K e n t u c k y R e a l E s t a t eN E W Se-archives.ky.gov/pubs/Real_estate/KRECnewswntr04.pdfKentucky Real Estate Commission 10200 Linn Station Road Louisville, KY 40223 Phone: 502-425-4273

CONTENTS

Listings & ContractsBelong to Principal Broker

Fax Transmissions

Inspectors are Buyer’sChoice

Inducement Update

No-Call Law

Surveys - Chairman’sComments

Seller’s DisclosureRequirements

New Law - PropertyConveyance/Stigmas

Disciplinary Actions

Mortgage Fraud Schemes

HUD Listings

Safety Tips for Licensees

Virtual Office Websites

Don’t Get Caught AsleepBecause the Fines are SteepRENEW ON TIMEIt is that time of year again. The deadline to renew yourlicense is MARCH 31, 2004. Escrowed licensees will receive a renewal

notice at their home address. Principal brokers will receive a renewal notice attheir business address. All active licensees renew through their brokers. Listedbelow are a few important reminders:11 .. The cost to renew your license is $50.00 for a sales associate and $55.00 for abroker. Active licensees will also have to either purchase group errors and omis-sions insurance or show proof of outside coverage.22 .. The Commission only accepts checks or money orders.33 .. Renewals received after March 31, 2004 will be assessed a penalty of $100.00.That penalty increases to $200.00 after May 15, 2004. If licensees do not renew,they are considered unlicensed and should not practice real estate during thattime.44 .. Only one check is accepted from each company. However, branch officesshould submit one check for each branch location.55 .. The group errors and omissions insurance applies to active licensees only. Thepremium remained the same as last year at $123.00, with applicable taxes and sur-charge. The insurance agent is still Rice Insurance Services Company (RISC).66 .. Licensees choosing to purchase outside errors and omissions insurance arerequired to submit a declaration page showing minimum coverage requirements.77 .. Principal brokers are required to have a bank official sign the renewal form,verifying the company’s escrow account. Only a bank official can sign the form.88 .. Licensees who are also appraisers will again be able to purchase an endorse-ment through the group insurance carrier to the real estate policy to cover theirappraisal activity as well. The cost for that coverage this year is $200.00. Thatamount should be sent directly to our group insurance carrier, Rice InsuranceServices Company (see address below).99 .. Licensees wishing to purchase an endorsement to the group errors and omis-sions insurance policy should send the form and premium directly to the groupinsurance carrier, Rice Insurance Services Company (see address below).

Printed with State Funds No. 196 Winter, 2004

GROUP ERRORS AND OMISSIONS INSURANCE COMPANYRISC Rice Insurance Services Company, LLC

4211 Norbourne Boulevard, Louisville, KY 40207502-897-1876 or 1-800-637-7319 TOLL FREE

K e n t u c k y R e a l E s t a t e

N E W SA Publication of the Kentucky Real Estate Commission

Kentucky RealEstateCommission10200 Linn Station RoadLouisville, KY 40223Phone: 502-425-4273Toll Free: 1-888-373-3300Fax: 502-426-2717Web Site: www.krec.net

Commissioners

Bob Roberts, ChairRichmond

Betty KaiserLouisville

Arvel J. McMahan Pewee Valley

Ron SmithLouisville

Sue TeegardenAlexandria

Commission Staff

Norman Brown Executive Director

Education and Licensing

Linda PoliskieEducation Director

Sarah WestSarah ChandlerMichelle Gary

Legal

Lee B. HarrisGeneral Counsel

Mary StevensonDianna RogersDenise Wade

Administrative

Michelle CameronDirector of Administration

Kim Brewer Louis CarterMelissa Kime

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Commentsfrom the Chairby: Bob Roberts,Chairman

Most of the time a survey is goodfor about ten years. However, ifchanges have been made to the prop-erty, it is a good idea to either have anew survey or update the existingsurvey. A survey is like a “snap-shot” and if changes have beenmade, then the picture will not beaccurate. Changes, such as new ormodified fences, decks, driveways,garages or other features, can causean existing survey to be inaccurate.

If you are the listing agent, youshould always check to see if thesellers have an existing survey onfile. If so, you can use that as a sell-ing point to guarantee the bound-aries of the property to be sold.

On average, it costs around $400.00to obtain a real property survey. Tellyour buyers and sellers to look at itas an investment that could poten-tially save them thousands of dollarsin legal fees down the line. It couldalso be the deciding factor inwhether or not your buyers evenwant a particular piece of property.

