Dear REALTOR,
I have some good news to share with you on the legislative front. Just last week, Gov. Brown signed into law several bills. The first bill, AB 1393 (Perea), extends tax relief on forgiveness of mortgage debt by conforming California law to federal law for the 2013 tax year. C.A.R. supported the bill so that homeowners will not be charged state income tax when they’ve had a mortgage loan modified to reduce the principal. Previously, the forgiven debt created by a reduction in principal (e.g., loan modification) wasn’t subject to federal income tax, but was taxable under state law. AB 1393 will provide much-needed state-level tax relief to homeowners facing financial hardship and is great news for homeowners.
The second bill, AB 2136 (Daly), clarifies a REALTOR’s® record retention obligations when it comes to electronic communications. In its Spring 2013 Real Estate Bulletin, the Bureau of Real Estate set in motion a need for clarification when they took the position that “texts, emails, tweets, and the like” sent or received by a licensee during the negotiation for the sale or purchase of property must be maintained under the record retention requirements of Business and Professions Code Section 10148. This is a big win for C.A.R. members and will give some welcome relief from the possibility of having to save all “ephemeral” electronic communications, such as tweets and texts. The law is effective Jan. 1, 2015, but Commissioner Wayne Bell of CalBRE has informed C.A.R. that in light of the new law, they will not be requiring retention of “ephemeral” records referred to in the bill. See the C.A.R. Q&A CalBRE Record Retention Requirements for full details.
The last bill, AB 2430 (Maienschein), is a C.A.R.-sponsored bill in response to third-party vendors charging common interest development (CID) purchasers excessive fees for documents required to be provided to buyers under the Davis-Stirling Act. In 2011, C.A.R. successfully sponsored AB 771 (Butler), which was intended to prohibit the “bundling” of unrelated document fees with the Davis-Stirling document fees. Despite AB 771, third party vendors continued to “bundle.” AB 2430 provides specific document delivery and disclosure standards and tightens the anti-bundling provisions in connection with condominium sales and homeowner association (HOA) document delivery requirements.
Speaking of the legislative front, we’ve heard that C.A.R. members are always seeking fresh content for their various marketing vehicles – blogs, newsletters, web sites, etc. Since so much of what C.A.R. does in the legislative arena protects not only REALTORS®, but their clients as well, C.A.R. has created Homeowner Legislative Facts, a monthly compilation of articles about laws and legislation that your clients may find valuable. At least once a month, C.A.R. will post new articles to this section so that you can copy and paste them into your own marketing materials. And now we’ve made it even easier to share with your clients via social networking. Get the facts here and click on the social media icon of your choice below each section.
Lastly, as you know, one of the things that separates REALTORS® from real estate agents is the Code of Ethics – the guiding principles that help them make decisions. One way to do this is to show that there are consequences for bad behavior. Therefore, beginning Aug. 1, C.A.R. will publish the names of those members who are found in violation of the Code of Ethics and meet the criteria after that date. Only those found in violation and are disciplined with a reprimand, fine, suspension, or expulsion will be published. C.A.R. will not publish names of those who just made a mistake and received a warning or stand-alone education. The rationale is that members reprimanded are usually those that repeat an offense or do something significantly wrong – the rest get warnings and education. The publication on car.org will include the name and photo of the member found in violation, a synopsis of the facts on which the finding of violation was based, the articles of the Code of Ethics, and the discipline imposed, and may include a rationale for the severity of the discipline, such as repeated offenses, etc. Local associations have the option to republish the information in their local members-only publications. We actually hope the list will be small and will shrink as members become more conscious and thoughtful of crossing the ethics line and elevate the professionalism we all seek to achieve. Finally, if you are rusty on the Code of Ethics, now is a particularly good time to refresh your understanding with C.A.R.’s Ethics CE course, which is available at no cost through C.A.R.’s 12 free hours of CE courses. View the full details of this effort here.
Have a great summer!
Sincerely,
Kevin Brown
2014 President
CALIFORNIA ASSOCIATION OF REALTORS®