Highlights from this video

Register for the March 29th Commercial Referral Network event
Learn more about the new laws that affect REALTORS®
See the most recent Code of Ethics Case Interpretation blog post
View January 2019 Market Stats

Here is a summary of some new laws passed by the California Legislature that may affect REALTORS® in 2019. You can view an even larger list on C.A.R.’s website and you can read the full text of each law here.

 


Civil Liability: Liability of real estate agents for sexual harassment expanded

Even if a business, service, or professional “relationship” does not presently exist, a real estate agent (and “investor” among other persons) may be liable for sexual harassment when he or she holds himself or herself out as being able to help the plaintiff establish a business, service, or professional relationship with the defendant or a third party. This law eliminates the element that the plaintiff prove there is an inability by the plaintiff to easily terminate the relationship. (Senate Bill 224)


Common Interest Developments: Financial review on a monthly basis and other anti-fraud precautions 

This law requires HOA boards to review on a monthly basis the association’s accounts and reserves; requires fidelity bond coverage for directors, officers, and employees to be maintained equal to three months’ reserves; and requires a manager to obtain written board approval before they may transfer association funds of $10,000 or more. (Assembly Bill 2912)


Employment: Discrimination and harassment

Prohibits an employer from requiring the execution of a release or non-disparagement agreement in exchange for any condition of employment. Broadens the definition of harassment to include any type of harassment, not merely sexual, for which an employer may be responsible when committed by a nonemployee. Explains in detail the legal standards constituting sexual harassment by citing and affirming various court cases. (Senate Bill 1300)


Employment: Sexual harassment training requirements Expanded By January 1, 2020.

Employers who employ 5 or more employees, including temporary or seasonal employees, must provide at least 2 hours of sexual harassment training to all supervisory employees and at least one hour of sexual harassment training to all nonsupervisory employees by January 1, 2020, and once every 2 years thereafter. (Senate Bill 1343)


Financial Disclosures: Foreign language translations for loan modifications

This law requires financial institutions to provide specified mortgage loan modification documents in the same language as the negotiation if the terms of negotiation are conducted in Spanish, Chinese, Tagalog, Vietnamese, or Korean. Currently, these disclosures are required only when a loan is originated. The law is also updated to include the Loan Estimate and Closing Disclosure forms in addition to the Good Faith Estimate. (Senate Bill 1201)


Insurance: Fires and other natural disasters: Eight new laws to strengthen the rights of homeowners

With wildfires and other disasters devastating areas across the state, insurers have employed various tactics to avoid paying out on claims and to minimize their losses in the future. This set of eight new laws attempts to ensure that a homeowner who has purchased insurance will realize the benefits of their policy and will not be improperly or unfairly denied coverage presently or in the future.

(View links to all 8 laws on C.A.R.’s website)


Real Estate Law Clean-up: Updates the real estate law to make it clearer and conform it to existing practice.

This C.A.R. sponsored “clean-up” legislation updates the real estate law to conform it to existing practice, eliminates antiquated or confusing laws, clarifies existing law, and introduces plain language where appropriate.

Among the more important changes: This law reiterates that existing law permits agents and brokers to establish their working relationship as one of either independent contractor or employment: it consolidates real estate definitions across a range of laws; and it resolves a variety of specific issues caused by confusing and antiquated laws. (Assembly Bill 1289)


Real Estate Law Clean-up: Independent Contractor Relationship Reaffirmed: New Private Transfer Fees Outlawed

This C.A.R. sponsored law prohibits developers from creating new property covenants, conditions, or restrictions that force subsequent owners to pay specially designated fees every time the property is transferred, unless the fee provides a “direct benefit” to the property, as defined in federal law. (Assembly Bill 2884)


Sexual Harassment: Liability for real estate agents expanded

Even if a business, service, or professional “relationship” does not presently exist, a real estate agent (and “investor” among other persons) may be liable for sexual harassment when he or she holds himself or herself out as being able to help the plaintiff establish a business, service, or professional relationship with the defendant or a third party. This law eliminates the element that the plaintiff must prove there is an inability by the plaintiff to easily terminate the relationship. (Senate Bill 224)

Code of Ethics Case Interpretations

This ongoing series explores the NAR Code of Ethics through various case interpretations. Please read through the following case and try to decide if there was any Code of Ethics violations. Then click the box at the bottom to find out the answer. (These cases have been provided by the National Association of REALTORS®.)


Case #1-9: Ex​clusive Listing During Term of Open Listing

During a Board of REALTORS® luncheon, REALTOR® A described to those at the table an old house in a commercial area which was open listed with him and invited the others to cooperate with him in selling the property. REALTORS® X and Y said they also had the property open listed but had found very little interest in it. REALTOR® B made no comment, but feeling he could find a buyer for it, went to the owner and discussed the advantages of an exclusive listing. The owner was persuaded and signed an exclusive listing agreement with REALTOR® B, telling him at the time that he had listed the property on an “open” basis for 30 more days with REALTORS® A, X, and Y. REALTOR® B’s comment was, “Just don’t renew those open listings when they expire.”