As always, in addition to having asurvey, the Commission encourageslicensees to have their buyers obtaina home inspection and purchaseowner’s title insurance. Buying andselling a home is usually the largestfinancial investment a person makesin his or her lifetime and it is worththe extra effort to ensure that yourclient will be happy and satisfiedwith his or her purchase. Thesethings will protect you and yourclients as well.

erving as a Commissioner since1989, I have reviewed and

voted on many real estate com-plaints. Many of those cases couldhave been avoided, if a real proper-ty survey had been completed priorto the closing of the transaction.

A real property survey is a legaldocument that illustrates in detailthe boundaries of the property aswell as any buildings or visible pub-lic and private improvements rela-tive to the property boundaries. Italso shows whether or not theimprovements are located withinthe boundaries and whether thereare any visible encroachments onthe property by neighboring build-ings, etc.

All too often, buyers do not want toincur the extra expense of a survey.Many times, buyers are trying tosave as much money as they can fortheir down payment and closingcosts that they try to skip these veryimportant steps of ensuring thattheir transaction will go smoothly.

I would also encourage buyers toget a survey as soon as possible sothat they know EXACTLY whatthey are buying. By having the sur-vey in advance, it can allow buyersand sellers to work out any prob-lems that might have been detectedin the survey prior to the closingdate. The survey would allow buy-ers to know whether their newhome is too close to the propertyline, or if part of their garage is ontheir neighbor’s land.

S

3

From theDirector’s Deskby: Norman E. Brown,Executive Director

It is my pleasure to use this col-umn to let you know about sever-al exciting new things going on atthe Commission.

RADIO ADVERTISEMENTS

First of all, many of you mayhave heard the radio advertise-ments that were produced andrun by the Commission. Theadvertisements encourage sellersand buyers to use a real estateagent when buying or selling ahome. The tag line is: "Get Real,use a licensed real estate agent."

The licensees who have heard theadvertisements have given us verypositive feedback, saying thatthey liked the content and qualityof the advertisements. We wouldlike to hear from you regardingthe advertisements. For example,did you like the advertisementsand the presentation? Would youlike to see the Commission domore such advertisements in thefuture?

RENEWAL TIME

Secondly, as you know from ourfront-page article, the time forrenewing your license is here. Tomake the renewal more efficient,we are in the process of imple-menting an online renewalprocess. We still need severalvolunteers to sign up to use the

online renewal system this year.If you are interested in renewingyour company online, please con-tact me at 1-888-373-3300 or 502-425-4273 and I will give you allthe details.

PROPOSED LEGISLATION

Finally, we are in the process ofproposing a bill to the GeneralAssembly with several license lawchanges. We have been workingwith the Kentucky Association ofRealtors® to get this proposalready and to present it to the leg-islature. The sponsor of our billis licensee Charlie Borders fromRussell, Kentucky.

If you would like to see a com-plete text of the changes, pleasefeel free to log onto our websiteat www.krec.net and review theproposal online. Once our statu-tory packet is complete, we willof course be updating our regula-tions to comply with these newchanges. Please let us know ifyou have any feedback on theproposals.

As always, we are here to servethe real estate licensees and thereal estate consumers of this finestate. If you have ideas abouthow the Commission can betterserve this industry, we are alwaysopen for suggestions.

201 KAR 11:300 is the regula-tion regarding the use of fac-simile (FAX) transmissions.It states that licensees maytransmit and receive docu-ments via the FAX machine,but that a copy of the docu-ment shall be immediatelymailed by regular mail and

addressed to the person whoreceived the FAX. TheCommission has been

informed that although theFAX machine is used oftenduring a real estate transac-tion, licensees are not fol-

lowing through with mailinga copy of the FAX by regular

mail if the agent or partymakes that request. You

must do this - it’s the law!

FFAXED COPIESAXED COPIES

Seller Disclosure FormThe Seller Disclosure form isrequired for single family resi-

dential dwellings only.However, sellers of any type of

property are required to dis-close any known/latent defectswith their property, no matterwhat type of property is being

sold.

Court-Ordered foreclosures areexempt from the mandated useof the Seller Disclosure form.However, if a foreclosed prop-

erty is listed through a licensee,that licensee is obligated toobtain a Seller’s Disclosure

form. If a third party entity,such as a bank, is involved,

there is a waiver on the back ofthe form that they can sign stating that they refuse to

complete the form.

