Chairperson Gale convened a Meeting of the Nebraska Real Estate Commission at 9:05 a.m. on May 21, 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. Also present were Director Les Tyrrell, 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 regulation and policy items.

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.

Director Tyrrell noted that the Hearing had been continued since the Tentative Agenda was mailed to the Commissioners.

After review of the Final Agenda, a motion was made by Nigro and seconded by Wiebusch to adopt the Final Agenda as presented. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye.

The Minutes of the Commission Meeting held on April 3, 2002, were considered.

After review, a motion was made by Shepard and seconded by Johnson to approve the Minutes as presented. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, and Wiebusch voting aye, and with Gale not voting, not having been present at the Meeting.

Director Tyrrell presented the Receipts and Expenditures Report for April. A copy of said Report is attached to and made a part of these Minutes.

Director Tyrrell noted that there was nothing unusual to report in Receipts. In Expenditures Category 4414, Education Services, the entire amount was for just one month of examinations; and Category 4721, Commercial Transportation, showed a correction for an incorrectly coded receipt.

The Cash Fund Balance as of April 30, 2002, was $642,735.85, which compared to a Cash Fund Balance of $549,905.75 on April 30, 2001.

After discussion, a motion was made by Wiebusch and seconded by Nigro to file the April Receipts and Expenditures Report for audit. Motion carried with Johnson, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye, and with Moline temporarily absent and excused.

Following discussion, a motion was made by Strand and seconded by Wiebusch to approve the registrations as presented. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye.

Director Tyrrell 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.

Later in the Meeting, Director Tyrrell noted that the broker reported on his application that he had never had any criminal convictions, had not been involved in any lawsuits during the past three years, and had no revocations or disciplinary actions in Colorado. Commissioner Moline said he knew him, and felt he was not worthy of having a license because he did not have the integrity needed to sell real estate in Nebraska. Chairperson Gale asked if it was the same person. Director Tyrrell said it appeared to be, and that the application indicated he previously had a Nebraska license. Commissioner Moline said the person he knew came from Colorado, and he thought he went back there.

A motion was made by Moline and seconded by Strand to ratify issuance of the licenses as set forth in the Report, with the exception of the non-resident broker as discussed. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye.

A motion was made by Moline and seconded by Johnson to deny issuance of the license to the non-resident broker as discussed.

Commissioner Strand asked Counsel Widger to clarify the procedure that would result if the motion passed. Counsel Widger noted that the law stated that applicants must have the qualities of honesty, trustworthiness, and integrity, and that Commissioner Moline did not believe the broker had those qualities. If the motion passed, the broker would have the opportunity to request a formal hearing within 30 days. After the evidence was presented at the Hearing, the Commission would decide whether to continue denial of the license. If the Commission continued to deny the license, the broker could appeal the decision to district court.

Commissioner Moline asked if he would have to recuse himself if he was a witness at the Hearing. Counsel Widger said yes, appearing as a witness would disqualify him from being a decision-maker.

Commissioner Moline said that, 3-4 years ago, his broker had a lot of difficulty with the person. Commissioner Moline did not have a good feeling about this fellow. He had worked at Woods Brothers for 2-3 years. Commissioner Moline did not recall the final ending, whether he was fired or not, and said he would have to look up the records. Chairperson Gale asked if he and his broker would be willing to testify. Commissioner Moline said he could not answer for Mr. Woods, but he did not think it would be problem for Commissioner Moline to testify as to accounting. Counsel Widger said it may be a formal or informal appearance, depending on timing. Director Tyrrell clarified the procedure.

A motion was made by Moline and seconded by Johnson to amend the motion, to request an Informal Special Appearance at an upcoming meeting so as to afford the applicant the opportunity to discuss any issues. If the applicant chooses not to appear, the license will be denied as of the date of said decision by applicant.

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 presented for ratification the Examination Reports for March and April, copies of which are attached to and made a part of these Minutes.

After review, a motion was made by Moline and seconded by Wiebusch to ratify the March and April Reports for the purpose of issuing licenses. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye.

Director Tyrrell 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 Wiebusch and seconded by Moline to ratify the Report. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye.

Director Tyrrell 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.

Director Tyrrell 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.

Director Tyrrell presented the Continuing Education Activity Rejection Report, a copy of which is attached to and made a part of these Minutes.

No action was necessary on this Report.

Director Tyrrell presented for ratification the Continuing Education Activity Significant Change 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 Johnson to ratify the Report. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye.

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:

Item A Complaint #2002-001 - Teressa R. & Raymond B. Franken vs. Timothy Charles Plate & Maria M. Jones

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. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye.

