MINUTES OF MEETING LOUISIANA REAL ESTATE COMMISSION OCTOBER 19, 2011

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1 MINUTES OF MEETING OF LOUISIANA REAL ESTATE COMMISSION OCTOBER 19, 2011 The Louisiana Real Estate Commission held its regular meeting on Wednesday, October 19, 2011, at 9:00 a.m., at 9071 Interline Ave, Baton Rouge, Louisiana, according to regular call, of which all members of the Commission were duly notified, at which meeting the following members were present: COMMISSION Frank Trapani, Chairman Patrick T. Caffery, Jr., Secretary Mike D. Bono arrived 9:45 a.m. Paul Burns Archie Carraway James Gosslee Rodney Noles Sterling Ory arrived 9:15 a.m. Cynthia Stafford STAFF Bruce Unangst, Executive Director Arlene C. Edwards, Legal Counsel Stephanie Boudreaux Mark Gremillion Robert Maynor Summer Mire Sara Wheeler Jenny Yu GUESTS Jean Carraway Amy Fennel, Louisiana Realtors Commission members Tim Flavin and Judy Songy were not present for the meeting. Commissioner Burns led the Invocation; Commissioner Caffery led the Pledge of Allegiance. Commissioner Gosslee made motion, seconded by Commissioner Burns, to approve the minutes of the meeting of September 15, Motion passed without opposition. PERSONAL APPEARANCES: 1. Donnel Coleman Mr. Coleman appeared before the Louisiana Real Estate Commission in connection with his request to sit for the real estate exam. In 1995, Mr. Coleman was convicted of uttering a counterfeit check. For this offense he was sentenced to five (5) years confinement. On August 17, 1998, Mr. Coleman was released. On January 28, 2002, Mr. Coleman pled guilty to unlawfully hindering the apprehension of a criminal. For this offense, he was sentenced to a period of two (2) years confinement. On June 27, 2003, Mr. Coleman was released and served three (3) years probation satisfactorily. Mr. Coleman discussed the events that led to his felony conviction and answered questions from the Commissioners. Mr. Coleman stated that he is currently working in the timber 1

2 business and would like to sell small tracts of land for hunting, etc. He has held a Mississippi real estate license for the past three (3) years. Commissioner Stafford made motion, seconded by Commissioner Carraway, to allow Mr. Coleman to sit for the real estate exam pending his sponsoring broker signing an affidavit that he is aware of Mr. Coleman s conviction. After a roll call vote, motion carried with Commissioners Carraway, Stafford, Burns, and Noles voting in favor, Commissioners Caffery and Gosslee voting in dissention, and Commissioner Ory abstaining. 2. David Flickinger Mr. Flickinger appeared before the Louisiana Real Estate Commission in connection with his request to sit for the real estate exam. On December 7, 1998, Mr. Flickinger pled guilty to possession of a Scheduled II Controlled Substance cocaine. The court deferred imposition of the sentence under Article 893 and he was sentenced to three (3) years probation. On January 9, 2003, an acquittal for the conviction was granted under Article 893. On March 20, 2006, Mr. Flickinger pled guilty to possession of a Schedule II Controlled Substance Alprazolam (Xanex). For this offense, he was sentenced to a period of eight (8) years hard labor and a fine of $2, The court ordered that the hard labor be suspended under Article 893 and he was placed on five (5) years supervised probation. On March 20, 2011, Mr. Flickinger satisfactorily completed his probation. Mr. Flickinger discussed the events that led to his conviction and answered questions from the Commissioners. Mr. Flickinger currently works with Fresh Start Ministries where he completed his rehabilitation. Commissioner Noles made motion, seconded by Commissioner Burns, to allow Mr. Flickinger to sit for the real estate exam. After a roll call vote, motion carried unanimously. COMMITTEE REPORTS: 1. Budget Commissioner Stafford stated thanked Commissioner Noles for his questions in regards to the budget. Stafford reminded commissioners that the decrease in revenue was partially due to the large amount of delinquent penalties that are no longer being received after the shortened delinquent renewal timeframe. She stated there has been a decrease in personnel as well as travel expenses. Retirement and healthcare costs have risen in the past years. Stafford deferred any other questions to Executive Director Unangst and accountant Jenny Yu. Ms. Yu presented the budget to the Commission for approval. Ms. Yu stated that personnel costs and travel also decreased in the month of September. Ms. Yu stated that the Commission will finish$79,000 in the black. Commissioner Noles questioned the credit card fees from fiscal year and fiscal year Mr. Unangst stated that Rice Insurance will be picking up the costs for credit card fees during the renewal season of They did not previously do this in FY (Attachment A) 2 Commissioner Burns made motion, seconded by Commissioner Carraway, to approve the budget as presented. Motion carried. 2. Education/Research/Publication Commissioner Caffery announced the Special Committee on Continuing Education is continuing to move forward with instructor certification and may have a committee meeting in November if materials can be prepared and distributed in time. Commissioner Ory questioned when the first Train the Trainer classes for the mandatory course will be held. Mr. Unangst and Mr. Gremillion stated the goal is for late November or early December. Commissioner Caffery stated that the Commission is much further ahead than has been in previous years. 3. Legislative/Legal/Timeshare Mr. Unangst stated that he spoke with Commissioner Flavin and he will hold a Legal/Legislative meeting in November. 4. Standardized Forms No report. 5. Strategic Planning No report. 6. Errors & Omissions No report.

