Legislature(2003 - 2004)

05/02/2003 04:10 PM JUD

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HB 257 - DISCLOSURES BY REAL ESTATE LICENSEES                                                                                 
                                                                                                                                
Number 1347                                                                                                                     
                                                                                                                                
CHAIR McGUIRE  announced that the  final order of  business would                                                               
be  HOUSE  BILL NO.  257,  "An  Act  relating to  the  disclosure                                                               
requirements for  real estate  licensees, to  disciplinary action                                                               
against real  estate licensees, to  private actions  against real                                                               
estate   licensees,   and   to  real   estate   licensee   agency                                                               
relationships, fiduciary duties, and  other duties; and providing                                                               
for an effective  date."  [Before the committee  was the proposed                                                               
committee  substitute  (CS)  for  HB  257,  Version  23-LS0893\Q,                                                               
Bannister,  4/28/03,  which  was  adopted  as  a  work  draft  on                                                               
4/28/03.]                                                                                                                       
                                                                                                                                
Number 1376                                                                                                                     
                                                                                                                                
HEATHER  M. NOBREGA,  Staff  to  Representative Norman  Rokeberg,                                                               
Alaska State  Legislature, on behalf of  Representative Rokeberg,                                                               
sponsor,   noted  that   there  was   a  new   proposed  CS   for                                                               
consideration.                                                                                                                  
                                                                                                                                
Number 1392                                                                                                                     
                                                                                                                                
REPRESENTATIVE  SAMUELS moved  to adopt  the proposed  CS for  HB
257, Version  23-LS0893\U, Bannister, 5/1/03, as  the work draft.                                                               
There being no objection, Version U was before the committee.                                                                   
                                                                                                                                
MS.  NOBREGA  explained   that  Version  U  no   longer  has  the                                                               
commercial   [real  estate]   exemptions,  which   some  realtors                                                               
objected  to.    She  relayed  that  the  Alaska  Association  of                                                               
Realtors  (AAR)  has  reviewed  Version U  and,  aside  from  one                                                               
suggestion for  change, now fully  supports the bill.   The AAR's                                                               
suggestion  is  to change,  on  page  4,  line 17,  "blanket"  to                                                               
"written preauthorized", and  she said she thought  that this was                                                               
a  good suggestion.    This  change would  occur  to proposed  AS                                                               
08.88.396(d), which is a new  provision specific to Version U and                                                               
which is intended to reflect  current real estate practices.  She                                                               
elaborated:                                                                                                                     
                                                                                                                                
     The   way  [subsection   (d)  is   currently]  written,                                                                    
     basically, from  house to house  to house, you  have to                                                                    
     have a  change in paperwork  because there is  a change                                                                    
     in  your   circumstance,  and  (d)   requires,  anytime                                                                    
     there's a  change [in] circumstance, [that]  you get it                                                                    
     in writing.   Well, the  reality is, a  realtor doesn't                                                                    
     go and  change their  paperwork [for] every  house they                                                                    
     go to depending on who is  listing the house and who is                                                                    
     ... selling the  house and what office it is.   So this                                                                    
     allows  the  daily  practice  of   a  realtor  to  show                                                                    
     multiple  houses,  and not  until  they  decide what  a                                                                    
     buyer  wants  to  buy  -  which  house,  and  what  the                                                                    
     relationship is  between the buyer and  the seller, and                                                                    
     who is the  selling agent and who is  the listing agent                                                                    
     - once you  figure that out, the end,  and you're ready                                                                    
     to write an  offer, then you know exactly  what kind of                                                                    
     relationship you're  dealing with, and that's  when you                                                                    
     get the  final -  finalized in writing  - "this  is our                                                                    
     relationship" [disclosure].                                                                                                
                                                                                                                                
MS.  NOBREGA said  that although,  technically, this  practice is                                                               
not allowed  under current statute,  as a practical matter  it is                                                               
what  occurs on  a daily  basis; therefore,  [proposed subsection                                                               
(d)] is intended to merely reflect current practice.                                                                            
                                                                                                                                
CHAIR McGUIRE reopened public testimony on HB 257.                                                                              
                                                                                                                                
REPRESENTATIVE GARA asked for a  comparison between Version U and                                                               
Version Q,  which has already  been reviewed by the  committee at                                                               
the bill's last hearing.                                                                                                        
                                                                                                                                
MS. NOBREGA relayed that in  addition to amending AS 08.88.396(d)                                                               
-  found on  page  4, lines  14-17 -  for  the previously  stated                                                               
purpose, the "legislative findings  and intent" language has been                                                               
removed,  as   have  the  provisions,  including   their  sunset,                                                               
pertaining   to  the   exemption   of   commercial  real   estate                                                               
transactions.                                                                                                                   
                                                                                                                                
