NCAR Membership Continues Decline

Membership in the North Carolina Association of Realtors (NCAR) declined further in 2008 having peaked in 2007, according to data from the National Association of Realtors (NAR). The current membership roll of 41,044 as of 11/30/2008 is 5.8% below the enrollment of 43,569 at the same time last year, a loss of 2,525 members, and is below the 2007 year end total of 43,342 members. This is consistent with a national decline in NAR membership which saw an average drop of 9.24% from 1,357,993 members to 1,232,521, a loss of 125,472 members since 11/30/2007.

Membership in NAR peaked in October 2006 at 1,370,758. The only three territories that saw an increase in membership since 11/30/2007 were South Dakota (+7 members), North Dakota (+28) and Guam (+21). The rate of growth in NCAR membership peaked in 2006 at 17% slowing to 5% in 2007 before turning negative for the first time in about 15 years.  NCAR's membership decline of 5.8% still outperforms neighboring states: Virginia membership declined 11.43%, Tennessee 8.94%, South Carolina 9.3%, Georgia 14.22% and Florida membership declined 13.25% since 11/30/2007.

Alt-A and Option ARM Meltdown Coming

A Second Mortgage Disaster On The Horizon?
A Sixty Minutes story explains that the housing bubble is not finished bursting by a long shot.

As correspondent Scott Pelley reports, it turns out the abyss is deeper than most people think because there is a second mortgage shock heading for the economy. In the executive suites of Wall Street and Washington, you're beginning to hear alarm about a new wave of mortgages with strange names that are about to become all too familiar. If you thought sub-primes were insanely reckless wait until you hear what's coming.

Learn how Alt-A and Option ARM mortgage defaults are leading a second wave of foreclosures.

New Take on the American dream

Wednesday, November 5th, 2008
Audio Report by Chris Fitzsimon [Click here to listen]

Election Brief

Ty Harrell and Cullie Tarleton return to the NC House, Tony Foriest returns to the NC Senate and, Stan Norwalk gets elected as Wake County Commissioner despite the best efforts of NC Realtors to defeat them. Transfer tax proposals in Polk and Tyrrell Counties were defeated as were some sales tax increases but some bonds were approved. Voters don't like to be taxed but they like having a say about it.

Realtors Spend Against Ty Harrell, Tony Foriest

Realtors dropped some last minute money on attacking NC District 41 Representative Ty Harrell and promoting his opponent Bryan Gossage, a darling of the right-wing. The NC Realtors also put more money into calls for Realtor Rick Gunn, their chosen candidate running against Tony Foriest, NC Senate District 24, who supported giving counties the option for a transfer tax:

Not all senators in swing districts are against the proposal. Sen. Tony Foriest, a freshman Democrat from fast-growing Alamance County, said he can support the proposal because it requires county voters to approve it before it could go into effect. He agreed with Easley that a land transfer tax could give counties another option to raise revenues rather than relying on the property tax. The six counties in Basnight's district have a 1 percent land transfer tax, and officials there say they have been able to keep property taxes low as a result.

"You might find yourself in a situation where the land transfer tax might be more palatable," Foriest said.

Harrell and Foriest are both African-American. Gossage and Gunn are white.

Tarleton Targeted Update: Soucek Did Not Pay

On October 8th we had a post entitled Tarleton Targeted about The NC Realtors' favorite push polling company, Fallon Research & Communication, targeting State Representative Cullie Tarleton in his bid for re-election. Tarleton has had the temerity to oppose the realtors political positions. Opponent Dan Soucek was unlikely to have paid for the polling given his limited campaign funds.

Third quarter campaign finance reports now indicate that this is likely the case. Soucek did not report any payments to Fallon Research & Communication and the only expenditures reported by a campaign to Fallon Research & Communication in 2008 have been:

$10,000.00    04/28/2008
NC REALTORS PAC for POLLING

$39,300.00    09/24/2008
NC REALTORS PAC for POLLING

$9,250.00    09/24/2008
LES MERRITT COMMITTEE for RESEARCH

Realtors, Builders Give Big to Kenn Gardner

From today's Raleigh News & Observer:

Realtors, builders spend heavily to back Gardner

An undisclosed amount spent on attack ads by the N.C. Homeowners Alliance, a group created by the N.C. Association of Realtors.

In addition to the ads against [Stan] Norwalk, Realtors and others tied to development stepped up to support [Kenn] Gardner's campaign. Of the $21,261 in receipts reported since July 1, about 71 percent came from Realtors, builders and others involved with construction.
   :::::
Gardner also got $8,000 from the N.C. Realtors Political Action Committee and the PAC of the N.C. Home Builders Association. Gardner did not respond to a message seeking comment.

Norwalk said Friday he has no hope of keeping pace with what the Realtors are spending to attack him. Disclosure reports filed with the state Board of Elections show that the Homeowners Alliance has received at least $880,457 from the Realtors association.

4th NC Realtor Mailer Attacking Stan Norwalk

Here's the 4th realtor mailer attacking Stan Norwalk which is the 2nd specifically from the NC Realtors PAC:
· NCAR Flyer #2 PDF on the web
Copy of the N&O articles referenced (out of context) in the NCAR flyer:
· 10/2/2003 Article
Stan Norwalk wasn't proposing a reassignment plan. He was just pointing to the Charlotte experience to help people better understand the implications of various kinds of choice related to schools in Wake County.

Mary Edna Williams - Be Very Ashamed

Mary Edna Williams is 2009 President-elect of the North Carolina Association of Realtors and President of the NC Homeowners Alliance responsible for the content of this disgusting mailer that came in Wake County mailboxes this afternoon.

Do unto others as you would have others do unto you. That belief and a strong work ethic is the standard that Mary Edna Williams lives by.

Mary Edna Williams website

Is this what you would have others "do unto you" Mary Edna? Or this? Or this? Do you really think what you are doing to Stan Norwalk and Ty Harrell is consistent with the Code of Ethics that "Sets REALTORS® Apart"? Is it really a standard you live by?

Code of Ethics Sets REALTORS® Apart
Here’s a general overview of just a few of the key principles REALTORS® willingly agree to under the Code:
· REALTORS® avoid practices, which may harm the public.
· REALTORS® do not exaggerate, misrepresent or conceal facts related to property or transactions.
· REALTORS® protect and promote their clients’ interests and treat all parties fairly.
· REALTORS® represent themselves truthfully in advertising and other public forums.

Yeah, right.

Morning Cuppa

In an Editorial this morning the Raleigh News & Observer says that the NC Realtors attacks on Stan Norwalk and Ty Harrell are
Over the top

This is bush-league politics. The supporters of a transfer tax are welcome to their view, and the real estate brokers are welcome to their view, and the voters are welcome to decide their position on candidates based on that alone, if that's what they want to do. But deceptive efforts such as this one don't inform. They assault.

Chris Fitzsimon explores the realtors' silver lining in the housing cloud in last night's Fitzsimon File:
Making six percent on the American nightmare

The people of North Carolina are getting a reminder this fall of where some of that billions in annual profit ends up, paying for misleading ads in local tax votes and offensive attacks against candidates for the General Assembly and county commissions.

Realtor-funded group rips candidates

Ripped from the front page of the Raleigh News & Observer:

Realtor-funded group rips candidates
Two mailers have been sent against a Wake commissioner candidate. A state lawmaker is also a target.

A land transfer tax has never appeared on the ballot in Wake County, but you wouldn't know it from the money the state's real estate agents are spending to influence voters. A group called the N.C. Homeowners Alliance is using a direct-mail campaign and automated phone calls that depict Stan Norwalk, a Democratic candidate for Wake commissioner, as a serial tax raiser.

The group also has sent fliers to Wake voters attacking state Rep. Ty Harrell, who represents a district in the western part of the county, for not supporting a 2007 bill that would have required members of the Wake County school board to be elected at large, rather than in districts. The bill, backed by Republicans, never came up for a vote and died in committee. When he saw the mailer, Harrell, a Democrat, said he was confused.

The alliance's president is Mary Edna Williams, a Raleigh real estate agent who is also the president-elect of the N.C. Association of Realtors. When called about the alliance's ads, Williams referred all questions to Julie Woodson, the director of public affairs for the Realtors Association.

