CALIFORNIA ASSOCIATION OF REALTORS®
BOARD OF DIRECTORS
JANUARY 23 - 24, 2009
The following is a summary of the significant action items approved by the CALIFORNIA ASSOCIATION OF REALTORS® Board of Directors at its January 2009 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
1. It was reported for information only that the CALIFORNIA REALTOR® EXPO will be held October 6 - 8, 2009 at the San Jose Convention Center, and the CALIFORNIA REALTOR® SHOWCASE will be held June 3 - 4, 2009 at the Sacramento Community Convention Center.
C.A.R. Scholarship Foundation/C.A.R. Education
1. It was reported for information only that the C.A.R. Scholarship Foundation granted awards totaling $23,000. The C.A.R. Education Foundation announced the availability of its first application for awards beginning in February 2009, with awards to be determined at the next meeting in June 2009.
1. It was reported for information only that the CREPAC Trustees have transferred the 2009 Fair Share contribution of $690,000 to the National RPAC.
1. That the following 2009 Presidential Appointments be approved:
2009 Executive Committee:
James Liptak, Paso Robles, President
Steve Goddard, President-Elect, South Bay
Beth L. Peerce, Treasurer, Southland Regional
Joel Singer, Executive Vice President, Los Angeles (Ex-Officio)
William E. Brown, Bay East
David Cabot, San Diego (Regional Chair)
Linda Carroll, North Bay
Mary Funk, Southland Regional
Mike Godfrey, Bay East
Patricia Bouie-Hinds, Oakland
Jim Myrick, Santa Clara County
Andy Nazaroff, Fresno
Barbara J. Palmer, Santa Cruz
Leigh Rutledge, Sacramento
Emily Schwartz, Citrus Valley (Association Executive)
Rick Violett, Pacific West
Jeffrey Wright, West Contra Costa
2009 Directors at Large:
Arlene Baxter, Berkeley
Kim Boda, Big Bear
Jackie Crowley, Palos Verdes Peninsula
Les Fishman, Palos Verdes Peninsula
Miguel Garcia, Montebello District
Donald J. Grubb, Jr., Oakland
Lynn Heintz, Fresno
Tracy Helard-Shumard, Humboldt County
Janene Klocek, East Valley
Carol Luckenbach, San Francisco
Josie Marie Grant, Inglewood
Leslie McBride, Sutter Yuba
Stephen Pearson, Watsonville
Heather Raphael, Pacific West
Staci Siddhadas, Santa Barbara
Bill Stoll, Paso Robles
Scott Swendiman, Shasta
Theresa Wilson-Allen, Yosemite Gateway
Suzanne Yost, Santa Cruz
2. To adopt a Resolution of Grateful Appreciation in honor of 2008
President William E. Brown.
3. To adopt a Resolution of Grateful Appreciation in honor of Leslie Munger, recipient of the 2008 California Distinguished REALTOR® Award.
1. It was reported for information only that C.A.R. recognizes the need for healthcare reform and the substantial calls for change coming from numerous sectors of society. While REALTORS® are not experts on all aspects of healthcare reform, it is appropriate for REALTORS® to be involved in the issue as it impacts REALTORS® cost of business and quality of life. Additionally, rising healthcare costs can limit a person’s ability to be able to afford both health insurance and the American dream of homeownership. Furthermore, a recent NAR study found that concerns with health insurance and healthcare were among the top domestic policy concerns for REALTORS®.
C.A.R. believes that NAR should support healthcare reform which includes
-- Healthcare insurance reform should continue to be a hybrid of the private and public sector. There should be the creation of new programs and policies, but the private market should not be restricted or eliminated.
-- Health insurance should be made available, affordable, and portable for all; including premium stability and available options. Insurance should cover pre-existing conditions and be continuous.
-- There should be an individual mandate for health insurance. The individual mandate must include incentives to assist those unable to afford insurance as well as disincentives for those who fail to participate. This includes both the expansion of current programs and financial incentives.
-- There is the need for financial incentives for small business owners and the self-employed in order to assist them in gaining access to affordable health insurance.
-- There should be support for a Federal Healthcare Board that would function similar to the Federal Reserve and set minimum mandates, set minimum standards such as preventative health and long-term care, and allow medical providers to offer appropriate care. The Federal Healthcare Board would be independent, but still accountable to elected officials and the American people. The Federal Healthcare Board would be staffed by experts in the healthcare and medical field and establish guidelines that programs can follow.
-- Health insurance should come in clear and transparent language concerning what services are covered and how they are covered.
