CALIFORNIA ASSOCIATION OF REALTORS® BOARD OF DIRECTORS 540th SESSION MAY 2 - 3, 2014
The following is a summary of the significant action items approved by the CALIFORNIA ASSOCIATION OF REALTORS® Board of Directors at its Spring 2014 meeting. Some additional information items are included, but do not necessarily represent Association policy. A complete set of minutes is available for review upon request.
California REALTOR® Expo Advisory 1. It was reported for information only that the CALIFORNIA REALTOR® EXPO 2014 will be held on October 7 - 9, 2014 in Anaheim, California. The theme will be "One Cool Expo."
C.A.R. Housing Affordability Fund 1. It was reported for information only that the Seller Incentive Program (SIP) will continue to be vetted by legal and finance to develop programmatic details for a statewide program.
C.A.R. Scholarship Foundation/C.A.R. Education Foundation 1. It was reported for information only that the C.A.R. Scholarship Foundation awarded scholarships in the amount of $3,000.
CREPAC Trustees 1. It was reported for information only that the following slate is duly noticed for approval at the Fall 2014 Business Meetings. New Trustees serve for a two-year term. Non-voting Alternate Trustees may be selected to fill the remainder of a vacant term during the year.
NOMINEES FOR CREPAC TRUSTEE (November 2014- November 2016) Doug Covill, Region 03, Sacramento Association of REALTORS® Todd Mendoza, Region 04, North Bay Association of REALTORS® Leslie Dopp-Manzone, Region 05, Contra Costa Association of REALTORS® Craig Ragg, Region 06, Bay East Association of REALTORS® Cheryl McFall, Region 07, Central Valley Association of REALTORS® Barbara J. Palmer, Region 10, Santa Cruz County Association of REALTORS® Debbie Rodgers, Region 11, Conejo Simi Moorpark Association of REALTORS® Linda Jay, AE, Region 12, Bakersfield Association of REALTORS® Aida Dimejian, Region 13, Pasadena-Foothills Association of REALTORS® Gregg Pawlik, Region 17, Beverly Hills/Greater Los Angeles Association of REALTORS® Evelyn Arnold, Region 22, Rancho Southeast Association of REALTORS®
NOMINEES FOR CREPAC NON-VOTING ALTERNATE TRUSTEE (November 2014 - November 2015) Michael Stoffel, Region 14, Inland Valleys Association of REALTORS® Carol Banner, Region 15, Rim O’ The World Association of REALTORS® Catherine da Gama, Region 17, Beverly Hills/Greater Los Angeles Association of REALTORS® Diana Wood, Region 23, Tri-Counties Association of REALTORS® Anne Oliva, Region 25, San Mateo County Association of REALTORS®
2. It was reported for information only that CREPAC contributed in a bi-partisan manner to Democratic and Republican candidates that share the attitudes, values and beliefs of organized real estate. 3. It was reported for information only that CREPAC contributed $800,000 in a bi-partisan manner to Democratic and Republican Party leadership; and $500,000 to Coalition partners for the 2014 Election Cycle.
Executive 1. That the following 2014 Presidential appointments be approved:
Directors at Large Adam Fedeli, Chico AOR, Region 2 Sue Vaterlaus, San Mateo County AOR, Region 25
Home Ownership Housing 1. That C.A.R. “FAVOR” SB 1026 (Vidak), which would require a homeowners association in a CID, prior to initiating a foreclosure proceeding for delinquent assessments, to post a copy of the notice for delinquent assessments on the unit, mail via first class mail copies of the notice to all known addresses of the owner(s) of the unit, and post the notice in a newspaper of general circulation once a week for three consecutive weeks. 2. It was reported for information only that the Home Ownership Housing Committee took no action on a State Senate proposed compromise on SB 391 (DeSaulnier), the $75 recording tax.