Change My World

More Realtor Attacks on Norwalk

There's a new flyer out, worse than the first, this time direct from the NC Association of Realtors PAC attacking Stan Norwalk for Wake County Commissioner and urging people to "Vote against Stan on Election Day".

· NCAR Flyer PDF on the web

Copies of the N&O articles referenced (out of context) in the NCAR flyer:
· 8/19/2000 Article
· 5/8/2002 Article

The state Court of Appeals on Tuesday upheld the dismissal of a campaign finance complaint against a political action committee that supported Cary Mayor Glen Lang and a slate of growth-control candidates running for the Cary Town Council three years ago.

This was the lead paragraph in the article that the NC Realtors reference to support their statement that Stan Norwalk has a "shady past". Having a politically motivated case brought against you dismissed gives you a shady past?

Link to Appeals Court and Supreme Court Opinions clearing Stan Norwalk and the other "Grumpy Old Men":
· Appeals Court Opinion
· Supreme Court Opinion

Also previously, NC Realtors have been fined big bucks by FEC:
· FEC Fined Realtors $78,000 for Burr Campaigning
· High Point Realtors Coerced PAC Payments

 

Just the Facts Ma'am

Campaign Finance 2008 Third Quarter for: NC REALTORS PAC [STA-C3219N-C-001]

Detailed Expenditures. Some notable expenditures:

10/3/2008 $209,640.00 [$209,640.00] CORNERSTONE SOLUTIONS & COMMUNICATIONS LLC
9/24/2008 $39,300.00 [$49,300.00] FALLON RESEARCH & COMMUNICATION, INC.
9/24/2008 $30,000.00 [$38,500.00] NORTH CAROLINA HOMEOWNERS ALLIANCE
10/18/2008 $27,449.52 [$174,466.43] North Carolina Association of Realtors, Inc.
10/03/2008 $8,500.00 [$38,500.00] NORTH CAROLINA HOMEOWNERS ALLIANCE
09/08/2008 $4,000.00 [$4,000.00] KENN GARDENER FOR WAKE COUNTY COMMISSIONER
09/16/2008 $4,000.00 [$4,000.00] BEVERLY PERDUE FOR NC GOVERNOR
09/16/2008 $4,000.00 [$4,000.00] BRYAN GOSSAGE FOR NC HOUSE
09/16/2008 $4,000.00 [$8,000.00] David Hoyle for NC Senate
09/16/2008 $4,000.00 [$4,000.00] DEBBIE CLARY FOR NC SENATE
09/16/2008 $4,000.00 [$8,000.00] Harold J. Brubaker for NC House
09/16/2008 $4,000.00 [$6,000.00] JIMMY LOVE, SR. FOR NC HOUSE
09/16/2008 $4,000.00 [$8,000.00] John Snow For NC Senate
09/16/2008 $4,000.00 [$4,000.00] Julia Boseman For NC Senate
09/16/2008 $4,000.00 [$8,000.00] Lorene T. Coates For NC House
09/16/2008 $4,000.00 [$5,000.00] LOUIS M. PATE, JR. FOR NC SENATE
09/16/2008 $4,000.00 [$5,000.00] Neal Hunt For NC Senate
09/16/2008 $4,000.00 [$6,000.00] Nelson Dollar For NC House
09/16/2008 $4,000.00 [$8,000.00] PAT MCCRORY FOR GOVERNOR
09/16/2008 $4,000.00 [$8,000.00] Paul Stam For NC House
09/16/2008 $4,000.00 [$8,000.00] Philip E. Berger For NC Senate
09/16/2008 $4,000.00 [$4,000.00] Pryor Gibson For NC House
09/16/2008 $4,000.00 [$4,000.00] RICHARD GUNN FOR NC SENATE
09/16/2008 $4,000.00 [$8,000.00] Tom Apodaca For NC Senate
09/16/2008 $4,000.00 [$5,000.00] William C. McGee For NC House

     Amounts in brackets [-] are cumulative for the 2008 election cycle.

Legalese

This morning I spoke with attorney representing the North Carolina Association of Realtors (NCAR). He declined to submit concerns in writing but they relate to three posts, made in the last few days, which he requested that I remove and recognize with an apology.

In my posts I try to strive to present an abundance of fact, spiced with opinion, believing that sunlight is the best disinfectant and that humor is the best medicine.

I have been dismayed in recent days at attacks on Stan Norwalk, a candidate for Wake County Commissioner, a thoughtful, knowledgeable, "Grumpy Old Man", simultaneously cantankerous and congenial and, a persistent advocate for the public good. Those are my opinions. The attacks have been funded by the North Carolina Association of Realtors. That is a fact.

My respect for Stan and my disdain for the political activities of NCAR may have led to a contraction of fact and opinion such that a reader might consider them indistinguishable. I have revised two posts to avoid that confusion. I have removed one post which I will repost later with a clarification.

The posts were not intended to suggest illegal or unlawful activity or violations of criminal law where none exist.

I willingly correct mis-statements of fact and mitigate any misunderstanding of opinion. I have done so on occasion, when requested and often when not. Any reader is free to communicate by commenting or by email to gregflynn@bluenc.com. No posse is necessary. For my part I will strive to do a better job of separating the illicit from the merely reprehensible.

 

Pop-Pop for Wake County Commissioner

Stan Norwalk, candidate for Wake County Commissioner, gets his family's endorsement:

Cornerstone Solutions & Communications, LLC

From the Florida Department of State, Division of Corporations, regarding Cornerstone Solutions & Communications, LLC, which has been the recipient of $156,915 reported to the State Board of Elections so far in Disbursements for Electioneering Communications by the North Carolina Homeowners Alliance, funded by $880,457 in contributions from the North Carolina Association of Realtors.

Florida Limited Liability Company
CORNERSTONE SOLUTIONS & COMMUNICATIONS, LLC
Filing Information
Document Number L08000061354
FEI Number NONE
Date Filed 06/23/2008
State FL
Status ACTIVE
Principal Address
6917 VISTA PARKWAY NORTH
SUITE 1
WEST PALM BEACH FL 33411
Mailing Address
6917 VISTA PARKWAY NORTH
SUITE 1
WEST PALM BEACH FL 33411
Registered Agent Name & Address
WASCH, JOSEPH C
1900 CORPORATE BOULEVARD, NW
SUITE 400 EAST
BOCA RATON FL 33431 US
Manager/Member Detail
Name & Address
Title MGRM
ASNANI, PRADEEP B
6917 VISTA PARKWAY NORTH
WEST PALM BEACH FL 33411
Title MGRM
SINCLAIR, ROBERT C
6917 VISTA PARKWAY NORTH
WEST PALM BEACH FL 33411
Title MGRM
MACAULAY, ALASTAIR L
6917 VISTA PARKWAY NORTH
WEST PALM BEACH FL 33411
Annual Reports
No Annual Reports Filed

Cornestone Solutions & Communications, Inc., dba Cornerstone Solutions, a North Carolina corporation, was dissolved effective 11:59pm on June 30th, 2008. Articles of dissolution dated June 18th, 2008 were filed June 19th, 2008.

Cornerstone Solutions & Communications, LLC dba Cornerstone Solutions was formed as a Florida Limited Liability Company on June 23rd, 2008 with the same Principals, Rick Asnani, Chris Sinclair and, Alistair Macaulay.

NC Homeowners Alliance Send Realtor PAC Money

According to a new report filed with the IRS the North Carolina Homeowners Alliance made a contribution of $50,000 to RPAC, the National Realtors Political Action Committee. On the last page there is this entry:

Recipient's name, mailing address and ZIP code:
Realtors Political Action Committee
430 N. Michigan Avenue
Chicago, IL 60611

Purpose of expenditure
Contribution to National Realtors Political Action Committee

Amount of Expenditure
$ 50000
Date of expenditure
09/23/2008

The North Carolina Homeowners Alliance is a 527 political committee funded by a mandatory assessment on all NC Realtors by the NC Association of Realtors. This contribution of $50,000 to RPAC would appear to exceed Federal contribution limits, would appear to violate the limitations on corporate contributions and on the electioneering activities of a 527 committee.<-->

Norwalk Attackers Support Even Higher Taxes

The people who are attacking Stan Norwalk for Wake County Commissioner, by lying about his position on a half cent sales tax, actually support a higher, one cent, sales tax. The Triangle Community Coalition, an organization of builders and realtors has advocated for a large increase in the regressive sales tax:

The TCC Executive Committee, at their April 19, 2007 meeting, adopted the following resolution:

WHEREAS, the Triangle Community Coalition supports and advocates the following alternatives to fund infrastructure: the authority to impose an optional one cent sales tax to fund only roads and schools; public-private partnerships to build schools; the use of development agreements to help with infrastructure needs that benefit the community and individual developments; and the use of project development financing (also known as Tax Increment Financing)

The TCC has maintained this position at least since 2003:

The TCC therefore supports the use of a local option sales tax.

