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California Model MLS Rules, Issues Briefing Papers, and other articles and materials related to MLS policy.
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CALIFORNIA ASSOCIATION OF REALTORS®
BOARD OF DIRECTORS
JANUARY 24 - 25, 2014
The following is a summary of the significant action items approved by the CALIFORNIA ASSOCIATION OF REALTORS® Board of Directors at its Winter 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 REALTOR® Energy Audit Program has been extended to December 2014. The REAP Program provides up to a $250 rebate on a Home Energy Rating System (HERS) home energy audit conducted by a certified HERS rater. A Casino Night event supporting the C.A.R. Housing Affordability Fund will take place on Friday, May 2, 2014 in Sacramento.
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 $1,900.
1. It was reported for information only that CREPAC continued the evaluation and support for candidates in a bi-partisan manner for the 2014 Election cycle. CREPAC and CREIEC Trustees will evaluate the bulk of open seats after the candidate filing deadline (second week of March) and maintain a bipartisan approach to supporting candidates that share the attitudes, values and beliefs of organized Real Estate. The CREPAC Trustees contributed $340,000 in a bi-partisan manner to Democratic and Republican Party leadership and legislative caucuses; and $70,000 to Coalition partners for the 2014 Election cycle. The CREIEC Trustees funded Elections in the amount of $175,000 for the 2014 Election cycle. The CREPAC/Federal Trustees made recommendations to NAR’s RPAC that resulted in funding $115,000 to members of the California Congressional delegation for the 2014 Primary Election cycle, as well as opportunity races to support incumbent members.
1. That the following 2014 Presidential appointments be approved:
2014 Executive Committee
2014 Directors At Large
2. To approve a special resolution honoring 2013 President Don Faught.
3. To approve a special resolution honoring 2013 California Distinguished REALTOR® Award Recipient Deborah Ritchey.
Home Ownership Housing
1. That C.A.R. “SPONSOR” legislation to provide greater clarity in common interest development transactions by establishing more specific document delivery and disclosure standards and to tighten the anti-bundling provisions created in C.A.R. sponsored AB 771 of 2011.
2. That C.A.R., in conjunction with NAR, "SUPPORT" an easing of FHA’s condominium requirements that include, but are not limited to: a) extending the time between re-certification; b) simplifying recertification process; and c) mirroring Fannie Mae’s and Freddie Mac’s condo requirements.
1. That, per the IMPAC Bylaws, on January 7, 2014, the following Non-Voting Alternate was appointed as a Voting Trustee to serve the remainder of a two-year term ending November 2015: Kim Tucker, Region 3.
2. That the following IMPAC requests were approved:
11/21/2013 - $50,000 to the Jobs Coalition for a signature gathering campaign for a linkage fee referendum.
1/22/2014 - $100,000 to Civil Justice Association of California.
1/22/2014 - $75,000 to the Contra Costa Association of REALTORS® for continued work against eminent domain on performing mortgages.
1. It was reported for information only that a Working Group will be created for the purpose of studying the Eviction Process and Jury Trial Demands by Tenant Attorneys.
Land Use and Environmental
1. It was recommended that C.A.R. appoint a task force to explore alternatives to point of sale energy efficiency audits and retrofits.
Legal Action Fund Trustees
1. That since October 2013 the Legal Action Fund Trustees have reviewed 7 cases and approved filing amicus briefs in 4 cases:
Galbreath v. Zimmerman (Costa Hawkins Rent Control) is a case in which the trial court ruled that a new owner’s rent of a separately alienable single family dwelling (which, like new contruction is exempt from rent control under Costa Hawkins) is subject to having to be “in good faith.” The Trustees approved an amicus brief supporting their writ before the Court of Appeal.
Marina Pacifica Homeowners Association v. Lansdale et al. (assignment fee) A 570-unit residential development was subject to a 68-year ground lease with rent escalation in 2006 and 2021 which was bought out by the HOA. It was also subject to an “assignment” fee to the prior owners. The “assignment” fee is based on the market price at the same time as the now-bought-out-lease rent increase. The court struck down the assignment fee (after 2009) as illegal under the C.A.R.-sponsored bill requiring private transfer fees to be recorded.
Swartz v. Coldwell Banker (broker duty) A broker prevailed in a suit alleging the agent must conduct an independent investigation of public record to find recorded documents that were not disclosed by the title company. The court proclaimed some of the Field case was not binding. C.A.R. supported the petition to publish the case but the court did not grant the motion.
