1. License Law34-27-36 Alabama Real Estate Commission 3 Hour CE credit for 2010 Steve McTyeire, MBA, Broker Real Estate Instructor Avery Yarbrough School of Real Estate SteveMcT@gmail.com NewLocationRealty.com 205-807-5200

2. AREC Rules Turn off Cell Phones You must be here now to receive credit later And stay till end Everyone Signed in? Name & license # MUST pass 100 question test at end of class Just kidding, no test Check Cmap for credit in 2 days Leave praising evaluation www.arec.alabama.gov

3. Handouts Power Point Slides Cases Articles by Charles Sowell Advertising A Few Points Advertising Advisory Opinion Estimating Net Sheets Seller Disclosure in Alabama Caveat Emptor Minimum Service

4. Class Outline License law 34-27-36 (1-31) Break License Law Jeopardy Game Case Studies Break Advertising Net Sheets Seller Disclosure Caveat Emptor Close

5. Alabama License Law 1931 14 Page Booklet 10 Violations

6. Alabama License LawEffective June 1931 Making a substantial misrepresentation, or Making a false promise of a character likely to Influence, persuade or induce , or Pursuing a continued and flagrant course of Misrepresentation or making of false promises Through agents or salesmen or advertising, or Acting for more than one party in a transaction Without the knowledge of all parties, or Representing a real estate broker without the Knowledge and consent of the employer

7. Alabama License LawEffective June 1931 Failing, within a reasonable time to account for Or to remit any money coming into his possession Which belongs to others, or Being unworthy or incompetent to act as a RE broker or agent in such a manner as to safeguard the Interest of the public, or Paying a commission or valuable consideration To any person for acts or services performed in Violation of this act, or Any other conduct, which constitutes improper Fraudulent or dishonest dealing

8. Alabama License LawEffective June 1931 Any unlawful act or violation of the provisions of this act by any salesman of a licensed real estate broker, shall not be cause for the revocation of a license of any real estate broker, unless it shall appear to the satisfaction of the Commission that the broker had guilty knowledge himself.

9. Complaint on licensee Commission will investigate a verified complaint by any person If probable cause is found Formal complaint is filed Notice issued Hearings are held The Commission may issue subpoenas and compel the testimony of witnesses, production of documents and records during an investigation of a licensee.

10. Complaint Form Complaint Form http://www.arec.alabama.gov/pdf/Complaint%20Form%202007.pdf

11. If licensee is found guilty,The Commission may Suspend or Revoke license Fine $100 to $2500 Or both of above Restitution Require CE, usually Risk Management If criminal act, refer to Attorney General Could be jailed Hold Broker liable for acts of salespeople Get in broker’s checkbook as well as agent’s

12. AREC Update

13. Alabama License Law 2009 114 Pages & Lots of Violations

14. 1931 (9) , 2009 (40) Violations 34-27-36 (1) Procuring or attempting to procure, a license for himself or herself, or another, by fraud, misrepresentation, or deceit, or by making a material misstatement of fact in an application for a license

15. 34-27-36 (2) Engaging in misrepresentation or dishonest or fraudulent acts when selling, buying, trading or renting real property of his or her own or of a spouse, child or parent

16. 34-27-36 (3) Making a material misrepresentation, or failing to disclose to a potential purchaser or lessee any latent structural defect or any other defect known to the licensee. Latent structural defects and other defects do not refer to trivial or insignificant defects, but refer to those defects that would be a significant factor to a reasonable and prudent person in making a decision to purchase or lease

17. 34-27-36 (4) Making any false promises of a character likely to influence, persuade, or induce any person to enter into any contract or agreement.

18. 34-27-36 (5) Pursuing a continued and flagrant course of misrepresentation or the making of false promises through agents or salespersons or any medium of advertising or otherwise.

19. 34-27-36 (6) Publishing or causing to be published any advertisement which deceives or which is likely to deceive the public, or which in any manner tends to create a misleading impression or which fails to identify the person causing the advertisement to be placed as a licensed broker or salesperson.

20. 34-27-36 (7) Acting for more than one party in a transaction without the knowledge and consent in writing of all parties for whom he or she acts.