And more recently in the TCC blog, "Growth Matters":

Maybe legislators will broker a new deal, and allow counties to have more authority (a full penny versus the quarter of a penny they got last year) for a sales tax to help pay for infrastructure. The sales tax hits everyone, and not just a select few, as Rick Martinez points out in his recent column in the N and O.

Chris Sinclair, TCC blog, Growth Matters.

What is Stan Norwalk's real position on transit funding? Read what he said to the Independent:

As a general rule I am against regressive taxes that fall heavily on working and low income families. However, transit is progressive and would help such families. In that case I have proposed a portfolio of taxes including a ¼ cent sales tax coupled with assessments that would be borne by businesses that would benefit from transit. A portfolio of taxes would best serve the future needs of transit as the sales tax is not keeping up with the economy and the cost of infrastructure.

The TCC supports Norwalk's opponent, incumbent Republican Kenn Gardner. Gardner is the Commissioner who famously claimed no conflict of interest regarding the funding of an aquatic center he designed claiming he wasn't being paid, then turned around and sued the center for almost $400,000 in fees.

NC Realtors Provide Alternate Reality About Norwalk in Mailer

The NC Realtors have been mailing out flyers, under the alias of the NC Homeowners Association, with lies alternate versions of reality and distortions about Stan Norwalk who is running for Wake County Commissioner.

On Land Transfer Tax: True: Norwalk has been an advocate for the use of a Land Transfer Tax for school funding in high growth counties like Wake. That's about the only truth in the flyer.

On property tax: False: Norwalk has not proposed an increase in property tax. In fact he has advocated for the Land Transfer Tax as a way to avoid property tax increases. In the absence of a Land Transfer Tax increase in Wake County Norwalk projected that property taxes would increase. Guess what? Wake County increased property taxes.

On sales tax: False: Norwalk has not supported the tax. In fact he has gone to great lengths to look at alternate sources of funding for transit. The quote in the flyer was take out of a context where Norwalk was explaining elements of the STAC (Special Transit Advisory Commission) Report and he even included a reference to the NC Justice Center's opposition to sales tax increases: Is there transit in your future?. Here is the entire post:

$4+ per gallon gas, the success of the CM lynx transit system, and the growth in outlying portions of the region, away from job centers, the energy led, rapidly rising costs of road infrastructure have combined to make transit a hot topic once again. As I travel around the County, the high cost of commuting is uppermost in most peoples minds. Our emphasis on the car is coming back to haunt us. Only 3% of the state's dollars is pent on transit.

Recently a new plan was unveiled for the region. While it still contains the commuter rail component of the previous plan that failed to get federal funding, the new plan sensibly put far more emphasis on buses and van pools.

The proposed funding mechanism, largely for the bus component, is an additional half cent sales tax, which likely would have to be approved by each county in the region. CM's vote in a recent referendum, strongly rejected a move to roll-back their half cent sales tax for transit has heightened support for this funding mechanism. Funding for transit and transportation in general will be major topics in the long session of the NCGA starting in January.

Here is a streaming video of a forum sponsored by WakeUP and others on transit. It was attended by about 300 people including many public officials. A link to a 2 hr+ video of the forum can be found on WakeUp's home page http://wakeupwakecounty.com/cms/

Here is an excellent summary of NC's declining transportation infrastructure by the NC Justice Center. They do not support the sales tax as currently structured.
http://www.ncjustice.org/assets/library/1158_btcrpt28feb08roadfund.pdf
__________________
It's Time for a Change
Elect Stan Norwalk for County Commissioner

On Norwalk's property tax payments: Distortion: Norwalk has an excellent record of paying property taxes on time dating back to 1995 when records first went online. Wake County property taxes are due between September and January of the following year. It is misleading for the NC Realtors Homeowners Alliance to state that September is the due date as most escrow payments are not made until the middle of December, a fact that any realtor would know. For 2006 property taxes interest began January 8, 2007. Norwalk paid before the end of January, on the 24th, including interest of $30.62 which was the only such payment in thirteen years of online records.

Stan Norwalk runs for Wake County Commissioner

Why Stan Norwalk is running for Wake County Commissioner:

Realtors Attacking Stan Norwalk

NC Homeowners Alliance, the NC Realtors 527 Political Committee, has been robo-calling in Wake County with a message attacking Stan Norwalk who is running for County Commissioner against incumbent Republican Kenn Gardner. Gardner is the Commissioner who famously claimed no conflict of interest regarding the funding of an aquatic center he designed claiming he wasn't being paid, then turned around and sued the center for almost $400,000 in fees.

As a public official, he [Gardner] should have been more straightforward about his role. And his assurances that he had no conflict as he sought to advance the pool project now don't seem to hold much water.

NC Realtors 527 robo-call attacking Stan Norwalk [Click here to listen]

NC Court Instructs Realtors to Return $40,000 Escrow

After almost three years of court battles a Chapel Hill couple may finally get their $40,000 earnest money deposit back from an escrow account held by real estate firm York Simpson Underwood. The case arose from a December 2005 home sale that fell through when a house appraised for $200,000 less than the purchase price of $2,100,000. The house was eventually sold to another buyer a year later for $300,000 less than the original purchase price. The sellers and York Simpson Underwood were named as defendants for not refunding the $40,000 earnest money deposit. The NC Association of Realtors filed an amicus curiae brief.

The North Carolina Court of Appeals Ruling October 7th, 2008 held that:

This appeal arises from a dispute concerning a contract for the sale and purchase of certain real property located in Chapel Hill. Defendants, Richard and Barbara Stewart, appeal from the entry of summary judgment in favor of plaintiffs, Michael and Louise Harris, ordering that plaintiffs' earnest money deposit, plus any accrued interest held in escrow by York Simpson Underwood,L.L.C. (“York Simpson Underwood”) be refunded to plaintiffs. For the reasons stated herein, we affirm.

In sum, the undisputed evidence of record shows that plaintiffs appraised the Stewart property within a reasonable period of time following the 15 December 2005 deadline and such property appraised at a value less than the purchase price. The trial court properly concluded that plaintiffs had the option to terminate the Contract pursuant to the express terms of Section 13(f) of the Contract and that plaintiffs are entitled to a refund of their earnest money deposit plus accrued interest. Accordingly, we affirm the trial court's grant of plaintiffs' motion for summary judgment and denial of defendants' motion for summary judgment.

10% Commission Danger Zone

Strange things happen to realtors when 10% commissions are involved. Here are two recent cases that ended up in the NC Court of Appeals:

Brunswick County
No. 07-CVS-255

AUSTIN HATCHER REALTY, INC.,
Plaintiff,
v .
HAZEL GAITHER ARNOLD, MICHAEL JAMES ARNOLD, ROGER WADE ARNOLD, CHARLES TONY ARNOLD, JAMES ARNOLD and JAMES KEITH ARNOLD,
Defendants.

Mecklenburg County
No. 06 CVS 5087

REALTY WORLD PROFESSIONALS,INC.,
Plaintiff,
v.
THE TILLERY TRADITION, INC.,
Defendant/Third-Party Plaintiff,
v.
VERONICA D. McBROOM,
Third-Party Defendant.

NC County Government

Tarleton Targeted

The NC Realtors' favorite push polling company, Fallon Research & Communication, has been targeting State Representative Cullie Tarleton in his bid for re-election. Tarleton has had the temerity to oppose the realtors political positions and, according to sources at the state legislature, had been threatened with retaliation. Seem like they're making good on the threats. Opponent Dan Soucek is unlikely to have paid for the polling given his limited campaign funds. WataugaWatch.net has been following the antics:
http://www.wataugawatch.net/2008/09/unpacking-soucek-push-poll.html
http://www.wataugawatch.net/2008/09/soucek-push-poll.html
http://www.wataugawatch.net/2008/09/dan-soucek-is-push-polling.html
http://www.wataugawatch.net/2008/04/politicizing-real-estate-industry.html

Update: Campaign finance reports filed 10/23/08 for the NC Realtors PAC show a payment of $39,300 to Fallon Research on 9/23/2008.