Item B Complaint #2002-005 - Mary H. Jochim vs. Linda Matson Andersen

Prior to discussion of this matter, Commissioner Nigro recused herself, 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 Moline and seconded by Wiebusch that the Complaint be dismissed without prejudice. Motion carried with Johnson, Moline, Shepard, Strand, Wiebusch, and Gale voting aye, with Nigro not participating or voting, having recused herself, thereby nullifying any potential conflict of interest.

There were no Stipulation and Consent Orders to be presented at the Meeting.

Prior to discussion of this matter, Commissioner Moline recused himself, thereby nullifying any potential conflict of interest.

The Hearing was continued so that Counsel Widger could give an investigative report to the Commission regarding new information obtained through depositions and interviews with the parties. The Complaint had resulted from a miscommunication between the agents for the buyer and seller, but their actions did not appear to rise to the level of negligence.

After being advised of the results of the investigation and discussion, a motion was made by Strand and seconded by Johnson that the Complaint be dismissed without prejudice. After further discussion, 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.

Commissioner Moline asked if Mr. Carbaugh had talked to a broker about employment. Mr. Carbaugh said yes.

Chairperson Gale asked when Mr. Carbaugh would be caught up on child support. Mr. Carbaugh said it would be some time, perhaps the middle of next year at the current rate. His oldest child lives with him, and the other two live with their mother in Colorado. He also has two additional children with his current wife.

Commissioner Shepard asked if Mr. Carbaugh planned to do real estate full time, or continue at Subway while starting out. Mr. Carbaugh said he would like to do real estate full time, but still needed to support his family. He planned to work with the owner of Subway to do both, until his real estate career got going, and then he would do it full time. Commissioner Strand asked about the letter of recommendation. Mr. Carbaugh said it was from the assistant manager at Subway, Tom Jackson, and that they had a friendship outside the workplace. He had worked at Subway since January.

Chairperson Gale asked if all the debts were paid in full, except child support. Mr. Carbaugh said yes.

Commissioner Johnson asked where Mr. Carbaugh planned to work. Mr. Carbaugh said he planned to work in Lincoln, and noted he lived only 40 minutes from the office.

After discussion, a motion was made by Strand and seconded by Johnson to allow Mr. Carbaugh to sit for the salesperson examination, and to have a license issued upon passing.

Chairperson Gale said he was concerned with the creditworthiness issue, and maintaining professional standards in the industry. There was some concern with having continuing collection activity as a licensee, and he felt that possible future bad checks were unbecoming a professional. Chairperson Gale noted that the most recent bad checks were just in November. Chairperson Gale felt there should be a longer period of time for the applicant to recover good credit and maintain solvency. Chairperson Gale noted that the bad checks occurred after the bankruptcy. After his other debts had been wiped out, new bad debts were incurred.

Commissioner Nigro was also concerned about the recent bad checks. She noted that licensees handled money every day, and it bothered her that there were recent bad checks that he did not remember writing. Commissioner Nigro was concerned about Mr. Carbaugh dealing with daily business practices.

Commissioner Shepard said he would like to see more of the debts paid off. He felt they were not large amounts of money, and noted that Mr. Carbaugh had to be able to handle ongoing bills. If Mr. Carbaugh could stay current for the next year, it would be a lot better for him personally as well. Commissioner Shepard said he would vote against the motion.

A vote was taken on the pending motion. Motion failed with Moline and Strand voting aye, and with Johnson, Nigro, Shepard, Wiebusch, and Gale voting nay.

Mr. Wick said his background was in sales. He was raised in Chicago, lived in Seattle, then followed his girlfriend (now wife) to Nebraska. He has three kids, as his wife had two when they met and they had one together. Having a family changed him greatly, and he would like to put his past behind him.

Chairperson Gale asked why Mr. Wick was interested in real estate. Mr. Wick said his father was a commercial appraiser, and he had helped his father remodel apartment buildings. He wanted to further his career. He felt he had conquered retail sales, having been in retail for 5 years, and wanted to move into a different type of sales. From watching his father, real estate seemed like an exciting career.

Chairperson Gale asked if Mr. Wick had been employed full time for the past 4 years. Mr. Wick said he has been employed for 2 years in Nebraska, and 3 in Washington. Chairperson Gale asked if there were any arrests during that time. Mr. Wick said not since his last DUI, in late 1997.

Commissioner Wiebusch asked if Mr. Wick had anything to drink since joining Alcoholics Anonymous. Mr. Wick said no, not since 1997.

