Florida Realtor April 2010 : Page 7

 “Coming together is a beginning. Keeping together is progress. Working together   is success.” —Henry Ford, American industrialist Law & Ethics LegAL Q & HotLine A AppRAIsALs I’m a certified residential appraiser. I supervise three registered trainee appraisers. My office is in Orlando (Orange County). One of the registered trainees wants to perform appraisals out of an office in Miami-Dade County. May I supervise a registered trainee in Miami while I’m located in Orlando? no. Section 61J1-4.010, Florida Administrative Code, states that a supervising appraiser shall train or supervise appraisers located in the county where the supervising appraiser’s primary address is located and registered with the Department of Business and Professional Regulation and any county contiguous to the county where the supervising appraiser’s primary business address is located and registered with DBPR. Since Dade and orange counties are not contiguous, you may not supervise, from your orlando office, a trainee appraiser located in Miami. BROkERAgE DIscLOsuRE I’m a broker representing a buyer purchasing a residential property. I want to be a transac-tion broker for this buyer. I know that I’m no longer required to provide a Transaction Broker Relationship Notice, but I want my buyer to understand what a transaction broker relationship is. Is it illegal to still provide the buyer with a transaction broker relationship notice? no. the law that required a transaction broker notice to be provided expired on July 1, 2008. However, it would not be a violation if the transac-tion broker notice were still provided. InTERnATIOnAL Compensating Referrals May you pay an out-of-state or international real estate agent a referral fee? rokers are often faced with in-dividuals from other states and countries who refer customers wanting to buy or rent property in Flori-da. Those making the referrals often ask for compensation. The question then be-comes: May a Florida broker compensate a foreign broker or person who is not a Florida real estate licensee for the refer-ral of a customer? Section 475.25(1)(h), Florida Statutes, states that a licensed Florida broker may pay a referral fee or share a real estate commission with a broker licensed or registered under the laws of a foreign B state as long as the foreign broker does not violate Florida laws. From there, educate yourself on the licensing laws in the state or country where the person making the referral lives. If the foreign state or country re-quires its residents to be licensed to refer real estate customers, you must deter-mine whether the person is active in that state or country. If the person is active, you must make payment through that person’s broker—just as you would pay another office within the state. When dealing with a person in a country or ju-risdiction that does not require people April 2010 FLORIDA REALTOR 7

Law & Ethics

INTERNATIONAL

Compensating Referrals

May you pay an out-of-state or international real estate agent a referral fee?

Brokers are often faced with individuals from other states and countries who refer customers wanting to buy or rent property in Florida. Those making the referrals often ask for compensation. The question then becomes: May a Florida broker compensate a foreign broker or person who is not a Florida real estate licensee for the referral of a customer?

Section 475.25(1)(h), Florida Statutes, states that a licensed Florida broker may pay a referral fee or share a real estate commission with a broker licensed or registered under the laws of a foreign state as long as the foreign broker does not violate Florida laws.

From there, educate yourself on the licensing laws in the state or country where the person making the referral lives. If the foreign state or country requires its residents to be licensed to refer real estate customers, you must determine whether the person is active in that state or country. If the person is active, you must make payment through that person’s broker—just as you would pay another office within the state. When dealing with a person in a country or jurisdiction that does not require people who engage in referrals to be licensed, anyone may be compensated for the referral of a customer.

It’s important to remember that whether licensed or not in the foreign countries or jurisdictions, these individuals are prohibited from conducting real estate activity within the state of Florida without a Florida real estate license. This means that the referring individual may not show the property in Florida, may not be involved in the negotiation or drafting of the contract, may not receive the referral fee in a Florida bank account and may not, in any way, be involved in the transaction other than making the referral.

Should the referring individual conduct real estate activity in Florida, the Florida broker will then be prohibited from compensating the individual for the real estate referral.

LEAD-BASED PAINT

NEW RULES FOR RENOVATORS

Certification and training are required.

Effective April 22, 2010, the U.S. Environmental Protection Agency (EPA) has announced, there’s a new lead-basedpaint renovation rule that impacts anyone paid to perform work that disturbs paint in housing and child-occupied facilities built before 1978.

The new rule re-enforces the 2008 requirement that the EPA’s lead pamphlet “Renovate Right” be given to the owner or occupant no more than 60 days before the renovation begins unless it’s an emergency renovation. It also requires that informational signs and the lead pamphlet be posted prominently, describing the nature, locations and dates of the renovations.

Additionally, landlords and employees of property management firms who perform renovation activities must obtain confirmation of receipt of the EPA pamphlet from the owner or occupant.

As of April 22, the EPA must certify firms that perform renovation work, renovators must be trained and lead-safe work practices must be followed. These practices include containment of the area to prevent dust and debris from leaving the workspace and thorough cleanup to minimize exposure to lead-based-paint hazards.

The EPA considers receipt of rent payments or salaries derived from rental payments as compensation under this lead program. This means that landlords and employees of property management firms who perform renovation activities must comply with this rule.