IMPAC Trustees 1. It was reported for information only that the following slate is duly noticed for approval at the Fall 2014 Business Meetings. New Trustees serve for a two-year term. Non-voting Alternate Trustees may be selected to fill the remainder of a vacant term during the year.
NOMINEES FOR IMPAC TRUSTEE (November 2014 - November 2016) Tom Hiller, Region 1 Paul Cardus (AE), Region 9 Lynn Heintz, Region 12 Roger Wade, Region 16 Patricia Douglas, Region 17 Fred Sabine, Region 18 Carl San Miguel, Region 19 Marjorie McLaughlin, Region 24 Ron Brownell, Region 29 Paula Cosenza, Region 32
NOMINEES FOR IMPAC ALTERNATE TRUSTEE (November 2014 - November 2015) Natalie Yanish, Region 3 Sally Crain, Region 4 Carla Weston, Region 5 Peter Torres, Region 14 Jaime Sutachan, Region 21 Josephine Taylor, Region 23
2. It was reported for information only that the following IMPAC requests were approved: a. Bakersfield Association of REALTORS®: up to $5,000 for GAD start-up costs. b. Marin Association of REALTORS®: $7,500 for past GAD/CEO Search expenses. c. Lake County Association of REALTORS®: $12,000 for a local ballot initiative on the environmental health of Clear Lake. d. C.A.R. GAD & AE Institute: $10,000 for the bi-annual training institute. e. Oakland Association of REALTORS®: $20,000 to fight the Emeryville charter city conversion that would allow for transfer taxes, and approve up to three interboard solicitations for a total of $5,000. f. Pacific Legal Foundation: an annual contribution of $40,000. g. Palos Verdes Peninsula Association of REALTORS®: $10,000 to fight a point of sale view preservation ordinance. h. Victor Valley Association of REALTORS®: $10,000 to support the Yes on Utility Users Tax local ballot proposition in the City of Adelanto. i. Victor Valley Association of REALTORS®: $10,000 to fight the Minimum Lot Size proposal in the City of Victorville.
Investment Housing 1. That C.A.R. “NOT FAVOR” SB 1260 (DeSaulnier), which requires all new and substantially rehabilitated units developed within an Infrastructure Finance District to be affordable to low and moderate income households for 55 years for rental housing and 45 years for owner occupied. 2. That C.A.R. “FAVOR” AB 2175 (Daly), which proposes to enact the Renter’s Tax Assistance Act to provide a renters tax credit to all low income persons who have a gross household income below $42,588. 3. That the Standard Forms Advisory Committee consider modifying C.A.R.’s lease agreement to either eliminate, or limit, the fees that may be collected by the prevailing party’s attorney in an unlawful detainer cause of action.
Legal Action Fund Trustees 1. It was reported for information only that since January 2014 the Legal Action Fund Trustees have reviewed 7 cases and approved filing amicus briefs and/or funding in 4 cases:
Ventura AOR v. Tax Assessor of Ventura County. Trustees authorized matching funding for the Ventura AOR to fight the tax assessor’s subpoena to compel access to the MLS for his staff. The parties have now worked out a licensing agreement with restricted information.
Bararsani v. Coldwell Banker. The Trustees authorized funding for outside specialty class action counsel to assist C.A.R., should it become necessary, as this class action case alleging salespersons are employees and not independent contractors progresses.
NLRB v. Strategic Sales and Marketing. The NLRB filed a complaint against a broker alleging the salespersons were employees of the broker. After investigation, the NLRB dismissed its case due to lack of jurisdiction based on interstate commerce. The plaintiff is appealing the dismissal. The Trustees authorized funding to assist with the appeal.
Horiike v. Coldwell Banker Residential Brokerage. The Trustees authorized a brief to support the petition for hearing to the California Supreme Court after a published decision held that a listing salesperson for a broker had a fiduciary duty to the buyer who was represented by a different salesperson under the same broker. The buyer’s salesperson was not named in the suit.