Number 1702                                                                                                                     
                                                                                                                                
DAVE FEEKEN,  Legislative Chair,  Alaska Association  of Realtors                                                               
(AAR),  noted that  he is  a  real estate  broker in  Kenai.   He                                                               
confirmed  that the  AAR almost  unanimously supports  Version U,                                                               
recommends the previously mentioned  change, and urges passage of                                                               
HB 257.                                                                                                                         
                                                                                                                                
REPRESENTATIVE GRUENBERG turned attention to  page 4, lines 8 and                                                               
9, and sought confirmation that  the addition of "representation"                                                               
and  the removal  of "agency"  merely conforms  this language  to                                                               
that of other statutes in Title 8.                                                                                              
                                                                                                                                
MS. NOBREGA confirmed that.                                                                                                     
                                                                                                                                
REPRESENTATIVE GARA,  noting that  the prior version  intended to                                                               
exempt commercial  real estate transactions  from the  common law                                                               
principles of agency,  referred to Section 3, page  3, of Version                                                               
U  and  mentioned  that  he   is  still  uncomfortable  with  the                                                               
possibility  that  deleting "agency"  might  also  exempt a  real                                                               
estate licensee  from the  fiduciary duties  that arise  from the                                                               
common law  principles of  agency.  He  asked Mr.  Feeken whether                                                               
the AAR believes  that under the law of  agency, fiduciary duties                                                               
between real estate agents and the public should be maintained.                                                                 
                                                                                                                                
MR. FEEKEN opined  that because the abrogation of  the common law                                                               
principles of  agency is  not included in  Version U,  a licensee                                                               
would  still   have  common  law  fiduciary   duties.    Removing                                                               
"agency",  he  posited,  will  merely  standardize  the  language                                                               
throughout  the real  estate statutes,  wherein  the licensee  is                                                               
referred to as a real estate licensee, rather than an agent.                                                                    
                                                                                                                                
REPRESENTATIVE GARA argued:                                                                                                     
                                                                                                                                
     I  guess I  worry;  it  seems to  me  ...  that if  ...                                                                    
     throughout  the   statutes  we   take  out   the  words                                                                    
     "agency", and throughout the  statutes we indicate that                                                                    
     we as a  legislature intend that there's  not an agency                                                                    
     relationship, and if it  doesn't state anymore anywhere                                                                    
     in the  statutes that there is  an agency relationship,                                                                    
     I'm worried  that what  we do  could be  interpreted as                                                                    
     trying to  abrogate the agency relationship.   Is there                                                                    
     some other place in the  statutes that says there is an                                                                    
     agency relationship  if we take  ... the  word "agency"                                                                    
     out of this section?                                                                                                       
                                                                                                                                
Number 1891                                                                                                                     
                                                                                                                                
MR.  FEEKEN said  he is  not  sure on  that point.   Instead,  he                                                               
offered that  in the practices  of real estate  agents, fiduciary                                                               
duties are  governed by the  common law  of agency, which  is not                                                               
very simple  to abrogate.   He  noted that  although a  number of                                                               
states have  attempted to abrogate  portions of common  law, none                                                               
have  them  have  done  so  successfully.   No  matter  what  the                                                               
statutes say, the  court system uses the common law  of agency as                                                               
its "guidance" in a dispute.                                                                                                    
                                                                                                                                
REPRESENTATIVE GARA said,  "So, if we did something  in this bill                                                               
just  to make  sure  that  ... the  common  law  of agency  would                                                               
continue, I take it you wouldn't have an objection."                                                                            
                                                                                                                                
MR. FEEKEN said no, because that's what's in place now.                                                                         
                                                                                                                                
REPRESENTATIVE   GRUENBERG  offered   that   use   of  the   word                                                               
"representation" on  page 4, lines 8  and 9, has the  same effect                                                               
as using the  word "agency", and suggested  that perhaps language                                                               
could be added to clarify that point.                                                                                           
                                                                                                                                
CHAIR McGUIRE  agreed to return  to that issue after  others have                                                               
had a chance to testify.                                                                                                        
                                                                                                                                
REPRESENTATIVE  GARA mentioned  that there  are four  points that                                                               
still cause  him concern.  He  turned attention to page  4, lines                                                               
14-17, and asked Mr. Feeken  what the term "written preauthorized                                                               
consent" entails and when it would come into play.                                                                              
                                                                                                                                
MR. FEEKEN explained:                                                                                                           
                                                                                                                                