3 DIRECTORS REPORT: Mr. Unangst reminded Commissioners that the amended rules and regulations go into effect on October 20 th, The Cite and Fine system will also go into effect on this date. Mr. Unangst stated that outreach and educational efforts have continued. Mr. Unangst advised Commissioners to not discuss enforcement issues that stem from the Cite and Fine system with licensees. This would render their ability to sit and hear any cases that come before the Commission and they would have to recuse themselves. Commissioner Trapani questioned whether websites will be getting into compliance, such as and if licensees will be held responsible for issues they have no control over. Mr. Unangst stated that is working on getting into compliance and licensees will not be fined if the information on a website is something they can t control. Most items on are in compliance with the exception of banners. MLS and IDX systems are not considered advertising by rule. Renewal process will hopefully be opening within the next week dependent upon the CAVU.net upgrade. blasts will be sent to all licensees. Mr. Unangst stated that the budget has been approved which includes a fee schedule that includes processing fees that were passed into law in 1995 (See Addendum 1 of Attachment A). There will be a $15.00 renewal processing fee across the board for all license renewals. The 1995 statute allows for a processing fee up to $ Broker corporation (company license) renewals will increase from $25.00 to the full authorized amount of $70.00 if approved by the Commission. Commissioner Carraway made motion, seconded by Commissioner Burns, to return the company license renewal fee to the $70.00 renewal fee as authorized by statute. Commissioner Noles noted that this renewal fee is the only fee that has changed significantly. He states that he is speaking in favor of the motion. Commissioner Stafford questioned if inactive licensees will also be charged the $ Mr. Unangst stated that this will be an across the board adjustment so they will be included. Commissioner Ory questioned the motive for raising the broker corporation fee. Mr. Unangst stated that the fee was previously set at $70.00 and a motion was passed by a past Commissioner to reduce the fee to $ The current motion will bring the fee back to what was originally set by statute. After no further discussion, motion carries. Commissioner Noles made motion, seconded by Bono, to formally approve the fee schedule as set forth in the budget. Motion carried. Commissioner Noles stated that the processing fee addition is only a 1 ½% increase annually since 1995 and barely puts the Commission in the black for the fiscal year. The company license renewal is a 300% increase but is merely setting the fee back to what was previously authorized by statute. The full $25.00 processing fee was not utilized by the Commission as it could have been. Commissioner Bono requested that an article be placed in the Boundary Lines which discusses the increased cost of living such as gasoline, bread, ground chuck, etc so that licensees may understand the need for the increase. Legal counsel Arlene Edwards requested to add items to the Director s Report. Ms. Edwards also reminded the Commissioners to not discuss any complaints or investigations with a member of the public or a licensee as they may have to come before the commission for a hearing. Commissioners should refer any questions or discussion to the appropriate staff member or they will not be able to sit and listen to the hearing and vote. They will be forced to recuse themselves from the hearing. Ms. Edwards reminded the Commissioners that they Governor could replace a member of the commission for recusing themselves due to involvement. At the request of the Ethics Board, Ms. Edwards stated if there is any item that comes before the commission that involves a family member or that a Commissioner has any personal involvement in such as a company, they must recuse themselves as this is an ethics violation and they could be charged by the Ethics Board. Commissioner Stafford also reminded Commissioners to not take any calls from felony applicants or their family members. Ms. Edwards said that a Commissioner cannot have superior knowledge of an item before it comes before the Commission. PUBLIC COMMENT: None UNFINISHED BUSINESS: None 3