Bardack v. Tomjanovich (seller’s indemnity of broker) A seller did not disclose material information on the sale of a property. The broker sued the seller to enforce the seller’s indemnity under a clause in the listing contract and was awarded damages. C.A.R. is filing a brief to support the broker on appeal.
Updates on Previously Approved Cases
All Cities Realty v. Brunet (salesperson’s responsibility for broker’s name)
The California Supreme Court did not accept hearing in a case in which the court is considering whether salespersons are individually liable when they use the name issued to the broker by CalBRE-issued DBA which is alleged to infringe on the trademark of another broker. The case against the salespersons will proceed to trial.
Bararsani v. Coldwell Banker Residential Brokerage (independent contractor)
In an unpublished order, the Court of Appeal denied the writ seeking to force dismissal of the case on the ground that a salesperson is an independent contractor. This case will proceed at the trial level.
Prahm v. Pickford (procuring cause)
In an unpublished opinion, the court found a salesperson to be the procuring cause in a case in which a salesperson had discussions with a buyer who subsequently made an offer after the listing had expired. The cooperating broker had declined to arbitrate but assigned the commission rights to the salesperson who sued.
1. That C.A.R. adopt the following positions on upcoming state ballot measures:
--As yet unnumbered Proposition for the June 3, 2014 state ballot entitled Public Information. Legislative Constitutional Amendment. “FOR”
--As yet unnumbered Proposition for the November 4, 2014 state ballot entitled Referendum to Overturn Indian Gaming Compacts. Referendum. “NOT REAL ESTATE RELATED”
2. The Board of Directors postponed action to the next meeting, scheduled for May 2-3, 2014, on an as yet unnumbered Proposition 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.
Note: C.A.R. has previously taken the following positions on upcoming ballot propositions:
--As yet unnumbered Proposition for the November 4, 2014 state ballot entitled Safe, Clean, and Reliable Drinking Water Supply Act of 2012. Bond Measure. “NEUTRAL”
--As yet unnumbered Proposition for the November 4, 2014 state ballot entitled State Budget. Changes California Budget Process. Limits State Spending. Increases “Rainy Day” Budget Stabilization Fund. Legislative Constitutional Amendment. “NOT REAL ESTATE RELATED”
--As yet unnumbered Proposition for the November 4, 2014 state ballot entitled Approval of Healthcare Insurance Rate Changes. Initiative Statute. “NOT REAL ESTATE RELATED”
1. That the following applicants be granted C.A.R. Honorary Member-for-Life status:
Beverly Hills/Greater Los Angeles AOR
John Bruce Nelson
Joseph T. Terranova
California Desert AOR
East Valley AOR
Greater San Diego AOR
Orange County AOR
Pacific West AOR
Fletcher L. Woodruff
San Luis Obispo AOR
Santa Barbara AOR
Gordon Williams Hardey
Santa Maria AOR
Scenic Coast AOR
Anne B. Coy
Southland Regional AOR
Victor Valley AOR
1. Click here for MLS Policy Action Item
Political Activities Fund
1. It was reported for information only that the following programs were funded for 2014:
--Member Mobilization program including the Legislative Day Scholarship program and all other grassroots legislative programs
--Government Affairs field program
--Member Education direct mail campaign
--A voter registration effort
--A new web-based mobilization infrastructure system called the Voter Activation Network or VAN
2. It was reported for information only that a new Consumer Education campaign, already a component of the Member Mobilization program, has now been further developed and will soon be introduced.
Strategic Planning and Finance
1. That the Statement of Income and Expenses by program for the eleven months ending November 30, 2013 be approved.
Revenue of $27,142,500
Expenses of $24,443,900
An excess of income (including investment income) over expenses of $2,698,600
Political Activities Fund
An excess of income over expenses of $1,892,300
Issues Action Fund
An excess of income over expenses of $910,000
REALTOR® Action Assessment
An excess of income over expenses of $6,864,800
The C.A.R. Balance Sheet as of November 30, 2013
Total assets of $63,531,100 (of which $52,374,000 are current assets)
Total liabilities of $4,500,500 (of which $4,462,000 are current liabilities)
C.A.R. Fund Balance of $59,030,600
2. That the Projected Statement of Income and Expenses by program for the year ending December 31, 2013 be approved.
Revenue of $28,006,400
Expenses of $28,483,900
An excess of expenses over income (including investment income) of $477,500
Political Activities Fund
An excess of income over expenses of $1,824,900
Issues Action Fund
An excess of income over expenses of $810,300, this amount will be allocated to IMPAC as approved by the Directors.
