California’s Realtors Slate Convention : Decisions Likely to Have a Broad Impact on Millions

As more than 3,000 California realtors gather in Anaheim this week for their annual convention, a handful of them will be meeting with the trade group’s lobbyists to begin hammering out their priorities for the Sacramento legislative session, which begins next January.

Exactly what is decided in their closed-door sessions at the Disneyland Hotel will undoubtedly have a broad impact on millions of California homeowners and renters. Although the California Assn. of Realtors actually sponsors fewer than a dozen measures each year, it closely tracks about 1,200 of the 8,000 or so bills typically introduced in any legislative session.

The session that ended last month saw the realtors take a stand on a variety of measures, ranging from pest control to manufactured housing. About 80% of the bills they either introduced or supported were signed into law, while most of the measures they opposed went down to defeat.

And even though a realtor-backed bill aimed at weakening local rent-control and growth-control laws didn’t get approved, “it was a great year” for the real estate lobby in Sacramento, says Alex Creel, CAR’s chief lobbyist.

Gives Up Right

Creel says one realtor-sponsored bill that was approved should make it easier for home buyers and sellers to settle disputes through arbitration instead of going through a long, costly court battle.

The measure makes it easier for a buyer to prevent a disputed property from being sold to someone else during arbitration proceedings. However, the buyer will also have to be told that he gives up his right to file legal action if he goes to arbitration.

Previously, those who entered arbitration weren’t always informed that they were also waiving their right to sue over the dispute. Simply filing papers to prevent the property from being sold until the problem was resolved sometimes legally prevented the parties from pursuing arbitration.

Saves Money

“We generally feel that going to arbitration is better for consumers and realtors than (is) going to court, and this bill makes arbitration a lot more viable,” says Walt McDonald, a Riverside broker who chairs the committee that steers the association’s lobbying efforts. “It’s usually faster, and saves a lot of money.”

The realtors also succeeded in pushing through one bill that will make it easier for buyers and sellers to negotiate problems caused by termites, and another that will eliminate the need for two appraisals in certain types of transactions. Yet another realtor-sponsored bill will give small trust-deed investors much of the same protection previously provided only to big lending institutions.

However, real estate lobbies didn’t have as much luck when it came to weakening cities’ ability to enact or enforce rent-control ordinances.

Cities Oppose Bill

The realtors had thrown their support behind a measure that would deny state housing funds to communities with local rent-control and growth-control measures. It was sponsored by state Sen. John Seymour (R-Anaheim), himself a former president of the realty group.

Los Angeles, Santa Monica and West Hollywood were just a few of the cities that came out against the bill, saying it would cost them millions of dollars in state housing aid. The proposal died in the Assembly, making it the fifth straight time that a realtor-supported bill aimed at curbing rent-control laws couldn’t get through the Legislature.

Realtors and landlords fared better in their battle against another rental-property measure.

The bill would have required tenants and landlords to do a joint walk-through inspection when the tenant moved into an apartment and also when he moved out. Some tenant groups said the measure would make it harder for landlords to keep a deposit without a valid reason.

Items Already Required

The measure was dropped, however, after realtor and landlord lobbies complained that it could create too much confusion and that the state should first devise a comprehensive bill for rental agreements.

Realtors also killed a bill aimed at making homes across the state more “earthquake-safe” by requiring installation of huge safety bolts and other items when a home is sold. “A lot of these items are already required in many areas,” Creel says, “and it would be (structurally) impossible to install the bolts and some of the other items” in certain types of homes.

They also tried to kill a bill that would prevent local governments from banning the placement of manufactured homes in areas designed for single-family houses. But the bill was passed and signed into law by Gov. George Deukmejian, who pointed out that today’s manufactured homes look much like conventionally built houses but are much less expensive.

Annual ‘Franchise Fee’

Creel said the realtors’ lobbying efforts weren’t hampered by the widely publicized FBI sting operation against several Sacramento lawmakers, in part because some of the bills promoted by the realty group also benefit the general public.

However, notes Riverside realtor McDonald, the state’s widely publicized budget woes earlier this year hurt the association’s attempt to prevent the state from levying--for the first time ever--an annual “franchise fee” on real estate partnerships beginning in 1989.

The fee will initially cost about $300 annually, but will rise to about $900 in a few years.

“We introduced a bill to exempt partnerships from the fee, but I think it got caught up in all the budget problems,” says McDonald. “Any bill that looked like it might cost the state money basically got killed.”