Commissioner’s

Corner

Betty Kaiser

Arvel J. McMahan

Sue Teegarden

Bob Roberts

Ron Smith4

There is a new statute regarding alicensee’s duty to disclose defectsabout a property. KRS 324.162states: “An agent licensed under thischapter representing a party in thesale, leasing, or exchange of real prop-erty shall have no affirmative duty todisclosure to any person whoacquires, by voluntary or involuntarytransfer, a legal or equitable interest inreal property, including any leaseholdor security interest for an obligation,information not required by this chap-ter or applicable federal law.”

What does this mean? This meansthat real estate licensees do not haveto disclose any stigmas associatedwith a property, such as a murder, asuicide or a violent crime that hasoccurred at the property. It also elim-inates the licensee’s need to disclose the existence of sex offenders in a par-ticular neighborhood, as Megan’s Law

does not require such disclosure byreal estate licensees involved in atransaction.

The Commission also determined thatlicensees do not need to disclose otherconditions about a property, such as agas station going in next door. Theydetermined that licensees only need todisclose defects regarding the physicalaspects of the property.

Remember that licensees still mustanswer any and all direct questions inan honest manner, including ques-tions regarding stigmas and sexoffenders.

NNNNEEEEWWWW LLLLAAAAWWWWDisclosure of Stigmatized Property

INSPECTORS AREBUYER'S CHOICE

The Commission has receivedseveral concerns lately fromagents who represent buyers.

The buyers in these cases haveretained an inspector to inspect

the home they intend to pur-chase but the seller or the sell-er's agent refuses to allow thatparticular inspector to perform

the job. Unless a particularinspector has been specificallydenied in the purchase con-

tract, the seller and/or the sell-er's agent have no right to denythe buyer's inspector of choice.

Kentucky's no-call list is governed bythe Office of the Attorney General.Under this law, merchant to merchantcalls are acceptable. However, theAttorney General's office does not con-sider a "For Sale By Owner" seller as a“merchant” under the statute.Therefore, an agent cannot contact a"For Sale By Owner" seller in order toprospect a listing. An agent may con-tact a "For Sale By Owner" only in theinstance when he or she has a legiti-mate buyer prospect who wants to seethat seller's home.During that conver-sation, though, theagent may not dis-cuss payment of feesor commissions.

NNOO--CCAALLLL LLAAWW::

I regularly read real estate newsletters from around thecountry. Two states have published articles concern-ing a recent rash of attacks against real estate agents inGeorgia. In November of 2003, two real estate agentswere shot and killed while in a model home. Theassailant was later found in Wisconsin and arrested.Also, in Georgia, a man was passing himself off as ahome buyer and was robbing agents when they methim at a home. While we have not heard of anyrecent attacks against Kentucky licensees, theCommission is concerned for the safety of all agentsand brokers in Kentucky.

Below is a list of safety tips that I have compiled thatcould possibly prevent an attack or maybe even saveyour life.

1. When meeting a new client or customer at a prop-erty, don’t go alone. You should try and meet withnew clients and customers at your office first in orderto verify their identity and write down their licenseplate number. If that is not possible, never go alone tomeet someone you do not know.2. Let someone in your office, a friend or familymember know where you are, who you are meetingand when to expect you back.3. Don’t wear expensive jewelry or carry largeamounts of cash.4. Always wear your cell phone and program “911”

into your speeddial. You shouldalso make sureyour phone is fullycharged at alltimes duringappointments.5. Dress appropriately and professionally and makesure you could run in your shoes if necessary. Yourappearance should reflect self-assurance.6. When showing property, try to have the client orcustomer walk ahead of you to avoid being attackedfrom behind. Avoid basements, attics and closets.7. Have your keys in your possession at all times andpark in an area where you cannot be blocked in.8. Take a self-defense course and carry mace or pepper spray.9. Avoid glamorous photos in marketing materialsand try to avoid personal conversation.10. Don’t advertise that a listing is “vacant.”11. Keep doors unlocked to escape quickly.12.Trust your instincts. If you think something doesnot seem right, most of the time it isn’t.13. Develop a “customer identification form” andhave all new clients fill out and verify their driver’slicense number.14. Let your office and co-workers know who to callin an emergency situation.15. Always go in your own car on the first appoint-ment. Don’t ever get into a car with someone youdon’t know.