Legislative 1. That C.A.R. adopt the following position on Proposition 41 for the June 3, 2014 state ballot entitled Veterans Housing and Homeless Prevention Bond Act of 2014: Veterans Housing and Homeless Prevention Act of 2014. "FOR" 2. That C.A.R. "SUPPORT" AB 2108 (Eggman), which pertains to flood management in the Sacramento - San Joaquin Valley.
Membership 1. That the following applicants be granted C.A.R. Honorary Member-for-Life status:
Bay East AOR Fay Louie John Lynch Sunny Puri
Beverly Hills/Greater Los Angeles AOR John Aberle Gary Aminoff Elaine Capdeville Sue Casey Marily Convey Fatima Darwish June Davies Barbara Duskin Barbara Gibson Richard Herstrom Natalie Janger John Juknavorian Ronald Kates Joyce Kay Tom Lawrence Drew Mandile Mollie McGinty Joan McGoohan John Nelson Richard Rosenthal Janet Sarnoff Sherry Sexton Roberta Shaffer Stephen Shapiro Jerry Smith Joyce Solton Leah Steyer Reva Tavelman
Big Bear AOR William Lemke
California Desert AOR John Jacobs Marilyn Schwartz Robert Scott Rita Smith Morgan Ward William Waring
Downey AOR Bev Baumann
Greater San Diego AOR Darlene Allen Edwin Austin George Gardner
Humboldt AOR Janet Porteous
Imperial County AOR Robert Villalobos
Inland Valley AOR Michael Lynch
Lodi AOR Sylvia Filipas
Lompoc Valley AOR James Bowen Ayla Brown Lera Shelby
Monterey County AOR Herbert Aronson Carol Cech Roger Powers|
Newport Beach AOR Nigel Bailey Lawrence Campeau Don Grady Robert Halley Mary Ann Mascaro Roger McKinnon Beverly Morphy Linda Oeth Betty Parker Sonja Powell William Ring Ali Zarrinnegar
Northern Solano County AOR Penny Vest
Oakland AOR Myrtis Anderson
Orange County AOR Rene Venen Virginia Wilden
Pacific West AOR John Carusillo Patricia Guthrie Mary Hardin Franklin Opp Arlene Simmons
Palos Verdes Penisula AOR Marilyn Cristiano-Buddes Kerstin DeVirgilio Junne Hayes Gloria Joncich Shunro Kananzawa Kathleen Tonsich
South Bay AOR Betty Beake Olivia Danihel Keith Franz Barbara McNamara Paul Nunez
Tehama County AOR Janet Darrow
Tulare County AOR Marilyn Deardorff
Ventura County Coastal AOR Vella Buchanan Roberto Cardenas Cindy Fox Linda Freeny Mohan Narula Helen Simonaitis
Nominating 1. That the following be designated to serve as State Allocated NAR Directors for a three year term ending November 2017 and as Alternates for the 2015 elective year.
State Allocated NAR Directors (2015-2017) 1. Robert Bailey, Santa Cruz County, Region 10 2. Kevin Brown, Bay East, Region 6 3. Cynthia Carley, Rim O’ The World, Region 15 4. Jared Martin, Fresno, Region 12 5. Geoff McIntosh, Pacific West, Region 23 6. Beth L. Peerce, Southland Regional, Region 18 7. Jeanne Radsick, Bakersfield, Region 12 8. Tamara Suminski, South Bay, Region 21 9. Michael Teer, Pacific West, Region 23 10. Rick Violett, Pacific West, Region 23 11. Pat “Ziggy” Zicarelli, Southland Regional, Region 18
Alternates in Priority Order (2015) 1. John Yen Wong, San Francisco, Region 8 2. Jim Hamilton, Silicon Valley, Region 9 3. Jennifer Branchini, Bay East, Region 6 4. Heather Ozur, California Desert, Region 28 5. Melanie Barker, Yosemite Gateway, Region 12 6. Suzanne Yost, Silicon Valley, Region 9 7. Marion Proffitt, Tri-Counties, Region 23 8. Patricia Hicks, East Valley, Region 15
2. That the following individuals be nominated as Directors For Life:
Phyllis Carmichael, Silicon Valley, Region 9 Gregory Pawlik, Beverly Hills/Greater Los Angeles, Region 17 Jeff Sposito, Contra Costa, Region 5
3. That Joel S. Singer be elected as Chief Executive Officer/State Secretary for the year 2015. 4. That Pat “Ziggy” Zicarelli be elected as President-Elect for the year 2015. 5. It was reported for information only that Geoff McIntosh will continue to serve as Treasurer for the year 2015. 6. It was reported for information only that Chris Kutzkey will become President for the year 2015.
