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Consumer Rights - Idaho Commerce & Human Resources Committee Passes HB135

Posted by Heinrich Wiebe in Fizbomap, For Sale by Owner, News, Consumer Rights on March 6th, 2007

The Idaho Senate Commerce & Human Resources Committee voted unanimously to pass HB 135. Much attention was given to our presentation which is outline as follows:

ISSUE: HOUSE BILL NO. 135
I’m Heinrich Wiebe. I broker, co-own, and manage Genius Realty. Me and my company represent the future of real estate. We integrate technology and real estate services on behalf of buyers with sellers who are dissatisfied with the antiquated and unfair real estate model that the Nation Association of Realtors has patterned since the 1950’s.

Whether the industry of real estate likes it or not, the market is undergoing a paradigm shift. If you are wondering what that looks like, think about what has happened to stock trading, investment or the travel industries.

To my surprise, this bill passed the house without opposition.
I don’t believe anyone presented against this bill.
That’s why I’m here to day.

The Idaho Business Review quoted Jim Patrick, a member of the Business Committee, as saying, “It sure is attractive when you see some really cheap rates for real estate fees; most people aren’t sophisticated enough and this is the largest purchase they’ll ever make.”

Personally, I find it offensive that he considers real estate owners too dumb to handle their own affairs without the aid of Realtors. Let me remind you that it takes a two week course, and passing grade on the state test to get a license. In fact, it’s such a low threshold to obtain a license that real estate agents aren’t considered professionals, and they don’t have a fiduciary duty according to the Idaho State statues.

This bill should not pass.
Here’s three Reasons:
1. It avoids clear definition.
2. It is redundant to existing statues.
3. It takes away consumer rights while limiting competition.

Let me direct you to a section of House Bill NO 135,… please see Page 3, paragraph 2 and 3, line 11-18 READS:
54-2086
11 If a customer has entered into a compensation agreement or customer
12 services agreement with the brokerage, the brokerage shall have the obligation
13 to be available to the customer to receive and timely present all written
14 offers and counteroffers.
15 (3) The duties set forth in this section are mandatory and may not be
16 waived or abrogated, either unilaterally or by agreement.
17 (4) Nothing in this section prohibits a brokerage from charging a sepa-
18 rate fee or commission for each service provided to the customer in the trans-
19 action.

This bill nor existing statue defines PRESENT and AVAILABLE. Clear understand of these terms are critical to correct interpretation.

Let me begin with what does it mean to “present”?

Is the word present used as an adjective (the workers are present),
as a noun (presents Law The document or instrument in question)
or as a verb (to present). Can offers present themselves, or do they need a ‘presenter’.

If a presenter is required, that also requires a presentation, right? If so, what would that minimum requirement look like? Where is it defined?

If this legislature intends to make this presentation mandatory and un-wavable, then wouldn’t it be important to be effective too? What is the standard for that?

Presentation defined - Setting forth in words and visuals a speech to enlighten an audience and/or persuade them to commit themselves to a course of action. An effective presentation is usually planned, organized, and tailored to a specific audience to help facilitate the behavior change desired by the presenter.

Ask yourself what does it mean to be available?
How should the term available be considered?

In the business of real estate, time is found to be of essence. Is Monday through Friday, 8am to 5pm except holidays good enough? Are weekend hours required? Can an agent be considered available if they are in another country? What if they have another full time job?
How should the standard be found with such ambiguous parameters?

2. This bill is redundant to existing statues
REDUNDANCY OF LAW - Existing Statue
54-2051. Offers to Purchase.
(1) A broker or sales associate shall, as promptly as practicable, tender to
the seller every written offer to purchase obtained on the real estate involved,
up until time of closing, and shall obtain the signature of the seller or seller’s
agent verifying time and date such offer was received. A purchase and sale
agreement signed by the prospective buyer shall be deemed in all respects
an offer to purchase.

As you read this statue you will notice that it addresses the same issue as HB135. However, this statue turns on the word ‘TENDER’.

TENDER vs PRESENT.
Let me ask you to focus on this issue. What is the standard?

Here’s a definition of Tender:
1. A formal offer, as:

a. Law An offer of money or service in payment of an obligation.
b. A written offer to contract goods or services at a specified cost or rate; a bid.
2. Something, especially money, offered in payment.

Ask yourself why would Idaho Association of Realtors bring this bill? Have they done so with the intent to protect consumer’s best interest or to protect their old model of business?

Jeanne Jackson-Heim, executive director for the Idaho Real Estate Commission, was quoted by Inmann News as saying, she wasn’t aware whether the commission has received complaints over companies that offer limited services to clients. “We don’t keep track of complaints necessarily unless they develop into investigations.”

I made a formal request to the Idaho Real Estate Commission for anything pertaining to this draft legislation and their review. All I got back were the minutes of the board meetings for the past year and a letter stating that they were invoking Attorney client privilege.

I didn’t get back a list of consumer complaints, or a lists of investigations. What I did notice is the DOJ came to town and objected to the draft. Have you discovered the reason the DOJ and FTC are apposed to this bill? It takes away consumer choice. Your rights. My rights.

With that I’ll stand for questions.

Let me just say that there were a lot of questions, for like 40 minute worth! I’d say the issues we pointed out hit a few nerves. We were amazed at how little a few of the Senators knew about the process that involves listing with Realtors and the duties required. It was also interesting that they couldn’t see the valuable distinction between “present” and “tender” and how the interpretation would affect the process. I don’t remember a single question about the available component either.

We had a consumer testify too. David Griffin with High Desert Construction told the Senators that he didn’t want to loose his access to the MLS and didn’t need to have Realtors interpret the contracts for him.

The bit about the Department of Justice investigation got their attention. Senator Werk asked the IAR attorney if the DOJ had reviewed this legislation since its’ last revision. The IAR Attorney answered by saying the DOJ sent a letter to the chairman of the Senate committee. None of the other members on the committee were aware of this letter. Let just say they were caught off guard and the chairman found himself scrambling to explain.

When I get some more time, I’ll do my best to elaborate on the experience.

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