Commission=s cost. Commissioner Moline asked if Director Tyrrell wanted to testify against the bill. Director Tyrrell said he suggested that the Commission take a neutral position, with concerns regarding the cost. He would plan to give the Commission=s financial concerns, and have Counsel Widger give a description of our proceedings. Commissioner Moline asked if the legislation could be fixed by adding a provision like Aunless the agency has a formal court reporter, etc.@ Counsel Widger noted that the Commission held full hearings. A motion was made by Moline and seconded by Wiebusch that the Commission adopt a neutral position with great concern, and authorize Director Tyrrell and Counsel Widger to testify regarding those concerns, and that they suggest an exemption for agencies who hold appropriate proceedings. Chairperson Gale suggested that they could create a certification process, and have a judicial officer observe hearing proceedings. If the proceedings met minimum requirements, the agency would be exempt; if not, the agency would proceed with de novo hearings. A vote was taken on the pending motion. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye. Director Tyrrell noted that there were now just two bills, LB 1049 and LB 863, for the Commission to keep an eye on. At the hearing Tuesday, the Banking and Finance Committee voted to incorporate the provisions of LB 871 into LB 863, to cap the Errors and Omissions insurance premium at $200, and to advance LB 863 to general file with committee amendments. Commissioner Moline asked if LB 863 had been prioritized. Director Tyrrell said not yet, but Mr. Radcliffe was working on getting it prioritized. Commissioner Nigro asked if Agenda Item 17c should state it was a committee amendment to LB 863, rather than 683. Director Tyrrell said yes, and that a corrected copy would be placed in the Minutes Book. Director Tyrrell said he was keeping an eye on a few other bills which might affect office procedures, and would present them to the Commission if changes were needed. No action was necessary on this Report. Information Matters ARELLO Special Meeting - January 10-13 - Report of Attendees Director Tyrrell said that he packed a lot into basically one day. Deputy Director Hoffman had attended for an extra day. The Strategic Planning Committee was looking at policies for sponsorships and banner ads for the website, and potential conflicts of interest. The Program Committee was trying to minimize session conflicts, and would be reorganizing the meeting to allow non-committee members to come a day or two later. Commissioner Moline said that the Information Services Council was working on how to get information out. Commissioner Moline distributed Exhibits consisting of printouts from the ARELLO/National Association of Realtors7 website. Commissioner Moline noted that there were duplicated names from the National Association of Realtors database and information provided by jurisdictions. There were two listings for Commissioner Moline, and no way to cross-check them. The database also contained expired license information. The database administrator had said Awe=ll contact you when we want an update.@ Commissioner Moline asked for feedback from the Commissioners and Nebraska Realtors7 Association representatives, and said the database provided somewhat limited information to check if a person was licensed. Director Tyrrell said that, in some situations at the database website, it may show four listings for the same person, and states Adata received from NE as of 7-10-2001.@ Director Tyrrell said this probably resulted from being listed by each jurisdiction of licensure, plus the National Association of Realtors. Director Tyrrell had recommended just putting a link to the Commission=s website, but they said no. He had offered daily updates when the database was set up last July, but as Commissioner Moline had said, they said Awe=ll let you know when we want an update.@ Commissioner Moline asked for feedback. So far, the database included information from 23-24 states, and should have some things worked out with that many states participating. The Information Services Council needed to publicize how to find it, and figure out who would use it and how to market it. Commissioner Moline said the Model License Law Committee was trying to create something like the Model Title Act to be used for foreign countries. NARELLO had developed a first draft, which Commissioner Moline asked Counsel Widger and the Commissioners to review and provide comments. Commissioner Moline said he would forward all comments to the Committee. No action was necessary on this Report. ARELLO Mid-Year Meeting - Fort Worth, TX - April 10-13, 2002 Director Tyrrell distributed an Exhibit which consisted of enrollment materials for the Meeting. A copy of said Exhibit is attached to and made a part of these Minutes. Director Tyrrell said that Commissioners could send their completed forms to the Commission office, and staff would send them in with one big check. Commissioners should include a check or credit card information for spouse registrations. Commissioner Nigro noted that there was a train from the Dallas airport to downtown Dallas, which continued to downtown Ft. Worth. No action was necessary on this Report. Future Meeting Dates February 26-27, 2002 - Staybridge Suites, Lincoln Recesses and Adjournment At 9:12 a.m., Commissioner Moline joined the Meeting. At 9:30 a.m. on January 24, Chairperson Gale declared a brief recess, and reconvened the Meeting at 9:35 a.m. for the Public Hearing. At 10:55 a.m. on January 24, Chairperson Gale concluded the Public Hearing and declared a brief recess, and reconvened the Meeting at 11:14 a.m. At 12:35 p.m. on January 24, Chairperson Gale declared a recess for lunch. At 1:48 p.m. on January 24, Chairperson Gale reconvened the Meeting. At 3:10 p.m. on January 24, Chairperson Gale declared a brief recess, and reconvened the Meeting at 3:25 p.m. At 4:02 p.m. on January 24, there being no further business to come before the Commission, a motion was made by Wiebusch and seconded by Johnson that the Meeting adjourn. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye. I, Les Tyrrell, Director of the Nebraska Real Estate Commission, do hereby certify that the foregoing Minutes of the January 24, 2002, Meeting of the Nebraska Real Estate Commission were available for inspection on February 7, 2002, in compliance with Section 84-1413(5) R.R.S. 1943, of Nebraska. Respectfully submitted, Guests Signing the Guest List Tammy Brookhouser, Nebraska Realtors7 Association, Lincoln Perre Neilan, Nebraska Realtors7 Association, Lincoln Beth Lube, Re/Max Real Estate, Omaha Harding Collis, NP Dodge, Omaha |