Chairperson Gale asked if Mr. Wick had asked officials in Washington about a pardon. Mr. Wick said he had not inquired there, but had in Kearney. An expungement required a 5-year period with no criminal offenses, and Mr. Wick would like to do that when he was eligible, when 5 years had passed since his last DUI. Mr. Wick reiterated that this happened in his younger years, he was not proud of it, and wished he could change the past.

After discussion, a motion was made by Nigro and seconded by Shepard to allow Mr. Wick to sit for the salesperson examination, and to have a license issued upon passing.

Commissioner Moline said he was struggling with consistency. The Commission had turned people down for financial problems, and not being far enough away from bankruptcy. This criminal activity was even more recent than the prior person, and included a felony and two DUIs. Commissioner Moline said it did not seem consistent.

A vote was taken on the pending motion. Motion carried with Johnson, Nigro, Shepard, Strand, and Wiebusch voting aye, and with Moline and Gale voting nay.

A motion was made by Johnson and seconded by Nigro to require Mr. Wick to notify Commission staff of any criminal charges, except those involving no possible jail time, for one year. Motion carried with Johnson, Moline, Nigro, Shepard, Wiebusch, and Gale voting aye, and with Strand voting nay.

At 12:12 p.m. on May 21, a motion was made by Moline and seconded by Nigro that the Commission declare a brief recess, and resume in closed session to deal with personnel matters. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye. Chairperson Gale declared a brief recess, and reconvened the Meeting in closed session at 12:23 p.m.

At 12:50 p.m. on May 21, Commissioner Strand was excused from the remainder of the Meeting.

At 1:45 p.m. on May 21, a motion was made by Nigro and seconded by Wiebusch to go into open session and declare a brief recess. Motion carried with Johnson, Moline, Nigro, Shepard, Wiebusch, and Gale voting aye, and with Strand not participating or voting, being absent and excused. Chairperson Gale declared a brief recess, and reconvened the Meeting at 1:51 p.m.

After reconvening in open, public session, a motion was made by Moline and seconded by Johnson to increase the salaries of Director Tyrrell and Deputy Director Hoffman by 1.5% on July 1, 2002, and by 2.5% on January 1, 2003. Motion carried with Johnson, Moline, Nigro, Shepard, Wiebusch, and Gale voting aye, and with Strand not participating or voting, being absent and excused.

Director Tyrrell presented an Exhibit which included the Audit Report for July 1, 2000, through June 30, 2001, and exit interview topics with related staff action. A copy of said Exhibit is attached to and made a part of these Minutes.

Director Tyrrell said the main problem identified was that the examiner vehicle logs were not considered satisfactory. The auditors did not think that anyone driving state vehicles was doing anything illegal or improper, just that it was poor record-keeping. Director Tyrrell agreed and instituted changes before the auditors completed the audit. The records are reviewed by the Deputy Director for Enforcement and the Finance Officer. Director Tyrrell reviewed the other items mentioned in the report. Director Tyrrell said the audit was a very pleasant experience, there was good cooperation on both sides, and all the auditor concerns had been addressed.

Director Tyrrell noted the audit report reference to the trust account examination cycle, and asked the Commission to approve the examination cycle.

After discussion, a motion was made by Wiebusch and seconded by Moline to approve the 12-15 month trust account examination cycle for each trust account, including follow-up examinations as needed, and biannual examinations of large accounts. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye.

Director Tyrrell presented an Exhibit which specified the costs involved in providing licensee information in various formats. A copy of said Exhibit is attached to and made a part of these Minutes.

After discussion, a motion was made by Moline and seconded by Nigro to approve the fees as presented in the Exhibit, retroactive to May 13, 2002. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye.

Director Tyrrell presented an Exhibit which showed the recent changes to Title 299, Chapter 3. A copy of said Exhibit is attached to and made a part of these Minutes.

Director Tyrrell recommended deleting section 006.02 and sending the remaining changes through for approval. The PRO told Director Tyrrell that the Insurance Department was working on their response to the State Title situation, and the Commission could review their proposed regulatory changes when they were done.

Commissioner Wiebusch asked if the other changes to Chapter 3 were acceptable. Director Tyrrell said yes.

A motion was made by Moline and seconded by Nigro to delete the new language in Chapter 3, Section 006.02, and forward the rest of the changes for formal approval. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye.

