Kichen isn’t out “on the street” like he used to be. Nowadays, he spends the majority of his day assisting agents and reviewing files. However, this 30+ year real estate veteran and instructor knows a thing or two about what can happen when you don’t have a BBEEA. “I tell my students that I wouldn’t put a buyer in my car if they refused to sign the agreement,” said Kichen. “[The BBEEA] takes the uncertainty out of who you work for, procuring cause and how you get paid.” Kichen also believes that as salespeople, the BBEEA shows clients you’re serious about meeting their needs and you’re serious about your business.

Cara McGuire, CDPE, ePRO, GRI, SFR and REALTOR® with RE/MAX Professionals echoes Kichen’s enthusiasm for the BBEEA stating, “I’ve used it consistently for the past four years, since the downturn.” When McGuire first started using the BBEEA, it was to ensure that her clients knew she was on “their team”. McGuire started utilizing the BBEEA as a conversation starter with her clients, laying all her cards out on the table, setting expectations and showing off her ability to negotiate at the get-go. “I’ve only had one client question me about it,” said McGuire. “He said, ‘No other agent has ever asked me to sign this, why should I?’ But, after I explained my reasons, he had no issue signing it.”

Lauren Overton, a first-time home buyer and director of operations at Allison-Shelton Real Estate Services, AMO®, signed a BBEEA with her REALTOR® and says that she’d absolutely do it again. “I would never be opposed to this – but I could see where some buyers would be,” said Overton. She added that she could see how some home buyers would be “hesitant to sign right away in fear that the agent might not find something right away and they’d be stuck with them. But if it’s not working out, I think the agent should be ok with rescinding the agreement and let the buyer go elsewhere.”

While many brokerages in Arizona don’t require the BBEEA, Kichen believes that if one did, a domino-effect would take place. “That’s what happened on the East Coast. One broker started to require it and now many do. It just takes one.”

The BBEEA and the Code of Ethics
By Carole Ridley, AAR Professional Standards Administrator

Quite a few complaint calls and complaint filings cite a member’s alleged lack of adequate explanation with regards to the Buyer-Broker Exclusive Employment Agreement. The most common issue purported is that the BBEEA was signed at the same time as a lot of other papers and the agreement’s purpose was not adequately explained.

Allegations of this nature frequently result in a claim by the complainant that they have not been treated fairly, they have been misled, and they were not provided with a copy of the fully executed agreement until it is presented with a request for compensation. These allegations can support a violation of the Code of Ethics, Articles 1, 2, and 9.

Take a few extra minutes to explain the purpose of the BBEEA with the buyers so that buyers are not blindsided when they receive notice to compensate the REALTOR® per the terms of the BBEEA, and so that REALTORS® are not blindsided when they receive an ethics complaint. Let the buyer ask questions and then provide examples of how the agreement obligates you to perform in their best interests.

By way of its bulletin, IIAB of Arizona emphasized to its members that directly obtaining and conveying a CLUE Report may result in the loss of the insurance producer’s license.  A CLUE Report is considered a “consumer report” under federal[1] and state law. Arizona defines the term “consumer report” as “any written, oral or other communication of information that bears on a natural person’s creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics or mode of living and that is used or expected to be used in connection with an insurance transaction.” See A.R.S. § 20-2102(4).  In addition to the Federal Credit Reporting Act, Arizona regulates how “consumer reports” and the personal information contained therein must be handled and protected. See A.R.S. § 20-2113. IIAB of Arizona therefore cautions its members that “an insurance producer that provides a CLUE Report to ANYONE is subject to regulatory action such as revocation of their license, civil penalties, and civil action by the consumer.” 

As a result of the restrictions placed upon insurance producers, IIAB of Arizona has provided specific instructions to its members when responding to a CLUE Report request made by a policyholder or the policyholder’s REALTOR^®.  Specifically, IIAB has instructed its members to respond to any such request by stating, “Federal law mandates that the policyholder has a right to obtain information contained on a CLUE Report, but that process must be accomplished by the policyholder directly with LexisNexis.”  It is therefore expected that sellers and REALTORS^® will be directed to https://personalreports.lexisnexis.com when seeking to obtain a CLUE Report. This is consistent with the information contained in the Buyer Advisory which advises property owners of their right to “purchase a C.L.U.E. report online at https://personalreports.lexisnexis.com/index.jsp or by calling 866-527-2600.”