A few days later, REALTOR® A brought the owner a signed offer to purchase the property at the asking price. The owner told REALTOR® A that he now had the property exclusively listed with REALTOR® B, and asked him to submit the offer through REALTOR® B. Before REALTOR® A could contact REALTOR® B, REALTOR® B had taken another offer to purchase the property at the asking price to the owner. Confronted with two identical offers, the owner found both REALTOR® A and REALTOR® B expected full commissions for performance under their respective existing listing agreements. The owner filed an ethics complaint with the Board of REALTORS® alleging violations of Article 1 of the Code of Ethics because of the difficult position he had been placed in by REALTOR® A and REALTOR® B. The owner alleged neither of them had warned him that he might be liable for payment of more than one commission.

What do you think the Hearing Panel decided? Click here to find out.

In reviewing the actions of REALTOR® A, the Hearing Panel found that he was not at fault; that he had performed as requested under his listing agreement. On the other hand, it was the conclusion of the Hearing Panel that REALTOR® B had violated Article 1 by failing to advise the owner of his potential commission obligation to the other listing brokers when the client told him other listing agreements were in force.

The Hearing Panel pointed out that because of REALTOR® B’s omission his client, through no fault of his own, may have incurred legal liability to pay two commissions; that REALTOR® B should have advised the owner of his potential liability for multiple commissions; and that by not doing so REALTOR® B had failed to protect his client’s interests as required by Article 1.

Gen Mem Banner

Thank you to all our members who came out to our first General Membership Meeting of 2019. We were welcomed by our 2019 President, Gustavo Gonzalez, who shared some SCCAOR updates and information on all the SCCAOR Committees. This meeting featured a special presentation from Carl Guardino, CEO of the Silicon Valley Leadership Group. We also heard a C.A.R. update from Rick Smith, a local government affairs update from Chrissy Garavaglia, an MLSListings update from Karl Lee, and a Commercial Council update from William Chea.

Click here to download a copy of Carl Guardino’s presentation.

Click here to download a copy of the MLSListings update.

Watch a copy of the Facebook Live Stream below:

Code of Ethics Case Interpretations

This ongoing series explores the NAR Code of Ethics through various case interpretations. Please read through the following case and try to decide if there was any Code of Ethics violations. Then click the box at the bottom to find out the answer. (These cases have been provided by the National Association of REALTORS®.)


Case Standard of Practice #1-4: Fidelity to Client

Client A contacted REALTOR® B to list a vacant lot. Client A said he had heard that similar lots in the vicinity had sold for about $50,000 and thought he should be able to get a similar price. REALTOR® B stressed some minor disadvantages in location and grade of the lot, and said that the market for vacant lots was sluggish. He suggested listing at a price of $32,500 and the client agreed.

In two weeks, REALTOR® B came to Client A with an offer at the listed price of $32,500. The client raised some questions about it, pointing out that the offer had come in just two weeks after the property had been placed on the market which could be an indication that the lot was worth closer to $50,000 than $32,500. REALTOR® B strongly urged him to accept the offer, stating that because of the sluggish market, another offer might not develop for months and that the offer in hand simply vindicated REALTOR® B’s own judgment as to pricing the lot. Client A finally agreed and the sale was made to Buyer C.

Two months later, Client A discovered the lot was no longer owned by Buyer C, but had been purchased by Buyer D at $55,000. He investigated and found that Buyer C was a brother-in-law of REALTOR® B, and that Buyer C had acted on behalf of REALTOR® B in buying the property for $32,500.

Client A outlined the facts in a complaint to the Board of REALTORS®, charging REALTOR® B with collusion in betrayal of a client’s confidence and interests, and with failing to disclose that he was buying the property on his own behalf.

At a hearing before a panel of the Board’s Professional Standards Committee, REALTOR® B’s defense was that in his observation of real estate transactions there can be two legitimate prices of property—the price that a seller is willing to take in order to liquidate his investment, and the price that a buyer is willing to pay to acquire a property in which he is particularly interested. His position was that he saw no harm in bringing about a transaction to his own advantage in which the seller received a price that he was willing to take and the buyer paid a price that he was willing to pay.

What do you think the Hearing Panel decided? Click here to find out.

The Hearing Panel concluded that REALTOR® B had deceitfully used the guise of rendering professional service to a client in acting as a speculator; that he had been unfaithful to the most basic principles of agency and allegiance to his client’s interest; and that he had violated Articles 1 and 4 of the Code of Ethics.

The Santa Clara County Association of REALTORS® (SCCAOR) installed Gustavo Gonzalez as its President during an evening ceremony at Villa Ragusa in Campbell on January 24. He will serve as the 2019 President of SCCAOR, a real estate trade organization that represents over 6,400 REALTOR® and Affiliate members in Santa Clara County.