Professional Standards 1. That C.A.R. adopt the amended Citation Policy, subject to approval by NAR, to (a) use Citations for progressive discipline; (b) limit the maximum number of Citations to three (3) in a three (3) year period; (c) add Standards of Practice 12-8, 12-9, 12-10, 12-11, 12-12 and 12-13 to the Citation Schedule; and (d) delete Articles 4 and 5 and Standard of Practice 12-4 from the Citation Schedule. 2. It was reported for information only that C.A.R. will amend the California Code of Ethics and Arbitration Manual to recommend that local Associations retain ethics hearing files for seven (7) years.
Standard Forms Advisory 1. It was reported for information only that there were 21 Regional Representative reports given to the Standard Forms Advisory Committee (SFAC). Much of the discussion was with regards to the removal of the Wood Destroying Pest Addendum (WPA) from the forms library. The SFAC voted to remove the WPA from the C.A.R. library.
The rationale in favor of removing the WPA from the library are as follows: From the buyer’s perspective – A buyer has the ability to order a pest control report or ask the seller to pay for a pest control report that the buyer can review during the investigation period. Once a report has been received, a buyer has the ability to negotiate with the seller via a Request to Repair (RR) form to correct any section 1 or 2 repairs recommended in the report. Depending on the seller’s response, the buyer retains the ability to move forward with the transaction or to cancel. As long as the investigation contingency remains in effect, the buyer is not obligated to purchase the property in unacceptable condition.
From the seller’s perspective – A seller who agrees to a contract with the WPA form attached is at risk of having a contractual obligation to pay for unanticipated, unlimited costs amounting to a blank check.
From the Broker’s perspective – A listing Broker who allows a seller to accept a contract with a WPA form attached is at risk for breaching a fiduciary duty and exposed to liability for all of the unanticipated, unlimited costs. A buyer’s Broker who does not use a WPA form as part of an offer has the ability to satisfy her/his fiduciary duty by advising the buyer to get an inspection as part of their due diligence or requesting the seller provide a report. Once the report has been obtained, the buyer’s Broker can further satisfy the fiduciary duty by counseling the buyer on how to proceed with further negotiations with the seller; including asking for repairs, credits, reduction of purchase price, etc.
Other considerations – By negotiating the WPA as part of the purchase agreement, both the buyer and seller are locked in to specific terms even when they don’t understand or have knowledge of what the report will reveal. In those cases, other options are limited with respect to specific types of corrective measures, possible price reductions or credits because of the lender’s requirements for pre-closing conditions.
Establishing consistency throughout the state in terms of transaction management as many regions do not use the WPA.
Strategic Planning and Finance 1. That the audited Statement of Income and Expenses by program for the twelve months ended December 31, 2013 be approved.
Total C.A.R. Revenue of $28,303,700 Expenses of $27,881,900 An excess of income (including investment income) over expenses of $421,800
Political Activities Fund An excess of income over expenses of $1,790,600
Issues Action Fund An excess of income over expenses of $831,100 This amount was allocated to IMPAC as approved by the Directors.
REALTOR® Action Assessment An excess of income over expenses of $6,715,800. This amount was allocated to the PACs.
