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

1. Resolve to Have a SAFE New Year!
2. TAR Forms Changes for 2011 Explained!
3. Code of Ethics Has Been Amended
4. HOT LINE: Transferring a Buyer-Client to a New Firm?
5. HOT LINE: Payment After Retirement of License?
6. HOT LINE: Starting a Property Management Division?
7. Upcoming Events and Courses
8. Rates Rise Slightly
9. Useful Web Links

To ask a TAR Legal and Ethics Hot Line question, CLICK HERE.

For other questions about this newsletter, please use the “CONTACT” form HERE.

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1. Resolve to Have a SAFE New Year!

This news item, published on Christmas Eve, caught our attention:

A real estate practitioner who was showing a high-end home in San Antonio, Texas, was kidnapped and beaten before she escaped her attacker.

Bexar County Sheriff Sgt. Charles Campbell says the homes in the neighborhood were multimillion-dollar properties in a gated community with lots ranging from a half acre to three acres.

“She was bending over, working the lockbox when the man she was showing the house to started beating her on the head with a stick,” Campbell says.

The attacker forced the woman to drive him to the bank to withdraw money. When the attacker stopped the car at a traffic light, the practitioner jumped out of the vehicle and got in a car full of young men. The attacker chased the car until the rescuers flagged down a police officer. The officer arrested the suspect, who is jailed on several felony charges, Campbell says.

The practitioner was treated for her injuries at a local hospital.
*** END QUOTE ***

Events like this should be a reminder to everyone to take sensible precautions when showing property! For safety tips and a variety of resources you can view or download for personal (or sales meeting) use, CLICK HERE.

[SOURCES: Associated Press; REALTOR Magazine Online; NAR]

2. TAR Forms Changes for 2011 Explained!

The video “2011 TAR Form Changes” taken during TAR’s recent Managing Brokers Forum is now available to watch online in three parts at:

Each of the 3 video parts is about an hour in length:

Video 1 – Agency
Video 2 – The Offer
Video 3 – Disclosures

In addition, you can download the 2011 forms that are referenced and follow along with the video. Referenced line numbers may have changed slightly due to tweaks following the Managing Brokers Forum held on December 6th.

Please visit TAR’s web site to view the videos!

3. Code of Ethics Has Been Amended

The REALTOR Code of Ethics was amended in 2010, with all changes taking effect as of January 1, 2011!

The revised Code of Ethics and Standards of Practice for 2011 can be viewed online HERE.

The most significant change involves a revision to Article 10, which now bans discrimination based on sexual orientation.

To see all of the changes — to the Code, Standards of Practice, and the Code of Ethics and Arbitration Manual — you can download a six-page “2011 Summary of Key Professional Standards Changes” HERE.


4. HOT LINE: Transferring a Buyer-Client to a New Firm?

QUESTION: We have an agent that wants to join our firm and they have a buyer with a Buyer’s Representation Agreement. This buyer currently has an offer (not a contract) on a home where the buyer and seller are still negotiating. What do we need to do paperwork-wise if anything when moving this agent over to our firm? If it turns into a contract and the agent is a member of our firm, I believe the commission would be ours since it is not a contract but I do not know.

ANSWER: If the agent has a buyer representation agreement with the buyer at their current firm, then that agent cannot bring the buyer with them unless given permission to do so by their current principal broker.  Listing agreements, buyer representation agreements and contracts belong to the firm, not the individual agent. If the broker allows the agent to take the buyer with them, then how to handle the commission would be negotiated between the new company and the old company. We recommend getting the exact terms of this agreement in writing. Note that you must handle this situation carefully as you do not want to appear as though you are interfering with the first company’s contract. This would be in violation of the Broker’s Act, TREC Rules and the Code of Ethics. The agent can ask if they can take the buyer with them, but if the broker says “no”, then the matter should be dropped. If the broker says “yes”, do not be surprised if they ask for a referral fee.

[SOURCE: TAR Legal & Ethics Hot Line Attorneys]

5. HOT LINE: Payment After Retirement of License?

QUESTION: If I have a sold listing and then retire or make my license inactive before it closes, can the broker still pay me the agent’s listing commission if the closing is after my license was placed in inactive status?

ANSWER: Possibly. If the contract was entered into while you still had an active license, then you may be entitled to receive a commission even though your license is retired or the license is inactive. Commission is earned upon the signing of the lease, purchase and sale agreement, etc. Therefore, if you were licensed at that time, then you can receive it if your independent contractor’s agreement or office policy dictates that you are entitled to receive commission (or partial commission) after leaving the company. Your principal broker can simply pay you directly. If you have other questions concerning your commission, you would need to speak with your own attorney.

[SOURCE: TAR Legal & Ethics Hot Line Attorneys]

6. HOT LINE: Starting a Property Management Division?

QUESTION: I’m looking to start a residential property management division within my company and I am trying to assemble all the necessary forms. The only form on TransactionDesk that appears usable for my purposes is the “Single Family Dwelling Lease Agreement.” Can this form be used for duplexes, apartments, etc. as well? If not, is there another available form that I can use? Also, is there form available describing the relationship/commission structure between the property owner and the management company?

ANSWER: At this time, TAR only offers form F58, the Residential Lease Agreement for Single Family Dwelling. This form is for use for a single family dwelling. If you need a lease agreement for a duplex, apartment, etc., you would need to speak with your own attorney who can assist you in drafting a lease which would be appropriate for those transactions. You would also need to consult with an attorney to assist you in drafting forms to use in setting forth the nature of your relationship between your company and the property owner including agency, services offered and provided, responsibilities and payment arrangements.

Property management is very different than regular residential sales. You must be aware of specific laws concerning property management, such as the Landlord and Tenant Act which only applies in certain counties. We strongly recommend that, before you begin doing property management, you take some classes in order to educate yourself about the laws in Tennessee concerning rental property. Furthermore, you will need to contact your E & O carrier to ensure that you have proper coverage. You may not have coverage for property management under your current policy.

[SOURCE: TAR Legal & Ethics Hot Line Attorneys]

7. Upcoming Events and Courses

The complete 2011 schedule of GRI Courses (both Classroom and E-Class) is now posted HERE.

We are now taking registrations for the 2011 offering of our popular 2-day instructor-training course (The Learning-Centered Instructor Workshop), scheduled for March 10-11, 2011. You can get more information or register online by CLICKING HERE.

Registration is now OPEN for the 2011 Leadership TAR Program! For more information about Leadership TAR and registration for the three retreats, CLICK HERE!

Since 2003, we have graduated an impressive array of local and state association officers and directors, as well as committee chairs and others wishing to join a statewide network of program graduates!

You can also learn more about the program by going to:

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

8. Rates Rise Slightly

Freddie Mac’s Primary Mortgage Market Survey showed all rates but the 1-year ARM rising this past week. This brings 30-year mortgage rates back to levels seen in May of this year, while the 15-year ties levels not seen since June. Even so, mortgage rates remain incredibly low. The 30-year fixed-rate mortgage (FRM) averaged 4.86 percent with an average 0.8 point for the week ending December 30, 2010, up from the prior week when it averaged 4.81 percent. Last year at this time, the 30-year FRM averaged 5.14 percent.

[SOURCE: Freddie Mac]

9. Useful Internet Links

Click on any of the following to access:

Back Issues of the TAR DIGEST
Tennessee Assn. of REALTORS
TAR Education
Online Risk Reduction Resources
Online Resources for Association Leaders
Tennessee Real Estate Commission