Frequently Asked Questions
Real Estate Licensing
By Representative Rokeberg
Does HB 33 restrict the ability of an individual or business from managing or selling their own property?
No. The bill clarifies current law and provides numerous exceptions to required licensing.
Can a person have a relative or friend manage and rent their rental property or properties?
Yes. The bill allows a relative to perform the same activities as an owner. Also, anyone can do this and be reimbursed for expenses only, but cannot collect a fee. Moreover, there are no restrictions on four (4) units or less.
Is a person free to negotiate the amount of the fee or commission?
Yes. A person has every right to bargain with a real estate licensee on the amount of compensation.
Why license community association managers?
To ensure that anyone entering this business is subject to regulation, thus affording protection to consumers. Currently anyone can enter into this business without any regulation or any consumer protection.
Can a community association be self-managed?
Yes. The association board can do it. Also, a resident unit owner is allowed to manage for a fee.
My subdivision has a homeowner’s association. Is that covered by this bill?
No. Only condominium and townhouse community associations established under AS 34.07 (Old Horizontal Regime Act) or AS 34.08 (New Alaska Common Interest Ownership Act) are covered by this bill.
Will the Real Estate Commission ("REC") be overburdened with individual complaints from community association members?
No. Only complaints received from the community association board of directors will have standing with the REC.
What benefits will a community association receive from this bill?
Several: the right to make a claim against the surety fund; mandated fidelity bonds for community association managers; restricted access to association funds by community association managers; a grievance process; increased competence with mandatory continuing education; and more.
How will the strengthened licensing provisions of HB 33 help protect Alaskan consumers?
Alaska law has always required a license to practice real estate in Alaska. But our licensing statutes are more than twenty-five years old, and according to the assistant attorney general, do not adequately cover recent developments in the real estate industry. New "kick-back" marketing schemes have emerged which attempt to circumvent the consumer protections provided by state licensure requirements.
Under these schemes, non-licensed entities procure buyers or sellers of real estate in return for a percentage of the commission or other compensation. Because such entities are not licensed, the state has no authority to regulate the activity to protect the consumer.
The schemes also threaten to channel millions of dollars of Alaska real estate activity outside. To participate, consumers must agree to "package" transactions that are facilitated by a central "clearinghouse" processor outside of Alaska who then arranges for all aspects of the transaction. Alaska consumers would be denied the opportunity to pick the agent, lender, appraiser or title company of their choosing. Since the loan financing is referred to outside lenders, Alaska consumers would also be deprived of the opportunity to participate in unique and beneficial Alaska financing programs like AHFC that require the use of instate lenders.
Wouldn’t prohibiting these "kickbacks" amount to "protectionism" or "restraint of trade"?
No. The law would simply create a level playing field by requiring that all entities that engage in real estate transactions be licensed. That has always been the intent and interpretation of Alaska law. Any marketing company would be free to do business in Alaska as long as they were licensed here and followed the regulations established by Alaska’s real estate commission.
Is there a precedent for such provisions?
Yes. The provisions contained in HB 33 are modeled after a Mississippi statute that recently withstood federal court challenge. The provisions also have the strong support of Alaska’s Real Estate Commission which has stated that it is imperative that Alaska’s licensure statutes be updated.
ED2: 3/9/98
Frequently Asked Questions
Real Estate Licensing
By Representative Rokeberg
Does HB 33 restrict the ability of an individual or business from managing or selling their own property?
No. The bill clarifies current law and provides numerous exceptions to required licensing.
Can a person have a relative or friend manage and rent their rental property or properties?
Yes. The bill allows a relative to perform the same activities as an owner. Also, anyone can do this and be reimbursed for expenses only, but cannot collect a fee. Moreover, there are no restrictions on four (4) units or less.
Is a person free to negotiate the amount of the fee or commission?
Yes. A person has every right to bargain with a real estate licensee on the amount of compensation.
Why license community association managers?
To ensure that anyone entering this business is subject to regulation, thus affording protection to consumers. Currently anyone can enter into this business without any regulation or any consumer protection.
Can a community association be self-managed?
Yes. The association board can do it. Also, a resident unit owner is allowed to manage for a fee.