DePriest Departure

I'm told that the Chief Operating Officer of the North Carolina Association of Realtors, CPA William "Bill" DePriest has resigned suddenly. DePriest is/was an officer in NCAR's various for-profit entities and was the treasurer and/or custodian of books for the NC Realtors PAC, the Realtors 527 political committee known as the NC Homeowners Alliance and, the various county anti-transfer tax committees set up over the past year for which he managed payments. An examination of public reports shows that money flowed freely between NCAR's various non-profit and for-profit entities and political committees.

For-profit NCAR subsidiaries include:
NCAR Management Corporation
NCAR Service Corporation
Realfast, Inc.
RealServ, LLC
DePriest's wife Joanne is/was Director of Education for Realfast, Inc.

The timing of DePriest's departure is curious. This week the NC Realtors annual conference is being held in Charlotte and elections are coming up, including a transfer tax referendum in Polk County. DePriest is still listed as Treasurer for the NC Realtor's PAC. State Elections laws require a new Certification of Treasurer within 10 days of a change along with a revised Statement of Organization.

Winds of Change

Raleigh Realtor Becky Harper, running on a platform of change and of opposition to the the Issues Mobilization Assessment by NCAR has been elected to the board of the Raleigh Regional Association of Realtors.

· What position are you running for? RRAR Board of Directors
· When did you join RRAR? 1993
· How long have been in the business? Since 1986
· What is your position within the company? Broker Associate
· What committees have you served on at RRAR? Government Affairs Committee
· You may add one line (only) about your community involvement or personal life. I have been a leader in the movement to oppose the Issues Mobilization Assessment levied by NCAR. I want to serve on the Board to ask the tough questions.

The Man Who Told You So

Dean Baker Links:
Center for Economic and Policy Research | In the News | Beat The Press | truthout.org | Talking Points Memo

Will Bill You Later Anyway

Some realtors don't really have a choice about contributing to RPAC. From a recent email from a North Carolina realtor:

One of the things they do so that they will have 100% office participation for RPAC is that if you refuse to give, they give in your name...then they bill you for it.

Sound familiar? Drop me a line and share your RPAC story.

Money Talks Again in Clay County

As expected the transfer tax was defeated in Clay County but not by the margins one would expect given the heavy spending by the North Carolina Association of Realtors (NCAR) to kill the measure. With 9 out of 9 precincts reporting, 2,641 votes were cast, a voter turnout of 31.98% based on 8,262 registered votes. The final result was 1,038 votes for and 1,603 votes against, a margin of 565 voters or, 39.3% for and 60.7% against.

Based on spending of $36,200 reported on August 8th this represents spending of $22.58 per no vote, a new record. Based on funds of $57,500 committed to the opposition committee set up by NCAR this represents spending of $35.87 per no vote, yet another all time high. Somebody's getting rich. Meanwhile Clay County residents still have to find a way to pay for their schools and it's a sure bet that it's going to be property tax.

NCAR can afford to keep doing this for a while but can its members? All that NCAR is doing is shifting the burden from one form of taxation to another at $35.87 per vote. According to the Asheville Citizen Times:

Hoping to build a new primary school, Clay was the 20th county seeking to triple the land transfer tax. Voters everywhere have rejected the tax.

The land transfer tax would have raised about $350,000 last year, covering more than half the payment on a $10 million school-construction loan, Clay County Board of Commissioners Chairman Hub Cheeks has said.

Big money and absurd claims in Clay County

Big money and absurd claims in Clay County

By Chris Fitzsimon, NC Policy Watch Thursday, August 28th, 2008

Voters in Clay County head to the polls Friday to decide if they want to raise the local real estate transfer tax by .4 percent to build a new elementary school.

Hayesville, the county seat, is 350 miles from Raleigh, but big Raleigh money, slick misleading mailers, and misrepresentations from the market fundamentalist think tanks may decide the election if previous local transfer tax votes are any indication.

The Asheville Citizen-Times reports that realtors and developers have spent more than $36,000 fighting the tax so far, most of it from the N.C. Association of Realtors in Raleigh. The realtors have bought victory in all 20 of local transfer tax votes since the General Assembly gave counties the authority to put the tax on the ballot last session.

The realtors are using all the misleading arguments in Clay County that they have perfected in the last few years, calling the proposed increase a home tax, an attack on the American dream, and feigning concern for low-income families. Those are families the realtors charge 6 percent to sell a house, 15 times more than the transfer tax now proposed to build a school.

The big Raleigh money pays for a constant barrage of slick mail pieces that all but claims the transfer tax increase will end civilization as we know it. And just like in previous elections the realtors and homebuilders have the support of Raleigh's most well-known market fundamentalist think tank, that issued a predictable report that the county doesn't need to raise any tax to build a new school.

The report demands that the county commissioners "practice more honesty in government," attacking public officials honesty and integrity as part of the propaganda campaign.

The report urges the county to put a bond issue on the ballot "if" a new school is needed, which only people from Raleigh could question. It also criticizes county officials for using a bond issue to pay for a new jail which opened in May, but it doesn't stop there.

One author of the report says that "flat-panel TVs for inmates and hidden taxes" appear to be the commissioners' priorities. He goes on to question the need for the jail, criticize its size, and wonders why it wasn't built in cooperation with neighboring counties.

Sheriff Joe Shook, who is elected by the people in the county, said at the opening of the new jail that inmates were sleeping on the floor in the old one. As for the flat-panel televisions, that's what stores sell now. That doesn't mean they are high definition or plasma TVs, they are just flatter than older models.

A simple check of the Best Buy website would have made that clear, and it turns out Graham County authorities are planning to send some of its inmates to the new Clay County facility that can hold up to 60 prisoners.

That was reported by the local newspaper in May, three months before the think tank report criticized local officials for not cooperating with other counties who might want to use the new jail. But the report isn't about the facts.

It is anti-government propaganda designed to mislead Clay County voters and supplement the absurd claims of big money real estate interests in Raleigh.

And it is likely to work. An industry that makes close to $2 billion a year in the state has a lot of money to throw around to control elections and mislead voters. Maybe the people in Clay County will be able to see through the propaganda and vote to ask the people who make money off the county's growth help pay for the costs associated with it.

But don't count on it. More likely is more chest-thumping by the realtors and homebuilders and anti-government zealots when the tax is defeated. But that won't prove much. It won't even mean that voters don't want the transfer tax.

It will just be another confirmation that big Raleigh money, slick ads, and faux research funded by the Right can buy elections in small counties. And we already know that. But what do we tell the kids about their overcrowded school?

Clay County Overdrive

The North Carolina Association of Realtors (NCAR) has poured more money into the committee set up by NCAR to defeat the Clay County transfer tax referendum than previously reported. According to the Asheville Citizen Times:

Through Aug. 8, the committee organizing the campaign received $10,000 from the N.C. Home Builders Association and more than $32,500 from the Realtors group, which also loaned the committee $15,000.

Of that $57,500 about $36,200 had been spent by August 8th, or $4.38 per registered voter, a record high. If the amount invested in the committee by NCAR is spent it will come to about $5.72 per registered voter. If the total amount invested in the committee is spent it will come to about $6.93 per registered voter. There are about 8,300 registered voters in Clay County. There are almost 6 million registered voters in North Carolina. Do the math. $10 million won't be enough money to make the transfer tax go away. NCAR will be squeezing its members for years to come.

Lobbyists Ranked, Brokers? - Not So Much

While the non-realtor lobbyists who represent realtors get high marks from their peers for excellence in braggadiccio the individual real estate brokers that they claim to represent consistently get poor ratings from the public at large.

This year's Harris Poll measuring public perceptions of 23 professions and occupations again ranks real estate brokers last, a position held for 5 out of 6 years since being added to the survey in 2003. In 2008 only 6% of respondents regarded real estate agent/broker as an occupation having "Very Great Prestige" while 34% ranked the occupation as having "Hardly Any Prestige At All".

What are realtors paying association dues and assessments for? NCAR's lobbyists are polishing their resumes at the expense of NCAR members and public respect for real estate professionals.