Much like REALTORS^®, insurance producers are eager to assist their clients, but must do so within the confines of the law. It is therefore important for REALTORS^® to ensure that their clients are obtaining insurance/claims information in the proper manner.

Here are four tips that might make your next session move a lot smoother:

1.       What’s the best way to get zipForm® to work on an iPad?

iPad, tablet and phone users should use the zipForm® Mobile program.  Unfortunately, zipForm® Mobile came out after our last contract renewal and is not an AAR member benefit.  The cost is $12.95 per year and provides excellent access to forms from mobile devices.

2.       What are two ways to create a session in AAR eSign?

Roberts said, “The best way to create a session is to use the eSign print driver function to print forms from zipForms into eSign. This saves you time by not having to upload each document independently and it also automatically adds the signing locations to the forms.

“Or you can log into your eSign account and upload your documents manually. After you’ve done that, you apply a template that does the same thing that the print driver does and puts all the signing locations in the document for you.“

Keep in mind, when you have a locked .pdf document that you need to have electronically signed, you will need to either use the eSign print driver, or recreate the document into a new .pdf by printing and re-scanning.

3.      Don’t forget to update your zipForm® templates

Roberts says that zipForm® is great because “it allows users to create templates for different types of transactions like short sales or foreclosures.” But she cautions that templates are just like file folders and have to be refreshed when new forms are updated in zipForm®. A good practice is to do so at least once a year and when you are alerted about updates to your zipForm libraries. Also, the eSign print driver uses the QR scan codes in the bottom right corner of the form to automatically place the signing locations on the form when sending your documents to eSign. You want to make sure your forms have the latest version of this code as well. For directions on how to update templates call AAR Business Services Department or search on zipForm®.

4.       AAR eSign signing emails not being delivered to clients

Some clients with a heightened email filter (or AOL accounts) have reported an inability to receive emails from AAR eSign.  When a client calls to say they haven’t received the transmission first ask them to check their SPAM and JUNK folders. If it’s still missing you have two options:

• Have your clients add eSign to their safe senders list. For instructions on how to do so, email: support@aaronline.com.
• Re-send the signing invitation to yourself from eSign and forward it to your clients.

Get Help from AAR

As a benefit to members, AAR hosts free webinars every week that teach users how to use AAR eSign and zipForm®. We also have a live class once a month. To see the schedule, click here.

For more help with AAR eSign and zipForm®, visit: www.aaronline.com/efficient-business-tools.

In October, five winners will be announced and recognized at the 2013 REALTORS® Conference & Expo in San Francisco. Five winners will receive a $10,000 grant for their community cause, travel expenses to the convention, and extensive publicity to benefit their cause. In addition to the winners, five honorable mentions will receive $2,500 grants.

Eligible activities include any volunteer work that helps improve the quality of life in a community.

You can find all this information and more at http://www.realtor.org/news-releases/2013/02/realtor-magazine-seeking-nominations-for-2013-good-neighbor-awards

Deadline for entry is Monday, May 20, 2013.

To use zipForm^®, you must download and install a Java plug-in from Oracle into your web browser (Firefox, Chrome, Internet Explorer, Safari, etc.). Recently, a series of Java security vulnerabilities in these plug-ins have been revealed. … [T]he recent spate of Java vulnerabilities has resulted in Apple “turning off” Java support in Safari. The net result is that safe Java websites like zipForm^® are affected, too.

Following this post, LaMee also sent this message to membership via the AAR Blog about changes happening at zipLogix:

“We’ve been talking about the new, Java-free version of zipForm® lately, but now we have official word about timing for the release.  Here’s a statement from Wendy Waldrep, vice president of sales at zipLogix:

‘We want to officially confirm that zipLogix is working on zipForm® Plus,  a new release that eliminates the need for Java and adds new features.  zipLogix commits  to releasing zipForm® Plus to AAR members in June.  Initially, AAR members will have the ability to switch back and forth from the new application to zipForm® 6 Professional to ease transition to the new platform.’

“As we in Business Services get some experience with zipForm® Plus, we’ll be better able to guide AAR members. Stay tuned for more information as we get closer to the launch” wrote LaMee.

If you are experiencing issues using zipForm®, AAR is here to help. Feel free to call our support team during business hours at Toll Free: (866) 833-7357 or Email AAR Support.

