Commission and Division of Real Estate Sunset Update
On Wednesday January 25th, CAR General Counsel, Scott Peterson testified at the pre-hearing on the Division of Real Estate Sunset before the Senate Business, Labor and Technology Committee. This pre-hearing was an opportunity for the committee to hear from the Department of Regulatory Agencies’ Policy Analyst and stakeholders on the DORA Sunset Report. Peterson shared CAR’s comments on the report, explaining that CAR believes the Division and Commission should be continued and continue to regulate licensees.
Peterson also informed the committee of our support for Recommendations 4, 5, and 7, which would increase the qualifications necessary to become an employing broker (4), amend state statutes dealing with referral fees to conform with RESPA (5), and revise license renewal dates from anniversary dates to December 31 of each year (7).
However, CAR strongly disagreed with Recommendation 2, related to “standard forms”, which is troublesome for our members for several reasons. Removing “standard” and “including those” language is inconsistent with established legal precedent stemming from the Conway Bogue case that has defined the practice of real estate brokers for the past sixty years. In this case, the Colorado Supreme Court determined that when a broker fills out a form given to them by their clients it does not constitute unauthorized practice of law.
If this ruling were changed by the Sunset recommendation a real estate licensee would only be able to complete forms that are promulgated by the Real Estate Commission and any other form, no matter how innocuous, would need to be prepared by an attorney. These simple tasks could include filling in the parties on a lease or completing a builder’s new construction contract with the sale price and closing date. Accordingly, this proposed change could reduce the authority of broker licensees and expand the role of attorneys in real estate transactions. This type of substantial change that erodes the rights of the 40,000 real estate licensees throughout the state should only be undertaken with substantial evidence of clear and direct consumer harm rather than the vague and nonspecific references at issue in the Sunset Report.
Further, REALTORS® care deeply about their profession and do not wish for their consumer clients to be harmed. And in Colorado there are a variety of remedies available to consumers for their protection. Colorado is one of a few states that require maintenance of errors and omissions professional liability insurance by every licensee. In addition to civil recourses, the Division of Real Estate also maintains an extensive regulatory framework and a qualified staff of investigators to look into addressing complaints against licensees if a member of the public feels they have been harmed in any manner.
Finally, CAR also addressed Recommendation 9 at the pre-hearing. CAR informed the committee that requiring the Commission to develop guidelines for the annual commission update course instead of developing the course itself will curtail the supply of instructors, and thereby restrict the availability of course offerings. It would also overburden the Division who would need to not only develop the guidelines, but also approve, police and audit the classes developed by the instructors.
The Senate Business, Labor and Technology Committee will take these comments from stakeholders and the DORA policy analyst into consideration in drafting a bill. That bill will be calendared for future hearings in committee and follow the regular legislative process. Continue reading future editions of the Capitol Connection to stay apprised about the Sunset Review and CAR’s work on your behalf.
Senate Bill 17-085: Increase Documentary Fee and Fund Attainable Housing
Last Friday, the Legislative Policy Committee (LPC) voted to oppose SB17-85, Increase Documentary Fee & Fund Attainable Housing introduced by Representative Rachel Zenzinger (D-Arvada). This bill would raise the doc fee for recording or filing to five dollars. The first dollar would go towards electronic filing costs under existing law and the remaining four dollars would go towards a statewide attainable housing investment fund. At least twenty-five percent of funds collected would be allocated to financial assistance for lower income households to finance, purchase, or rehabilitate single family residential homes or provide financial assistance to nonprofits and political subdivisions that make loans to persons for that same purpose.
CAR believes increased documentary are akin to transfer taxes and fees; they are regressive. They wind up creating barriers to homeownership by impacting those that can least afford it because they increase the amount of money needed to purchase a home. Moreover, these types of transfer taxes and documentary fees are extremely sensitive to market forces making the frequency of transactions and value of property variable in relation to the strength of the economy, which makes these types of funds a poor revenue source for affordable housing. Finally, it is likely that transferring a portion of this fee to a different fund is unconstitutional.
House Bill 17-1033 Colorado Water Conservation Board Grants Loans Dredge South Platte Basin Reservoirs
Last Friday, the Legislative Policy Committee (LPC) voted to support HB17-1033, Colorado Water Conservation Board Grants Loans Dredge South Platte Basin Reservoirs introduced by Senator Bob Gardner and Representative Paul Lundeen, both Republicans from Colorado Springs. The bill appropriates $5 million from the Colorado Water Conservation Board Construction Fund to the Colorado Water Conservation Board in the Department of Natural Resources. This loan and grant funding would be used for dredging the existing reservoirs in the South Platte River Basin to restore their full storage capacity.
CAR understands the state’s need for water storage and the importance of Colorado decision-makers being effective stewards of these critical natural resources for future generations of Coloradans. The protection of water is also an important aspect of preserving our environment that CAR supports in our legislative policy statements. Similar to last year’s South Platte Water Storage Study bill, this legislation will increase the ability for the state to prioritize water storage operations.
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REALTOR® Day at the Capitol: February 8th is SOLD OUT
We will not have on-site registration for this event. For our attendees, we are looking forward to seeing you on February 8th. Lunch will begin promptly at 11:30AM featuring Keynote Speaker Henry Sobanet, Director of the Office of State Planning and Budgeting. The afternoon program will take place in the Old Supreme Court Chambers of the Capitol with visits from Lt. Governor Donna Lynne and caucus leadership from both the House and Senate.
Colorado Project Wildfire
Developed by the Colorado Association of REALTORS®, Project Wildfire is designed to help reduce the destruction of land, property, and lives. Working in partnership with other like-minded fire prevention organizations across the state, local REALTOR® associations are bringing education and awareness, as well as access to resources, directly to residents in their local communities. To learn more about Colorado Project Wildfire, click here.
Transit Alliance Spring 2017 Citizen’s Academy
The Transit Alliance is hosting their annual spring 2017 Citizen’s Academy from April 5, 2017 – May 17, 2017. This is a great opportunity to discuss transportation, community development, and sustainability in Colorado. The class is limited, so please get your applications in soon. More information and the application can be found here. The deadline to apply is March 17, 2017.