21. 34-27-36 (8 a) Failing to within a reasonable time to properly account for or remit money coming into his or her possession which belongs to others, or commingling money belonging to others with his or her own funds

22. 34-27-36 (8 b) Failing to deposit and account for at all times all funds belonging to, or being held for others, in a separate federally insured account or accounts in a financial institution located in Alabama.

23. 34-27-36 (8 c) Failing to keep for at least three years a complete record of funds belonging to others showing to whom the money belongs, date deposited, date of withdrawal, and any other pertinent information.

24. 34-27-36 (9) Placing a sign on any property offering it for sale, lease, or rent without the consent of the owner.

25. 34-27-36 (10) Failing to voluntarily furnish a copy of each listing, contract, lease, and other documents to each party executing the document with reasonable promptness. 34-27-36 (25) Failing to include a fixed date of expiration in a written listing agreement or failing to leave a copy of the agreement with the principle

26. 34-27-36 (11) Paying any profit, compensation, commission, or fee to, or dividing any profit, compensation, commission, or fee with anyone other than a licensee or multiple listing service. This subdivision shall not prevent an associate broker or salesperson from owning any lawfully constituted business organization, including, but not limited to, a corporation or LLC for the purpose of receiving payments contemplated in this subsection. The business organization shall not be required to be licensed under this chapter, and shall not engage in any other activity requiring a real estate license.

27. 34-27-36 (12) Paying or receiving any rebate from any person in a real estate transaction.

28. 34-27-36 (13) Inducing any party to a contract to break the contract for the purpose of substituting a new contract, where the substitution is motivated by the personal gain of the licensee.

29. 34-27-36 (14) If the licensee is a salesperson or associate broker, accepting a commission or other valuable consideration for performing any act for which a license is required from any person except his or her qualifying broker.

30. 34-27-36 (15) If a qualifying broker or company, allowing a salesperson or associate broker licensed under him or her to advertise himself or herself as a real estate agent without the name or trade name of the qualifying broker or company appearing prominently on the advertising inletters at least as large as the name of the salesperson or associate broker. Webster’s -- prominent sticking out; projecting; noticeable; conspicuous Fine print is not prominent

31. 34-27-36 (16) Presenting to the commission, as payment for a fee or fine, a check that is returned unpaid #1 violation of license law $250 fine, plus bank charge Name in AREC Update Risk management Electronic payment or money order

32. 34-27-36 (17) Establishing an association, by employment or otherwise, with an unlicensed person who is expected or required to act as a licensee, or aiding, abetting, or conspiring with a person to circumvent the requirements of this chapter.

33. 34-27-36 (18) Failing to disclose to an owner the licensee’s intention to acquire, directly or indirectly, an interest in property which he or she or his or her associates have been employed to sell.

34. 34-27-36 (19) Violating or disregarding any provision of this chapter or any rule, regulation, or order of the commission.

35. 34-27-36 (20) If a broker, accepting a “net listing” agreement for sale of real property or any interest therein. A “net listing” is one that stipulates a net price to be received by the owner with the excess due to be received by the broker as his or her commission.

36. 34-27-36 (21) Misrepresenting or failing to disclose to any lender, guaranteeing agency, or any other interested party, the true terms of the sale of the real estate.

37. 34-27-36 (22) Failing to inform the buyer or seller at the time an offer is presented that he or she will be expected to pay certain closing cost and the approximate amount of those cost.

38. 34-27-36 (23 a) Having entered a plea of guilty or nolo contendere to, or having been found guilty of or convicted of a felony or a crime involving moral turpitude

39. 34-27-36 (23 b) Having a final money judgment rendered against him or her which results from an act or omission occurring in the pursuit of his or her real estate business or involves the goodwill of an existing real estate business.

40. 34-27-36 (24) Offering free lots or conducting lotteries for the purpose of influencing a party to purchase or lease real estate

41. 34-27-36 (25) Failing to include a fixed date of expiration in a written listing agreement or failing to leave a copy of the agreement with the principle

42. 34-27-36 (26) Conduct which constitutes or demonstrates dishonest dealings, bad faith, or untrustworthiness

43. 34-27-36 (27) Acting negligently or incompetently in performing an act for which a person is required to hold a real estate license.

44. 34-27-36 (28) Failing or refusing on demand to produce a document, book, or record in his or her possession concerning a real estate transaction conducted by him or her for inspection by the commission or its authorized personnel or representative.