Nice Work If You Can Get It

Must be nice for a small group of non-realtor buddies to have access to a virtually bottomless well of money filled by millions of dollars in compulsory dues on every real estate broker and licensed or certified appraiser connected to a MLS in North Carolina. When will the North Carolina Real Estate Commission (NCREC) take action to protect consumers and licensed real estate brokers from the predatory and self-perpetuating actions of NCAR? After all, that's part of the NCREC mission:

Goal
· To identify and address issues affecting real estate consumers and practitioners
Objectives
· Detect and monitor special problems and areas of concern affecting real estate consumers and licensees
· Adopt positions, promulgate rules and propose legislation to address problems and concerns
· Disseminate to licensees and consumers information addressing subjects of special interest and concern

You won't find Zechini, Kent, DePriest or Woodard in the NC Licensee database. NCAR's political campaigns, supposedly on behalf of realtors, make claims and statements about transfer taxes and local government spending that would be prohibited if made by an actual real estate licensee to a consumer.

Misrepresentation or Omission [G.S. 93A-6(a)(1)]
Misrepresentation or omission of a material fact by brokers or salespersons is prohibited, and this prohibition includes both “willful” and “negligent” acts. A “willful” act is one that is done intentionally and deliberately, while a “negligent” act is one that is done unintentionally. A “misrepresentation” is communicating false information, while an “omission” is failing to provide or disclose information where there is a duty to provide or disclose such information.

Instead of the disciplinary action that an actual real estate broker would face, NCAR lobbyists are premiated for their powers of influence, regardless of the merits, or lack thereof, of the message:

The highest-ranked lobbyist involved in the transfer tax debate was John McMillan, who ranked 2nd and is a contract lobbyist who represented the N.C. Association of Realtors and 31 other clients. The Realtors Association opposed the real estate transfer tax. Also representing the Realtors Association were executive vice president Tim Kent and Rick Zechini, both of whom ranked among the most influential lobbyists for the first time (11th and 12th, respectively).

Nice work if you can get it

Clay County Overkill

According to the Clay County Progress the North Carolina Association of Realtors (NCAR) has invested $38,000 in "Clay County Citizens Against the Home Tax" the latest local referendum committee set up by William DePriest and run out of NCAR's Greensboro office to defeat the transfer tax. According to voter registration records, Clay County has about 8,300 registered voters. That puts the NCAR investment at about $4.50 per registered voter, a new record high. Election day is Friday, August 29th and early voting has begun.

For the Orange County referendum in May spending per registered voter by NCAR was $1.96, the highest to that point. Area realtor organizations contributed another $0.37 per registered voter (mostly from the Triangle MLS which gave $30,000) while other groups like the National Association of Homebuilders, the NC Homebuilders (NCHBA) and Triangle Community Coalition (TRICC aka realtors and builders) threw in another $0.77 per registered voter. This made for a total of $300,011.66 or $3.11 per registered voter spent in Orange County.

According to the Campaign Reports filed with the Orange County Board of Elections $151,068.90 of that went to Public Solutions Inc, the firm of Chris Sinclair, head of the TRICC, for for flyers, mailings and website design. $23,018.96 went to Cornerstone Strategy of West Palm Beach, the firm of Rick Asnani a political consultant and advisor to TRICC. Sinclair and Asnani have since set up a joint firm called Cornerstone Solutions along with a former NCHBA lobbyist.*

Now NCAR is using even more brute force in Clay County by committing over $4.50 per registered voter to defeat the transfer tax. North Carolina has almost 6 million registered voters (5,913,332 to be exact). Is NCAR planning to spend over $20 million to keep defeating the transfer tax statewide? NCAR is not defending homeowners, especially those on fixed or low incomes. NCAR is defending the property tax with complete overkill.

Who is going to pay for the schools?

Support Your County Transfer Tax

Update: *Cornestone Solutions & Communications, Inc., was dissolved effective 11:59pm on June 30th, 2008. Articles of dissolution dated June 18th, 2008 were filed June 19th, 2008.

Forced Political Speech

Over the years, mandatory dues and forced political speech have been explored by the courts including the Supreme Court of the United States. Most, but not all, of the cases have involved mandatory union dues and political expenditures beyond the collective bargaining purposes of a union. The protection of members from forced political speech comes from what is know as the Abood line of cases. The case of Abood v. Detroit Board of Education was decided by the Supreme Court in 1977.

The Court ruled that compulsory dues for politics violates the First Amendment and that it is illegal to withhold forced dues from dissenters beyond the cost of collective bargaining.

National Right to Work Legal Defense Foundation.

In 1988 the Supreme Court ruled in Communication Workers v. Beck, a case related to a specific collective bargaining provision, that non-members required to pay dues could not be compelled to pay dues or fees beyond those related to collective bargaining. This established what is known as "Beck rights".

The Supreme Court again ruled June 2007 in a case about the protection of non-members from forced political speech, Davenport v. Washington Education Association, by upholding a Washington State law making it harder for unions to spend mandatory fees collected from nonmembers on political campaigns.

Prior court rulings have held that people required to pay fees to certain organizations for professional or other reasons -- such as attorneys who must join a state bar in order to practice law or undergraduates who are assessed student-government fees -- can't be compelled to contribute to political causes they oppose. Those rulings often have led to "opt-out" policies, in which individuals can request a refund of the portion of their fees that would be used for political speech.

Wall Street Journal 1/8/07

The Supreme Court in 1990 had held in Keller v. State Bar of California that:

1. The State Bar's use of petitioners' compulsory dues to finance political and ideological activities with which petitioners disagree violates their First Amendment right of free speech when such expenditures are not necessarily or reasonably incurred for the purpose of regulating the legal profession or improving the quality of legal services.

The virtual monopoly held by the North Carolina Association of Realtors (NCAR) over licensed residential real estate brokers in North Carolina, (NCAR members and non-members alike), North Carolina's Right to Work Law and the case law established by the United States Supreme Court, makes NCAR vulnerable to legal challenge over the mandatory dues assessment for the Issues Mobilization Fund and threatened punishment of dissenting members.

North Carolina Right To Work

North Carolina is a Right To Work state. Most realtors are required by their firms to be members of NCAR. The few licensed real estate brokers who may choose not to be members will see their firms billed for dues anyway. NCAR's mandatory dues appear to skirt North Carolina's Right To Work Law by making the Designated Realtor in a firm liable for nonmember dues, not technically the nonmember. As a practical matter a nonmember licensed real estate broker would be under great pressure to join NCAR or to otherwise reimburse the Designated Realtors for the amount of dues charged. NCAR rules provide that even if the dues assessment for a nonmember is paid by the nonmember, the Designated Realtor is credited with the payment. The relationship between individual real estate brokers and their firms is that of independent contractors and has evaded traditional employer-employee protections and benefits. If it can be shown that aspects of real estate brokers' work are being controlled by the firm, or by others with the acquiescence of the firm, such as mandatory NCAR dues and assessments, violations of IRS rules on Independent Contractors and NC Right To Work Law may be demonstrable. From the Chapter 95: Department of Labor and Labor Regulations of the NC General Statutes:

Article 10.
Declaration of Policy as to Labor Organizations.

§ 95-78. Declaration of public policy.

The right to live includes the right to work. The exercise of the right to work must be protected and maintained free from undue restraints and coercion. It is hereby declared to be the public policy of North Carolina that the right of persons to work shall not be denied or abridged on account of membership or nonmembership in any labor union or labor organization or association. (Enacted March 18, 1947.)

§ 95-79. Certain agreements declared illegal.

Any agreement or combination between any employer and any labor union or labor organization whereby persons not members of such union or organization shall be denied the right to work for said employer, or whereby such membership is made a condition of employment or continuation of employment by such employer, or whereby any such union or organization acquires an employment monopoly in any enterprise, is hereby declared to be against the public policy and an illegal combination or conspiracy in restraint of trade or commerce in the State of North Carolina. (Enacted March 18, 1947.)

§ 95-80. Membership in labor organization as condition of employment prohibited.

No person shall be required by an employer to become or remain a member of any labor union or labor organization as a condition of employment or continuation of employment by such employer. (Enacted March 18, 1947.)

§ 95-81. Nonmembership as condition of employment prohibited.

