The 7-3-12 Newsletter of the Tennessee Association of REALTORS
Editor: Pug Scoville


UPCOMING TAR COURSES & EVENTS:
July 4: Happy 4th to Everyone!
July 12: Deadline for 2013 TAR Officer Applications
July 12: Deadline for 2012 TAR Realtor of the Year Nominations
July 12: Deadline for 2013 TREEF Trustee Nominations
To see a complete calendar of other courses around the state, go to: http://tnrealtors.com/education/realtor-courses/

HOT LINES IN THIS ISSUE:
1. HOT LINE: Contacting Someone Else’s Client Directly?
2. HOT LINE: Is Listing Still Active After Seller’s Death?
3. HOT LINE: Can Listing Show Team Name Only?

IN OTHER NEWS:
4. TAR Member Survey Results!
5. TREC Ends Reciprocity Agreements
6. Congress Passes 5-Year Flood Insurance Extension!
7. REALTORS Behaving Badly
8. Special July Promotion for Online Courses
9. Register Now for the 2012 TAR Convention!
10. Mortgage Rates Hold at Record Lows!
11. To Ask a Hot Line Question…

NOTE: If you are reading a hard-copy of this DIGEST, and want to access some of the links cited, simply go to http://www.tardigest.com to access the current issue with “live” links!


1. HOT LINE: Contacting Someone Else’s Client Directly?

QUESTION: Does the Code of Ethics apply to a relationship between a property manager and the property owner that the property manager represents? If someone with another property management company contacts the property owner rather than contacting us, when we have a signed agreement with the owner to represent him, is this a violation of the Code?

ANSWER: This would likely constitute a violation of Article 16 of the Code of Ethics, which applies whether or not we are talking about residential or commercial sales, or we are dealing with a property management situation like this one. Standard of Practice 16-13 states:

“All dealings concerning property exclusively listed, or with buyer/tenants who are subject to an exclusive agreement shall be carried on with the client’s representative or broker, and not with the client, except where such dealings are initiated by the client.”

It is important, though, to note that the agent must know that the owner is represented. Further, if the owner contact this agent directly, then it is permissible for the agent to speak with the owner. However, this could be a violation of the listing agreement with the owner.

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


2. HOT LINE: Is Listing Still Active After Seller’s Death?

QUESTION: If a seller dies at any point during the listing period, is the listing voided?

ANSWER: Whether the listing agreement would be binding on a seller’s heirs at his death will depend upon the terms of the listing agreement. TAR’s listing agreements contain language which state that the listing agreements will be binding upon the heirs in the event of the seller’s death. For example, on Form F87, lines 277-283 state:

A. Binding Effect, Entire Agreement, Modification, Assignment, and Binding Agreement Date.
This Agreement shall be for the benefit of, and be binding upon, the parties hereto, their heirs, successors, legal representatives and permitted assigns. This Agreement may only be assigned with the written consent of both parties. This Agreement constitutes the sole and entire agreement between the parties hereto and no modification of this Agreement shall be binding unless signed by all parties or assigns to this Agreement. No representation, promise, or inducement not included in this Agreement shall be binding upon any party hereto. Any assignee shall fulfill all the terms and conditions of this Agreement.”

There is a similar provision in the TAR Purchase and Sale Agreement (see lines 320-321 of the F9), that would apply if either of the parties to a contract dies before closing!

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


3. HOT LINE: Can Listing Show Team Name Only?

QUESTION: On Internet sites, such as Trulia, Realtor.com, etc., is it acceptable to use a group name (Example: The XXX GROUP) as opposed to an individual name as the listing contact, as long as the company name and company phone number are also included?

ANSWER: No. You would need to include the agent’s name as well.

Pursuant to TREC Rule 1260-2-.12(3):

“(a) Any licensee using a franchise trade name or advertising as a member of a cooperative group shall clearly and unmistakably indicate in the advertisement his name, broker or firm name and firm telephone number (as registered with the Tennessee Real Estate Commission) adjacent to any specific properties advertised for sale or lease in any media.
(b) Any licensee using a trade name on business cards, contracts, or other documents relating to real estate transaction shall clearly and unmistakably indicate thereon:
1. his name and firm telephone number (as registered with the Commission); and
2. the fact that his office is independently owned and operated.”

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


4. TAR Member Survey Results!

Our 2012 TAR Membership Survey revealed substantial optimism among our members, as well as some concern about how either government actions or the economy may affect the real estate business.

In answer to the question, “How do you feel about the future of the real esate business over the next 5 years?”, 76.3% of our members were either SOMEWHAT or VERY OPTIMISTIC about the future. 23.7% of our members were either uncertain or pessimistic about the future.

In answer to the question, “How do you feel about the future of YOUR PERSONAL real esate business over the next 5 years?”, 75.9% of our members were either SOMEWHAT or VERY OPTIMISTIC about the future of their personal business. 24.1% of our members were either uncertain or pessimistic about their future.

