SUMMARY OF ACTION ITEMS
CALIFORNIA ASSOCIATION OF REALTORS®
BOARD OF DIRECTORS
October 24, 2001

The following is a summary of the significant action items approved by the CALIFORNIA ASSOCIATION OF REALTORS® Board of Directors at its October 2001 meeting. A complete set of minutes is available for review upon request. For more information please contact Marleen Schuster at (213) 739-8209 or marleen_schuster@car.org.

SPECIAL REPORTS

Energy Crisis Task Force
That C.A.R. adopt the Energy Policy Guidelines as presented in the report of the Energy Crisis Task Force dated September 27, 2001.

Property Information/MLS Task Force
It was reported for information only that Force has initially developed the following as their general direction and areas of focus, and have identified four essential elements that are considered to be fundamental to this vision. It is anticipated that the task force will develop this into a formal motion for approval by the Board of Directors during the January 2002 meetings.

Task Force's Statement of General Direction:
The goal is to create a boundariless environment for data exchange.
Data access should not be limited by arbitrary, geographic boundaries.
The data exchange should be built to integrate into and promote the sharing of tax, mortgage and other property data from multiple sources.
The exchange should integrate reasonable business rules that are enforced locally. They should include rules addressing compensation, dispute resolution and data integrity.
The exchange should be compatible with the evolving technology platform(s).
It should give participants access to data at a significantly lower cost than current systems.

Task Force's Statement of the Essential Elements:
Four elements should be put into place to create an environment where existing boundaries on data exchange have been lifted.
1. RETS: A critical mass of relevant databases should adopt the RETS standard. (the Real Estate Transaction Specification is a defined detailed set of standards for Internet based communication and exchange of real property data) The standard can be expanded and elaborated to accommodate the demands of mortgage transactions, wireless communication and other elements associated with a property transaction.
2. Technology: Development of a REALTOR® centric intelligent agent, or similar technologies, that let brokers collect data directly from a variety of databases, is necessary. The intelligent agent could operate in a peer-to-peer network or in the current data environment.
3. Cooperation: MLS systems and vendors should be encouraged to adopt RETS and support greater sharing of data. Shared access to public records and other databases is encouraged.
4. Economies of scale: It isnecessary to reap the cost savings available through economies of scale in the management of MLS data. Greater reciprocity and mergers should also be encouraged, while still preserving and centralizing the capacity to enforce business rules locally.

Real Estate Business Services
1. That the slate of nominees for a two-year term on the REBS Board of Directors be approved, and that the C.A.R. President be instructed to elect these individuals on behalf of C.A.R.

Nominees
Joshua D.J. Sharfman, Los Angeles, CEO, Digital LAVA, Inc.
Bob Kulick, Santa Clara, NOVA Investment Realty
Connie Misiewicz, Silicon Valley, Broker/Owner RE/MAX
Richard Genari, Greater Antelope Valley, AT Realty

2. That the nomination of Zena Drewisch be approved to complete the remainder of a vacant term on the REBS Board of Directors, and that the C.A.R. President be instructed to elect this individual on behalf of C.A.R.

PUBLIC POLICY

Common Interest Development
That C.A.R. "SPONSOR" legislation to prohibit homeowner associations from unreasonably prohibiting an owner/agent from showing property for sale. Further, the legislation shall prohibit associations from collecting or levying any fee or charge in connection with the sale or closing of escrow that exceeds the association's actual costs incurred.

Federal Issues
That C.A.R., in conjunction with NAR, work with the appropriate federal department to explore regulatory options to address the precedent set by Holley v. Meyer with respect to the personal liability of brokers in fair housing cases. (See Legal Action Fund report for more information regarding Holley v. Meyer)

Housing Affordability
That C.A.R. "SPONSOR" legislation that permits cities and counties to downzone residential property only if it is consistent with the local government's housing element. Further, staff is to recommend potential "rewards" for local governments that are in "substantial compliance" with the housing element law; that recommendation to be reviewed by the committee at the January 2002 C.A.R. Directors' Meeting.

That C.A.R. "SPONSOR" legislation that will permit builders to receive a density bonus (not less than 20%) for low and moderate-income common interest developments.