No person shall be required by an employer to abstain or refrain from membership in any labor union or labor organization as a condition of employment or continuation of employment. (Enacted March 18, 1947.)

§ 95.82. Payment of dues as condition of employment prohibited.

No employer shall require any person, as a condition of employment or continuation of employment, to pay any dues, fees, or other charges of any kind to any labor union or labor organization. (Enacted March 18, 1947.)

§ 95-83. Recovery of damages by persons denied employment.

Any person who may be denied employment or be deprived of continuation of his employment in violation of G.S. 95-80, 95-81 and 95-82 or of one or more of such sections, shall be entitled to recover from such employer and from any other person, firm, corporation, or association acting in concert with him by appropriate action in the courts of this State such damages as he may have sustained by reason of such denial or deprivation of employment. (Enacted March 18, 1947.)

The right to live includes the right to work. The exercise of the right to work must be protected and maintained free from undue restraints and coercion. It is hereby declared to be the public policy of North Carolina that the right of persons to work shall not be denied or abridged on account of membership or nonmembership in any labor union or labor organization or association. (Enacted March 18, 1947.)

§ 95-84. Application of Article.

The provisions of this Article shall not apply to any lawful contract in force on the effective date hereof but they shall apply in all respects to contracts entered into thereafter and to any renewal or extension of any existing contract. (Enacted March 18, 1947.)

How NCAR Controls Nonmembers

The North Carolina Association of Realtors (NCAR)controls the North Carolina residential real estate business by exacting dues for all licensed residential real estate brokers and appraisers in North Carolina member firms whether they are members of NCAR or not making it certain that NCAR's ranks are swollen with people simply taking advantage of benefits they can not avoid paying for.

Realtors and appraisers who need access to the Multiple Listing Service (MLS) are required to be members of the North Carolina Association of Realtors, an affiliate of the National Association of Realtors, and pay local, state and national dues. It is a little known fact that NCAR also exacts dues for nonmember licensed real estate brokers and appraisers in members firms regardless of whether those brokers and appraisers are accessing the MLS. By requiring a Designated Realtor in a member firm to pay dues for nonmembers in the firm NCAR is strong-arming all licensed real estate agents and appraisers in the residential trade in North Carolina into contributing to NCAR directly or indirectly.

Raleigh Regional Association of Realtors Bylaws:

(a) The dues of each Designated REALTOR® Member shall be in such amount as established annually by the Board of Directors. Also, an additional amount shall be established annually by the Board of Directors times the number of real estate sales persons and licensed or certified appraisers who are (1) employed by or affiliated as independent contractors, or who are otherwise directly or indirectly licensed with the REALTOR® who are (2) not REALTOR® Members of any Association in the state or a state contiguous thereto Institute Affiliate Members of the Association.

Brunswick County Designated Realtor Dues Notice:

A non-member licensee assessment of $490 will be charged for each licensee in your office that is not a member of the Brunswick County Association of REALTORS®.

North Carolina Association of Realtors Bylaws:

The dues of the Association for each REALTOR® Member holding primary membership in a Local Board shall be an amount as established by a majority vote of the Board of Directors, plus an amount as established by a majority vote of the Board of Directors times the number of real estate licensees and licensed or certified appraisers who are employed by or affiliated as independent contractors with such members and who are not themselves REALTORS®, provided however, that if two or more REALTORS® are principals of the same firm, partnership, or corporation, then only that REALTOR® designated from time to time in writing (the "designated REALTOR®") by the firm, partnership, or corporation shall be required to pay that portion of the dues which is computed on the basis of the real estate licensees and licensed or certified appraisers employed by or affiliated as independent contractors with such firm, partnership, or corporation, and the dues of the remaining REALTORS® who are principals of such firm, partnership, or corporation shall be an amount as established by a majority vote of the Board of Directors.

Names: Each year and throughout the year as required, each Local Board shall provide the Association the names of the REALTOR® and Affiliate Members of the Board, and the names of licensees affiliated with REALTOR® Members of the Board who are not themselves members of the Local Board. Any such names shall be provided by a Local Board together with applicable dues.

National Association of Realtors from standard DESIGNATED REALTOR® CERTIFICATION FORM:

This Board/Association's dues policy provides that: the dues of each Designated REALTOR® shall be a base amount plus an amount multiplied by the number of real estate salespersons and licensed or certified appraisers who: (1) are employed by or affiliated with as independent contractors or who are otherwise directly or indirectly licensed or certified with such REALTOR® member; (2) are not REALTOR® or Institute Affiliate members of the Board/Association, and the Designated REALTOR® notifies the Board/Association in writing of the Board/Association which dues have been paid. Therefore, please list all real estate licensees and licensed or certified appraisers in the firm and the primary Board or Association affiliation, if any. If no membership at any Board/Association in the state, check the non-member box for that person. This list shall be used by the Board/Association for dues calculation. Attach additional sheet if necessary.

Realtors Held Hostage

Raleigh area Realtors Becky Harper and Carlton Brown have written an op-ed about the special assessment imposed on members by the North Carolina Association of Realtors for the political Issues Mobilization Fund. The article appeared in this morning's Raleigh News & Observer.

  Realtors Held Hostage

Realtors statewide have received a $70 mandatory assessment levied by the N.C. Association of Realtors to replenish its Issues Mobilization Fund. The Realtors association will use this money to pay for lobbying against things such as proposed stormwater management rules in coastal counties and Jordan Lake, and against steep-slope building restrictions in the mountains.

Every Realtor is forced to pay these fees. Failure to pay will eliminate access to the Multiple Listing Service (MLS), the essential tool of a Realtor's trade.

The association has created a myth that it speaks for a huge constituency of committed members and has backed this up with its deep pockets. Its leadership, staff and paid lobbyists have used this massive fund to advance an agenda with little meaningful input from the thousands of residential Realtors who pay their dues just to maintain MLS access.

New Incentive Disclosure Rules

A change to real estate rules in North Carolina will require written disclosure of commissions, incentives, bonuses, rebates and other considerations provided to real estate brokers including the value of the payments and the identity of the person or company making the payment. The changes to Real Estate Commission Rules were approved by the NC Rules Review Commission on July 17th, 2008 and scheduled for formal publication in the NC Register September 2nd, 2008. The rules had been approved by the Real Estate Commission in May though at one point it appeared that the Real Estate Commission was hesitating to vote on them due to pressure from the real estate industry. The rules become effective October 1st, 2008.

The change was spawned by the publication of an article in the Charlotte Observer in 2007 (noted previously in a post called Bonus Round). The investigative reporting by Peter St. Onge and Binyamin Applebaum revealed that home buyers were unaware that their real estate brokers had received a bonus from the homebuilders selling them houses. The NC Real Estate Commission established an "Incentive Disclosure Advisory Commission" which issued a report November 2007 with three main observations/recommendations:

After reviewing and discussing the relevant issues, the committee determined that proper disclosure of incentives of more than nominal value requires:

1. That the disclosure be in writing and preferably accompanied by an oral explanation of the incentive arrangement, that it be prominent, and that it be acknowledged by the agent’s clients; but if the client fails to acknowledge the written disclosure, the broker may proceed with the transaction after noting this in his or her transaction records.

2. That the value of the incentive be disclosed and, if other than cash, a description of the incentive item and its monetary value stated.

3. That the disclosure by the agent be timely; i.e., preferably while showing properties for which an incentive is being offered, but in no event later than the making of the buyer’s offer to purchase such properties.

The committee then concluded that, since the current Commission rule on disclosing the receipt of sales incentives does not require that the disclosure be made in writing nor does it address the timing or content of the disclosure, the rule should be amended to incorporate the disclosure elements it identified.

The Commission went on to develop amendments to the rules which were submitted to the Rules Review Commission and published in the North Carolina Register:

BROKERAGE FEES AND COMPENSATION

(a) A licensee shall not receive, either directly or indirectly, any commission, rebate or other valuable consideration of more than nominal value from a vendor or a supplier of goods and services for an expenditure made on behalf of the licensee's principal in a real estate transaction without the written consent of the licensee's principal.