     What is  common practice in  the industry is,  when you                                                                    
     take  a listing,  or  someone puts  a  property on  the                                                                    
     market, there's  a discussion of  agency at  that time.                                                                    
     And it's fairly common for  the listing agent to obtain                                                                    
     written,  preauthorized consent  to basically  show the                                                                    
     property themselves and enter  into the potential dual-                                                                    
     agency,  dual-representation  situation at  that  time.                                                                    
     That was not  clear in the [current  subsection (d)] as                                                                    
     to  what  happened  when ...  a  particular  buyer  was                                                                    
     found.   The interpretation of the  [current subsection                                                                    
     (d)] was that  that had to be  reestablished in writing                                                                    
     at that  point.  This  [proposed new language]  is just                                                                    
     to clarify what's really the practice in the industry.                                                                     
                                                                                                                                
Number 2028                                                                                                                     
                                                                                                                                
REPRESENTATIVE GARA replied:                                                                                                    
                                                                                                                                
     I  guess what  I'm worried  is happening  here is  -- I                                                                    
     mean,  I  think  we're  both  on  board  that  we  want                                                                    
     customers  to know  if there's  a dual  agency at  some                                                                    
     point,  so we  want  some sort  of  disclosure if  that                                                                    
     happens.   I'm wondering whether this  new language, by                                                                    
     allowing  a written  preauthorized  consent, gives  the                                                                    
     agent  the  right  to,  just   at  the  outset  of  the                                                                    
     relationship,  state  to  the client,  "Look,  I'm  not                                                                    
     representing anybody  else, I'm just  representing you,                                                                    
     but  would you  mind  signing this  form document  that                                                                    
     says  you're giving  me  preauthorization to  represent                                                                    
     both  sides if  that ever  occurs in  the future."   Is                                                                    
     that the kind of document we're talking about?                                                                             
                                                                                                                                
MR.  FEEKEN explained  that  the document  says  that the  seller                                                               
acknowledges - or doesn't acknowledge,  if he/she doesn't want it                                                               
to happen  - that  there is  a potential for  that agent  to move                                                               
into a  neutral position  in which  he/she will  withhold certain                                                               
confidential  information,  for  example,   what  the  seller  is                                                               
willing to  take for the property  and what the buyer  is willing                                                               
to pay  for the property.   These are  the most common  issues of                                                               
confidentiality that  the agent would  retain.  Condition  of the                                                               
property  and "all  of  that"  is still  passed  freely back  and                                                               
forth, he assured the committee.   The seller, at the time of the                                                               
listing, has the ability to  reject that option if he/she prefers                                                               
the agent to fully represent  him/her through the entire process.                                                               
He  remarked that  as a  practical matter,  such does  not happen                                                               
very often.   He mentioned that this document  would be presented                                                               
to the client  at the outset of the relationship,  and he offered                                                               
to fax members a copy so they could see the wording.                                                                            
                                                                                                                                
REPRESENTATIVE GARA said that would be helpful.                                                                                 
                                                                                                                                
Number 2172                                                                                                                     
                                                                                                                                
LINDA S. GARRISON,  Broker, AAR #1 Buyer's  Agency, first relayed                                                               
that  HB 257  would  neither  hurt nor  help  her  company.   She                                                               
remarked that  although testimony has indicated  that the purpose                                                               
of HB  257 is to  bring statute  in line with  industry practice,                                                               
there  has  been  no  mention  that  the  bill  would  offer  any                                                               
additional  public  or  consumer  protection.   She  opined  that                                                               
current statute  and common law work  well as is.   She suggested                                                               
that  the  assertion  that   new  disclosure  documentation  must                                                               
provided to the  seller every time a  different prospective buyer                                                               
looks at  a piece of property  is inaccurate.  The  agent has the                                                               
option  of   simply  telling   prospective  buyers   that  he/she                                                               
represents the seller.  In  conclusion, she said that her concern                                                               
centers around the fact that  certain members of the industry are                                                               
attempting  to change  the law  to  conform to  how they  conduct                                                               
business, rather  than conforming how they  conduct business with                                                               
current law, which, she reiterated, works well as is.                                                                           
                                                                                                                                
Number 2266                                                                                                                     
                                                                                                                                
DAVID A. GARRISON, Associate Broker,  AAR #1 Buyer's Agency, said                                                               
that  although he  could agree  with  the provision  in the  bill                                                               
pertaining to  written preauthorization and with  the addition of                                                               
"lessee" and  "lessor", and  would like to  see those  items move                                                               
forward, he thinks that the rest  of the bill could be gotten rid                                                               
of.  He  then turned attention to  page 3, line 3,  and said that                                                               
removing  "agency" from  that provision,  which pertains  to what                                                               
real estate  examinations may  include, does  not make  any sense                                                               
whatsoever   because   agency,    not   "real   estate   licensee                                                               
relationships",  is  what needs  to  be  taught.   He  mentioned,                                                               
however,  that  if  "real  estate  licensee  relationships"  were                                                               
followed  by  ", agency",  it  might  resolve  his concern.    He                                                               
offered his  belief that the  reason [proponents of HB  257] want                                                               
to eliminate "agency"  is because "they don't even  want to teach                                                               
it."                                                                                                                            
                                                                                                                                