April 7 – 11, 2013 marked the first time in nearly 20 years, AAR held a convention for Arizona REALTORS®. The AAR Spring Convention took place at the Casino Del Sol in Tucson and featured industry experts from around the state for three days of intense learning, with a little bit of fun ( Read:  REALTOR® karaoke, Mariachi Band, a singing Secretary of State) mixed in.

Here’s what some attendees had to say about the event:

“Good overview of the industry in AZ, legal and legislative issues, and networking.”
“…[T]he fair housing class gave a refresher on what needs to be remembered daily with real life scenarios”
“The class with the ADRE Commissioner and following panel was terrific!”
“I am using the REALTOR® survey at my office meeting tomorrow.”
“I plan to deduct more expenses from my taxes.”
“The quality of the instruction was very good.”
“Truly enjoyed the Video Power Session presented.”

 AAR would like to thank the following speakers and presenters for making this event such a success:

Ken Bennett

To view photos of this event, visit the AAR flickr page.

 We thank you all for attending!

Addressing “disparate impact” or unintended discriminatory effects claims, the final rule enacted by HUD provides guidance as to how a housing provider that engages in a facially neutral (unbiased) practice can nonetheless violate fair housing laws. The rule, therefore, better enables plaintiffs and governmental agencies to challenge housing or lending practices that have a disparate impact – even under circumstances in which the practice is facially non-discriminatory and not motivated by bias or prejudice. According to the rule, impact of this nature results when a neutral practice actually or predictably:
(1) results in a disparate impact on a group of persons on the basis of race, color, religion, sex, handicap, familial status, or national origin; or
(2) has the effect of creating, perpetrating, or increasing segregated housing patterns on the basis of race, color, religion, sex, handicap, familial status or national origin.

In its final rule, which can be found here, HUD created a three-step burden-shifting system to determine liability under the FHA. First, HUD or the private plaintiff must establish that the housing practice caused or predictably will cause a discriminatory effect on a protected class. Once a disparate impact of this nature is proven, the burden shifts to the defendant to show that the practice is necessary to achieve a substantial, legitimate, nondiscriminatory interest. Any such justification must be supported by actual evidence and not be hypothetical or speculative. HUD defines a “substantial” interest as “a core interest of the organization that has a direct relationship to the function of that organization.” Finally, if such an interest is established by the defendant, HUD or the private plaintiff must prove that those same interests cannot be served by another practice that has a less discriminatory effect. If the complaining party is ultimately able to establish a practice that achieves the same interests in a less prejudicial manner, a defendant may be guilty of fair housing violations even though there is no evidence of discriminatory intent.

EXAMPLE: A lending institution maintains a policy by which it does not extend loans for single family residences for less than $60,000. The policy has been in place for eight years and does not take race, color, religion, sex, handicap, familial status or national origin into account. While the policy is therefore neutral on its face, it has been found that the policy disproportionately excludes minority applicants from consideration because of the home values in certain areas in which the minority applicants predominantly live. After discovering this disparate impact, the new rule will require the lender to prove that its lending policy is justified by a substantial business necessity. Factors relevant to the lender’s justification may include cost and profitability. If the lender is able to establish a substantial, legitimate, nondiscriminatory interest in its policy, a fair housing violation may still be found if the complaining party is able to establish that an alternative lending practice could serve the same purpose with a less discriminatory effect.

The final rule became effective on March 18. It applies to a broad range of housing activity including, but not limited to, the approval of loan applications, the provision of information regarding the availability of loans and housing options, the servicing of loans, and the approval and provision of homeowners insurance. So when a practice results in the denial of a housing related service (i.e. refusal to rent an apartment or approve a mortgage loan) or unfavorable terms and conditions under which that service is available to members of protected classes, it will violate the FHA unless the practice serves a substantial, legitimate, and nondiscriminatory interest that cannot be similarly served by a less discriminatory practice.

With the new rule in place, it is expected that private individuals, HUD and other fair housing enforcement agencies will be able to more effectively realize the objectives of the FHA by eliminating housing discrimination and creating strong, sustainable, inclusive communities and quality affordable homes for all. To the extent that this rule helps clarify objective, and non-discriminatory policies and practices, it should prove widely beneficial.

About the Author:

Scott Drucker, a licensed Arizona attorney, is general counsel for the Arizona Association of REALTORS^® serving as the primary legal advisor to the association. This article is of a general nature and reflects only the opinion of the author at the time it was drafted.  It is not intended as definitive legal advice, and you should not act upon it without seeking independent legal counsel.