(b) A licensee shall not receive, either directly or indirectly, any commission, incentive, bonus,rebate rebate, or other valuable consideration of more than nominal value for services which the licensee provides, recommends, procures, or arranges relating to a real estate transaction for any party, without full and timely disclosure to such party; party. Full disclosure shall include a description of the commission, incentive, bonus, rebate, or other consideration including its value and the identity of the person or party by whom it will or may be paid. A disclosure under this rule is timely when it is made in sufficient time to aid a reasonable person's decision-making. provided, however, that nothing When the party is the licensee's principal, the licensee shall also confirm the disclosure in writing before the party makes or accepts an offer to purchase, lease, rent, or option, or before the party enters into any other contract relating to a real estate transaction. Nothing in this Rule shall be construed to require a licensee to disclose to a person not his principal the compensation the licensee expects to receive from his principal in a real estate sales or lease transaction or from the licensee's employing broker. Nothing in this Rule shall be construed to permit a licensee to accept any fee, kickback or other valuable consideration that is prohibited by the Real Estate Settlement Procedures Act of 1974 (12 USC 2601 et. seq.) or any rules and regulations promulgated by the United States Department of Housing and Urban Development pursuant to such Act. said Act or to fail to make any disclosure required by said Act or rules.

(c) The Commission shall not act as a board of arbitration and shall not compel parties to settle disputes concerning such matters as the rate of commissions, the division of commissions, pay of brokers, and similar matters.

(d) Except as provided in (e) of this rule, a licensee shall not undertake in any manner, any arrangement, contract, plan or other course of conduct, to compensate or share compensation with unlicensed persons or entities for any acts performed in North Carolina for which licensure by the Commission is required.

A public hearing was held April 16th, 2008 by the Real Estate Commission and the proposed amendment, with minor technical changes was approved by the Rules Review Commission July 17th, 2008.

Pending action by the [Real Estate] Commission on the proposed rule change, licensees are reminded that they are required by current Commission rules to fully disclose to their clients any compensation incentive they are offered and that federal law requires them to report on the HUD-1 form their “total sales/broker’s commission” including any compensation incentives.

Reporting of incentives is particularly problematic for buyers of new homes when builders provide performance incentives to realtors many months after a sale. The rules change will require written disclosure prior to an offer of incentives such as bonuses and realtor reward programs such as those offered in NC by Atreus Homes:

In 2007 the yearlong "Dream On"program of Atreus Homes & Communities, formerly HomeLife Communities,provided $10,000 each month to the three top-selling agents.

Winners, rewarded quarterly, were:
April:
· First -- ($5,000) Tiffany Richardson, Coldwell Banker Howard Perry & Walston
· Second -- ($3,000) Janet Smith, Fonville Morisey
· Third -- ($2,000) Phi Jacobs, New Homes.com
May:
· First -- ($5,000) Norma Abney, Realty World
· Second -- ($3,000) Teresa Pitt, Century 21/Vicki Berry
· Third -- ($2,000) Robert Page, Page Agency
June:
· First -- ($5,000) Ingrid Wright, ReMax Highlander Realty
· Second -- ($3,000) Glen Savio, Fonville Morisey
· Third -- ($2,000) Zach James, Pinnacle Properties
July Winners
· First place -- Jasper Gorham, Realty Executives Triangle
· Second place -- Hilda Eubanks, Brokers United Realty
· Third place -- Neill McLeod, Access Real Estate Services
August Winners
· First place -- Phi Jacobs, New Homes.com
· Second place -- Jeanine Lind, Allen Tate
· Third place -- Nigre Holcroft, New Homes Realty
September Winners
· First place -- Tiffany Richardson, Coldwell Banker Howard Perry & Walston
· Second place – Mark Connor, Fonville Morisey
· Third place – Rachael Leber, Coldwell Banker Howard, Perry & Walston
October 2007 Winners
· First place – Mark Connor – Fonville Morisey
· Second place – Kirk Keyes – America’s Best Realty
· Third place -- Samuel Pyrtle – Fonville Morisey
November 2007 Winners
· First place – George Wilson – Real Living Partners Triangle Inc.
· Second place – Thomas Wohl – ReMax Preferred Associates
· Third place – Ransford Thompson, Real Estate Today
December 2007 Winners
· First place -- Barbara Brotherson – ReMax United
· Second place -- Rachael Snow Lam – First Triangle Realty Inc.
· Third place- Julie Crespo – Crespo Real Estate

In 2008 Atreus recognized and awarded Triangle-area Realtors with $20,000 in cash prizes for quarterly “Extreme Realtors Rewards Program” Realtor incentive program.

Winners for the first quarter of 2008 are:
· First place – Laura Bonds – Bonds & Associates Realty - $10,000
· Second place – Sandra Smith – Coldwell Banker Howard Perry and Walston - $5,000
· Third place - Robbin Sutton - Pinnacle Realty - $3,000
· Fourth place – Larry Thomas - Brokers United - $2,000
Winners for the second quarter of 2008 are:
· $10,000 First Place Winner – Donnis Dunn of A. Dunn Deal Realty
· $5,000 Second Place Winner – Christian Isaacs of Isaacs Realty
· $3,000 Third Place Winner – Maggie Hobberchalk of NC Neighborhood Realty
· $2,000 Fourth Place Winner – Arneta Wicker of A. Wicker Realty

Atreus Homes Raleigh reports offering 3% commission and, additional flex money on certain homes. Flex money is most often a euphemism for down payment assistance (DPA) which has been banned by recent federal legislation for FHA guaranteed mortgages.

Note to IRS

Re: Political Campaign and Lobbying Activities of the North Carolina Association of Realtors, an IRC 501(c)(6) Organization.

Proxy taxes? We ain't got no proxy taxes. We don't need no proxy taxes! I don't have to show you any stinkin' proxy taxes!

"Like it or not, we are in the business of politics"

Wendell Bullard, NCAR President 2008

"If there is anyone who doesn’t think we are in politics…think again"

Cindy Chandler, NCAR President 2006

In general, no deduction is allowed for expenditures in connection with any attempt to influence the general public or segments thereof with respect to legislative matters, grassroots lobbying; elections; or referendums. See IRC § 162(e)(1)(C).

If the actual lobbying and political campaign expenditures of an organization subject to IRC 6033(e) exceed the amount that it notified its members was not deductible (either because the expenses were higher than anticipated or the dues receipts were lower), the organization is liable for a proxy tax on the excess amount. IRC 6033(e)(2)(A). The organization may seek a waiver of the proxy tax.

An organization may use this waiver procedure only if it sent dues notices at the time of assessment or payment of dues that reasonably estimated the dues allocable to nondeductible lobbying and political campaign expenditures.

Public copies of IRS 990 tax returns for NCAR indicate that NCAR did not elect to use this waiver on line 85h.

The amount subject to the IRC 6033(e)(2) proxy tax equals lobbying and political campaign expenditures under IRC 162 minus the amount disclosed to the members as nondeductible.

Political Campaign and Lobbying Activities of IRC 501(c)(4), (c)(5), and (c)(6) Organizations

For more IRS information read: IRC 501(c)(6) Organizations and IRS procedure for Examining Business Leagues - IRC 501(c)(6)

How NAR Controls MLS Access

Procedures to Be Followed by an Association of REALTORS® Upon Demand for Access to the Association’s Multiple Listing Service without Association Membership

In states other than California, Georgia, Alabama, and Florida, whenever an association is confronted with a request or demand by an individual for access to the association’s multiple listing service without membership in the association, member associations are advised that the association should immediately advise both the state association and the Member Policy Department of the National Association, and the recommended procedures will be provided to the member association with any other pertinent information or assistance. It is important that the state association and National Association be advised immediately if such request or demand for access to the association MLS as described is received.

Mandatory:

Adoption is necessary to ensure compliance with mandatory policies established by the NATIONAL ASSOCIATION OF REALTORS® Board of Directors and coverage under the National Association’s master professional liability insurance policy.

Shoot The Messenger

NCAR Membership Declines

Membership in the North Carolina Association of Realtors (NCAR) declined in 2008 having peaked in 2007, according to data from the National Association of Realtors (NAR). The current membership roll of 41,872 as of 7/31/2008 is 2.14% below the enrollment of 42,788 at the same time last year and is below the 2007 year end total of 43,342 members. This is consistent with a national decline in NAR membership which saw an average drop of 7.7% from 1,363,493 to 1,257,491, a loss of 106,002 members since 7/31/2007. Membership in NAR peaked in October 2006 at 1,370,758. The only territories that saw an increase in membership were Wyoming (+24), South Dakota (+23) and, Guam (+33). The rate of growth in NCAR membership actually peaked in 2006 at 17% slowing to 5% in 2007 before turning negative for the first time in about 15 years.