Director Tyrrell presented information regarding the proposed rule to require background checks for applicants. In preparing the rule language, Director Tyrrell sent a copy to Lieutenant Dishong. Steve Shaw, chief legal counsel for State Patrol, replied. Director Tyrrell was told that some states would not give criminal history reports to an individual, and would only share that information with other law enforcement agencies. Also, not all states would do a fingerprint check. The proposed rule would create a situation where certain people could not comply with the rule. To make it workable, the Commission would have to put in all kinds of exceptions. Since this was a new policy and the Commission will be doing legislation anyway to implement the FBI checks, the Commission might be better off if they waited for the legislation and skipped this rule. The State Patrol offered to work with the Commission on the statutory language and send it to the FBI for preapproval, so that it could be submitted to the Legislature ready for implementation. Director Tyrrell agreed that it would probably be better to not confuse people with all the exceptions needed. The rule would not be in effect until probably November or December, and the legislation would probably be effective the following September.

Chairperson Gale asked if the FBI check legislation had been passed by other state agencies. Director Tyrrell said yes, and that information is reported from every state with one check from the FBI. Chairperson Gale asked if any rule was needed at this time. Director Tyrrell said that the FBI requires a statutory change to share information, and the Commission could not do that by rule. Commissioner Moline noted that the proposed rule was just intended as a stopgap measure until the legislation passed. Chairperson Gale said that the legislation could possibly include an emergency clause, to put it into effect next spring. Counsel Widger agreed that the rule would be two pages long, and far too involved.

It was the consensus of the Commission to not pass a rule regarding background checks, and to wait for the required legislation for implementation.

Director Tyrrell reported that LB 863 passed and was signed by the Governor, and will be effective July 20. Staff are updating documents accordingly for that implementation date.

No action was necessary on this Report.

Commissioner Nigro said the mold seminar was interesting and well-presented. The Fair Housing Training Board Chair was not at the meeting, and not much effort was made to bring that forward. Commissioner Nigro hoped the Board would become active and viable again.

Commissioner Wiebusch agreed that the mold session was interesting, and that the meeting was very good overall. Commissioner Wiebusch received a questionnaire from ARELLO soliciting meeting feedback, and thought perhaps state budget cuts had negatively affected attendance.

Commissioner Johnson said the meetings were good. He was disappointed in the Realty Times session, and did not get much out of it, but the accountant had a good session.

No action was necessary on this Report.

Director Tyrrell reported that the Public Hearing for Title 302, the Seller Property Condition Disclosure rule, was scheduled for June 12, 2002.

No action was necessary on this Report.

Director Tyrrell presented the Trust Account Examination Evaluation - First Quarter 2002 Report. A copy of said Report is attached to and made a part of these Minutes.

Director Tyrrell reported that comments were again positive. He reviewed some of the comments received, and how the situations were handled.

No action was necessary on this Report.

June 12-13, 2002 - Staybridge Suites, Lincoln
August 21-22, 2002 - Staybridge Suites, Lincoln
September 25-26, 2002 - Staybridge Suites, Lincoln

Commissioner Moline was temporarily absent and excused from 9:10 a.m. to 9:14 a.m.

Commissioner Strand was temporarily absent and excused from 9:50 a.m. to 9:54 a.m.

At 10:15 a.m. on May 21, Chairperson Gale declared a brief recess, and reconvened the Meeting at 10:28 a.m.

Commissioner Moline was temporarily absent and excused from 11:39 a.m. to 11:40 a.m.

Commissioner Strand was temporarily absent and excused from 11:16 a.m. to 11:18 a.m.

At 12:12 p.m. on May 21, a motion was made by Moline and seconded by Nigro that the Commission declare a brief recess, and resume in closed session to deal with personnel matters. Motion carried with Johnson, Moline, Nigro, Shepard, Strand, Wiebusch, and Gale voting aye. Chairperson Gale declared a brief recess, and reconvened the Meeting in closed session at 12:23 p.m.

At 12:50 p.m. on May 21, Commissioner Strand was excused from the remainder of the Meeting.

At 1:45 p.m. on May 21, a motion was made by Nigro and seconded by Wiebusch to go into open session and declare a brief recess. Motion carried with Johnson, Moline, Nigro, Shepard, Wiebusch, and Gale voting aye, and with Strand not participating or voting, being absent and excused. Chairperson Gale declared a brief recess, and reconvened the Meeting at 1:51 p.m.

At 1:53 p.m. on May 21, there being no further business to come before the Commission, a motion was made by Wiebusch and seconded by Nigro that the Meeting adjourn. Motion carried with Johnson, Moline, Nigro, Shepard, Wiebusch, and Gale voting aye, and with Strand not participating or voting, being absent and excused.

I, Les Tyrrell, Director of the Nebraska Real Estate Commission, do hereby certify that the foregoing Minutes of the May 21, 2002, Meeting of the Nebraska Real Estate Commission were available for inspection on June 5, 2002, in compliance with Section 84-1413(5) R.R.S. 1943, of Nebraska.

Respectfully submitted,
Les Tyrrell
Director