NYS REAL ESTATE BOARD MEETING
August 2, 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:
George Haggerty, representing Benjamin Lawsky, Superintendent, Dept. of Financial Services
Trisha Ocona Francis
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 Wallunder, NYSAR
Michael Kelly, NYSAR
John Manfred, Manfred RE Learning Center
Neil Garfinkel, Real Estate Board of NY (REBNY) counsel
Eileen Taus, REBNY
Gary Leogrande, Keller Williams Realty
P.G. Mercurio, Hudson Gateway MLS
Richard Haggerty, Hudson Gateway Assoc. of Realtors
Claude Szyfer, Stroock, Stroock & Lavan
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 May 2, 2012 meeting summary.
S. Erickson made a motion to approve the summary of the public hearing and board meeting held on May 2, 2012. The motion was seconded by D. Ramirez and passed unanimously.
M. Vigil shared application processing statistics (Jan-June 2011 and 2012) showing an increase in the number of real estate sales and broker original and renewal applications processed. He also shared a breakdown by counties of the number of original and renewal broker and sales licenses, stating that downstate has been the most active followed by Albany, Erie and Dutchess counties.
J. Goldman gave an enforcement update. He stated that the Department recently hired four new investigators; two to work out of Buffalo and two to work out of NYC. He also shared that the new fillable complaint form on the Department’s web site is very successful. A. Qureshi shared that the department is adding the complaint form to our web site in other languages. Currently, the form is available in English or Spanish; translations into Chinese, Korean, Russian, and French are being processed.
J. Goldman next shared complaint statistics: In 2011, 919 real estate complaints were received. Of those, 115 were referred to Counsel’s office after investigation, for further review and possible disciplinary action; 65 were abandoned; 304 are open in the investigation stage; 12 licenses were suspended; 31 licenses were revoked; and almost $117,000 was collected in fines. So far in 2012, 548 complaints have been received; 5 licenses have been suspended; 2 licenses have been revoked; and almost $45,000 has been collected in fines. He then explained the complaint process. T. Ocona Francis expressed concern that many complaints are not filed as the complainant does not want his complaint information shared with the accused. M. Vigil explained that as part of due process requirements the information must be shared with the accused to allow for their input. J. Goldman agreed and further explained that if a general complaint is received (non-transaction; non-specific) that information would not be shared with the accused.
Mr. Qureshi spoke about market fraud trends and shared that the department has been participating in the Market Fraud Working Group meetings sponsored by the Department of Financial Services, which discusses current market fraud trends and includes representatives from several state and federal offices such as the FBI and the US and NY Attorney General. During these meetings, it was discussed that an increase in Suspicious Activity Reports (SARs) were filed alleging mortgage fraud in 2011 (92,000 compared to 70,000 in 2010 and 67,000 in 2009). In addition, New York State was listed as the third highest state (after CA and FL) in market fraud SARs filings. NYC counties have the highest market fraud SARs in the State, and brokers (as well as appraisers, attorneys and title companies) are listed as participants in these activities. Predators target the weak and look for people nearing foreclosure, and in many instances convince the homeowner to sell or transfer the property, only to resell it at a higher price and pocket the profit. M. Vigil shared how the department has been having informal meetings in various communities throughout NYS to bring awareness to issues such as this.
S. Erickson spoke for the education committee, and stated that a meeting was recently held to discuss three issues. They first discussed reviewing the broker curriculum for any possible changes, and it was decided to conduct a survey to get schools input. Next, they discussed ce for diversity and the possibility of expanding the topics approved for ce; committee members will be provided with a current list of approved topics. Finally, they discussed ce for agency and decided to first review information on complaints received regarding agency.
D. MacKenzie spoke for the trends committee, and stated that the committee discussed revising regulation 175.23 Records of transactions to be maintained, and revising regulation 175.1 Commingling money of principal. Both issues are still being worked on.
W. Clark updated members on the proposed advertising regulations. Members were provided with a copy of the final draft. She shared that these new regulations will update the current vague regulations, and asked for a motion to advance the regulations for publication to allow for any public comments to be made. Any comments made will need to be discussed by board members, and then the board can vote to adopt the regulations. Board members made a few minor changes.
D. MacKenzie made a motion that the advertising regulations be advanced for publication in the NY State Register to allow for public comment. The motion was seconded by D. Ramirez and passed unanimously.
G. Haggerty, representative from the Department of Financial Services, shared how his agency deals with title insurance and recently has been discussing ethical moral hazards with realtors owning title agencies, such as information being held from the consumer and brokers handling sale of the title. Members received a copy of an article published in the Real Property Law Journal by Denise Ward about this topic. Mr. Haggerty asked that the board discuss this topic. J. Goldman shared that the department is seeing an increase in “one stop shops” (attorney, broker, title company in one office) in upstate New York; A. Qureshi stated that it is also increasing in downstate New York. M. Vigil suggested a committee be formed to work with G. Haggerty to develop a proposed opinion for discussion at a future board meeting. Members of the committee are G. Haggerty, W. Clark, J. Goldman, D. Dworkin, D. MacKenzie, S. Erickson, D. Leno, D. Rumsey.
PUBLIC COMMENT PERIOD
N. Garfinkel thanked the department and board members for their work on the advertising regulations, and feels they will be very helpful.
G. Librandi suggested some additional minor changes to the proposed advertising regulations.
M. Vigil asked for a motion to adjourn the meeting.
D. Leno made a motion to adjourn the real estate board meeting. The motion was seconded by D. Dworkin and passed unanimously. The meeting was adjourned at 11:50am.
PUBLIC HEARING SESSION
The public hearing was opened at 11:51am; there were no comments; the public hearing was closed at 11:52am.