Safety TSafety Tips for Licensees ips for Licensees By: Shelly CameronDirector of Administration

A basic principle of realestate law is that the list-ings and purchase con-tracts belong to the prin-cipal broker. Eventhough the agent may infact sign the agreementand may have most, ifnot all, of the contactwith the clients, the con-tracts still belong to thebroker. Therefore, if anagent is going to leaveone company and go toanother company, theprincipal broker must

agree to release andtransfer the listings andpurchase contracts to thenew broker. If he doesnot, then the listings andpurchase contractsremain. It is a violationof license law, KRS324.160(4)(p), for theagent to attempt to getthe sellers to seek releas-es of those contracts.

The best way to handlethis situation is to obtainan employment agree-ment up-front. Part of

that agreement shouldaddress what will hap-pen if the agent decidesto leave the company inthe future. If you do nothave an agreement at thetime you intend to leave,you should obtain suchan agreement at thattime. The principal bro-ker can legally pay anagent who has left, buthe or she is under nolegal obligation to do soabsent a written agree-ment.

BROKER OWNS LISTINGS AND CONTRACTS: VVIIRRTTUUAALLOOFFFFIICCEE

WWEEBBSSIITTEESSThe Commission

reviewed the newlyapproved concept of vir-tual office websites, orVOW’s. A motion was

made that a VOW isconsidered an advertise-ment and therefore, anylisting on a VOW must

have disclaimers explaining

which company has thelisting agreement.

5

6

“After 25 years in the real estatebusiness, I still learn somethingnew in each class I take.” Thatwas one licensee’s comment aftertaking a recent continuing educa-tion class. Continuing education(six total hours, with three in law,each calendar year) is one way toprovide licensees with updates onnew laws and regulations and otherinformation which affects theindustry.

Once every four years, all activelicensees subject to continuing arerequired to complete the KentuckyCore Course. The Kentucky CoreCourse is a six-hour comprehensivereview of the state, federal andcommon laws relating to realestate. When it is your year to takethis course again, you will receive acourtesy notice in January and areminder in October if you havenot completed the program at thatpoint. As new licensees come intothe system, through exam or reci-procity, the database system willlook at where we are in the four-year cycle and automatically assignthe compliance year based on thelicensee’s birth date. No other con-tinuing education or pre-licensecourse will substitute for theKentucky Core Course for thatyear.

Remember that continuingeducation/core coursecredit is only valid forthe calendar year inwhich it is com-pleted. Hours maynot be carried for-ward to apply tonext year’s require-ment or for the

reactivation of an escrowed license.

We offer these continuing educationtips:

1. Check the KREC website,(www.krec.net) periodically toobtain a list of approved continu-ing education or Kentucky CoreCourse providers. You must regis-ter directly with the provider andmany of them have links directly totheir course schedules. TheCommission does not sponsor con-tinuing education programs.

2. Watch for new courses or topicsthat you have not heard in a while.Take advantage of the opportunityto refresh your memory or learnmore about a new aspect of thereal estate business.

3. Take classes early in the year.These classes are rarely filled tocapacity. By doing so, you’ll avoidthe year end rush, crowded class-rooms and potentially bad weather.You might choose to attend acourse in another town, thus pro-viding you with a chance to meetand network with licensees you donot know already.

4. Arrive early for class and returnpromptly from the breaks. Turn offall pagers and cell

phones andavoid con-versa-

tions with other participants duringthe presentation. Providers arerequired to enforce the classroommanagement guidelines establishedby the Commission or they riskwithdrawal of their approval tooffer courses.

5. Give us your honest evaluationof the topic and presentation skills.Regulation 201 KAR 11:460requires all instructors to maintainan approval rating of at least 85%in the areas of knowledge and pre-sentation. The Commission hasthe authority to take correctiveaction if the students consistentlyrate an instructor too low.

Many hours of preparation go intothe development and presentationof every continuing educationcourse, from writing the course topreparing the pretests, visual aids,handouts, monitoring the class, etc.We want to know how the instruc-tors and the providers are perform-ing and you might be surprised tolearn that the evaluations arereviewed by at least one KRECstaff member. You, as the student,play an important part in thisprocess when you provide your

evaluation. Providers,instructors, monitorsand the Commission allcome together to make

every continuing education class aworthwhile experience. That is

why your input is sovaluable to our efforts.

This article was written by Education DirectorLinda Poliskie.

Continuing Education Update

7

The Commission receivesnumerous calls each week con-cerning possible mortgage fraudschemes. The Commission andother regulatory agencies needyour assistance in trying to pre-vent and eliminate theseschemes from our marketplace.