Land Use and Environmental
That C.A.R. "SPONSOR" legislation in 2002 to clarify that the lot line restrictions of SB 497 do not apply to small landowners, and research other possible exemptions for consideration by the Land Use and Environmental Committee in January.

Legal Action Fund
That C.A.R. seek funding from other states, N.A.R. and other allied industries in the effort to get a hearing before the U.S. Supreme Court in Holley v. Meyer.

It was reported for information only that, in the case of Holley v. Meyer, the federal Ninth Circuit Court of Appeals held that a broker/officer that was also the sole owner of a corporation could be held personallyliable in fair housing cases for the discriminatory acts of a salesperson even if the alleged discriminatory acts were not authorized, condoned or approved by the broker. The Legal Action Fund Trustees had previously authorized the filing of an amicus brief supporting the petition for a rehearing en banc (the full circuit) but the request was denied. $10,000 had been allocated to that effort. The Trustees approved up to $75,000 to support a petition to the U.S.Supreme Court.

The Legal Action Fund Trustees also reported on the following important cases which they have funded or for which they have authorized an amicus brief: Galland v. Clovis; Nippon Bank v. 1333 N. California Blvd.; Marine Forests Society v. California Coastal Commission; Tahoe Preservation Council v. TRPA (Tahoe Regional Planning Authority); Freeman

A new section on mold has been added to the Environmental Hazards Booklet, effective January 1, 2002. In the interim, the 4 page mold section has been e-mailed to all members, and posted on the website. Brokers wishing to obtain the protection this disclosure can give prior to January can now insert these four pages into the environmental hazards booklet immediately.

There is a new movement for class actions against brokers for Regulation Z violations in real estate ads. C.A.R. knows of three actions that have been filed so far, each naming multiple parties. Everyone is urged to review theiradvertising policies. A Q&A and an alert was sent out to all members by e-mail.

Legislative
That C.A.R. sponsor legislation to permit temporary open house and directional signs in public rights-of-way subject to reasonable dimension, design and safety concerns.

That C.A.R. meet with the appropriate leadership of the residential rental industry to discuss the implementation of SB 732 (Ortiz).  The subjects/issuesto include the "reasonable cause to believe" liability standard and a liability shield when a consumer booklet is given.

Real Estate Finance
That C.A.R., in conjunction with NAR, "WATCH" the Ginnie Mae Choice Proposal currently being circulated on Capitol Hill.

That C.A.R., in conjunction with NAR, "OPPOSE" the U.S. Department of Housing and Urban Development proposed rule regarding the Prohibition of Property Flipping in HUD's Single Family Mortgage Insurance Programs [Doc. No. FR-4615-P-01].

It was reported for information only that the Real Estate Finance Committee Chair will appoint a working group to consult with Golden Feather Realty and HUD on possible changes to the HUD REO property disposition program that would increase the return to HUD from the sale of foreclosed properties.

Taxation
That C.A.R. adopt a "NEUTRAL" positionon ACA 4, a ballot proposition that constitutionally dedicates gasoline sales tax revenues to transportation and includes a specific, but modifiable, funding formula.

That C.A.R. "SUPPORT" S. 424 (Feinstein) and H.R. 1669 (Thompson), the Earthquake Loss Reduction Act of 2001.

BUSINESS

MLS/Computer & Business Technology
1. That C.A.R. add the following Sections, subject to NAR approval, to the C.A.R. Model MLS Rules:

That C.A.R. approve substantive revisions, effective 01/01/02, to the C.A.R. Professional Standards Manual, with respect to disclosures required of all proposed neutral arbitrators as required by California law, as shown in Attachment A.

That C.A.R. approve substantive revisions, effective 01/01/02, to the C.A.R. Professional Standards Manual, with respect to optional notification of ethics violations to other Associations to which the member belongs as allowed by N.A.R. policy, as shown in Attachment B.

That C.A.R. approve substantive revisions, effective 01/01/02, to C.A.R. IBA Rules, with respect to disclosures required of all proposed neutral arbitrators as required by California law, as shown in Attachment C.

That C.A.R. approve the adoption of the Procuring Cause Guidelines as presented in the Issues Briefing Paper dated October 1, 2001.

That the definition of Association Executive in the C.A.R. Professional Standards Manual shall be an Association Executive or his or her designee.

