NYS REAL ESTATE BOARD MEETING
November 13, 2012
The meeting was held at the Department of State, Division of Licensing Services, 99 Washington Avenue, Albany, 123 William Street, NYC, and 65 Court Street, Buffalo (via video-conference and live web cast) and included an open public hearing session on general real estate issues following the Board meeting.
List of attendees:
Trisha Ocona Francis
George Haggerty, representing Benjamin Lawsky, Superintendent, Dept. of Financial Services
Department of State Staff:
Marcos Vigil, Deputy Secretary of State
Lisa Harris, Director, Division of Consumer Protection
Priscilla Toth, NYS Association of Realtors (NYSAR)
Anthony Gatto, NYSAR
Michael Wallender, NYSAR
Michael Kelly, NYSAR
John Manfred, Manfred RE Learning Center
Neil Garfinkel, Real Estate Board of NY (REBNY) counsel
Don Cummins III, Esq., Hudson Gateway Assoc. of Realtors
Richard LeBland, Human Resources Admin. (HRA)
Zivko Pulisic, Exec. Dir., HRA
Tom Cusack, Cusack Center
Dave Carswell, Calamar
CALL TO ORDER, INTRODUCTIONS and OFFICIAL ATTENDANCE
The meeting was called to order at 10:35am. Deputy Secretary of State Marcos Vigil made opening remarks, roll call was taken and a quorum was declared.
SUBCOMMITTEE AND DEPARTMENT REPORTS
M. Vigil asked for a motion to approve the August 2, 2012 meeting summary.
A motion was made to approve the summary of the board meeting and public hearing held on August 2, 2012. The motion was seconded and passed unanimously.
J. Bilello spoke about a referral sent to the Department from the NYC Human Resources Administration (HRA), who provides a variety of public assistance to residents of NYC including assistance with finding and renting an apartment. Effective in March, 2011 HRA public assistance clients seeking apartment rentals in NYC are no longer responsible for any broker fees in excess of the amount issued by HRA, and HRA currently pays 50% of one month’s rent as the broker commission. The referral involved four brokerage agencies from various counties in NYC who collected brokerage fees from HRA and also collected an additional fee from the client (after signing an agreement with HRA that they would not collect additional fees from the client). These files are being prepared for submission to counsel’s office for review and a decision on disciplinary actions.
J. Goldman next shared complaint statistics: So far in 2012, 800 complaints have been received; 8 licenses have been suspended/revoked; and almost $77,000 has been collected in fines.
S. Erickson spoke for the education committee, and stated that the committee will discuss diversity as a continuing education topic once the current pending regulations are adopted. Regarding the review of the broker curriculum for any possible changes, a survey was developed and approved by the committee to get schools input. The survey asks schools if there are any topics they feel should be included in the broker curriculum, if they feel enough time is dedicated for each topic, and if they feel enough time is dedicated specifically to law of agency.
D. MacKenzie spoke for the trends committee, and stated that the committee approved draft changes to regulation 175.23 Records of transactions to be maintained, which will allow electronic records to be kept, in addition to some housekeeping changes.
D. MacKenzie made a motion to send the draft changes to regulation 175.23 on through the Department’s approval process. The motion was seconded and passed unanimously.
W. Clark spoke about broker rebates, and shared that the Attorney General’s office had turned over information to the Department concerning the general real estate market place and what can be done to encourage alternate business models. One issue they are looking at is broker rebates, which are permitted under statute but there is a wide false belief that brokers cannot rebate a portion of their commission or offer other incentives to attract new business. The second issue involves the false belief that there are set commission rates in certain areas. They have asked for assistance from the Board on these issues. She stated that a few options would be an informal advisory opinion or adoption of a regulation. E. Spinola asked W. Clark to send the board members the Department’s opinion on broker rebates for their information. J. Goldman shared that questions about broker rebates and advertising are frequent to the Department. He feels there is confusion because the statute is vague and many believe they cannot split a commission if the other person involved is not licensed. He feels the statute should include language to say no split of commission is allowed “if the other person is involved with the case in a way that requires a real estate license”. This issue will be turned over to the trends committee for further discussion and recommendation.
T. Ocona Francis began a conversation about allowing the status of a real estate licensee to become “inactive” for a period of time, so that when they decide to go back to work they will not have to start the process from the beginning. She said they would be required to renew their license and complete their continuing education during that period. J. Bilello stated that it is in the statute that a licensee has two years from the date of expiration in which to renew without penalty. T. Ocona Francis feels the additional status of “inactive” is necessary. A. Penzabene explained that this would require a change to the current on-line system, as the current system requires a salesperson to be linked to a broker in order to become licensed or renew their license. She said this could possibly be accomplished when other upgrades are made to the system in a few years. A member suggested it would be helpful to find out what other states do. W. Clark suggested a new committee be formed to further discuss and make a recommendation on this topic. Members of the committee are W. Clark, T. Ocona Francis, S. Erickson, D. MacKenzie, and D. Ramirez.
M. Vigil shared that the Governor recently signed an executive order waiving fees for licensees in order to acquire replacement of documents, such as a license or ID card, as a result of Hurricane Sandy. W. Clark will send a copy of the executive order to the board members.
T. Ocona Francis said that she believes there are a lot of people selling real estate unlicensed. M. Vigil stated that the Department is aware of this issue and that it is a big part of most complaints that are investigated. He said the Department has been sharing information with other agencies, DA offices, AG office, etc. and getting information out to the public as much as possible, to advise buyers to verify licensure of a real estate agent before proceeding.
PUBLIC COMMENT PERIOD
T. Cusack agrees the Department should institute an “inactive” status for licensees, as a great deal of effort is put into acquiring their license. He next stated that he is aware of a few students from his school that have been issued their license without completing their qualifying education course. He’s concerned about modern technology and the possible issuance of fake licenses. A. Penzabene stated that the department conducts audits of schools throughout the year, and also verifies completion of a course by using the lists sent in by the schools. When the system is upgraded, schools will be required to confirm an applicant has completed a course before a license will be issued. T. Cusack also stated that he believes the exam is not hard enough and should be more challenging. K. Simon stated that the exam is based on the curriculum and is a test for competency to enter into this field, not far advanced at this point.
M. Vigil asked for a motion to adjourn the meeting.
A motion was made to adjourn the real estate board meeting. The motion was seconded and passed unanimously. The meeting was adjourned at 11:45am.
PUBLIC HEARING SESSION
The public hearing was opened at 11:45am.
Z. Pulisic read a statement issued by HRA regarding the above mentioned issue of brokers who collected brokerage fees from HRA and also collected an additional fee from a client (after signing an agreement with HRA that this amount represents the entire broker fee and they would not collect additional fees from the client). He said HRA is asking for assistance from the Department and the Board to help stop this action. Discussion followed about whether someone other than the client, i.e. the landlord or owner, could be required to pay the other half of the broker fee; further discussion needs to take place.
The public hearing was closed at 12:05pm.