A common practice is for themortgage broker to ask the par-ties to sign a separatecontract, reflecting apurchase price that ishigher than the actualagreed-upon price. Thissecond contract is thensubmitted to the under-writers, showing anincorrect loan-to-valueratio. Then, the proper-ty has to be appraisedfor an inflated price.Finally, the HUD-1 clos-ing statement reflectsinaccurate amounts andthose amounts arereported on the deed. This finalact is a Class D felony in theState of Kentucky.

Sometimes, there is not a sec-ond contract signed but the par-ties agree to an inflated pur-chase price with the selleragreeing to a “phantom” sec-ond mortgage that will be "cred-ited back" at the closing.Again, the HUD-1 closing state-ment does not accurately reflectthe monies that changed handsbetween the parties.

These types of schemes are

fraudulent and illegal. Anyoneinvolved in such schemes is sub-ject to be investigated and pros-ecuted by the federal govern-ment for mortgage fraud. Thepenalties are steep: fines andprison time. In addition, anyreal estate licensee who engagesin such practices can be stronglydisciplined by the Commission.

Often, a licensee will tell us thatthe mortgage company suggest-ed it, so it cannot be illegal. Or,

they will repeat that the mort-gage broker said that he or she"does it all the time." Doingsomething frequently does notmake it legal.

There are numerous agenciesyou can contact when you orone of your clients is asked todo something illegal:

KY Real Estate Commission502-425-4273 or 1-888-373-3300

Attorney General's office 502-696-5300

Kentucky Appraisers Board 859-543-8943

HUD1-800-669-9777

Federal Bureau ofInvestigation202-278-2000

Department of FinancialInstitutions 1-800-223-2579 or 502-573-3390

The Commission received sta-tistics indicating that over 80%of buyers who are involved in

one of these fraudulentschemes ends up beingforeclosed upon. Thegoal is to assist buyers inpurchasing a home thatthey can afford so theycan enjoy the value ofhome-ownership.Assisting a buyer inobtaining a fraudulentloan with a payment thathe or she cannot affordwill only lead to prob-lems for everyoneinvolved.

Several licensees have told theCommission that their clientsstill want to engage in thesepractices, even after they havebeen informed that they are ille-gal. If your client wants to pro-ceed with a loan that youbelieve to be fraudulent, run, donot walk, away from that dealand sever ties with that client.

It is important to educate your-self and your clients about thelaw. Only education andenforcement will eliminate thisproblem once and for all.

DO NOT GET CAUGHT IN THE MIDDLE OF A

By: Lee B. HarrisGeneral Counsel

MORTGAGE FRAUD SCHEME

8

Circle YES or NO to the following ten questions to test your knowledge of inducements and rebates in Kentucky.

1. Can a licensee give a client or customer a marketing coupon for a free fast-food sandwich which includes the agent’s name? YES or NO

2. Can a licensee offer free pictures with “Santa” for the purpose of collecting names and phone numbers? YES or NO

3. Can a licensee run the following advertisement? “Your Home Sold in 90 Days! Guaranteed or Receive $1,500.00.” YES or NO

4. Can a licensee offer to treat a potential customer to dinner to discuss the licensee’s fees and services? YES or NO

5. Can a licensee hold a give-away for a free DVD player at a fair or festival? YES or NO

6. Can a licensee give a television valued at $120.00 to a client or customer AFTER closing? YES or NO

7. Can a licensee give a free home warranty to a client or customer? YES or NO8. Is it illegal for a seller to give a buyer a refrigerator in order to close the deal?

YES or NO9. Can a licensee give away college basketball tickets in a raffle? YES or NO10. Can an agent rebate or refund an up-front fee to a client or customer for the purpose

of receiving additional business? YES or NO

ROTATE THIS PAGE TO SEE THE ANSWERS BELOW.

