The Weekly Membership Newsletter of the Tennessee Association of REALTORS
Editor: Pug Scoville


CONTENTS
1. The Busby Case & Administrative Fees
2. Congratulations to TREC’s New Leadership!
3. HOT LINE: Disclosing Sellers’ Contact Info?
4. HOT LINE: Are Contracts Assignable?
5. FREE Guide to TN Agency Law
6. Upcoming TAR Courses & Events!
7. Rates Dropped This Past Week
8. Tennessee Vs. Alabama!!!


1. The Busby Case & Administrative Fees

Much discussion — and unfortunately much misinformation — has been communicated broker-to-broker in recent weeks, in the wake of the “Busby Case” and a federal district court’s ruling regarding a brokerage’s administrative fees charged in addition to its commission.

Included in the MISinformation that’s been circulated are statements that any type of transaction fees, administrative brokerage fees, or fixed dollar commissions are now illegal because of the Busby case. Please do not jump to any unwarranted conclusions because of this case.

Instead, we encourage all brokers to read a letter reviewing the facts of that case and its implications from NAR General Counsel Laurie Janik, by going
HERE.

If you will visit the following page on REALTOR.ORG, you can also access the recording of a June 23 webinar on the Busby Case & RESPA, conducted by RESPA expert Phil Schulman. Go HERE.

[SOURCE: NAR]


2. Congratulations to TREC’s New Leadership!

At its meeting last week, members of the Tennessee Real Estate Commission (TREC) elected a new Chairman, Grover Collins, a longtime TAR member and owner-broker of Grover Collins Real Estate & Auction in Lewisburg, TN. Isaac Northern, another longstanding TAR member and Memphis broker, was elected Vice Chairman of the Real Estate Commission. This is obviously a critical time for the industry and the state’s real estate markets, and we look forward to their leadership of the Commission.

Congratulations to both gentlemen!


3. HOT LINE: Disclosing Sellers’ Contact Info?

QUESTION: This past Friday I received an email from a person who was the buyer of a home I had listed in March of 2008. The email stated this: “You were the listing agent on the home I purchased in March of 2008. The Sellers failed to disclose a drainage problem in the back yard. I want to contact them to discuss this situation, which has cost me several hundred dollars to repair. Would you send me their address so I can discuss this situation with them? I don’t want to bring an attorney into this, so I’m hoping we can work it out between us.”

I immediately pulled the file and called my sellers and told them of the email and asked them if they knew of a drainage problem at their home I sold for them over one year ago. They said, “No, we had no idea.” They lived in the home for about three years and they never had an issue with a drainage problem in the back yard whatsoever. I told them what the buyer was requesting, and they told me “Don’t give her any information yet.” I told them to let me know what to do and that I would not respond to the email. I also placed a call to the buyer’s agent that was involved and left her a message to call me. The buyer did have a home inspection. Please advise me on how to handle this situation.

ANSWER: Under agency law, you are required to follow the lawful instructions of your client. Therefore, you CANNOT provide their current contact information without their permission to do so. You also have no obligation to give this information to them. All you can do is pass along information to your client. Be careful if your client wants you to negotiate a solution. You cannot do more than simply pass along information. Anything further will require an attorney.

The only way that you can disclose the client’s information would be subject to a subpoena or testifying at a deposition or in court (required under a subpoena). Otherwise, you cannot legally disclose this information.

You could possibly be brought into a lawsuit if one is filed. This does not mean that you have done anything wrong. You will need to contact your E&O provider immediately to determine if you have coverage and if so, whether they will provide you with an attorney. If they do not provide you with an attorney, I would recommend that you get one of your own as quickly as possible as you only have a certain period of time in which to respond to a lawsuit.

[SOURCE: TAR’s Legal & Ethics Hot Line Attorneys]


4. HOT LINE: Are Contracts Assignable?

QUESTION: Regarding the Purchase and Sale agreement, is the agreement Assignable to a different buyer as it is currently written, or does language have to be added to make it assignable? We have an agent who has been told by an attorney that contracts in Tennessee are assignable unless the contract specifically states that it is not.