MR. GARRISON mentioned that he was  one of the members of the AAR                                                               
who voted  not to support  [the legislation].  He  suggested that                                                               
the committee  keep the word  "agency" in this  proposed statute:                                                               
Why call  something, something else  if it's  still a duck?"   He                                                               
also  mentioned  that  he  would  like to  see  the  Real  Estate                                                               
Commission be  responsible for  creating the  agency [disclosure]                                                               
form that's  to be  presented to buyers  and sellers,  receipt of                                                               
which is  to be acknowledged  at "first substance  contact," just                                                               
as it is  responsible for creating the disclosure  form that's to                                                               
be presented  to the  buyer.   On the  issue of  disclosing one's                                                               
representation, that is  something that can be added  to one's e-                                                               
mail  messages  so   that  every  recipient  is   informed.    In                                                               
conclusion, he offered  that the bill should be  narrowed down to                                                               
just  fix  the perceived  problem  of  the  agent having  to  get                                                               
written authorization for  each buyer in order to act  in a dual-                                                               
agency capacity.                                                                                                                
                                                                                                                                
TAPE 03-49, SIDE B                                                                                                            
Number 2393                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GARA  said  he   still  has  concerns  about  the                                                               
language  contained  in what  is  now  proposed AS  08.88.396(e),                                                               
which says:                                                                                                                     
                                                                                                                                
     (e)  The failure  of  the licensee  to  make a  written                                                                    
     disclosure as required  by this section or  to obtain a                                                                    
     written acknowledgment  or consent as required  by this                                                                    
     section  does  not give  a  person  a cause  of  action                                                                    
     against the  licensee for the  failure.   However, this                                                                    
     subsection does  not limit a  person's ability  to take                                                                    
     any other  action or pursue  any other remedy  to which                                                                    
     the person may  be entitled under other  law to recover                                                                    
     for damages or losses suffered.                                                                                            
                                                                                                                                
REPRESENTATIVE GARA asked  Mr. Garrison if it  would trouble him,                                                               
as an agent, to be held  liable for not making written disclosure                                                               
of dual representation.                                                                                                         
                                                                                                                                
MR. GARRISON,  in response, mentioned  that the courts  have held                                                               
that although dual agency is not  a good idea in the first place,                                                               
it should definitely be disclosed if it  is going to be done.  He                                                               
said  he   thought  there  definitely   should  be   some  strong                                                               
punishment for  failure to disclose,  and suggested  deleting all                                                               
of [subsection] (e).                                                                                                            
                                                                                                                                
MS. GARRISON added  that any time the public's  legal recourse is                                                               
taken  away,  it  negates  the   purpose  of  having  checks  and                                                               
balances.                                                                                                                       
                                                                                                                                
CHAIR  McGUIRE, after  determining  that no  one  else wished  to                                                               
testify on HB 257, closed public testimony.                                                                                     
                                                                                                                                
Number 2295                                                                                                                     
                                                                                                                                
REPRESENTATIVE SAMUELS made a motion  to adopt Amendment 1:  page                                                               
4, line 17, delete "blanket"  and insert "written preauthorized".                                                               
There being no objection, Amendment 1 was adopted.                                                                              
                                                                                                                                
Number 2259                                                                                                                     
                                                                                                                                
REPRESENTATIVE OGG made  a motion to adopt Amendment 2:   page 3,                                                               
line 3,  after "real estate licensee  relationships," insert "law                                                               
of agency,".                                                                                                                    
                                                                                                                                
Number 2236                                                                                                                     
                                                                                                                                
CHAIR McGUIRE objected for the  purpose of discussion.  She noted                                                               
that testimony has  indicated that the common law  of agency will                                                               
apply regardless of whether there  is reference to it in statute.                                                               
She then invited Ms. Nobrega to comment.                                                                                        
                                                                                                                                
MS. NOBREGA  remarked that  all last year,  an agency  task force                                                               
has been discussing  this issue.  "We know that  agency exists as                                                               
far as real estate  goes; whether or not we want  it to exist and                                                               
have a  different type  of relationship  is something  we've been                                                               
discussing," she  added.   House Bill 257  does not  abrogate the                                                               
common law  of agency, she  stated.   In response to  a question,                                                               
she said that neither she nor the sponsor object to Amendment 2.                                                                
                                                                                                                                
REPRESENTATIVE  OGG said  that Amendment  2 would  merely clarify                                                               
that the law  of agency is something that a  real estate licensee                                                               
should know in order to pass a real estate examination.                                                                         
                                                                                                                                
Number 2164                                                                                                                     
                                                                                                                                
CHAIR McGUIRE  withdrew her objection  to Amendment 2,  and asked                                                               
whether there  were any  further objections.   There  being none,                                                               
Amendment 2 was adopted.                                                                                                        
                                                                                                                                