4 NEW BUSINESS: Commissioner Caffery made motion, seconded by Commissioner Stafford, to approve the stipulations and consent orders presented in a memorandum dated October 10, 2011 from the Executive Director to the members of the Commission and that the stipulation and consent orders be executed in the name of the Commission. Discussion regarding the motion took place. Ms. Edwards stated that the Commission is approving the consent order that was previously approved for fines involving practice after expiration of a license, continuing education audits, and post-licensing audits. Commissioner Carraway questioned if the individuals that practiced without a license were required to pay back the commission monies they were paid during the unlicensed period. Ms. Edwards stated these cases did not come before her at an informal hearing due to the large number of cases involved. The Commission previously approved fine amounts for these cases. Commissioner Trapani questioned if these were repeat offenders. Commissioner Stafford stated that it was previously voted on that repeat offenders be required to pay a double fine. If there was a third instance, they would be required to come before the Commission. Investigator Robert Maynor stated that none of these cases were repeat offenders and the bulk of these cases were post-licensing cases. Commissioner Bono again questioned whether a licensee was required to pay back the commission monies earned during the unlicensed period. Ms. Edwards stated the Commission has discussed this issue numerous times before and they have decided not to return the money to the broker. It sometimes becomes impossible to locate the buyers/sellers to return the funds. It is illegal for the Commission to keep the commission monies and put into the Commission funds. Commissioner Trapani recommended that the commission fine the individuals that practice without a license up to $5, Ms. Edwards stated that there could be a discrepancy due to the differences in the amounts of commission monies received. After further discussion regarding unlicensed activity, the motion carried. Commissioner Gosslee stated that USAA contacted him and would like to speak to the Commission about cash back regarding relocation. Ms. Edwards stated that compensation cannot be given to any unlicensed individual. Anyone is allowed to come and speak at the commission meeting as it is a public meeting. Commissioner Gosslee also inquired about the selection of appraisers and whether we have any jurisdiction. This is a federal law and does not fall under the jurisdiction of the commission. Commissioner Caffery stated that he was posed with the question of how long a first offense in regards to Cite and Fine will be on the books. Ms. Edwards stated that there is no expongement period in the rules or law. Mr. Unangst stated this issue was going to be addressed to the Legal/Legislative committee for discussion. He agreed a past offense could not be taken out of their file but the hearing officer can take the length of time between offenses in consideration. Commissioner Noles stated he thought he understood that Commissioners were not reimbursed for travel expenses in relation to trade organization meetings such as National Association of Realtors and Louisiana Realtors Association. Mr. Unangst stated the Commission does pay these expenses and that Commissioners have not abused this in the past. The past commissions have approved this reimbursement due to the beneficial nature of the commissioners attending these meetings. Commissioner Trapani stated that the past LR convention in Lake Charles discussed the Cite and Fine system and also had a presentation by Mr. Unangst. Commissioner Noles thinks it is wrong for the commission to pay these expenses because not every licensee is a member of these trade organizations and get zero benefit for Commissioners attending. There being no further business, Commissioner Burns made motion, seconded by Commissioner Caffery, to adjourn. Motion passed without opposition. FRANK TRAPANI, CHAIRMAN PATRICK T. CAFFERY JR., SECRETARY 4

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