Inducement/Rebate QuizINDUCEMENT/REBATE QUIZ ANSWERSThe answer to all ofthe questions isNO.1.A fast-food sandwich has value and it cannot be given to a client or customer prior to closing as a marketingtool.2.A picture with “Santa”is a thing ofvalue and cannot be offered for the purpose ofsoliciting potential customers or clients.3.Running an advertisement that offers $1,500.00 back to a client or customer is considered an inducement andthe $1,500.00 would be a rebate,which is illegal.It would only be legal ifoffered as a commission reduction.4.Taking a client out to dinner prior to the closing ofthe transaction is considered an inducement.5.Licensees cannot give away anything ofvalue at a fair or festival to induce potential clients or customers.However,the Commission has ruled that licensees can give away incidental items,such as magnets or pencils.6.A closing gift must have a value ofless than $100.00;therefore,the television would be illegal since it is val-ued at $120.00.7.A home warranty has a value ofmore than $100.00 and would be considered an inducement.8.A seller can give a buyer anything he or she wishes because they are not governed by the Kentucky RealEstate Commission.However,the advertising should make it clear that the item is coming from the seller,andthe seller must actually pay for the item.9.College basketball tickets have value and would be considered an inducement.10.Giving any type ofrebate to a client or customer is illegal and is considered an inducement.

How well do you know the law?

9

The Commission sent out a survey in late 2003to all principal brokers who hold a Kentuckylicense. The survey listed three questions per-taining to the inducement and rebate prohibi-tion that currently restricts Kentucky licenseesfrom offering ANY type of inducement orrebate to a client or customer. TheCommission was very pleased with the numberof principal brokers who participated in thesurvey. For those of you who took the time tofill out our survey, we thank you.

An inducement is money, a prize, a free gift, orany other thing of value that an agent or brokerwould offer a potential client or customer toinduce that client or customer to work withthat particular agent or broker. A rebate is a

refund of monies or commissions once theyhave come into the agent’s or broker’s posses-sion.

As you can see from the page to the left,licensees in Kentucky currently cannot eventake a client or customer out to dinner.Kentucky is one of the few states that does notallow inducements or rebates. TheCommission and the Kentucky Association ofRealtors® are forming a task force to researchand study the inducement/rebate prohibitionand to compare Kentucky’s laws with those ofother states around the country.

The questions and results of the survey are listed below.

IIIINNNNDDDDUUUUCCCCEEEEMMMMEEEENNNNTTTT SSSSUUUURRRRVVVVEEEEYYYY RRRREEEESSSSUUUULLLLTTTTSSSS

1. Are you in favor of amending Kentucky state law to allow licensed agents and brokers to offerinducements to potential clients or customers?

YES - 184 NO - 985 (Responses by Mail)YES - 70 NO - 141 (Responses on Website)

TOTALS YES - 254 NO - 1126

2. Are you in favor of amending Kentucky State law to allow licensed agents and brokers tooffer rebates to clients or customers?

YES - 179 NO - 991 (Responses by Mail)YES - 62 NO - 148 (Responses on Website)

TOTALS YES - 241 NO - 1139

3. Are you in favor of keeping Kentucky law the same, which prohibits the offering of induce-ments or rebates?

YES - 981 NO - 196 (Responses by Mail)YES - 141 NO - 66 (Responses on Website)

TOTALS YES - 1122 NO - 262

254

1126

0

200

400

600

800

1000

1200

1

Yes

No

241

1139

0

200

400

600

800

1000

1200

1

Yes

No

1122

262

0

200

400

600

800

1000

1200

1

Yes

No

10

Disciplinary Actions Disciplinary Actions Marion Adams (Louisville) Case

No. 03-0049Violation: Mr. Marion Adams stipu-lated that he violated KRS 324.160(4)(v) for conduct that constitutesimproper, fraudulent, or dishonestdealing. Mr. Adams failed to retrievea key from his buyer/client andreturn the key to the listing agent.Disposition: Mr. Adams agreed tocomplete nine (9) hours of continu-ing education in a Commission-approved course, in addition to anyhours already required by Kentuckylaw. He also agreed to pay a fine inthe amount of three hundred andfifty dollars ($350.00).

Darlene Adams (Louisville) Case

No. 03-0049Violation: Ms. Adams stipulatedthat she violated KRS 324.160 (6) byfailing to adequately supervise one ofher licensees.Disposition: Ms. Adams agreed tocomplete nine (9) hours of continu-ing education in a Commission-approved course, in addition to anyhours already required by Kentuckylaw.

Sheila Wilson (Bowling Green)

Case No. 03-0023Violation: Ms. Wilson stipulated toa violation of KRS 324.160 (4)(g) forrepresenting a broker other than herprincipal broker, without the expressknowledge and consent of the princi-pal broker with whom she was affili-ated. She also obtained a new bro-kerage agreement with a consumer,knowing that the consumer had awritten outstanding contract grantingexclusive agency to her former prin-cipal broker. Ms. Wilson was notaware that when she terminated affil-iation with her former principal bro-ker that the listings were the propertyof that principal broker and theaforementioned violations were unin-

tentional.Disposition: Ms. Wilson agreed tocomplete three (3) hours of continu-ing education in a Commission-approved law course, in addition toany hours already required byKentucky law. She also agreed tocomplete three (3) hours of continu-ing education in a Commission-approved ethics course, in addition toany hours already required byKentucky law, and to pay a fine inthe amount of one thousand dollars($1,000.00).

