Sometimes local news is national in nature. This is often true when it comes to California. With such a large population and a history of “active” politics, many of the laws and regulations that California passes eventually migrate to other states; sometimes this is reminiscent of a rainbow spreading across the land and sometimes it resembles more of a virus infecting people at whim. Get ready to feel sick.
The California legislature is currently voting on AB0401, a seemingly innocuous alteration to the licensing regulations that govern real estate here. But, as usual, the ramifications will be unexpected and monstrous. The stated purpose of AB0401 is to clarify the relationship between RESPA law and non-monetary remuneration between licensed real estate agents and non licensed participants in real estate transactions. Here is the key section
All transactions falling under the penumbra of RESPA shall heretofore be subject to review and restatement. No value shall pass or be caused to pass between a licensed broker or licensed sales associate of said broker and any non-licensed agency before or after such time as a real estate transaction may occur. Transfer of value is to include, but not be limited to: all forms of currency, any property or asset of value, any service of value and any intellectual property of value. (emphasis mine)
I am already reading pundits this morning here in California describing all online websites and blogs as intellectual property of value. So what does this mean to the average agent, loan officer, title rep, etc? It means that if you are syndicating your posts to another person’s site, or posting on another person’s site and that site has the stated or implied purpose of generating real estate business, you are in violation of RESPA regulations and subject to fine and/or loss of license.
This from Assemblywoman Debra Brady (R-Del Mar): “I believe this will cast a chill across the Internet and is nothing short of Big Brother clamping down on the free exchange of ideas. We must defeat this and we must take a stand for the First Amendment rights of every citizen, no matter what business they conduct.”
I am not overly involved in politics and I do not know who to contact or even what the appropriate response should be. Here in California we should most assuredly be contacting our representatives and telling them we are against this bill. It might not hurt to get some nationwide outrage going too. I assume that BloodhoundBlog will be OK, because this is not created with the purpose of securing transactions, but who knows what these crazy Luddites will come up with next. Any suggestions?
Bawldguy Talking says:
Sean — I too have been following AB0401 with mounting trepidation. My worst fears appear to be on the edge of becoming reality.
This post saved me from publishing my thoughts. Just before lunch I spoke with Assemblywoman Brady, who was unnerved by the prospect of this bill becoming law.
i wonder where CAR is in all this? Wow.
April 1, 2008 — 1:42 pm
Mike Farmer says:
What is the purpose? To claim that exchange of intellectual property is an enticement to use certain unlicensed professionals for real estate services?
April 1, 2008 — 2:25 pm
Gary Frimann says:
First, as a CA licensed Broker, most of the unlicensed activity has stopped due to the poor prospects of late regarding making a “killing” in Real Estate.
I think the spirit of the law is to stop the referral companies. The letter of the law may be a halt to the big national franchises who run their own websites.
Interesting law, but it has not passed yet. Perhaps it wants to be yet another approach to stop land sales from other states, without the approval of the Department of Real Estate, which is currently required for any advertising of out of state properties/developments, which acts as a consumer protection type law for protection of the CA consumer.
Who knows how the bill will be diluted, or even if it will be shot down. YOu pose an interesting argument however…
April 1, 2008 — 4:20 pm
REBLogGirl says:
wow, and this isn’t an April Fool’s joke?
April 1, 2008 — 6:46 pm
Mariana says:
Per RESPA: “No person shall give and no person shall accept any fee, kickback, or thing of value pursuant to any agreement or understanding, oral or otherwise, that business incident to or a part of a real estate settlement service involving a federally related mrtgage loan shall be referred to any person.”
http://www.hud.gov/offices/hsg/sfh/res/resp2607.cfm
I see how “intellectual” property could fall into this category.
I do not think that contributing to a site in-and-of-itself is a violation, but saying, “I will contribute to your site for each person you refer to me” COULD be a violation.
Maybe I am off target, but I do see validity in this.
April 1, 2008 — 6:52 pm
Kaye Thomas says:
Have to keep an eye on Debra Brady…. you never know what she will do next.. those Republicans from Del Mar are a feisty bunch….LOL.. Way too funny.. altho who knows what the future will bring..
April 1, 2008 — 7:19 pm
Russell Shaw says:
As it should be pretty easy to prove that BloodhoundBlog has almost nothing to do with me (or any other Realtor here) getting business a law like that could work in our favor. BHB could become the largest blog in the world – just from all the Realtors flocking to write on the one site where it was obvious – no one would be doing THAT to generate sales.
LOL
April 2, 2008 — 1:20 am
Greg Cremia says:
Can the absence of CAR be considered an endorsement? In the shadow of NAR’s new MLS website policy it is starting to look more and more like somebody wants to take the web away from the us little guys.
April 2, 2008 — 6:17 am
Sean Purcell says:
I was leading a seminar all morning and only now have returned to the office. It appears there was a mix up yesterday.
I spoke with Brian, the spokesman for Assemblywoman Debra Brady (R-Del Mar) and he informed me that due to my quoting her (when I apparently wasn’t supposed to) she has been removed from the House Committee to Eschew Obfuscation and that her seat in the General Assembly was in question.
My apologies to all involved. (Brian also informed me that due to public outrage, the committee had killed AB 04/01 in 08. A similar law may be revisited around this time next year.) 🙂
April 2, 2008 — 4:49 pm