ANSWER: The TAR contracts are assignable as written. If you do not want them to be assignable to a different buyer, then additional language would have to be added to the special stipulations paragraph. Please understand that the original buyer will still be obligated to close on the transaction if the second buyer fails to close on the transaction. If you have a buyer who wishes to assign his rights under the Purchase and Sale Agreement, I would recommend having an attorney draft the assignment documents so as to provide as much protection as possible for your client.

[SOURCE: TAR’s Legal & Ethics Hot Line Attorneys]


5. FREE Guide to TN Agency Law

At the end of June, we announced the availablity of a new resource. As a FREE service to our members, a complete Guide to Tennessee’s Agency Law has been produced by TAR, in cooperation with the Tennessee Real Estate Educational Foundation (TREEF). As noted recently, agency topped the list of problems nationally in NAR’s 2009 Legal Scan!

This Guide to Tennessee’s Agency Law is written for our REALTOR members, their brokers, and instructors. It can be downloaded in PDF format for FREE HERE.


6. Upcoming TAR Courses & Events!

TAR Forms 101July 27 (Nashville, TAR Office), 4 hours CE. For more information, go HERE.

TransactionDesk Basic CourseJuly 27 (Nashville, TAR Office), 3 hours CE. For more information, go HERE.

Educators Conference 2009July 28-29 (Nashville, TAR Office). This annual event, hosted by TREEF, features education sessions and workshops for association staff & Instructors. For more information, go HERE.

Instructor-Training WorkshopAugust 27-28 (Nashville, TAR Office), 16 hours CE. This is another offering of our popular two-day instructor-training workshop, “The Learning-Centered Instructor”, at the TAR Office in Nashville. For more information, go HERE.

TAR’s 2009 Annual Convention!September 15-18 (Point Clear, AL), 12 hours CE. TAR will be hosting the 2009 TAR Annual Convention in Clear Point, Alabama, at the Grand Hotel Marriott Resort, Golf Club, & Spa. National speakers include real estate guru Stefan Swanepoel, Karel Murray, Internet-savvy Randy Eagar, and productivity wizard Merlin Mann! For more information about the Convention program or our hotel in Point Clear, go HERE.

PLEASE NOTE: SAVE $80!!! Early-bird registration deadline for the TAR Convention is July 28! Register by July 28 for $195 …the fee jumps to $275 after that date!

Watch each week’s TAR DIGEST for schedule changes and additions!


7. Rates Dropped This Past Week

Interest on 30-year fixed mortgages, 15-year fixed loans, five-year adjustable-rate mortgages, and one-year ARMs all fell this past week, according to Freddie Mac. The average on 30-year financing slipped to 5.2 percent from 5.32 percent a week ago. The 15-year mortgage declined to 4.69 percent, down from 4.77 percent; five-year ARMs were down to 4.82 percent from 4.88 percent; and one-year ARMs fell to 4.82 percent from 4.94 percent.

[SOURCES: Freddie Mac; Information, Inc.]


8. Tennessee VS. Alabama!!!

No …it’s not what you’re thinking! TAR has been invited by the Alabama Association of REALTORS to participate in a food drive — a “head-to-head” competition between associations. Since TAR is having its Convention in Alabama and AAR is having its Convention in Tennessee, this little rilvary was dreamed up. To make this year interesting, Alabama REALTORS have challenged Tennessee REALTORS to see who can donate the largest number of cans of food!

TENNESSEE’s STRATEGY: To put a “W” in the WIN column, Tennessee is doing it a little bit different than Alabama. You don’t have to physically bring in cans of food to any location. Rather a simple donation of ten dollars ($10) purchases one case of can goods (24 cans). Even better, you can make your donations online! Totals will be tallied and presented at the TAR Convention in September. Let’s show Alabama how Tennessee REALTORS CAN make a difference!!!

We’re going to see which local associations CAN donate the most cans to this drive! Awards will be given to the top “small”, “medium”, and “large” local association categories. Visit the TAR Newsroom now!


TAR’s Home Page: http://tnrealtors.com

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