Standard Forms Advisory
It was reported for information only that fourteen standard forms were revised for release in October 2001, including the Residential Listing Agreement (LA), the Business Opportunity forms, and the Disclosure Regarding Real Estate Agency Relationships (AD). The AD was revised to include an instructional box to assist members in the proper use of the form. Additionally, a new form was created, the Interpreter/Translator Agreement (ITA), for use with foreign language clients.  The Committee further reports that the following Regional Forum on Forms meetings were held this year:
San Diego Association of REALTORS®
Southland Regional Association of REALTORS®
Shasta County Association of REALTORS®
Fresno Association of REALTORS® (2 sessions)
The Committee further reports that the following standard forms have been identified for revision/creation in April 2002:
1. Vacation Rental Agreement
2. Buyer-Broker Representation Agreement (BR)
3. Authorization to Acquire Real Property (Buyer-Broker) (AAP)
4. Non-Exclusive Authorization to Acquire Property (NAP)
5. Non-Agency Agreement
6. Notice of Non-Responsibility

POLITICAL

CREPAC Trustees
1. That C.A.R. approve the following slate of Nominees for CREPAC Trustee and CREPAC Alternate:

Nominees for CREPAC Trustee (in Region Order):
November 2001 - November 2004
Mike Braden, Region 02
John Scarborough, Region 12
Gregory J. Pawlik, Region 17
David Moyers, Region 21
William E. Johnson, Region 24

Nominees for CREPAC Alternate (in Region Order):
November 2001 - November 2002
Paula Colombo, Region 03
Diane Hardie, Region 13
Terry Fenske, Region 15
Wendy Furth, Region 18
Stephen Goddard, Region 21
Melanie Hildebrand, Region 25
Ron Brownell, Region 29

IMPAC Trustees
1. That C.A.R. approve the following slate of nominees for IMPAC Trustee and IMPAC Alternate:

Nominees for IMPAC Trustee (in Region Order):
November 2001 - November 2004
Dennis Mason, Region 2
Curtis Jenkins, Region 6
Brian Malone, Region 13
Richard Kato, Region 20
Evelyn Arnold, Region 22

Nominees for IMPAC Alternate (in Region Order):
November 2001 - November 2002
Richard Otterstrom, Region 17
Steve White, Region 18
Greg Haas,Region 19
Dennis Pantano, Region 25
Mark Marchand, A.E., Region 30
Liz Anderson-Fitzgerald, Region 32

2. It was reported for information only that the IMPAC Trustees have approved the following contributions:
-Reason Public Policy Institute: Follow-up Study of SOAR Initiatives in Ventura County...$25,000 (pursuant to matching funds)
-The Community Renewal Project, a conference to assist individuals to foster renewal of inner-city communities...$5,000
-Rent Control Advocacy: Consultant funding pursuant to the request of the Oakland Association of REALTORS®...$20,000

OPERATIONS

California REALTOR® EXPO Advisory
It was reported for information only that EXPO attendance was in excess of 6,600. 884 attended the Technology Tuesday program, 1,150 attended the Wednesday Luncheon, and 725 attended the Gala Reception. EXPO featured 197 Exhibitor Companies and 271 Exhibit Booths. The California REALTORÒ EXPO 2002 will be held in Long Beach October 8 - 10, 2002.

Membership Committee
1. That the following applicants be granted C.A.R. Honorary-Member-For-Life status

Alameda AOR
Denise Codiga

Bakersfield AOR
John Bailey
James Hood
Douglas Minner

Beverly Hills/GreaterLos Angeles AOR
Paul Gader

California Desert AOR
William Bonnar
Bernard Kaplan
Walter W. Pershall
Sylvia A. Pranauski