“Having this first fair housing mobile application equips people everywhere with the information they need to combat housing discrimination,” says John Trasviña, HUD assistant secretary for fair housing and equal opportunity. “We are maximizing the latest technology to make the process for filing fair housing complaints faster and easier and arming our fair housing partners with the information they need to understand their fair housing rights and responsibilities.”

The app, available for the iPhone and iPad, includes information about the Fair Housing Act, HUD’s fair housing toll-free discrimination hotline, and information on housing rights following a natural disaster.

Source: “HUD rolls out fair housing mobile app,” Inman News (March 5, 2013)

April 2013 marks the 45th anniversary of the 1968 landmark Fair Housing Act. Each year, REALTORS® recognize the significance of this event and reconfirm our commitment to upholding fair housing laws as well as our commitment to offering equal professional service to all in their search for real property.

If you have not read the Fair Housing Declaration in a while, I encourage you to do so.

Every real estate licensee in Arizona is required to take a minimum of three hours of continuing education in Fair Housing each renewal period, so you are already well versed in Fair Housing issues. What can AAR impart to our members regarding their duty to offer equal services to all and thereby provide consumers with equal opportunity in housing? Article 10 states:

REALTORS® shall not deny equal professional services to any person for reasons of race, color, religion, sex, handicap, familial status, national origin, or sexual orientation. REALTORS® shall not be parties to any plan or agreement to discriminate against a person or persons on the basis of race, color, religion, sex, handicap, familial status, national origin, or sexual orientation (Amended 1/11).

You are therefore reminded that regardless of your client’s race, color, religion, sex, handicap, familial status, national origin or sexual orientation they are entitled to the same level of care and service that you take pride in offering.

In the March Code Talk column, members discussed the mechanics of listing agreements, ancillary forms for listings, MLS dissemination and advertising through the Internet as it pertains to the Code of Ethics. Standard operating procedure (SOP) 10-3 relates to listings, as well stating:  “REALTORS® shall not print, display or circulate any statement or advertisement with respect to selling or renting of a property that indicates any preference, limitations or discrimination based on race, color, religion, sex, handicap, familial status, national origin, or sexual orientation,” (Adopted 1/94, Renumbered 1/05 and 1/06, Amended 1/11). 

Mary Lee Greason, a Tucson REALTOR® and Fair Housing educator, offered some sage words of advice: “In advertising our listings, we need to remember the advice I heard years ago from an attorney [who] prosecuted Fair Housing violations, ‘Stick to the amenities of the property and not the people who might live there!’”

The Department of Housing and Urban Development recently shared two scenarios which may constitute housing discrimination:

• A gay man is evicted because his landlord believes he will infect other tenants with HIV/AIDS.  That situation may constitute illegal disability discrimination under the Fair Housing Act because the man is perceived to have a disability, HIV/AIDS.

• A property manager refuses to rent an apartment to a prospective tenant who is transgender.  If the housing denial is because of the prospective tenant’s non-conformity with gender stereotypes, it may constitute illegal discrimination on the basis of sex under the Fair Housing Act.

Finally, a reminder that Article 10 and SOP 10-4 extends discrimination to cover employment in real estate offices:  As used in Article 10, “real estate employment practices” relates to employees and independent contractors providing real estate-related services and the administrative and clerical staff directly supporting those individuals. (Adopted 1/00, Renumbered 1/05 and 1/06). 

I would like to leave you with the following from the National Association of REALTORS®:

As REALTORS®, our success isn’t measured by the bottom line. It’s measured by the trust of our clients and customers and the esteem in which we’re held by our colleagues and competitors. The National Association was founded with the goal of uniting the real estate profession through high standards to protect buyers and sellers. 100 years after its adoption, the Code of Ethics continues to be what sets us apart as REALTORS®.

About the author:

Jan Steward brings a wealth of experience to the Arizona Association of REALTORS® as the Risk Management Specialist. She is a former title company manager and escrow officer with paralegal training. As a REALTOR® and broker, Jan served the Northern Arizona Association of REALTORS® (NAAR) as board president, vice-president, director, MLS chair, delegate to NAR’s national convention and a member of the Professional Standards and Grievance Committees. Jan was honored as REALTOR® of the Year by NAAR. She also has served on AAR’s Professional Standards Committee and a variety of ad hoc committees.