Subject: NO Outside Support for Wisconsin Realtors Association Designated Agency Legislation Date: Fri, 01 Mar 2002 23:31:58 -0600 From: Jay Reifert Organization: Excel-Exclusive Buyer Agency ---------------------------------------------------------------------- List Removal Instructions: Reply to this Message With "Remove" in the Subject Line or Body of the Message. Governmental Officials and Their Respective Staffs Will Not Be Removed From This List. ---------------------------------------------------------------------- No Outside Support for Wisconsin Realtors Association Designated Agency Legislation ---------------------------------------------------------------------- Greetings Everyone! March 1, 2002 Yesterday, REAL-Reform and the consumers of Wisconsin won something of a victory when both the Department of Regulation and Licensing, DRL, and the State of Wisconsin Real Estate Board, WREB declined to support the Wisconsin Realtors Association's, WRA's, flawed, anti-consumer Designated Agency legislation, currently known in the Legislative Reference Bureau as LRB 4720 . While I was pleasantly surprised that the Wisconsin Real Estate Board refused to give its support, citing a desire for more study of the issue before handing down a recommendation, I was not at all surprised that the Department opted to withhold support. As one of the watchdog agencies for Wisconsin real estate consumers, it should not come as any surprise that the DRL would find this issue worthy of more study. However, what is surprising about the DRL's decision yesterday was the fact that Secretary Herrera did not take things farther and OPPOSE the proposed legislation asking that it be placed before an impartial committee, drawn from consumer ranks, for further study. However, it is my opinion that the Department may yet take the consumer's side and come out in opposition... The clear voice of reason on this day was that of William A. Black, the Attorney for the DRL who is responsible for advising the Department on this issue. Citing, among other things, lack of meaningful disclosures on the conflicts of interest posed by Designated Agency and the glaring conflict of interest of the Broker being able to designate him or herself as one of the two Designated Agents, Mr. Black pretty much took a consumer-oriented, common-sense approach. In brief, virtually everything Mr. Black said reduced down to the fact that his counsel to the Department and indeed his own opinion is that the Designated Agency proposal leaves a great deal of unanswered questions that require further study. Again, in light of what Mr. Black had to say, and you can read his insightful comments at: http://www.real-reform.org/one-clear-voice.pdf , it is surprising that Secretary Herrera has not quite yet taken a position of opposition of this issue on behalf of Wisconsin home buyers and sellers. As Mr. Black had said, and I'm paraphrasing here, if this is such a good idea, certainly it can stand more scrutiny. He also said that chances are good that the legislature is going to be around for another hundred and fifty years...so he can't see the harm in giving this some additional time for review. The day's usual dark spot was when Mr. Richard Staff, General Counsel for the WRA decided to dig deep within his bag of tricks and began attempting to deceive in earnest again. His first attempt at deceit, was to cite a portion of the venerable text, the Restatement of the Law, Agency (Second) in an effort to make it seem as if one of the clear uses of the common law of agency was to allow for something like Designated Agency. In his citation of Chapter 13, Section 392, he points out that acting for adverse parties--as is the premise under Designated Agency--is allowed with the client's consent. What he failed to notice--as both Attorney Black and I pointed out to him from the next two paragraphs in that Section--is that such a role would have to be filled impartially and if such impartiality and fairness cannot be maintained, then the agent cannot continue to act as adviser. As the whole premise behind Designated Agency is that both licensees will serve as biased advocates and biased advisors for the two clients of the one firm, this immediately violates the exception allowed under Section 392...meaning that the use that Mr. Staff asserted was there, was absolutely not there. Further, Mr. Staff's disingenuous attempt to use one small portion of the Restatement, when virtually all of the rest of its hundreds upon hundreds of pages are devoted to explaining how the agent is to put the interests of the client ahead of all others...including the agent's own, is very revealing