-- There should be the creation of a secure IT database for medical providers that protects patient’s privacy and helps reduce administrative costs. The database needs to be in a universal programming code so that all providers are able to access and update the records when needed.
-- There should be efforts made to help recruit and retain more healthcare providers, particularly doctors and nurses.
1. That C.A.R. “OPPOSE” SB 49 unless amended to apply the proposed tax credit to all sales of single family residences intended to be the principal residence of the purchaser, and if so amended, will remove its opposition.
Legal Action Fund Trustees
1. It was reported for information only that since the October 2008 meeting, the trustees reviewed and approved the following cases:
Hovaneisan v. Couveau
A prospective buyer entered into a contract to purchase property. The contract had an appraisal contingency. During escrow, the buyer indicated the appraisal was lower than the purchase price and informed the seller the transaction would not close if the seller did not reduce his price. The seller cancelled the sale and sold it to another person for over $100,000 more than the first buyer’s purchase price. The second escrow closed and the first buyer sued and lost. The Trustees approved a brief on the issue of whether the communication about the contingency was actually a cancellation of the contract.
Kazanjian and Rodeo Investors v. Bapna
Bapna, a non-licensee met with this friend, Kazanjian and introduced him to a potential buyer for a commercial property on Rodeo Drive. The non-licensee also asked for financial statements, sat in on negotiations, presented an offer, analyzed the pricing of the property and the market, actively tried to convince the buyer to pay the full asking price, transmitted a counter offer, and conveyed details of terms, among other things. There was also a licensed broker involved and the commission agreement with the broker allowed for the payment of a finder’s fee to Bapna for $175,000. Bapna sued to collect the finder’s fee of $375,000 from the seller, his friend. The jury awarded the finder’s fee of $375,000 plus attorneys fees of $140,000 to the non-licensee. The seller appealed. The Trustees approved an amicus brief in support of the seller on the issue of whether a non-licensee can collect a fee for activity that involves much more than a mere introduction of parties in a commercial transaction.
Robinson v. Greenwood
The owners of a 6-unit apartment building had been notified by the city of the need for repairs. The property was sold with a provision that the city must issue a release/letter that the repairs would be completed. The city issued such a letter before close and the buyer also conducted inspections of the property. Three years later, tenants complained to the city which issued a notice to vacate in 2006. The tenants also sued the buyers (now the owners). The buyers cross-complained against the seller. The trial court ruled in favor of the broker citing the lack of reliance on the broker because the buyers had inspected the property and the city had cleared the property before escrow; the buyer appealed. The trustees approved an amicus brief on the issue of whether claims against the broker fail due to lack of reliance when the buyer had an unfettered right to inspect the property, the buyer did inspect the property, and the buyer was aware of defective conditions of the property before close of escrow.
Updates on cases in which C.A.R. participated as amicus:
UAS Management Inc., v. Mater Misericordiae Hospital et al.
This was an antitrust case unrelated to real estate but which cited the Palsson decision for the proposition that the antitrust laws required opening of the MLS not only to nonmember brokers but also to members of the public. In response to C.A.R.’s request, the court removed the words “members of the public” in the published decision.
County of Humboldt v. McKee et al.
This issue relates to the renewal of a Williamson Act parcel and whether new changes to the County requirements enacted after the Williamson Act contract was signed automatically are incorporated into that contract which automatically renewed per its terms. Although the Trustees supported an amicus letter on behalf of the property owner who is seeking review before the California Supreme Court, the Court did not grant a hearing.
Witt Home Ranch v. Sonoma County.
This case involves whether a subdivision that was created in 1915 that was government approved and complied with then existing law, can be used to subdivide property in 2005 even through the 1915 subdivision does not comply with current subdivision requirements. Although the Trustees approved an amicus brief supporting the petitioner to get a hearing before the California Supreme Court, the Court did not grant a hearing.
Brand v. George Chung Realty.
The issue in this case was whether a broker had a duty to investigate the extent of a proposed freeway expansion effecting the front yard of a buyer, even though the fact that one was proposed was disclosed in the TDS. In an unpublished opinion, the Court ruled against the broker on procedural grounds unrelated to the issues briefed by C.A.R. Since it is unpublished, it cannot be cited as authority.
1. That C.A.R. “SUPPORT” a DRE license endorsement implementing the federal SAFE Act allowing loan origination by a real estate licensee.
The SAFE Act (the Secure and Fair Enforcement of loan origination Act)
requires state law regulating loan originators to include:
- Pre-license education
- Passage of an examination
- Annual maintenance of continuing education
- Effective regulation by the state licensing authority.