Number 2155                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GARA  made a  motion  to  adopt Amendment  3,  to                                                               
reinsert "agency"  on page  3, lines  13, 17, 19,  [and 28].   He                                                               
offered  that  doing  so  would  clarify  that  the  relationship                                                               
remains an agency relationship.                                                                                                 
                                                                                                                                
Number 2132                                                                                                                     
                                                                                                                                
CHAIR McGUIRE objected for the purpose of discussion.                                                                           
                                                                                                                                
REPRESENTATIVE GRUENBERG  asked whether  the same should  be done                                                               
on line 22.                                                                                                                     
                                                                                                                                
CHAIR McGUIRE  pointed out  that line 22  says "an  agent" rather                                                               
than "agency".                                                                                                                  
                                                                                                                                
REPRESENTATIVE GARA said he did  not think altering line 22 would                                                               
be necessary.                                                                                                                   
                                                                                                                                
CHAIR McGUIRE surmised that by  reinserting "agency" on lines 13,                                                               
17, 19,  and 28, Representative  Gara is simply seeking  to amend                                                               
the  areas  of statute  that  refer  to the  agency  relationship                                                               
itself, which is not what the language on line 22 refers to.                                                                    
                                                                                                                                
MS. NOBREGA indicated that Amendment 3 is acceptable.                                                                           
                                                                                                                                
Number 2064                                                                                                                     
                                                                                                                                
CHAIR McGUIRE  withdrew her objection  to Amendment 3,  and asked                                                               
whether there  were any  further objections.   There  being none,                                                               
Amendment 3 was adopted.                                                                                                        
                                                                                                                                
Number 2055                                                                                                                     
                                                                                                                                
REPRESENTATIVE GRUENBERG made  a motion to adopt  Amendment 4, on                                                               
page  4,  lines  8  and  9, to  [insert]  "agency"  in  front  of                                                               
"representation".                                                                                                               
                                                                                                                                
Number 2020                                                                                                                     
                                                                                                                                
CHAIR McGUIRE objected for the purpose of discussion.                                                                           
                                                                                                                                
MS. NOBREGA indicated that Amendment 4 is acceptable.                                                                           
                                                                                                                                
Number 2011                                                                                                                     
                                                                                                                                
CHAIR McGUIRE  withdrew her objection  to Amendment 4,  and asked                                                               
whether there  were any  further objections.   There  being none,                                                               
Amendment 4 was adopted.                                                                                                        
                                                                                                                                
REPRESENTATIVE  GRUENBERG turned  attention  back  to Section  4,                                                               
which  adds new  subsection (e)  to AS  08.88.396.   He suggested                                                               
that if  the intent of that  language is to excuse  an agent from                                                               
providing written disclosure  at a particular point  in time such                                                               
as when a buyer first views  the property, it might be helpful to                                                               
have a conceptual amendment that specifies exactly that.                                                                        
                                                                                                                                
Number 1971                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GRUENBERG  made  a  motion  to  adopt  Conceptual                                                               
Amendment [5]:  [on page 5,  lines 19-20] replace "as required by                                                               
this section" with something like  "at the time the person viewed                                                               
the property".                                                                                                                  
                                                                                                                                
Number 1959                                                                                                                     
                                                                                                                                
CHAIR McGUIRE objected.   She posited that the goal  of Section 4                                                               
is to clear  up some misunderstandings that have  occurred due to                                                               
perceptions of  what's required  at what time.   She  opined that                                                               
[Conceptual Amendment 5] would muddle the issue more.                                                                           
                                                                                                                                
REPRESENTATIVE  GRUENBERG replied  that he  merely wants  to make                                                               
Section 4 more specific than what is  done by use of the term "as                                                               
required by  this section", which,  he suggested, refers  back to                                                               
page 3, lines 14-15, which says:   "at the time that the licensee                                                               
begins to provide  specific assistance to locate  or acquire real                                                               
estate for the buyer [or lessee]".                                                                                              
                                                                                                                                
Number 1901                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GRUENBERG, after  indicating a  desire to  change                                                               
[Conceptual Amendment 5],  made a motion to word it  such that it                                                               
would replace  "as required  by this section"  with "at  the time                                                               
that  the  licensee  begins to  provide  specific  assistance  to                                                               
locate or acquire real estate for the buyer [or lessee]".                                                                       
                                                                                                                                
Number 1881                                                                                                                     
                                                                                                                                
CHAIR McGUIRE objected for the purpose of discussion.                                                                           
                                                                                                                                