Gustavo Gonzalez photo“We are so fortunate to have a passionate leader like Gustavo Gonzalez as our President,” said Neil Collins, SCCAOR CEO. “He has served as a civic leader while on the Alum Rock School board, he has provided affordable housing as a property manager, and he has been a local REALTOR® for over 18 years. I can’t think of anyone more qualified to represent our members.”

Gonzalez is the Broker/Owner of Valley View Properties based in San Jose. He served on the SCCAOR Board of Directors from 2007 to 2009 and was Vice President in 2014 and President-Elect in 2018. He has also been a member of the SCCAOR Professional Standards Committee since 2008.

“Family has always been an important part of my life,” said Gonzalez. “My theme this year as President is ‘The REALTOR® Familia – Coming together is a beginning, keeping together is progress, working together is a success.’ I look forward to a great year of collaboration and teamwork with SCCAOR’s Directors, Committee Chairs, Staff and Members. We are only limited by our imagination!”

SCCAOR Directors group photo

Other SCCAOR Officers that were installed include Sandy Jamison (President-Elect), William Chea (Vice President), and Stephen Theard (Treasurer/Secretary).

They will be joined by SCCAOR Board of Directors, which includes: Kip Barnard, Frank Cancilla, Helen Chong, Kevin Cole, Teressa Francis, Doug Goss, Gene Hunt, Don Jessup, Trisha Motter, Gabrielle Perez, Tam Quach, William Rehbock, Rick Smith, and Mark Von Kaenel.

Hemel photoHemal Sheth has joined SCCAOR as our new Membership Coordinator. Working alongside our Membership Team, Hemal will assist Association members with any questions or issues about their membership.

“I am happy to join the SCCAOR Team and I look forward to helping our members succeed and get the most out of their membership,” said Sheth.

“Hemal is a great addition to our Membership team,” said Tracey Lee, Membership Services Manager. “His background in sales and customer service will be a great benefit to our organization.”

In his free time, Hemal enjoys sports such as football, baseball, cricket, and tennis. He is also a cyclist who enjoys long bike rides.

“For the last four or five years I have participated in the ‘Tour de Cure’ which is the signature fundraising event for the American Diabetes Association,” he said. “The 2018 event was a huge success. We rode for over 50 miles and raised over $1000.”

The Santa Clara County Association of REALTORS® supports the proposed Memorandum of Understanding with Google, Inc. SCCAOR’s support for the MOU extends to support for the long-term vision laid out in the Diridon Station Area Plan originally adopted by Council in 2014. The plan, which includes a vision and strategy for a housing element in the Diridon area, articulates the importance and necessity of Google’s presence and the ability to move forward in approval of the proposed MOU. As a result of this articulated vision for the Diridon Station Area, and Google’s willingness to create a shared vision of benefit to the community and the City of San Jose it is critical to push this project forward into the next phase.

As a member-supported non-profit organization committed to the principles of equal-opportunities in housing, economic development, private property rights, and community building since 1896, SCCAOR identifies the following, specifically, as reasons to support approval of the MOU:

  1. Capitalize on Transit Synergy. Create a “whole greater than the sum of the parts” in the Diridon Station Area with new urban development, expanded transit service, and a new intermodal station in conjunction with transit partners Valley Transportation Authority, Caltrain, and the California High Speed Rail Authority.

  2. Optimize Density and Mix of Uses. Optimize development density and create a complementary mix of uses in order to create a vibrant, transit-oriented urban neighborhood and destination.

  3. Grow and Preserve Housing. Grow and preserve housing in the City to help address rising housing costs and displacement. Housing in the Diridon Station Area should include on-site units affordable to low-income households and “missing middle” households, and market rate homes in a combination that is financially viable for residential developers to ensure that planned housing is built. Affordable units can be built both integrated into market-rate developments and as stand-alone affordable housing projects.

  4. Create Broad Job Opportunities. Promote opportunities for San José residents of all skill and educational levels and diverse backgrounds to prepare for and secure jobs in the Diridon Station Area. Provide opportunities for existing and new small, local businesses to benefit from and/or integrate into the new development.

  5. Pursue Equitable Development. Develop the Diridon Station Area with intent to minimize potential negative impacts on people and place, and to maximize opportunity for local youth and adults to participate and benefit from job opportunities in the Diridon Station Area, through partnerships among the City, Google, and others.

We thank the Mayor and Councilmembers for their continued effort to bring the Diridon Station Area Plan into fruition and to staff for their dedication to making the Google, Inc. project process as inclusive as possible. SCCAOR feels that in the same spirit of collaboration and information gathering that the Station Area Advisory Group was created with, has been captured in the subsequent dialogue and interactions between Google and the community, and between Google and the City of San Jose.