Coronado AOR
Jacob Leroy ( Lee) Mather

Downey AOR
Harley Garrett
Margie Richey

Orange Coast AOR
Lora W. Vance

Orange County AOR
Jeanne Bodel

Palos Verdes Peninsula AOR
Jacqueline Brunskill
Robert Rockoff
Rod Rodriguez

Pasadena Foothills AOR
Ann Sacre

Rancho Southeast AOR
Cornelius Rylaarsdam

Sacramento AOR
George Espenshade
Evelyn Morgan
Mack Powell

San Diego AOR
William A. Batt
Harold Brodigan
Madeline Broker
Edward T. Clare
William A. Corbett
Hudson Glenn Deuel
Lorraine Ditler
Jane Rimell Frost
V. Jean Hill
Robert Leanders
Ben Link, Jr.
Theophilus A. Logan
Edith Matlack
Royal D. Morey
Maxine Oldham
John G. Palmer
Sherry Patterson
Peter Peckham
Willard M. Punch
Mervin A. Saathoff
Fred G. Shipp
Eunice H. Simmons
Lula Sykes
Elsie Marie Thompson
Ralph Thompson
Fay S. Whitney
Chris J. Zazas

Santa Barbara AOR
Virginia (Penny) Gay Carrick
LaMott W. Fisher
Walter Madden
David A. Pitts
Sylvia Buckley Weller

Santa Clara County AOR
Thomas T. McCarrick

Santa Cruz AOR
Dorothea ("DeDe") Goodrich

Santa Maria AOR
Ellen Fletcher
Ethel I. Snodgrass
Kathryn B. Williams

Southland Regional AOR
Minier J. Cusey
Tom ( "Tommy") Gost
Barnett Minden

Southwest Riverside County AOR
Dorothy Kuskie

Sutter-Yuba AOR
Charles W. Lee

West San Gabriel Valley AOR
Bennie Anne Hines
Mas Nakamura
Daniel T. Snell
William Wong

Strategic Planning and Finance
1. That the Association's Financial Statements as of August 31, 2001 be approved:
A. The Statement of Income and Expenses by program for the eight months ending August 31, 2001.
Total C.A.R.
-Revenue of $12,032,300
-Expenses of $8,628,700 (including federal income tax).
-An excess of income over expenses of $3,403,600
Political Activities Fund
An excess of income over expenses of $535,500.
Issue Action Fund
An excess of income over expenses of $629,300
B. The C.A.R. Balance Sheet as of August 31, 2001
-Total assets of $21,474,300 (of which $11,914,200 are current assets).
-Total liabilities of $2,789,500 (of which $2,032,200 are current liabilities).
-C.A.R.Fund Balance of $18,684,800.

2. That the Projected Statement of Income and Expenses by program for the year ending December 31, 2001 be approved.
Total C.A.R
-Revenue of $14,602,100
-Expenses of $14,061,300 (including federal income tax)
-An excess of income over expense of $540,800
Political Activities Fund
-An excess of income over expenses of $193,100.
Issue Action Fund
-An excess of income over expenses of $448,000. This amount will be allocated to IMPAC as approved by the Directors.

3. To approve a 2002-2004 strategic plan and 2002 budget with the following criteria:
A. Total C.A.R. Revenue $17,428,500
    Total C.A.R. Cost $16,372,000 (including federal income tax).
    Net Surplus $1,056,500
B. Political Activities Fund Revenue $950,000
C. Total Issue Action Fund Revenue $950,000
    Total Issue Action Fund Costs $581,500 
    Issue Action Fund Transfer to IMPAC $368,500
D. 92 budgeted C.A.R. staff positions.
E. Membership dues, including $115 for operating programs, $10 for the Political Activities Fund and $10 for the Issues Action Fund, are set at a total of $135 per member (predicated on 2002 year end membership of 99,000).
F. A 2002 Capital Budget (funded with Association reserves) totaling $390,065.

4. To approve for members in areas not serviced by local associations an additional $30 in membership dues. This amount would be in excess of the dues approved for members coming through the local associations.

5. That the association objectives as presented in the 2002-2004 Strategic Plan be approved as written.

6. That $124,000 be approved to provide an additional 2% discretionary pension contribution to C.A.R. and subsidiary staff for budget year 2001.

OTHER REPORTS

Award Selection Committee
To approve the selection of Ted Loring, Humboldt County, as the recipient of the 2001 California Distinguished REALTORÒ Award, the highest recognition that C.A.R. can bestow on a member.