High Point Realtors Coerced PAC Payments

In 2005 the High Point Regional Association of Realtors (HPRAR) publicly mocked realtor members who had not contributed to the Realtors Political Action Committe (RPAC). Realtor Michael Pugh of High Point filed a complaint with the Federal Election Commission (FEC) that resulted in a $4,500 fine and a "cease and desist order" imposed on the HPRAR in 2007. A summary of the complaint and statement of the $4,500 civil penalty and specific violations of federal election laws can be found in the Conciliation Agreement 2/8/2007. Read the text and documentation of the newsletter taunts in Original Complaint 9/21/2005 and follow-up regarding Powerpoint presentation slides in the Supplement to Complaint 9/30/2005

RE: MUR 5681
High Point Regional Association of Realtors

1. HPRAR is a local association of realtors affiliated with the National Association of Realtors (“NAR’). As a local affiliate of NAR, HPRAR regularly solicits its members for contributions to NAR's separate segregated fund, the National Association of Realtors Political Action Committee (“RPAC”).

2. In August 2005, HPRAR listed the name of each individual realtor member who had not contributed to RPAC on two pages of its eight-page monthly newsletter. The names of the non-contributing individuals were listed under the name of their company, and the percentage of contributing members from each company appeared next to the company’s name. Companies that had a 100% contribution rate fiom its individual members were listed at the very top of the two-page list under the heading “2005 100% RPAC Companies.” No individual names of members who had already made contributions to RPAC were listed anywhere in the two-page spread. At the bottom of the second page there is a logo of RPAC with the question: “Have you made your contribution?” (Emphasis in original.) .

3. The newsletter also contained an article summarizing new state legislation “that makes significant improvements to the State’s real estate licensing law.” The end of the article stated, “These bills are representative of your RPAC dollars at work to improve our industry standards and working environment as well as to firher protect our customers and clients, the real estate consumer. Have you given your RPAC fair share? The article then gave a “special RPAC thanks” to an individual realtor member for her generous monetary support of RPAC.

4. HPRAR also displayed the names of non-contributing members on an overhead projection screen at the association’s monthly meetings and at the association’s 2005 Annual Meeting, held on September 21,2005, where checks were being presented to local candidates.

5. It is unlawful for a solicitation for contributions, whether written or oral, to fail to inform the employee or member being solicited at the time of the solicitation of the political purposes of the separate segregated fbnd and of his or her right to refuse to so contribute without any reprisal.

6. The solicitation in this matter lacked proper notice of the political purposes of RPAC and the member's right to refuse to contribute without reprisal, as required by [federal election law].

V. Respondent improperly solicited contributions to a separate segregated fund by failing to inform members being solicited at the time of solicitation of the political purposes of the RPAC fund and of the members' right to refuse to contribute without reprisal, in violation of [federal election law]. Respondent contends that the violation was inadvertent.

VI. Respondent will pay a civil penalty to the Federal Election Commission in the amount of Four Thousand Five Hundred Dollars ($4,500).

VII. Respondent will cease and desist from violating [federal election law] by providing proper notice of the political purposes of the separate segregated fund for which contributions are being solicited, and the member's right to refuse to contribute to such fund without any reprisal, in any and all solicitations for contributions, whether written or oral, at the time such solicitation is made.

For further information search the FEC Enforcement Query System with Case #: 5681

Behind the RPAC Curtain

Members of the NC Association of Realtors who make a contribution to the Realtors Political Action Committee [RPAC] are actually making contributions to two PACs. 70% of the contribution goes to the state PAC known as the NC Realtors PAC and 30% goes to the national PAC known as RPAC.

Find out more about RPAC in its own words by reading the RPAC FAQ for Federal Political Coordinators or a detailed Powerpoint presentation on RPAC Administration or a handy list of Acronyms & Terminology Commonly used in Government Affairs which includes items like these:

NAR’s RPAC Major Donor Levels (per year)
Golden R Member: $ 5,000
Crystal R Member: $ 2,500
Sterling R Member: $1,000
Hall of Fame: $25,000 in aggregate contributions to RPAC
President’s Circle: Individual direct contribution program where $2,000 is given directly to NAR designated congressional candidates from Major Donors.

That's what is known as bundling and explains how NAR and NCAR could claim credit for contributions in support of Richard Burr beyond expenditures shown in federal reports to the Federal Election Commission and the Internal Rrevenue Service.

To join the program, you must contribute a total of $2,000 in personal contributions, in addition to your RPAC contribution, each calendar year. You must be a RPAC Major Donor of Golden, Crystal, or Sterling R level to participate. President's Circle members receive bipartisan requests throughout the year from NAR to use their funds to make contributions to national political party committees and/or NAR-selected federal candidates.

Realtors Already Forced to Spend on PAC

$196,763.44 has been spent to date by the North Carolina Association of Realtors on administrative support for the NC Realtors PAC since the beginning of 2007 the first period for which the PAC started reporting these amounts to the State Board of Elections. This is not PAC contribution money. This is NCAR member dues spent supporting the PAC and amounts to about $5 per member. From the perspective of election law it is legal for a corporation to make reasonable in-kind contributions to the administration of its own PAC. However, the amount of dues represented by the spending on the PAC is not tax-deductible and I doubt that many members are aware of or approve of this spending from their dues.

Realtor PAC Contributions Decline

While the NC Association of Realtors PAC reported income of $335,000 for the first half of 2008 the number is misleading because NCAR has only recently started including the administrative costs it incurs on behalf of the PAC properly as in-kind contributions. For the first two quarters of 2008 that amount was $41,300 $70,263. When actual contributions are added up the amount for the first half 2008 is only $283,652 which is less than $333,814 for the comparable period in 2007 or $349,700 for the comparable period in 2006. Real NC Realtor PAC contributions peaked in 2006 and have been declining since and, the participation rate is only about 28% among NCAR members. This is one of the reasons why NCAR is now forcing contributions from its members.

NC RPAC Individual Contributions
Period	Half Year	Year Total
2005 S1	$282,621.19
S2	$243,643.29	$526,084.48
2006 S1	$349,699.87
S2	$233,477.41	$583,177.28
2007 S1	$333,814.40
S2	$173,901.66	$507,716.06
2008 S1	$283,652.47

FEC Fined Realtors $78,000 for Burr Campaigning

In a little noticed action in 2007 the National Association of Realtors was fined $78,000 by the Federal Election Commission for violations of election law including $282,500 spent on mailings and advertisements expressly advocating the election of Richard Burr for Senate in 2004. The FEC found that the National Association of Realtors 527 Fund failed to register and file disclosure reports as a Federal political committee and accepted contributions in violation of Federal limits and source prohibitions. In total the NAR 527 Fund spent $2.8 million advocating the election of 9 federal candidates in 2004 including Richard Burr, their favorite son Johnny Isakson, a Georgia realtor, and the disgraced Rick Renzi.

The campaigning for Richard Burr spurred the complaint and subsequent enforcement action. One North Carolina man, Thomas Strini, of Mint Hill, had filed two separate complaints, one in September 2004 attaching a copy of one Burr mailing and another in November attaching copies of five Burr mailings from the National Association of Realtors (NAR), some with the specific authorization of the North Carolina Association of Realtors (NCAR). The enforcement process dragged on for almost three years until June 2007.

Richard Burr’s 2004 campaign for Senate received much support from the National Association of Realtors and the North Carolina Association of Realtors. It was quite overt and drew some media attention at the time but little, if any, follow-up. Since 2004 the realtor association leaders have crowed about their support for Burr and his support for legislation favoring realtors such as a bill to prevent banks from getting into the real estate brokerage business. Burr’s wife is a Winston-Salem realtor. In addition to the NAR 527 Fund spending of $2.8 million, the NAR Political Action Committee, known as RPAC, spent $3.75 million on 2004 federal campaigns and the NAR also boasts to members of bundled individual contributions direct to campaigns. RPAC is consistently a top spender in federal and state campaigns. Anecdotally, NAR and NCAR provided about $1,000,000 in combined support of Richard Burr’s 2004 campaign. RPAC alone spent $578,748.02 in independent expenditures on the Burr campaign.