James Kirk Tinsley (Bowling

Green) Case No. 03-0023Violation: Mr. Tinsley stipulatedthat he violated KRS 324.160 (4)(v)for conduct that constitutes improp-er, fraudulent, or dishonest dealing.Mr. Tinsley unintentionally signedlisting agreements for an agent whowas not yet affiliated with his com-pany.Disposition: Mr. Tinsley agreed tocomplete three (3) hours of continu-ing education in a Commission-approved law course, in addition toany hours already required byKentucky law. He also agreed tocomplete three (3) hours of continu-ing education in a Commission-approved ethics course, in addition toany hours already required byKentucky law, and to pay a fine inthe amount of one thousand dollars($1,000.00).

Stephanie Gilezan (Prospect)

Case No. 03-0020Violation: Ms. Gilezan stipulated toa violation of KRS 324.160(4)(v) and(u) and KRS 324.111(4)(6) for mis-handling earnest money funds.Disposition: Ms. Gilezan agreed topay restitution to the complainants inthe amount of two thousand fivehundred dollars ($2,500.00) andcomplete nine (9) hours of continu-ing education in a Commission-

CCCCeeeeaaaasssseeee &&&& DDDDeeeessss iiii ssss ttttOOOOrrrrddddeeee rrrrssss IIII ssss ssssuuuueeeedddd ttttoooo tttthhhheeee

FFFFoooollll lllloooowwwwiiiinnnngggg ::::(((( FFFFoooorrrr UUUUnnnnllll iiii cccceeeennnnsssseeeedddd BBBBrrrroooo kkkkeeee rrrraaaaggggeeee ))))

Crest PropertiesLouisville, Kentucky

David J. WojciechowskiNew York, New York

Rose Ann ClarkLebanon, Kentucky

Gary KeiblerProspect, Kentucky

Russell DanielLouisville, Kentucky

Alvin OsbourneMcDowell, Kentucky

Keen Consultants Great Neck, New York

approved law course.

Barbara B. Miranda (Prospect)Case No. 03-0020Violation: Ms. Miranda stipulatedthat she violated KRS 324.160(6) forfailing to adequately supervise a salesassociate.Disposition: Ms. Miranda agreed topay a fine in the amount of onethousand dollars ($1,000.00) andcomplete nine (9) hours of continu-ing education in a Commission-approved law course.

11

Are you aware that if you disturbmore than 2 square feet of paintedsurface in a property that was builtprior to 1978, you are required byfederal law to give the occupant alead pamphlet entitled “ProtectYour Family from Lead in YourHome”? This law went into effecton June 1, 1999 and is in additionto the 1996 federal law whichrequires lead-based paint disclosure.

This means that if you repair orremodel an area over 2 square feetin surface, the pamphlet must begiven to the occupant(s) of thatproperty. You must obtain a signa-ture verifying receipt of the pam-phlet or a certificate of mailing cer-tifying that you mailed the pamphlet7 days prior to the work being done.

If the work is being done by an out-side contractor, then that outsidecontractor is responsible for deliveryof the pamphlet. The exceptionswhich do not require delivery of thepamphlet are: 1) Property that hasbeen certified as free from lead-based paint by a state certified lead-based paint inspector, 2) Zero-bed-room dwellings, 3) Housing for theelderly, and 4) Emergency renova-tions.

If the work being done is in a com-mon area of multi-family housing,all tenants of the dwelling mustreceive the pamphlet. Records arerequired to be retained for threeyears.

The fines for non-compliance aresteep and one violation of this regu-

lation carries a civil penalty of up to$25,000.00. Federal fines have beenassessed in the millions of dollarsand are in addition to the civilpenalties.

For more information, please logonto the EPA’s website at www.epa.gov/lead. If you have specificquestions and want to speak with alead-based paint specialist, you cancall 1-800-424-LEAD. To downloadthe pamphlet and the disclosure,simply logon to www.epa.gov/lead/leadbase.htm. You can downloadthem in English and Spanish andsimply make copies of them for dis-tribution. For a charge, you canalso order color copies from theGovernment Printing Office at (202)512-1800.