REALTOR® Action Assessment
An excess of income over expenses of $6,681,000, this amount will be allocated to PACs.
3. That an augmentation to the Industry and Broker Relations program in the amount of $20,200 be approved to provide information, tools and communication through a one-day event -- The Broker's Conference 2014.
4. That the Federal Governmental Relations budget be augmented in the amount of $7,600 to include the Vice Chairs in the Lobbying Trip to Washington, DC for 2014.
5. That the Public Policy budget be augmented in the amount of $26,000 for water use efficiency education materials for members to share with consumers, given the current water crisis and recent statewide water conservation mandates.
Standard Forms Advisory
1. It was reported for information only that there were 23 Regional Representative reports given to the Standard Forms Advisory Committee (SFAC). The committee heard extensive comments regarding removal of the Wood Destroying Pest Inspection Addendum (WPA) form reference within the Residential Purchase Agreement (RPA) draft as well a few recommendations on other forms. It was noted that 12 regions voted to keep the WPA reference in the RPA and 8 regions voted to remove the reference. The WPA comments received will be forwarded to the RPA Study Group for their consideration.
Comments were also received at the Forum on Forms and from the regional representatives regarding the loan contingency removal time frame within the current RPA draft. The consensus was to leave the time frame at 17 days rather than the 25 days in the current RPA draft.
The SFAC reviewed and approved the following forms for April Release:
• Additional Agent Acknowledgement (AAA)
• Additional Broker Acknowledgement (ABA)
• Declaration Regarding Real Estate License and Tax Reporting (DLT)
• Notice of Non-responsibility (NNR)
• NEW - Representative Capacity Signature Addendum (RCSA)
The SFAC also reviewed the following drafts for a November Release:
• Receipt and Delivery of Notices (RDN)
• Contingency for Sale of Buyer’s Existing Property (BSEP)
• Contingency for Seller’s Purchase of Replacement Property (SPRP)
The SFAC discussed simplifying the Receipt and Delivery of Notices RDN and voted to recommend to the RPA Study group an inclusion of a delivery of notice paragraph in the RPA. Consideration will be made to revise this form or possibly eliminate the form in November 2014. Concerns were raised regarding the BSEP on the contingency of sale of buyer’s property and possible risk to the buyer.
The SFAC also received updates regarding the following study groups:
• RPA Study Group
• SFAC/zipForm Joint Study Group
Finally, the SFAC reviewed 27 of the 90 comments received. The balance will be reviewed via a conference call with 24 comments being deferred to the RPA Study Group.
Taxation and Government Finance
1. That C.A.R. “SUPPORT” legislation to study the revenue impact of allowing homeowners to transfer their property tax basis to a home anywhere in the state.
Transaction and Regulatory
1. That C.A.R. "SPONSOR" legislation to empower the Bureau of Real Estate to collect email addresses.
2. That C.A.R. "SPONSOR" legislation to clarify the rules for the Bureau of Real Estate (BRE) to regulate the use of "Team" names by licensees. The clarification should be consistent with existing BRE policy on advertising and team name rules, with further amendments to be considered during the May Board meetings.
3. That C.A.R. "SPONSOR" legislation to require an auction company to indemnify or "hold harmless" the listing broker in a transaction against liability that results from the auction company's actions in a short sale transaction.
4. That C.A.R. "SPONSOR" legislation to prohibit short-lived communication like tweets or text messages from being considered "transactional documents" that must be retained in a broker's file.
5. That C.A.R. "SPONSOR" a legislative resolution expressing California support for preservation of existing loan limits.
6. It was reported for information only that a Working Group will be established to explore options related to home inspectors contractual limitation of liability provisions and other options necessary to improve home inspection reports and practice.
7. It was reported for information only that a Working Group will be established to assist in developing policy recommendations related to C.A.R.'s sponsored legislation seeking to establish standards related to the Bureau of Real Estate's efforts to regulate the use of "Team" names by licensees.
1. That C.A.R. direct C.A.R. legal counsel, and if need be, hire an outside legal firm specializing in contract law, to review C.A.R.’s Residential Listing Agreement (RLA) to determine whether or not the RLA protects the exclusive rights and agency as it is currently written. To also determine whether it allows for any 3rd party brokerage to be inserted into the existing broker client relationship without the full rights and fiduciary responsibilities of agency. If it is determined that it is not adequate to protect those rights of the original broker and client that it be corrected to do so.
Revised: January 27, 2014