in its own right. Mr. Staff's second deception came when he made the INCREDIBLE claim that it was never the WRA's intent for the Managing Broker or Broker/Owner of the firm to be able to appoint him or herself to be one of the two Designated Agents in the transaction! Amazingly, he blamed drafter interpretation--meaning the LRB attorney redrafting the WRA's proposed legislation--for the error. (He then politely pressed the Board for their approval, subject to removal of that error. To their credit, they would not comply.) Well, Attorney Staff...considering that there was an LRB 4720/1, that would be draft one...and an LRB 4720/2, that would be draft two and a NOTE FROM THE DRAFTER which says, "This version makes the changes discussed with Rick Staff," then I guess my question to you would be, why did the WRA not speak with the drafter about what was misconstrued at that point? Why did the ludicrous language about the Broker/Owner being able to appoint him or herself as a Designated Agent continue to appear in the subsequent draft? Oh, what a tangled web we weave... In closing, I'd just like to thank both the Consumer Federation of America and the National Association of Exclusive Buyer Agents for prominently voicing their opposition to the WRA's ugly, mega-broker-serving Designated Agency scheme. Thanks also to all of the other people working behind the scenes to keep REAL-Reform moving toward defeating Designated Agency and returning the common law of agency to Wisconsin. As a good friend of mine--and past-president of the National Association of Exclusive Buyer Agents--Tom Early likes to say about the truth behind why the big brokers want Designated Agency...it's all about preserving the "double dip". He says, "If you take the 'double-dip' off the table...if it no longer is part of the equation, then for what other reason do we need Designated Agency? What's left to talk about?" ("Double-dip refers to the firm's ability to get paid on both the buyer side and the seller side of the transaction.) This battle, while being far from over, did take a turn for the better yesterday. However, in spite of not having the support from either the DRL or the WREB, the WRA is planning on pushing this out into--probably--committees of both legislative houses on, as I understand it, this coming Wednesday. On the plus side, the WRA stands alone in its quest to get this legislation passed, while REAL-Reform and the citizens of Wisconsin have the support of the Consumer Federation of America and other consumer-minded organizations and individuals. One would hope that the legislators are keeping in mind that, in this election year--thanks to redistricting--all seats are up for grabs and it really wouldn't pay for them to be taking chances with backing risky legislative schemes like what the WRA is trying to place before them in Designated Agency. Time, I guess, will tell. [Oddly, James R. Imhoff, Jr., the Chairman of the WREB--and mega-broker engineer of this Designated Agency train--was absent from yesterday's meeting.] ----------------------------------------------------------------------- Now would be a great time to contact your legislators to voice your opposition to LRB 4720...Designated Agency. You can find out how to contact your legislators to register your oppostion by going to: http://www.legis.state.wi.us/wamltest/ -------------------------------------------------------------------- Also, PLEASE forward this message to everyone you can and please also print it out--and distribute--to those who you know that don't have email capabilities.] --------------------------------------------------------------------- [This message is going out to thousands of Wisconsin Realtors, almost 500 governmental officials--including all State Legislators and their respective staffs, the Governor of Wisconsin and most candidates for Governor of Wisconsin, the Attorney General of Wisconsin, over 425 Consumer Advocacy Groups and/or individual Consumer Advocates, over 285 Registered Wisconsin Lobbyists and over 190 Media Outlets.] -- Sincerely Yours, Jay Reifert, Organizer/Director of Operations REAL-Reform (Real Estate Agency Law-Reform) Jay Reifert, Broker/Owner*****************Excel-Exclusive Buyer Agency 100% Homebuyer Representation********5136 E. Hilltop Road 100% Of The Time****************************Madison, Wisconsin 53711 South Central Wisconsin's ONLY********(800)928-9379, Toll Free Full-Time Exclusive Buyer Agency Firm.***(608)273-8841, Office Visit http://www.true-agent.com ***********(608)273-8388, Fax Machine or mailto:true-agents@true-agent.com Check out our NEW website, at: http://www.Buy-Madison-Real-Estate.com