The C.A.R. Balance Sheet as of December 31, 2013 Total assets of $64,981,700 (of which $51,641,400 are current assets) Total liabilities of $7,874,200 (of which $3,817,900 are current liabilities) C.A.R. Fund Balance of $57,107,500
2. That the Statement of Income and Expenses by program for the three months ended March 31, 2014 be approved.
Total C.A.R. Revenue of $19,734,500 Expenses of $6,314,600 An excess of income (including investment income) over expenses of $13,419,900
Political Activities Fund An excess of income over expenses of $2,871,400
Issues Action Fund An excess of income over expenses of $1,335,400
REALTOR® Action Assessment An excess of income over expenses of $7,066,200
The C.A.R. Balance Sheet as of March 31, 2014 Total assets of $74,608,200 (of which $61,788,200 are current assets) Total liabilities of $3,000,000 (of which $2,882,800 are current liabilities) C.A.R. Fund Balance of $71,608,200
3. That the Projected Statement of Income and Expenses by program for the year ended December 31, 2014 be approved.
Total C.A.R. Revenue of $28,989,800 Expenses of $29,853,600 An excess of expenses over income (including investment income) of $863,800
Political Activities Fund An excess of income over expenses of $1,498,300
Issues Action Fund An excess of income over expenses of $695,300. This amount will be allocated to IMPAC as approved by the Directors.
REALTOR® Action Assessment An excess of income over expenses of $6,764,300. This amount will be allocated to the PACs.
Taxation and Government Finance 1. That C.A.R. “SPONSOR” legislation to amend the statute that requires private transfer fees to be recorded so that private transfer fees whose payment is not triggered by a change in ownership or that are not based on sales price are covered by the statute. 2. That C.A.R. “SUPPORT” AB 2109 (Daly), which would require each county to submit specified parcel tax information (i.e. type, rate and number) to the Board of Equalization. 3. It was reported for information only that the Taxation and Government Finance Committee took no action on a State Senate proposed compromise on SB 391 (DeSaulnier), the $75 recording tax.
Transaction and Regulatory 1. That C.A.R. amend C.A.R. sponsored AB 2018 (Bocanegra) to clarify that “team names” are not fictitious business names and can be used without requiring they be filed as a fictitious business name, provided that: a) The “team” has a minimum of two licensees; b) The “team name” includes a licensee’s full name or surname; c) All marketing materials contain the salesperson’s name and CalBRE license #; and, d) All marketing materials contain the Broker’s full name which must be equally as prominent as the “team name”. 2. That C.A.R. amend C.A.R. sponsored AB 2018 (Bocanegra) to permit Brokers to contractually delegate their authority to a salesperson or broker associate to apply for, obtain and possibly own, a fictitious business name. A fictitious business name (or “DBA” – “doing business as”) is a name that does not qualify as a team name. 3. That C.A.R. amend C.A.R. sponsored AB 2018 (Bocanegra) to require that all marketing materials using a fictitious business name contain the salespersons’/broker associate’s name, CalBRE license number and Broker’s full name, which must be equally as prominent as the fictitious business name. 4. That C.A.R. amend C.A.R. sponsored AB 2018 (Bocanegra) to require a fictitious business name be filed with the County or Counties where it will be used. 5. That C.A.R. amend C.A.R. Sponsored AB 2039 (Muratsuchi) to prohibit the use of so-called "shill" bidders working for an auction company. 6. That C.A.R. withdraw its opposition to AB 1698 (Wagner), a bill dealing with fraudulent instruments, and adopt a "WATCH" position. 7. That C.A.R. “OPPOSE UNLESS AMENDED” the risk sharing provision of S. 1217, also known as the Johnson/Crapo bill, so that risk sharing is optional and there is no minimum amount required in statute. 8. It was reported for information only that the Transaction and Regulatory Committee recommends that C.A.R. develop a Legal Q&A to provide REALTORS® guidance related to advising clients on how to choose a home inspector.