45. 34-27-36 (29) Failing within a reasonable time to provide information requested by the commission during an investigation or after a formal complaint has been filed.

46. 34-27-36 (30) Failing without cause to surrender to the rightful owner, on demand, a document or instrument coming into his or her possession.

47. 34-27-36 (31 a) If a qualifying broker or company, failing to keep in their files copies of all contracts, leases, listings, and other records pertinent to real estate transactions for a period of three years.

48. 34-27-36 (31 b) If it appears that a person, firm, corporation, or any business entity has engaged, or is about to engage, in an act or practice constituting a violation of Article 1 or 2 of this chapter or any rule or order of the commission, the commission, through the Attorney General, may institute legal actions to enjoin the act or practice and to enforce compliance with articles 1 and 2 of this chapter or any rule or order of the commission. 79 words To prevail in an action, it shall not be necessary to allege or prove either that an adequate remedy at law does not exist or that substantial or irreparable damage would result from the continued violation.

49. 34-27-36 (31 c1) Not withstanding any other provisions of law, the commission may issue an order requiring any accused person, firm, corporation, or business entity to cease and desist from engaging in activities requiring a license under this chapter when the accused person, firm or business entity is not licensed under this chapter. The order shall be entered by the executive director after a finding of probable cause by the commission staff. The order shall become final 15 days after its service upon the accused, unless the accused request a hearing before the commission.

50. 34-27-36 (31 c1) Upon hearing the case and finding violations, the commission may make the cease and desist order final and the commission may impose a fine for each violation in an amount consistent with the range of fines applicable to licensees, and in addition, may impose a fine in the amount of any gain or economic benefit that was derived form the violation, and in addition, may impose a fine in the amount of the commission’s cost incurred. Any fines not paid as ordered shall be enforceable in any court with jurisdiction and proper venue.

51. 34-27-36 (31 c2) Notwithstanding any other provisions of law, the commission may decline to issue an order requiring any accused person, firm, corporation, or business entity to cease and desist from engaging in activities requiring a license under this chapter when the accused person, firm, corporation or entity is not licensed under this chapter. In this instance, the commission shall proceed to give appropriate notice of the violation and hold a hearing thereon.

52. 34-27-36 (31 d) The commission shall notify the licensee and qualifying broker in writing regarding the complaint.

53. 34-27-36 (31 e) The commission shall notify the complainant, licensee, and qualifying broker in writing regarding the disposition of the complaint.

56. Break 10 Minutes

57. Jeopardy

58. Complaint 1 page 1

59. Complaint 1 page 2

60. Count 1

61. Complaint 2 page 1

62. Complaint 2 page 2

63. Count 2

64. Complaint 3 page 1

65. Complaint 3 page 2

66. Count 3

67. Break 10 Minutes

68. Advertising Points

69. Advertising Advisory

70. Application of Advertising Law to Social Networking Sites Questions about social networking sites; Such as: MySpace, Facebook, and Twitter. We are seeing listings and other solicitations of business on these sites. The commission wants it to be known that these solicitations are advertising, and are subject to the same laws as all other kinds of advertising. Policy for many years has been to treat all forms of advertising the same, regardless of the media used. Electronic solicitations of business on Web sites, for example, are considered advertising just the same as a billboard. Any questions should be directed to the commission office. May 2009

71. Advertising Advertisinghttp://www.arec.alabama.gov/pdf/Update/update-fall-2009.pdf Advertising Company Namehttp://www.arec.alabama.gov/pdf/Update/AREC%20Update%20Summer%202009.pdf

72. Estimated Net Sheet

73. Net Sheets Refresher on Net Sheets http://www.arec.alabama.gov/pdf/Update/update303.pdf

74. Seller Disclosure

75. Seller Disclosure Seller Disclosurehttp://www.arec.alabama.gov/pdf/Update/arec_update_0417.pdf

76. Caveat Emptor

77. Caveat Emptor Caveat Emptor Let the buyer beware http://www.arec.alabama.gov/pdf/Update/summer97.pdf

79. Legal Articles Links Gifts http://www.arec.alabama.gov/legal/briefly-legal.asp Advertisinghttp://www.arec.alabama.gov/pdf/Update/update-fall-2009.pdf Briefly Legal Archives http://www.arec.alabama.gov/legal/briefly-legal-archive.asp

