GRRA Members, As you know, things are moving very fast in the Gen. Assembly toward a budget resolution. Dormant for weeks have been a few bills that we strongly lobbied for or against. One of our talking points in Raleigh focused on a provision in the regulatory Reform Bill. Cady references this provision below that discourages consumer protection in real estate transactions. Here are the phone numbers for Senators: Trudy Wade, 919–733–5856 Phil Berger, Senior, 919–733–5708 Gladys Robinson, 919–715-3042 Please see the talking points below in Cadys email and make a call today if you can by 3 pm. Nicole Arnold, GAD ------------------------ Good morning everyone, As you will recall during our legislative days, one of our talking points was to oppose Section 1.6(a) of SB 734, as passed by the Senate, as we were very concerned about the shift in liability and the protection of the consumer. That provision will allow not just employees of companies that own property to sell or lease the same, but also the employees of sister companies without a license. You will also recall that the NC Real Estate Commission voted to oppose this provision at their Commission meeting on May 21st. This provision has now shown up in another Senate bill. SB 761 was heard in Senate Rules this morning and includes the provision, with a couple of changes, in Section 2.12(a). I spoke against this provision and got a lot of heads nodding in agreement. But we need people calling the Senators from their districts – especially Republicans. Can you please reach out to them ASAP and ask that he talk to Senator Berger and Senator Wade and ask that they remove this provision from the bill. The talking points are below. This bill will be voted on by the Senate in the afternoon session today at 4 pm. One thing they did add was a provision that the person acting as a broker for the company must disclose that they are not licensed to the buyer or lessor. However, this would not have to happen at anytime prior to the closing of deal which as we all know, is too late. Below are a few reasons why this concerns NCAR and NCREC: 1. IMPRACTICAL, IRRESPONSIBLE – Constituents deserve the protections provided by licensed brokers who understand the risks and finer details of purchasing or leasing property – mineral rights, easements, fair housing laws, etc. Employees may have the best intentions, but be ignorant of important issues in real estate transactions. 2. NO RECOVERY – Consumers are being hung out to dry. Employees have no skin in the game – they have no licenses to be revoked and the company has no assets. You cannot go up the chain for recovery with an LLC like you can pierce the Corporate veil. Leaving all remedies useless. Additionally, if they were harmed by a licensed broker, they would have access to the NC Real Estate Commission recovery fund. . 3. UNFAIR TO THE CONSUMER – The exemption benefits owners at the expense of buyers. Corporations can only act through their officers and employees, and the law dictates that actions of corporate employees are actions of the corporation’s board. Shareholders (owners) cannot sell the corporations property, per a Court of Appeals. LLCs, GPs, and LLPs can operate through their member owners, but employees’ actions are not deemed by law to be actions of partners or members. This provision allows LLCs to set up shell corporations to serve as the official seller of the property. Once the LLC is dissolved, there are no assets. 4. LOW LICENSING COST – Licenses aren’t prohibitively expensive: $400 for a pre-licensing course, $30 for an application, $100 for the license test, and $120 per year for two continuing education courses and license renewal. 5. BREAKS AN ESTABLISHED PRECEDENT – We would be stepping out on a limb compared to the 49 other states. Other states require EITHER that the employees be part owner of the property OR that their employer owns the property they are leasing or selling. 6. EASY MONEY FOR BAD ACTORS – Individuals harmed by licensees can go after their license and take advantage of the NC REC recovery fund. This bill removes any real consequence for dishonest salespeople. 7. NC REAL ESTATE COMMISSION – The state’s consumer protection agency related to real estate transactions voted to oppose this provision at their Commission meeting on May 21st. Please let me know if you hear anything from your Senators.
Posted on: Wed, 30 Jul 2014 18:02:50 +0000
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