Assembly so-so for Realtors 'Overall, we had a good year,' lobbyist says

But who represents buyer?

Failure to pass licensing format is a disappointment

April 13, 1997|By Robert Nusgart | Robert Nusgart,SUN REAL ESTATE EDITOR

As the Maryland General Assembly concluded business Monday, both the Maryland Association of Realtors and the Greater Baltimore Board of Realtors could leave Annapolis knowing that they had gained some victories, but also knowing that there was still work to do.

Two of their main initiatives -- the Real Estate Licensing Reform Act and the Mandated Semi-Annual Property Tax Payment -- made little headway and were sent to summer study with the hope that they will be acted on during next year's session.

"We were disappointed that we didn't get our real estate licensing format through, but the rest of the session we found pretty encouraging," said Mary Antoun, executive vice president the Maryland Association of Realtors.

Frank Boston, a lobbyist for the GBBR, echoed those feelings. "Overall, we had a good year although there's disappointment because you like to have legislation passed immediately," he said.

Boston believes that some of the legislature's concern came with issues that dealt with consumer protection. Nevertheless, "we understand it's a big process when you're asking for a big change," he said.

The big change and the main focus of the licensing reform act would have been to change the presumptions of who represents DTC whom.

"What the law requires now is that the agent must disclose to the buyer at the first scheduled face-to-face meeting who he represents," Antoun said. "The law also presumes that, unless there is some other arrangement, the agent represents the seller.

"I think it's important to focus on why we want to change that. Most customers presume that the agent who they go out and look at houses with is representing them. It's a logical conclusion to draw. That's why we have the disclosure requirement in the first place. But what's happened in the last three or four years is it has become more common for agents to represent buyers."

She described the process now in place.

"When there is a meeting of substance, he [the agent] gives the customer a state-mandated disclosure form that tells you the duties of a licensee and indicates who [the agent] represents."

"It doesn't mean he can't represent the buyer, but if there is no agreement, then the law presumes he [the agent] represents the seller," she said.

Antoun admits that it can be quite confusing to buyers.

"Sometimes you can be overwhelmed with all these requirements and the buyer can feel lost or even obligated," she said.

"One of the biggest single problems when the agents give the disclosure is that the law requires that [the buyer] signs that disclosure so that the agent can say to the Real Estate Commission [in the event of a dispute] that I gave the disclosure and that he signed the disclosure.

"Sometimes they don't even want to sign it because, no matter what you say, they still believe it is obligating them instead of giving them the disclosure," she said.

Antoun said the proposed legislation that will be looked at during the summer would accomplish three main objectives:

It would change the presumption of agency when the customer is walking in off the street, from one of representing the seller to one of representing the buyer, "which then either party can alter, but if nobody does anything, then that's the presumption," she said.

It would require that if you want a buyer's agent to represent you, then you must have a written agreement. "The current law does not require a written agreement for buyer agency, only a written agreement for seller agency. What we are doing is creating mirror images," Antoun said.

Third, the law would say that the agent or his principal -- either the buyer or the seller -- would be responsible for the acts of each only when they know of those acts and specifically authorize those acts.

"It takes a while to study the changes and educate the legislators on what we're trying to do and change the law," Boston added. "They realized that they need a little bit more time. But we're optimistic that we will have that support and will get that bill through next year."

The mandatory semiannual property tax payment, which has been floating around the legislature for years, was key to Boston's agenda, but it met with strong opposition.

"We knew that it would be tough cookie, but we were successful in getting it to a summer study," he said. "It's a minor victory for us because it gets the issue of closing costs back on the table for us to study."

Homeowners have the option of paying property taxes on a semiannual basis. But, a study by the Department of Taxation and Maryland Association of Realtors found just 3 percent of the homeowners were electing to pay on a semiannual basis.

Consequently, when a buyer goes to settlement he must reimburse the seller for taxes that have already been paid.

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