80. Update Newsletter - Briefly Legal Index Article Title In This Issue Vacation Rental Brokers-It's All About Disclosure Spring 2010 Property Management: In's & Out's of Escrow Accounts Spring 2010 Disclosing Special Relationships Winter 2010 Advertising: A Few Points Fall 2009 Company Names in Advertising: What's in a Name? Summer 2009 Application of Advertising Law to Social Networking Sites Lawsuit and Criminal Case Reporting Requirements Summer 2009 Earnest Money Disputes Part II Spring 2009 No Referral Fees to Unlicensed Persons Renewal 2008 Company Licensing Requirements Fall 2008 "As Is" Little Words, Big Impact Spring 2008 Warning...Do You Know Who is Auditing Your Company? Spring 2008 Alabama Vacation Timeshares and Fractional Interest Spring 2008 Attention! Reciprocal Licensees Spring 2008 CE Courses Taken in Other States Spring 2008 How Do We Do It? Winter 2008 Commercial Practice Tips Renewal 2006 Earnest Money Disputes Winter 2007 Commercial Practice Tips Renewal 2006 Act 2006-601 (Unlicensed Activity & Jurisdiction) Renewal 2006 Letter Sizin’, Alabama Real Estate Advertising Regulation Spring 2006 Seller Disclosure in Alabama Spring 2006 CMA, BPO or Appraisal Spring

81. 2006 License Law Changes Fall 2005 Duplicate Company Names Fall 2005 Minimum Services Law Fall 2005 Double Dipping (So you want to be in the Mortgage Business Too) Spring 2005 When You Change Companies Fall/Winter 2004 Mortgage Loan Fraud–Don’t Do It Renewal 2004 Four Men Charged in HUD Loan Fraud Winter 2004 Real Estate on Late Night Television Winter 2004 Companies to Receive Commissions for Licensees Fall 2003 Buying a Property Listed by Your Company Summer 2003 A Refresher on Estimated Closing Statements or Net Sheets Spring 2003 Audit Checklist Is That Your Final Answer? Or is it Fraudulent Suppression? Fall 2002 Sweep Escrow Accounts? Renewal 2002 Random Office Inspections, Audits and Other Stuff Spring/Summer 2002 Commissioners Amend RECAD Form Spring/Summer 2002 Brokers Liens on Commercial Real Estate Spring/Summer 2000 Your Company Trust Accounts Winter 1999 RECAD in Commercial Deals Spring/Summer 1999 Property Transfer and Underground Storage Tanks Spring/Summer 1999 Risk Management 101: You and YOUR Real Estate Fall 1998 Questions: RECAD, Megan’s Law, Continuing Education Summer 1998 A Quiz on Getting Paid Winter 1998 Caveat Emptor vs. Seller Disclosure Summer 1997 Gifts, Rebates and Kickbacks Spring 1997 Deposit of Funds Rule Changes (See current Rule 790-X-1-.03) Summer 1996

82. CMap Student Instruction Sheet Check your credit on the Commission’s Web site at www.arec.alabama.gov. 1. Check your course credit on the Alabama Real Estate Commission’s Web site by clicking on “Check CE Credit” in the Quick Links on the home page. 2. Click “Online Services” on the next page. 3. Log in by typing your license number, last four digits of your social security number, and date of birth. 􀂃 Your license number should not include the extension (i.e. -0, -1, -2, etc.) 􀂃 Your date of birth must contain two digits for the month, two for the day and four for the year of birth. It will not work any other way! 4. Once your record appears, make any necessary changes to your address. If no changes need to be made, click “Next” at the bottom of the screen. 5. Select “Licensee CE Credit” from the Available Services and check to see which courses have been reported to the Commission. 6. It will take approximately 10 days after course completion to report your credit. 7. If your credit does not appear on the Web site by that time, you may choose to contact the appropriate instructor or school and have your credit reported to the Real Estate Commission. 8. Remember, if it does not show on the Commission’s Web site, the Commission does not have it and you do not have credit! 9. Once you access your record to check your CE credit, you can also submit a course evaluation. 10. Next to the course you completed is a button labeled, “Evaluate this Course.” You will have this option for thirty days after you complete the course. Rev 07142009

83. Conclusion License law 34-27-36 (1-31) License Law Jeopardy Game Case Studies Advertising Net Sheets Seller Disclosure Caveat Emptor Minimum Service