The following special awards were presented at the Board of Directors Session:
2001 Outstanding Committee Chairmen
Barry Burnett, Legislative Committee
Art Nellessen, CREPAC Trustees
Sandy Weisberg, Standard Forms Advisory Committee

ATTACHMENT A

Professional Standards Committee
1. That C.A.R. approve substantive revisions, effective 01/01/02, to the C.A.R. Professional Standards Manual, with respect to disclosures required of all proposed neutral arbitrators as required by California law, as follows:
Section 55(f) (changes in bold face): "f) Any party may file with the Association Executive a written request for disqualification of a member of a hearing Panel stating the grounds alleged as the basis for disqualification (Form A-5). Challenges submitted by any party pursuant to this Section shall be decided by the Professional Standards Chairperson or his or her designee. A party shall be deemed to have waived any ground of disqualification of which he or she then has knowledge unless he or she files the request within fifteen (15) calendar days after the names of proposed neutral arbitrators under Section 56 are mailed to the parties." Section 56 (e), (h), (k) & (m) (changes in bold face):"(e) If the Association Executive finds the complaint properly filed with the Association, the Association Executive shall pre-screen the pool of potential hearing panel members to identify those least likely to be disqualified, and from those not eliminated, choose a sufficient number to designate as proposed neutral arbitrators within the meaning of Part 3, Title 9, of the California Code of Civil Procedure, as provided in Section 55. Within 10 calendar days of notification to the proposed neutral arbitrators, each shall deliver to the Association Executive a signed disclosure statement (Form A-21). A proposed neutral arbitrator is automatically disqualified if he or she fails to return the disclosure statement. Upon expiration of the time limit for return of the disclosure statements, the Association Executive shall mail to each named respondent in the complaint 1) a copy ofthe complaint; 2) the Notice to Respondent (Form A-2), 3) the Response (Form A-3) with directions to return the written response within fifteen (15) calendar days from the date of mailing to the respondent. The Association Executive may require the respondent to supply the necessary number of copies of the response. The Association Executive shall concurrently at this time mail both the complainant and respondent a list of names of proposed neutral arbitrators, along with their completed disclosure statements (Form A-21), the Notice of Right to Challenge - Tribunal Member and Availability for Hearing (Form A-4), and the Reasons for Challenge - Tribunal Member (Form A-5).(h) From the names of the proposed neutral arbitrators not disqualified by either party within fifteen (15) calendar days from the date the names are mailed to the parties under (e) of this Section, the Chairperson of the Professional Standards Committee or his or her designee shall then select a Hearing Panel within the meaning of Part 3, Title 9, of the California Code of Civil Procedure, as provided in (i) and in Section 55 of this Manual. A party's right to disqualify a proposed neutral arbitrator under this subsection is waived if the party fails to deliver Form A-5 within the time limit specified. (k) The Professional Standards Committee Chairperson or his or her designee may select an alternate from the list of proposed neutral arbitrators not disqualified to attend the hearing. The alternate will be allowed to observe the hearingprocess and may also observe the deliberations. The alternate will not participate in any phase of the process unless the alternate is asked to substitute for one of the original hearing Panel members for any reason. The alternate has the same duties of confidentiality as the other hearing Panel members.m) A party will be deemed to have waived all objection to any person whose name he or she does not challenge, as provided in Sections 55 and 56 of Part Two of this Manual. If a challenge to proposed neutral arbitrators for the Hearing Panel results in an insufficient number of members to constitute the Panel, the President may appoint other qualified Association members as proposed neutral arbitrators, who shall comply with the disclosure provisions set forth in Section 56(e)."Section 53 (changes in bold face): "(a) All proceedings, including the allegations, findings, recommendations and decisions in arbitration proceedings are confidential and shall not be reported or published by the Association, any member of a Panel or any party under any circumstances except as authorized in this Section and Section 56. Upon conclusion of the proceedings, the Association, all Panel members and the parties shall have an obligation to maintain and protect this confidentiality except where disclosure is authorized in this Section and Section 56 or required by law."