My subdivision has a homeowner’s association. Is that covered by this bill?
No. Only condominium and townhouse community associations established under AS 34.07 (Old Horizontal Regime Act) or AS 34.08 (New Alaska Common Interest Ownership Act) are covered by this bill.
Will the Real Estate Commission ("REC") be overburdened with individual complaints from community association members?
No. Only complaints received from the community association board of directors will have standing with the REC.
What benefits will a community association receive from this bill?
Several: the right to make a claim against the surety fund; mandated fidelity bonds for community association managers; restricted access to association funds by community association managers; a grievance process; increased competence with mandatory continuing education; and more.
How will the strengthened licensing provisions of HB 33 help protect Alaskan consumers?
Alaska law has always required a license to practice real estate in Alaska. But our licensing statutes are more than twenty-five years old, and according to the assistant attorney general, do not adequately cover recent developments in the real estate industry. New "kick-back" marketing schemes have emerged which attempt to circumvent the consumer protections provided by state licensure requirements.
Under these schemes, non-licensed entities procure buyers or sellers of real estate in return for a percentage of the commission or other compensation. Because such entities are not licensed, the state has no authority to regulate the activity to protect the consumer.
The schemes also threaten to channel millions of dollars of Alaska real estate activity outside. To participate, consumers must agree to "package" transactions that are facilitated by a central "clearinghouse" processor outside of Alaska who then arranges for all aspects of the transaction. Alaska consumers would be denied the opportunity to pick the agent, lender, appraiser or title company of their choosing. Since the loan financing is referred to outside lenders, Alaska consumers would also be deprived of the opportunity to participate in unique and beneficial Alaska financing programs like AHFC that require the use of instate lenders.
Wouldn’t prohibiting these "kickbacks" amount to "protectionism" or "restraint of trade"?
No. The law would simply create a level playing field by requiring that all entities that engage in real estate transactions be licensed. That has always been the intent and interpretation of Alaska law. Any marketing company would be free to do business in Alaska as long as they were licensed here and followed the regulations established by Alaska’s real estate commission.
Is there a precedent for such provisions?
Yes. The provisions contained in HB 33 are modeled after a Mississippi statute that recently withstood federal court challenge. The provisions also have the strong support of Alaska’s Real Estate Commission which has stated that it is imperative that Alaska’s licensure statutes be updated.
Why shouldn’t a real estate licensee have a duty to disclose that a sex offender lives in the vicinity of the property?
In 1990, the Alaska Legislature enacted an agency disclosure statute which required licensees to disclose whose interests they are representing in each transaction. When a licensee represents both parties (i.e., shows a property listed by himself or within his own office), the principals’ interests are not always compatible. In this instance, the relevant information about convicted sex offenders is public; the licensee can be released from a specific duty to disclose, but still assist a buyer by letting them know where to find information, that may or may not be important to them, without acting contrary to the seller’s best interest.
AS 12.63.010 requires sex offender registration in Alaska. Because of the potential for an inaccurate list of sex offenders, as well as inaccuracies in their most current address, requiring real estate agents to disclose "known sex offenders in the area", runs a risk. Some of the problems are as followed: an offender may have moved and not changed his/her address which could lead to a non-offender being identified as an offender; an offender may have moved into the area and not registered so there would be no way for the agent to know this offender was in the area; false identification could pose problems for agent (i.e., suit for slander).
For example, if a "seller’s" agency disclosed that a sex offender lived three blocks down the street, a cause of action may raise as a breach of duty to the seller. A "buyers" agent may become a "dual agent" if the licensee shows his/her own listing. Therefore, a cause of action may arise on behalf of the buyer. This dilemma is addressed by notifying the buyer in the "Property Disclosure Statement" hat the information is available to the public.
Note: Property Disclosure requirements and law only relate to the property. "Psychological impairment", e.g., homicide, suicide and ghosts, not AIDS (protected class under Federal Housing Law).
Moreover, if a duty is to be created, what are its boundaries. In what vicinity? What if the data is inaccurate? Megan’s law has created an unintended consequence by creating a dilemma which has become the target in a lawyer’s cross hairs.