Submitted by Industry Issues Chairman Dave Somers

Your Industry Issues Key Working Group is covering a number of regulatory and legislative issues. Some of these issues are new on our agenda and some have been on our radar for a few years now.  While we work all year on matters that have an effect on our ability to work in the real estate field and to protect private property rights, we are always in full swing this time of year with the legislature in session. The following is an update in some of the more important items we are working on.

While we are not all in agreement on whether all licensees need a business license along with their real estate license, state law certainly seems to indicate that you do. Discussions at the Alaska Real Estate Commission in the recent past have shown a consensus among the commissioners that the business license is required and that failing to obtain one could be considered a violation of license law. Our committee is working on legislation that will add a real estate licensee to the list of those exempted from a business license in AS 43.70.105. A real estate licensee already has to obtain a license from the Division of Corporations, Business and Professional Licensing. Making a licensee obtain an additional license adds another layer of fees. The change will not affect the need for a real estate office to obtain a business license,  it will only affect those licensees working in that office.

We ran into a problem last year with the process for updating a real estate license to associate broker status. Current law mandates that after you go through the process of upgrading your license you need to take post licensing education within one year. In rare occasions a licensee may not be able to complete the requirements or may choose not to do so. Under current law the licensee would lose all license status and their ability to work in real estate. We are drafting language that would allow the Alaska Real Estate Commission to re-issue the lower status license if the upgraded license requirements are not met.

There have been a number of concerns voiced over the current content and format of the Consumer Pamphlet. By statute, the Alaska Real Estate Commission(AREC) has the duty, through the creation of regulations, to issue the Consumer Pamphlet. The Alaska Association of Realtors will be requesting the AREC to review the content and format of the form and will be giving them changes that we are recommending. At the time of this writing our committee has not decided on the final draft, but the following changes are in the  draft under consideration:

• Provide separate forms specifically for each of the following types of licensees:
• Residential sales (which would also be the default form for any unusual instances)
• Commercial sales and leasing
• Residential property management- specifically for owner or properties
• Residential property management- specifically for tenants
• Change the format of the document. Create a new base form (legal size if necessary, letter sized preferred) with a signature tear off piece for the lower portion of the form.

The new forms would have a common introduction for the pamphlet with explanations and other information required by statute. The last page would then be for the separate, specialized areas. The emphasis throughout will be on clarity for the licensee and client/customer and ease of use. The draft has additional licensee signature lines for teams and it has also been suggested that a line be added for the consumer to print their name. We will also ask that the AREC write regulations on how the form should be administered in an effort to have all licensees using the form the same way and to make it easier for instructors to teach the proper use of the form. Don’t be looking for a quick change to the form. If the AREC decides that our request has merit, the earliest they will look at it is the March meeting. From there it grows into a regulation project that will take at least 6 or more months to complete. During that process we will all get another chance to look at their proposed regulations and to comment during the public notification process.

During the last session AAR came out in opposition to a bill initiated by the insurance industry that would allow mid-term cancellation of insurance policies on homes that they considered abandoned. It was our opinion that homeowners could be severely damaged by the misuse of this law and we were able to stop the bill in committee. It will be reintroduced this session. The lobbyist for the insurance industry is asking us for our input this time around. We are in discussions on adding language that would balance the needs of the insurance industry while protecting the rights of homeowners. While we need to remember that the losses that result from the damage to truly abandoned homes cost all of us in the form of increased rates, they need to remember that not all houses without occupants are “abandoned”.  Simple examples would be a house left empty 90 days or more while a legislator is in Juneau during the legislative session, or a home left unoccupied while a retiree enjoys part of their winter in a warmer climate. Should they or the homeowner that was just transferred and is trying to sell their home be in jeopardy of having their insurance canceled?  We think not and will seek language that we can put into the law that will hopefully balance everyone’s needs.

Ever since the attempt to raise the real estate license fees in a dramatic and unjustified manner in the last licensing cycle showed the gross ineptness in the Division of Occupational Licensing’s accounting process, AAR has been constantly monitoring the Division for signs of progress. For a while it appeared that they were attempting to make progress. We have asked that the AREC be given a budget for their review and input, that they be given access to the ongoing posting of expenses so that they can monitor them for correctness, and more control and input in the investigative process. It appears that they are making progress in the investigative arena, but are falling flat everywhere else. We are, once again, looking for help from our legislators to put pressure on the Division to correct these deficiencies. We are approaching another license fee cycle at the end of the year and we would like to avoid the battle we went through last time around. We, as an industry, are prepared to pay our fair share for license fees. We simply need to have faith in the process that is taken to arrive at those numbers. Due to the history of the accounting practices of the Division and their grossly negligent attitude that the AREC does not have the right or need to see a budget or to be involved in the accounting process we have the right to harbor serious doubts as to whether they can correct the situation on their own.

We should all be following the Anadromous Stream Ordinance that is affecting the Kenai area. Simply put, the local borough established regulations on the use of land near waterways that have a certain type of fish population. The ordinance results in the taking of private property, creates an ordinance that could easily be interpreted in an overreaching manner by local officials, and may not be the best way to protect the species that they are concerned with. AAR put the local Board in touch with a law firm that works with NAR on issues like this. They were able to supply the local board with the material needed to stall the misguided effort, but we still don’t know if they will be able to reverse the action taken. For more information on this issue go to the AAR website.

There are more issues that we are monitoring and working on. If you have questions on issues not mentioned here please feel free to contact me at dsomers@alaska.net. We will be updating you on the above issues and others that may come up during the legislative session.