Any activity that disturbs paint in pre- 1978 housing is subject to the rule. That includes remodeling and repair, electrical work, plumbing, painting (only if paint is disturbed by sanding, scraping or other activity that may cause dust), carpentry and window replacement.

Notable exceptions to this rule are housing built in 1978 or later; housing for elderly or disabled persons unless children under age 6 live there; zerobedroom dwellings; housing or components declared lead free by a certified inspector or risk assessor; and minor repair and maintenance that disturbs 6 or fewer square feet of paint per room inside or 20 or fewer square feet on the outside of a home or other building.

Window replacement and projects involving demolition are not considered minor repair and maintenance. Additionally, the rules don’t apply if a homeowner renovates his/her own home.

An important exception to the renovation, training and work practices portion of the rule is allowed if the renovation firm obtains the owner’s signed statement that the renovation will occur in the owner’s residence, that no child under age 6 or pregnant woman lives there, that the housing is not a child-occupied facility and that the owner acknowledges that the firm will not be required to use the work practices of the rule.

For a copy of the “Renovate Right” pamphlet, go to epa.gov/lead. The EPA has a compliance guide called “Small Entity Compliance Guide to Renovate Right” on its website. Information is also available from the National Lead Information Center at (800) 424-LEAD. In addition, the National Association of Realtors® has a “Lead Paint Renovation Rule Compliance Guide” on realtor.org.

ETHICS

Fee Bait and Switch

Changes to compensation must be made before an offer is procured.

Listing Realtor® Sally just listed two bank-owned condominiums for $65,000 each. Due to the large size of its inventory and the number of condos on the market, the lender wants them sold quickly. Sally has authorization to offer a cooperating fee to other brokers, but the amount a cooperating broker will earn is minimal. To get her listings shown more quickly and more frequently, Sally exaggerates the amount of the cooperating fee she’s offering.

Sally immediately receives an overlisting- price offer. She presents it to the lender/seller, and it’s immediately accepted. She then tells the cooperating broker that the offer of compensation is actually 1 percent less than the amount listed in the MLS.

Cooperating broker Bill is confused as the MLS offer is fixed and it’s against the rules to change it this way. Sally replies, “Too bad, so sad, take it or leave it.” Bill decides he can arbitrate the dispute.

However, he realizes that the difference is really only several hundred dollars and that arbitration doesn’t seem worth it. He’s furious and believes that Sally did this on purpose, knowing he would not arbitrate such a small amount.

Bill contacts his local association to complain and learns that he can file both an ethics and an MLS complaint against Sally.

Why it might be a violation: Under both MLS rules and the Code of Ethics, Sally is required to communicate any change in the offer of compensation before the offer is procured.

Sally clearly failed to do this, and therefore a hearing panel could find her in violation of the Code of Ethics. While this will not result in Bill receiving the disputed funds, Sally may be sanctioned by the Realtors® association and may be fined more than the difference in the dispute.

Q&A LegAL HotLine

APPRAISALS

I'm a certified residential appraiser. I supervise three registered trainee appraisers. My office is in Orlando (Orange County). One of the registered trainees wants to perform appraisals out of an office in Miami-Dade County. May I supervise a registered trainee in Miami while I'm located in Orlando?

No. Section 61J1-4.010, Florida Administrative Code, states that a supervising appraiser shall train or supervise appraisers located in the county where the supervising appraiser's primary address is located and registered with the Department of Business and Professional Regulation and any county contiguous to the county where the supervising appraiser's primary business address is located and registered with DBPR. Since Dade and orange counties are not contiguous, you may not supervise, from your orlando office, a trainee appraiser located in Miami.

BROKERAGE DISCLOSURE

I'm a broker representing a buyer purchasing a residential property. I want to be a transaction broker for this buyer. I know that I'm no longer required to provide a Transaction Broker Relationship Notice, but I want my buyer to understand what a transaction broker relationship is. Is it illegal to still provide the buyer with a transaction broker relationship notice?

No. The law that required a transaction broker notice to be provided expired on July 1, 2008. However, it would not be a violation if the transaction broker notice were still provided.

LICENSE LAW

I'm a broker, and I employ an unlicensed assistant. Is it possible for unlicensed assistants to have their own MLS ID?

Maybe. It depends on the rules of your regional MLS. You'll need to contact your regional MLS to determine if it allows unlicensed assistants to have their own MLS iD.

I'm a sales associate who recently married. I've decided to legally change to my married name. Am I required to change my name on my sales associate license?

Yes. Rule 61J2-9.007, Florida Administrative Code, provides that when there's been a legal name change, the licensee shall file a request for the real estate license to be reissued in the new name. For a new license to be reissued, a copy of the legal document that legally changed the name (in this case, the marriage license) must be included with the request.

The Florida Realtors® Legal Hotline, (407) 438-1409, is available Monday through Friday from 9 a.m. to 5 p.m. Please have your Florida real estate license number available when you call.

Want answers to commonly asked questions? Go to: floridarealtors.org/LegalCenter/AskanAttorney/Index.cfm.

Read the full article at http://browndigital.bpc.com/article/Law+%26+Ethics/1280385/141630/article.html.

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