In response to which TAR services members have used, the top five services are:
    TAR Forms – 95.0%
    TAR DIGEST – 93.8%
    TAR Education Courses – 55.4%
    TAR Hot Line – 40.0%
    Governmental Affairs Updates – 31.8%

Other questions on the survey — about the biggest threats to the business, the most significant changes to occur, and services that members would like to see TAR provide — were open-ended questions, with a WIDE range of responses. Nevertheless, the economy, government actions or inaction, and our job situation were most often cited as significant threats to our real estate future.

Thanks to everyone who participated in this year’s survey!


5. TREC Ends Reciprocity Agreements

On May 2, 2012, the Tennessee Real Estate Commission (TREC) voted to require that any person applying for a license in Tennessee based on current licensure in another state must take the “state” section of the Tennessee license examination and pass it in order to obtain licensure in Tennessee, effective September 30, 2012. This effectively ends the reciprocity agreements that have been in place with a number of other states including Arkansas, Georgia, Mississippi and others.

After Sept. 30, Tennessee’s new approach will consider the completion of prelicensing education and passing the “national” section of another state’s license examination, but will no longer fully exempt the Tennessee license examination requirement. By requiring a passing score on the “state” section of the Tennessee license examination, Tennessee’s new approach assists with ensuring that applicants are familiar with Tennessee real estate law and practice.

Any licensee who obtained his or her Tennessee license via reciprocity prior to the effective date of this new approach may retain that license by keeping that license current and in good standing. However, any reciprocal licensee whose license expires for more than twelve (12) months, or whose license is revoked or suspended, must satisfy the new requirements in order to reinstate such license.

Questions about this change should be directed to the Tennessee Real Estate Commission at (615)741-2273 or (800)342-4031.

[SOURCE: TREC]


6. Congress Passes 5-Year Flood Insurance Extension!

At the end of last week, Congress passed a five-year extension of the national flood insurance program, and President Obama is expected to sign it into law this week. When the President signs the bill, NAR will send word to all members via e-mail.

On June 29, 2012, both the Senate and House passed the Biggert-Waters Flood Insurance Reform Act of 2012 as a part of H.R. 4348, the Surface Transportation Conference Report. The President will sign the measure in a few days. This is the culmination of a successful multi-year REALTOR campaign and a final push at NAR’s Midyear Legislative Rally and Meetings in May 2012. Congress had been extending the National Flood Insurance Program a few months at a time since 2008. Passage of this 5-year reauthorization will bring certainty to real estate transactions in more than 21,000 communities nationwide where flood insurance is required for a mortgage. The bill ensures the program will continue long-term for more than 5.6 million business and homeowners who rely on it, achieves one of NAR’s top priorities for the year, and means taxpayers will spend less on federal assistance for flood disasters over the long run. NAR will continue to monitor the legislation as it is implemented.

[SOURCE: NAR]


7. REALTORS Behaving Badly

This is, thankfully, NOT a Tennessee story …but it could be. We publish this link solely as a reminder to brokers and others that inappropriate behavior by only one licensee can reflect badly on everyone!

A REALTOR in another state was caught by a property owner’s security camera, going through the owner’s cabinets, apparently looking for drugs. To see the TV news story that resulted, CLICK HERE.


8. Special July Promotion for Online Courses

Save 25% off all CE Shop courses throughout the month of July. This is the biggest discount that The CE Shop has offered this year! Simply enter code: JULY4 to receive your discount. This promotion begins 7/1/2012 and ends 7/31/2012.

For a complete list of CE Courses that you can take with this offer, go to: http://tarnet.theceshop.com/


9. Register Now for the 2012 TAR Convention!

Our 2012 TAR Annual Convention takes place September 19-22, in Kingsport, TN, and our theme this year is “Race To Excellence”! You won’t find a more attractive setting than the beautiful mountains surrounding the Tri-Cities area. AND this is everyone’s opportunity to enjoy an outstanding lineup of national speakers and events here in the Volunteer State!

Speakers include David Knox and Jerry Rossi, as well as some new faces! Education sessions are designed to get your businesses in shape for recovery!

To learn more and/or to register online, go to: http://tnrealtors.com/meetings-and-events/convention/


10. Mortgage Rates Hold at Record Lows!

Last week, average interest on 30-year fixed mortgages according to Freddie Mac held steady at 3.66 percent, the lowest level since long-term mortgages began in the 1950s!

Also, 15-year rates remained extremely low at 2.79 percent.

To see current mortgage rates, go to: http://www.mortgagenewsdaily.com/mortgage_rates/

To see THDA rates and programs, go to: http://tn-tennesseehda.civicplus.com/index.aspx?NID=8


11. To Ask a Hot Line Question…

To ask a TAR Legal and Ethics Hot Line question, go to: http://tnrealtors.com/services-support/legal-ethics-hotline/