Number 1874                                                                                                                     
                                                                                                                                
REPRESENTATIVE   NORMAN  ROKEBERG,   Alaska  State   Legislature,                                                               
sponsor,  noted  that  there  are  other points  in  time  to  be                                                               
considered; aside from  that which is specified on  page 3, lines                                                               
14-15, another point in time,  for example, is referenced on page                                                               
3, lines 25-26.   He offered that by using  the term "as required                                                               
by this section", the drafter  is simply economizing on language,                                                               
and thus [Conceptual  Amendment 5] is redundant.   He assured the                                                               
committee that  Section 4 will  not abrogate the  duties required                                                               
by Section 3.                                                                                                                   
                                                                                                                                
Number 1802                                                                                                                     
                                                                                                                                
REPRESENTATIVE GRUENBERG withdrew [Conceptual Amendment 5].                                                                     
                                                                                                                                
REPRESENTATIVE   OGG  suggested,   however,  that   perhaps  some                                                               
standard language from the Uniform  Commercial Code could be used                                                               
to  clarify  the  issue.     For  example,  in  dealings  between                                                               
individuals  and/or   business  entities,  the  term   "within  a                                                               
reasonable time" is used.                                                                                                       
                                                                                                                                
Number 1759                                                                                                                     
                                                                                                                                
REPRESENTATIVE OGG  [made a motion to  adopt Conceptual Amendment                                                               
6], to alter  page 4, lines 19-20,  so that it would  read:  "The                                                               
failure  of a  licensee to  make  a written  disclosure within  a                                                               
reasonable  time as  otherwise  required by  this  section".   He                                                               
suggested  that  [Conceptual  Amendment  6]  would  provide  some                                                               
clarity as  to when  written disclosure  must occur,  while still                                                               
ensuring that someone  making his/her best effort  to comply will                                                               
not be penalized.                                                                                                               
                                                                                                                                
REPRESENTATIVE ROKEBERG  argued, however,  that Section  4 merely                                                               
provides for a "licensing action,"  rather than a cause of action                                                               
for   damages.      He  said   that   although   he   appreciates                                                               
Representative  Ogg's concern,  timeliness per  se should  not be                                                               
grounds  for  a cause  of  action  for  damages; by  inserting  a                                                               
specific time,  the issue would then  be raised to a  level where                                                               
it would have to be decided by the courts.                                                                                      
                                                                                                                                
CHAIR McGUIRE  opined that the  "reasonable time"  standard would                                                               
not engender  a cause of  action because  it does not  describe a                                                               
specific  time.   She indicated  that such  language wouldn't  be                                                               
either   confusing   or   burdensome.     From   the   consumer's                                                               
perspective,  she   added,  timing   is  a  part   of  meaningful                                                               
disclosure; for  example, if disclosure of  agency representation                                                               
occurs  three months  into the  relationship, that  disclosure is                                                               
meaningless.                                                                                                                    
                                                                                                                                
REPRESENTATIVE ROKEBERG  offered, however,  that the  language on                                                               
page  3, lines  14-15,  which  says, "at  the  time the  licensee                                                               
begins to provide specific assistance",  raises questions of what                                                               
that  is  and when  it  occurs.    Therefore, adding  the  phrase                                                               
"within a reasonable  time", would make the  issue convoluted, he                                                               
remarked.                                                                                                                       
                                                                                                                                
MS. NOBREGA added  the comment that because the  timing issue has                                                               
become  a subject  of  debate, staff  in  the attorney  general's                                                               
office is working  on changes to the regulations in  an effort to                                                               
define what timeliness means.   She suggested that at this point,                                                               
nothing  more should  be added  [to the  language in  Section 4];                                                               
instead, it  would be better to  allow the issue to  be addressed                                                               
via regulation.                                                                                                                 
                                                                                                                                
REPRESENTATIVE  ROKEBERG  said  he  would  be  happy  to  provide                                                               
members  with  a  draft  copy  of  those  [proposed  forthcoming]                                                               
regulations.                                                                                                                    
                                                                                                                                
CHAIR McGUIRE said she agrees  that statute should not be written                                                               
so  specifically   that  it  results  in   the  micromanaging  of                                                               
activities  over the  long  term.   She  said  that upon  further                                                               
consideration, it is clear that Section  4 does refer back to and                                                               
is triggered by the language on  page 3, lines 14-15, which says,                                                               
"at  the  time  that  the licensee  begins  to  provide  specific                                                               
assistance to  locate or  acquire real estate  for the  buyer [or                                                               
lessee]".    She  remarked that  making  changes  to  regulations                                                               
sounds like a better way to address this issue.                                                                                 
                                                                                                                                
Number 1530                                                                                                                     
                                                                                                                                
CHAIR   McGUIRE  said   she  would   maintain  an   objection  to                                                               
[Conceptual Amendment 6].                                                                                                       
                                                                                                                                
REPRESENTATIVE  GARA   offered  that  there  are   two  different                                                               
problems being discussed.  He elaborated:                                                                                       
                                                                                                                                