2. That C.A.R. take the following positions on ballot propositions that will be placed on the next statewide ballot (proposition numbers pending):
State Lottery Revenues (SCA 12) - Not Real Estate Related
State Lottery Revenues (SCA 13) - Not Real Estate Related
Public funding Secretary of State candidates - Not Real Estate Related
State Lottery Revenues (AB 1654) - Not Real Estate Related
State Lottery Revenues (AB 1741) - Not Real Estate Related
3. It was reported for information only that the Legislative Committee
rejected a motion to sponsor legislation creating a "Shortclosure"
process. Instead, the Committee recommends that the C.A.R.
President's Distressed Property Advisory Group consider ways to expedite
short sales raised in the "Shortclosure" Issues Briefing Paper for the
January 21, 2009 Legislative Committee meeting.
4. It was reported for information only that the Legislative Committee rejected a proposal to create an anniversary inspection and retrofit program as an alternative to Point of Sale legislation. The committee directed staff to maintain existing policy to oppose point of sale mandates and continue to study the issue in a working group and bring further options back at the June 2009 meeting.
5. It was reported for information only that the Legislative Committee rejected a proposal to consider creating lender access to pre-foreclosure properties, and directed staff to explore making the maintenance of REO property provisions of SB 1137 (Perata) pre-emptive of local government property maintenance ordinances.
1. That the following applicants be granted C.A.R. Honorary Member-for-Life status:
Amador County AOR
California Desert AOR
Conejo Valley AOR
Inland Valleys AOR
Amanda Jane Reynolds
Nevada County AOR
North Bay AOR
Christina F Mc Bride
Orange County AOR
Mary Aileen Matheis
Pacific Southwest AOR
Pacific West AOR
Palm Springs AOR
Palos Verdes Peninsula AOR
Pasadena Foothills AOR
Santa Cruz AOR
Edna Lee Kelly
Scenic Coast AOR
Southland Regional AOR
Victor Valley AOR
MLS/Computer and Business Technology
1. That, subject to NAR approval, the C.A.R. Model MLS Rules be revised to adopt all required and discretionary terms of the NAR VOW rules and policy per the DOJ vs NAR Final Settlement Order as set forth in the MLS Committee Issues Briefing Paper posted online. The discretionary provisions contained in the MLS Committee Issues Briefing Paper are summarized below:
A. Parity Provisions: [VOW rules contain a “parity mandate” which provides that certain restrictions can only be imposed on VOW brokers as long as the same restrictions are imposed on non-VOW brokers]
1. That both non-VOW and VOW rules prohibit display to consumers of (a) expired, withdrawn, or pending (“under contract”) listings; (b) compensation offered; (c) listing type; (d) personal seller information; and (e) broker-only showing instructions. [12.15.2 and 12.19.15]
2. That both non-VOW and VOW rules prohibit MLS content from being altered but allow it to be augmented with additional permissible information as long as the other source is clearly identified. [12.15.1(a), 12.16(e) and 12.19.16]
3. That both non-VOW and VOW rules require placement of a disclaimer i.e. “data deemed reliable but not guaranteed” on display of listing data. [12.15.1(d) and 12.19.17]
4. That both non-VOW and VOW rules require that display of listings (online and in all other mediums, i.e. client sheets, emails, etc.) identify the name of the listing firm and the listing broker or agent in a readily visible color, in a reasonably prominent location, and in typeface not smaller than the median typeface used in the display of listing data. [12.15.1(b) and 12.19.18]
5. That both non-VOW and VOW rules limit the number of listings that a consumer may view in response to an inquiry. [12.15.1(c) and 12.19.19]
B. Non-Parity Optional Rules: [These discretionary rules outline permissible regulations that an MLS may impose on a VOW]
1. That VOW Registants’ passwords be required to be periodically reconfirmed. [12.19.20]
2. That VOWs be subjected to regulation regarding placement of Participant’s logo and contact information to reduce risk of misleading advertising and co-branding. [12.19.21]
3. That VOWs be required to identify the source of any listing displayed that is not from the operative MLS. [12.19.22]
4. That listings displayed on a VOW from sources other than the operative MLS be required to be searched separately from the operative MLS. [12.19.23]
5. That VOW Operators/AVPs be required to execute a license agreement with the MLS. [12.19.24]
6. That a listing broker be required to provide a copy of a Seller Opt Out (where seller has requested listing or address of listing not to appear on the Internet) to the MLS within 48 hours. [12.19.25]
1. It was reported for information only that, in October 2008, the C.A.R. Board of Directors Approved adoption of a procedure to allow local associations to appoint an Ethics Advocate Subcommittee, whose members would assist parties to a disciplinary complaint through the process, by helping with paperwork and representing the party at the hearing, at the option of the party, subject to final approval from NAR. NAR has approved The Ethics Advocate program, and implementation documents are being distributed to local associations now, so that California REALTORS® can be the first in the nation to participate in such a program.