Property Managers, Owners and AgentsAre you in compliance with Federal Lead-Based Paint Laws?

Beginning February 11, 2004, theCommission began destroyingfiles which are 15 years old or

older. What does this mean? Itdoes not affect active licensees,but individuals who have been

inactive for 15 years or more andare wishing to reactivate their

licenses will need to provide theCommission with proof of theireducation. As always, licensees

should retain all records to verifytheir educational history.

At a recent Kentucky Association of Realtors® Convention, theCommissioners got a chance to meet with Governor Ernie Fletcher

and First Lady Glenna FletcherPictured left to right:

Commissioner Ron Smith, Governor Ernie Fletcher,Commissioner Betty Kaiser, Commissioner Jerry McMahan

and First Lady Glenna Fletcher

ADVERTISING HUD LISTINGS

The Commission recently ruledthat, despite HUD’s policy of

allowing their listings to be openlyadvertised, ONLY the listing com-

pany can legally advertise theproperty under Kentucky law.

ARARCHIVING FILESCHIVING FILES

Kentucky Real Estate Commission10200 Linn Station Road, Suite 201Louisville, KY 40223 Phone: (502) 425-4273 Fax: (502) 426-2717Toll Free: 1-888-373-3300 Fax-On-Demand: 1-888-KREC-FAXWeb Address: www.krec.net

PRESORTEDSTANDARD

U.S. POSTAGEPAID

LOUISVILLE, KYPERMIT NO. 73

TThe Khe Kentucentuckky Ry RealealEstaEstate Commission willte Commission will

be cbe closed on:losed on:

AApril 2,pril 2, 2004 2004 (1/2 Da(1/2 Day)y)

(Good F(Good Fridariday)y)&&

MaMay 31,y 31, 20042004(Memorial Da(Memorial Day)y)

AA pril is Fpril is Fair Housing Month! air Housing Month! All rAll r eal estaeal esta te companies arte companies ar eerr equirequir ed to displaed to displa y the "Fy the "Fairair

Housing PHousing Poster" in their ofoster" in their of ficesfices ..All licensees arAll licensees ar e re r equirequir ed to pred to pr oo --

vide a copvide a cop y ofy of the Kthe Kentucentuc kk yyCommission on Human RightsCommission on Human Rights

(K(KCHR) infCHR) inf oror mama tion brtion br ococ hurhur e to all be to all b uyuy erer ss ,, sellerseller ssand tenants as a rand tenants as a r outine paroutine par t oft of their btheir b usinessusiness ..

TT he posterhe poster s can be obtained bs can be obtained b y contacting they contacting theKKCHR ofCHR of fice afice a t 322 t 322 WW.. BrBr oadoadww aa yy,, Suite 700,Suite 700,LouisvilleLouisville ,, KY 40202 or bKY 40202 or b y phone ay phone a t 800-292-t 800-292-

5566 or 502-595-4024.5566 or 502-595-4024.

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tribtrib ution to yution to y our customerour customer s and cs and c lientslients ..

Principal brPrincipal br okok erer s should prs should pr oo vide periodic trvide periodic tr ainingainingto their licensees on fto their licensees on f air housing complianceair housing compliance

issuesissues .. RR ememberemember,, it is a violait is a viola tion oftion of KKentucentuc kk yylicense lalicense la w {KRS 324.160 (5)} to discriminaw {KRS 324.160 (5)} to discrimina tete

aa ggainst anainst any ofy of the prthe pr otected cotected c lasseslasses ..

The User ID and Password for accessing restricted contracts on the

Commission’s website:

USER ID - get

PASSWORD - forms(all lower case)

HAHAVE VE YYOU MOOU MOVED?VED?Did yDid you knoou know thaw that ift if yyou do notou do not

notify the Commission ofnotify the Commission of a ca changhangeeofof yyour home adour home addrdress yess you arou are violae violatt--ing KRSing KRS 324.330(2)? Simpl324.330(2)? Simply send usy send us

yyour cour changhange ofe of adaddrdress in writingess in writingeither threither through mail,ough mail, ffax (502-426-ax (502-426-

2717) or thr2717) or through emailough email(Louis(Louis.Car.Carter@[email protected]).v). WWe wille willupdaupdate yte your rour recorecord,d, and yand you canou canstastay ay abrbreast ofeast of corcor rrespondence espondence

coming out ofcoming out of our ofour officefice..

April