     You're  supposed to  give  written  disclosure, and  we                                                                    
     want real  estate agents to give  written disclosure of                                                                    
     a  conflict.   The question  is, when  do you  give the                                                                    
     written  disclosure.   And,  generally,  I don't  think                                                                    
     people really  have a hard  time with that:   it's when                                                                    
     you contract to  do the work for the party.   But if at                                                                    
     some point  somebody wants to  better define  that time                                                                    
     period  by  regulation,  that's   fine  -  or  even  by                                                                    
     statute, that's fine.  So that's a separate problem.                                                                       
                                                                                                                                
     The problem raised by Representative  Ogg is, should we                                                                    
     let real  estate agents  off the  hook when  they don't                                                                    
     give  written disclosure  of  a conflict.    And I  ...                                                                    
     recall  the  testimony  the  same  way  as  related  by                                                                    
     [Representative  Ogg],  it was  that  ...  we, as  real                                                                    
     estate  agents,  don't  want  to  be  held  liable  for                                                                    
     failing to give somebody  written disclosure on Monday,                                                                    
     when we started the relationship,  when in fact we gave                                                                    
     it to  them Tuesday  or Wednesday or  Thursday.   And I                                                                    
     understand that.                                                                                                           
                                                                                                                                
     So, I  think that ... the  suggestion by Representative                                                                    
     Ogg -  to insert  somewhere in Section  4 that  ... the                                                                    
     written  disclosure  is  provided within  a  reasonable                                                                    
     time - is a good one,  [although] we'd have to sit down                                                                    
     and  scratch out  the  language.   But  the moment  you                                                                    
     remove liability  for not revealing  a conflict  is the                                                                    
     moment  you make  the duty  meaningless to  a consumer.                                                                    
     So,  I think  we can  achieve the  intentions of  those                                                                    
     who've  requested  this  protection,  but  also  do  it                                                                    
     carefully so that we're not  throwing the baby out with                                                                    
     the bathwater.                                                                                                             
                                                                                                                                
Number 1447                                                                                                                     
                                                                                                                                
REPRESENTATIVE OGG said that regardless  of whether language such                                                               
as is  found page 3, lines  14-15, is placed in  regulation, also                                                               
altering  Section 4  of HB  257 is  not going  to complicate  the                                                               
provision on  page 3.  All  [Conceptual Amendment 6] will  do, he                                                               
opined, is  to say that  if and  when regulations are  changed to                                                               
stipulate  when  that  trigger  is, then  a  licensee  must  make                                                               
written disclosure  within a reasonable  time from that  point in                                                               
time stipulated  by regulation.   He posited that  if [Conceptual                                                               
Amendment  6] is  not adopted,  it exempts  a licensee  from ever                                                               
providing written  disclosure, regardless  of what point  in time                                                               
is later stipulated by regulation.                                                                                              
                                                                                                                                
REPRESENTATIVE  GRUENBERG remarked  that his  concern centers  on                                                               
the fact that  "as" - which is used  on page 4, line 20  - can be                                                               
read in two  ways.  It can  be read to mean either  "at the time"                                                               
or "in the manner."   Thus line 20 could be  read to mean "obtain                                                               
a written  acknowledgement or consent  'at the time'  required by                                                               
this  section" or  "obtain a  written acknowledgement  or consent                                                               
'in  the manner'  required  in  this section."    He offered  his                                                               
belief that the  intent was to have "as" mean  "at the time," and                                                               
suggested changing the language to that effect.                                                                                 
                                                                                                                                
REPRESENTATIVE ROKEBERG argued that the  phrase, "at the time" is                                                               
the crux  of the  problem "in  the field, out  there in  the real                                                               
world."  When is that time?                                                                                                     
                                                                                                                                
REPRESENTATIVE  GRUENBERG,  in  response, pointed  out  that  the                                                               
remainder of HB 257 makes  certain requirements.  "And what we're                                                               
doing here,"  he remarked, "is  creating additional  confusion by                                                               
the way  ... we're (indisc.  - voice  faded away) because  of the                                                               
word 'as'."                                                                                                                     
                                                                                                                                
REPRESENTATIVE  ROKEBERG  said  he  respectfully  disagrees  with                                                               
Representative  Gruenberg.   "What we're  talking about  here is,                                                               
what's the  remedy; if  there is  a failure on  the part  of this                                                               
type of a  disclosure, and it's in the main  a technical problem,                                                               
then ... the bill provides for  a lesser remedy than another type                                                               
of cause of  action," he added, "unless there  was actual damages                                                               
that occurred."                                                                                                                 
                                                                                                                                
CHAIR  McGUIRE  noted that  the  issue  before the  committee  is                                                               
whether to  adopt [Conceptual Amendment  6].  She  indicated that                                                               
she is still maintaining her objection.                                                                                         
                                                                                                                                
