‘A Pretty Good Year’ : California Realtors Tally Legislative Score Card

The 2,000 realtors who gathered here last week for their annual convention were celebrating not only one of the hottest home resale markets of the decade

they were also rejoicing over some impressive victories in the legislative battlefields of Sacramento.

Often, legislation pushed by the California Assn. of Realtors on behalf of its 113,000 members across the state also has some indirect benefits for homeowners and would-be buyers. The legislative session that wound up last month was no exception.

One CAR-supported bill that was passed shores up the state fund that reimburses consumers for some of their losses when they’re ripped off by real estate licensees, and another ensures that sales agents will have to take 45 hours of college-level courses to keep abreast of changes in the law before they can renew their license.

At the same time, some of the bills that the association supported this year failed--and that, too, may benefit consumers. In particular, the state’s largest trade group failed in its attempt to outlaw residential rent-control--at least for now.

“We didn’t get everything we wanted, but it was a pretty good year,” summed up Alex Creel, a CAR vice president and the trade group’s top lobbyist.

The state’s real estate recovery fund was formed 25 years ago to pay off judgments to consumers victimized by real estate fraud. But escalating claims threatened to empty the fund by the early 1990s.

Undeserving Claimants

The CAR-sponsored bill approved by state lawmakers makes some technical changes to prevent undeserving claimants from “raiding” the account, Creel said, and also calls for a greater portion of the fees licensees pay to the state to be funneled into the fund.

Another CAR-sponsored bill that won approval will mean that real-estate agents selling a home where a murder has occurred can’t be held liable if they don’t tell the buyer about the killing.

The measure was prompted by a real-life case. In a 1981 decision, a California court found a broker liable for failing to disclose that a multiple murder had occurred in a home 10 years earlier because the “notoriety” of the house could have been detrimental to its value and sales price.

The new law, which takes effect next January, says realtors generally don’t have to disclose a murder that occurred three or more years before the sale is made. However, if a buyer specifically asks whether a death has occured in a home and the broker knows about it, the death must be disclosed.

The law mandating that licensees take 45 hours of so-called “continuing education courses” before they can renew their license was set to expire in 1988. But the CAR-backed bill that won approval this year makes the courses a permanent part of California law.

Benefit to Consumers

Creel said the continuing education law will benefit consumers because their agents will be better educated. However, some experts also pointed out that the requirement discourages many part-time sales agents from staying in the real estate business--and that means more money for full-time sales agents, most of whom belong to CAR.

Perhaps the realty lobby’s biggest failure this year was the Legislature’s refusal to approve a CAR-sponsored bill that would weaken the ability of cities across the state to pass rent control ordinances. The trade group has tried to pass such legislation in each of the past five years, but has failed every time.

But this year’s rent control battle “wasn’t a total loss,” Creel said. Although the measure stalled in the Senate Judiciary Committee at the end of this year’s legislative session, it will automatically be taken up for further action next year.

Creel also notes that a measure outlawing rent control of commercial buildings, such as office towers and warehouses, was passed and becomes law Jan. 1. Although the measure wasn’t initiated by the trade group, Creel said CAR supported it.