Public Policy Reorganization Task Force
1. To approve the report and recommendations of the Public Policy Reorganization Task Force.
Standard Forms Advisory
1. It was reported for information only that the Standard Forms Advisory Committee (SFAC) received reports from 10 Regional Representatives. The SFAC approved the following forms for release in April:
-- Contract Paragraph Matrix (CPM)
-- Cash for Keys (CFK)
-- Qualified Substitute Declaration of Possession of Transferor’s Affidavit of Nonforeign Status (QS)
-- Loan Broker-Sales Broker Disclosure (LSB)
-- Notice of Prospective Buyers/Transferees (NPB)
-- Notice of Identified Properties (NIP)
-- Confidentiality and Non-Disclosure Agreement (CND)
-- Bill of Sale (BOS)
-- Notary Acknowledgement (NA)
-- Commercial Confidentiality and Non-Disclosure Agreement (CML-CNDA)
-- Commercial Environmental Issues Addendum (CML-EIA)
-- Commercial Landlord’s Environmental Consent (CML-LEC)
-- Commercial Release Agreement (CML-REL)
-- Commission Agreement (CA)
-- Cooperating Broker Compensation Agreement and Escrow Instructions (CBC)
-- Contingency Removal (CR)
-- Independent Contractor Agreement (ICA)
-- Notice to Buyer to Perform (NBP)
-- Notice to Seller to Perform (NSP)
-- Residential Income Property Purchase Agreement and Joint Escrow Instructions (RIPA)
-- Request for Repairs (RR)
The SFAC also approved a time extension to the Commercial Forms Study Group until the June business meetings to complete review of comments they have received on existing C.A.R. commercial forms and provide further input regarding the AIR library. The SFAC was advised about the possibility of C.A.R. adopting the DRE sample advanced fee loan modification agreement and approved the release as timely as possible. The SFAC was advised about the possibility of C.A.R. creating a package of three forms to help standardize documentation used with a short sale transaction and supports C.A.R.’s efforts in this regard. The SFAC spent significant time reviewing comments on the protection clause in the Residential Listing Agreement (RLA) and decided to leave the form as it is currently written. The Committee will continue to discuss and receive member input on if/what changes should be made. The RPA Study Group held their third meeting this week and will continue to review comments for consideration. Finally, the SFAC reviewed 13 of the 52 comments received. The balance of the comments will be reviewed on an upcoming conference call.
Strategic Planning & Finance
1. That the Statement of Income and Expenses by program for the eleven months ending November 30, 2008 be approved.
Revenue of $27,269,400
Expenses of $22,919,200
An excess of income over expenses of $4,350,200
Political Activities Fund
An excess of income over expenses of $1,813,900
Issues Action Fund
An excess of income over expenses of $1,018,900
The C.A.R. Balance Sheet as of November 30, 2008
Total assets of $57,148,300 (of which $37,862,300 are current assets)
Total liabilities of $3,743,600 (of which $3,712,900 are current liabilities)
C.A.R. Fund Balance of $53,404,700
2. That the Projected Statement of Income and Expenses by program for the year ending December 31, 2008 be approved.
Revenue of $27,937,400
Expenses of $26,314,300
An excess of income over expenses of $1,623,100
Political Activities Fund
An excess of income over expenses of $1,763,200
Issues Action Fund
An excess of income over expenses of $841,800. This amount will be allocated to IMPAC as approved by the Directors.
1. That C.A.R. “SUPPORT” the Property Tax: New Construction Exclusion: Seismic Retrofitting. Legislative Constitutional Amendment. (Proposition number pending)
2. It was reported for information only that C.A.R. would “SUPPORT” legislation, if introduced, informing homeowners via their property tax bill as to the tax benefit available under Propositions 60 and 90.
1. That C.A.R. grant CALMLS a line of credit of up to $3 million, to be repaid to C.A.R. within 7 years fully amortized with 6% interest to be used in accordance with the purposes outlined in the January 14, 2009 CALMLS Issues Briefing Paper.