Number 1187                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GRUENBERG  offered   a  conforming  amendment  to                                                               
Conceptual Amendment 6  such that line 20 would read:   "obtain a                                                               
written acknowledgement  within a reasonable time  as required by                                                               
this section".                                                                                                                  
                                                                                                                                
REPRESENTATIVE OGG indicated that  he would accept that amendment                                                               
to Conceptual  Amendment 6.   [No objection  was stated,  and the                                                               
amendment to Conceptual Amendment 6 was treated as adopted.]                                                                    
                                                                                                                                
REPRESENTATIVE   GARA   sought   confirmation   that   Conceptual                                                               
Amendment 6 [as amended] would  mean that liability should attach                                                               
if no written consent is provided within a reasonable time.                                                                     
                                                                                                                                
REPRESENTATIVE OGG agreed.                                                                                                      
                                                                                                                                
Number 1139                                                                                                                     
                                                                                                                                
REPRESENTATIVE GARA  made what he  called a  friendly restatement                                                               
of Conceptual Amendment  6 [as amended]:  "There  should still be                                                               
a cause of  action unless the real estate agent  fails to provide                                                               
written disclosure within a reasonable time."                                                                                   
                                                                                                                                
CHAIR   McGUIRE   asked   Representative  Ogg   if   he   accepts                                                               
Representative  Gara's  [restatement]  that "there  should  be  a                                                               
cause of action".                                                                                                               
                                                                                                                                
REPRESENTATIVE OGG said he accepts.                                                                                             
                                                                                                                                
Number 1070                                                                                                                     
                                                                                                                                
A roll  call vote  was taken.   Representatives Ogg,  Holm, Gara,                                                               
and  Gruenberg  voted in  favor  of  Conceptual Amendment  6,  as                                                               
amended.   Representatives Samuels,  Anderson, and  McGuire voted                                                               
against it.   Therefore, Conceptual Amendment 6,  as amended, was                                                               
adopted by a vote of 4-3.                                                                                                       
                                                                                                                                
The  committee  took an  at-ease  from  5:20  p.m. to  5:22  p.m.                                                               
[during which  Representative Holm  indicated a desire  to change                                                               
his vote].                                                                                                                      
                                                                                                                                
Number 1022                                                                                                                     
                                                                                                                                
REPRESENTATIVE HOLM [moved that  the committee rescind its action                                                               
in adopting Conceptual Amendment 6, as amended].                                                                                
                                                                                                                                
Number 0977                                                                                                                     
                                                                                                                                
A  roll call  vote  was taken.    Representatives Holm,  Samuels,                                                               
Gara,  Anderson,  Ogg,   and  McGuire  voted  in   favor  of  the                                                               
committee's   rescinding  its   action  in   adopting  Conceptual                                                               
Amendment 6, as amended.   Representative Gruenberg voted against                                                               
it.  Therefore,  the committee rescinded its action by  a vote of                                                               
6-1.                                                                                                                            
                                                                                                                                
Number 0952                                                                                                                     
                                                                                                                                
A roll  call vote  was taken.   Representatives  Gara, Gruenberg,                                                               
and Ogg  voted in  favor of adopting  Conceptual Amendment  6, as                                                               
amended.   Representatives Samuels,  Anderson, Holm,  and McGuire                                                               
voted  against  it.    Therefore,   Conceptual  Amendment  6,  as                                                               
amended, failed by a vote of 3-4.                                                                                               
                                                                                                                                
Number 0939                                                                                                                     
                                                                                                                                
REPRESENTATIVE  GARA  made a  motion  to  adopt Amendment  7,  to                                                               
delete Section 5.   He said he didn't think  that [HB 257] should                                                               
be applied retroactively.                                                                                                       
                                                                                                                                
Number 0928                                                                                                                     
                                                                                                                                
CHAIR McGUIRE objected.                                                                                                         
                                                                                                                                
Number 0832                                                                                                                     
                                                                                                                                
A roll  call vote  was taken.   Representatives  Gara, Gruenberg,                                                               
and Ogg voted in favor  of Amendment 7.  Representatives Anderson                                                               
Holm,  Samuels,  and  McGuire   voted  against  it.    Therefore,                                                               
Amendment 7 failed by a vote of 3-4.                                                                                            
                                                                                                                                
Number 0822                                                                                                                     
                                                                                                                                
REPRESENTATIVE HOLM  moved to report  the CS for HB  257, Version                                                               
23-LS0893\U,  Bannister, 5/1/03,  as  amended,  out of  committee                                                               
with individual recommendations and the accompanying [zero]                                                                     
fiscal note.  There being no objection, CSHB 257(JUD) was                                                                       
reported from the House Judiciary Standing Committee.                                                                           

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