ATTACHMENT B

Professional Standards Committee
2. That C.A.R. approve substantive revisions, effective 01/01/02, to the C.A.R. Professional Standards Manual, with respect to optional notification of ethics violations to other Associations to which the member belongs as allowed by N.A.R. policy, as follows:
Section 38(d) (changes in bold face): "(d) Upon final action by the Directors, the Association Executive shall notify the complainant, respondent, the Professional Standards Committee Chairperson, the Hearing Panel and may notify the Association Executive of any other Association in which the respondent holds membership. Unless the decision provides otherwise, the President shall notify the members of the Association or the Participants and Subscribers in the MLS of any decision of the Directors ordering suspension or expulsion."Section 39(w) (changes in bold face): "(w) Upon final action by the Directors, the Association Executive shall notify the complainant, respondent, Professional Standards Chairperson, the Hearing Panel and may notify the Association Executive of any other Association in which the respondent holds membership. Unless the decision provides otherwise, the members of the Association or the Participants and Subscribers in the MLS shall be notified of any final decision by the Directors ordering suspension or expulsion."

Section 17(a) (changes in bold face):
"(a) All proceedings, including the allegations, findings, recommendations and decisions in disciplinary proceedings, are confidential and shall not be reported or published by the Association, any member of a Panel or any party under any circumstances except as authorized in this Section and Sections 38 and 39."

ATTACHMENT C

Professional Standards Committee
That C.A.R. approve substantive revisions, effective 01/01/02, to C.A.R. IBA Rules, with respect to disclosures required of all proposed neutral arbitrators as required by California law, as follows: Section 15(c), (d) & (g) (changes in bold face): "(c) Any member desiring and entitled to interboard arbitration shall submit a completed and signed complaint with appropriate filing fees as established by C.A.R. In order fora complaint to be considered filed with C.A.R., the complaint must be complete, signed by all complainants, include the appropriate filing fee and include a statement describing the controversy and the amount in dispute. The C.A.R. Executive Vice President may require the complainant to supply the necessary number of copies of the complaint. The C.A.R. Executive Vice President shall determine preliminarily whether the dispute is properly subject to interboard arbitration. Once determined, the C.A.R. Executive Vice President shall pre-screen the pool of potential hearing tribunal members to identify those least likely to be disqualified, and from those not eliminated, choose a sufficient number to designate as proposed neutral arbitrators within the meaning of Part 3, Title 9, of the California Code of Civil Procedure, as provided in Section 14 of these Rules. Within 10 calendar days of notification to the proposed neutral arbitrators, each shall deliver to C.A.R. a signed disclosure statement (Form IBA-21). A proposed neutral arbitrator is automatically disqualified if he or she fails to return the disclosure statement. (d) Upon expiration of the time limit for return of the disclosure statements, the C.A.R. Executive Vice President shall notify the otherparty to the dispute by mailing copies of the complaint, and a response form for each respondent (Form IBA-3) to the respondent with directions to return the written response within fifteen (15) calendar days from the date of mailing. The C.A.R. Executive Vice President may require the respondent to supply the necessary number of copies of the response. The C.A.R. Executive Vice President shall, at the same time, mail a list of proposed neutral arbitrators from the appropriate geographic regions, along with their completed disclosure statements (Form IBA-21), to each party.

(g) From the names not disqualified by either party within fifteen (15) calendar days from the date the names of the proposed neutral arbitrators and their disclosure statements are mailed to the parties under (d) of this Section, the C.A.R. Executive Vice President shall appoint three (3) members to serve as a hearing tribunal of neutral arbitrators within the meaning of Part 3, Title 9, of the California Code of Civil Procedure, asprovided in Section 14 of these Rules, to hear the dispute. A party's right to disqualify a proposed neutral arbitrator under this sub-section is waived if the party fails to deliver the notice of disqualification within the time limit specified. The C.A.R. Executive Vice President shall select one (1) of the tribunal members to be the presiding officer. A party will be deemed to have waived all objection to any person whose name he or she does not challenge or disqualify, as provided in Sections 14 and 15. If a disqualification of proposed neutral arbitrators results in an insufficient number to constitute a tribunal, the C.A.R. Executive Vice President may appoint other qualified C.A.R. members as proposed neutral arbitrators, who shall comply with thedisclosure provisions set forth in Section 15(c)."Section 10 (changes in bold face): "The members of the tribunal shall not discuss the proceedings and deliberations with any person(s) other than the other members of the tribunal, or C.A.R. legal counsel, except as required by Section 15(g) of these Rules, the board of directors, the C.A.R. bylaws, or as may be required by law."