January/February 2013 - Greater Capital Association of REALTORS

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January/February 2013 - Greater Capital Association of REALTORS
Caring • Committed • Community-Minded
Official Publication of the Greater Capital Association of REALTORS®
Volume 24, Number 1 January/february 2013
Berger Assumes GCAR Presidency
New Leadership Elected To Serve
Miguel Berger, CRB, GRI, e-Pro, president of Better Homes & Gardens Real
Estate Tech Valley has assumed the
role of president of the Greater Capital
Association of REALTORS®, Inc. He
became president after a year as president-elect of GCAR. Previously he had
served as GCAR’s secretary/treasurer,
and as a director of the Association for
many years.
Mr. Berger has served GCAR and
its affiliated multiple listing service
(CRMLS) in the past as a committee
chair, committee member, educational
program instructor and as a leader
in GCAR’s RPAC efforts having been a
platinum contributor many times.
He is a past director of the Council of
Real Estate Brokerage Managers (CRB)
and holds that organization’s coveted
CRB designation. His career in real
estate dates back nearly thirty years
and his contributions to organized real
estate nearly as long as he realized
early in his career the importance of a
strong REALTOR® association.
Mr. Berger looks to continue GCAR’s
strong presence in the Capital Region
and to build a sound platform which
will allow GCAR to service its membership into the immediate and long
term future. His firm is noted for its
expertise in using new technology in
the real estate transaction and he will
bring his own experience in this area
to GCAR in 2013.
At his election in November 2012
additional members were selected to
serve alongside him in various leadership roles. Those newly elected members are pictured with Mr. Berger.
GCAR Officers
2013 President
Miguel Berger
BHG Tech Valley
President-Elect
Albert Picchi
RealtyUSA.com
Secretary/Treasurer
Cathy Griffin
Keller Williams Capital District
GCAR Directors
Marie Bettini
Albany Realty Group
Anthony Garufi
Fraida Varah Real Estate
Group
CRMLS Directors
Jason Christiana
Prudential Manor
Homes
W. Gregory Gersch
Gersch Real Estate
Group
Joel Koval
RealtyUSA.com
Susan Sommers
BHG Tech Valley
Elise Van Allen
Brokers Network
NYSAR Directors
Nina Amadon
RealtyUSA.com
Jason Christiana
Prudential Manor
Homes
Robert Freedman
RLF Realty
In This
Issue
DATED MATERIAL
Permit No. #164
Albany, NY
With The President...................... page 2
Welcome New Members............ page 6
Member Update........................... page 8
Anti-Money Laundering
pages 4-5
Greater Capital Association of REALTORS®
451 New Karner Road
Albany, New York 12205
PAID
PRSRT STD
U.S. Postage
2
Across the Association
january/february 2013
With The President
major issue we need to be aware of
that could potentially destroy what
we call “the market”. Are you aware
that the government is toying with
the idea to reduce or eliminate the
Mortgage Interest Deduction (MID)?
2013
GCAR President
Miguel Berger
As I write my first president’s message I can say 2012 was a success.
We saw an increase in the market (as
of the end of November) with the
number of contracts for sale increasing by 21%, closed sales increasing
by 15% and the median price increasing by 4%. We could sit here and feel
good about our market and how great
things are going, however, there is a
That is one of the biggest tools
we have to make sure the consumer
understands the importance of homeownership.
The reduction or elimination of the
MID would be catastrophic to our business. As I see it the MID is one of the
most valuable benefits of owning a
home. Are you aware that if someone
bought a home this year for $200,000
with a 30 year fixed rate mortgage
they could save up to $3,500 in federal
taxes when they file next year.
I think everyone that would read this
gets the idea now for the pitch: The
only way we can fight this huge fight
is by contributing to RPAC, I know
everyone is telling me they already
contribute through their dues payment. I can tell you that only about
45% of our membership contributes
to RPAC through their dues, the other
65% gets the benefit but do not invest
in their business.
Let’s take a step back, one of the
discussions we have with buyer when
they are thinking about buying a home
is the benefit of the MID. Can you imagine not be able to have the “rent vs.
own” discussion with a consumer?
The challenge I would like to propose is quite simple: I would like to see
every GCAR member contribute $100
for the year, which is less than 28 cents
a day. Is that too much to ask anyone
to invest in their self?
If we want to have a viable business
we need to seriously start thinking
what is next and how we need to
protect what makes sense. I would
hope everyone has answered NAR’s
call to action on the MID, but that is
not enough.
I am looking forward to a great year
and I want to make sure everyone
knows that their opinion counts. If
you have any ideas you would like
to share with me or the rest of the
GCAR leadership feel free to contact
us, don’t ever think that your opinions
don’t count, this association is our
association and I’m looking forward to
serving everyone equally.
Have a great and successful year.
Community Outreach Fund 2012 Donations
Total $12,750
GCAR’s not-for-profit Community Outreach Fund has collected
and distributed $12, 750 in 2012 to charities throughout the Capital
Region. A donation also went to NAR’s Disaster Relief Fund for distribution to Hurricane Sandy victims.
The COF is funded entirely by donations made by GCAR members
most of which are collected during the semi-annual dues billing cycle.
Consider including the voluntary $10 with your next dues payment.
Since its inception the COF has distributed just over $150,000 in the
Capital Region. GCAR and the COF remain “Committed, Concerned,
and Community Minded”. Thank you for your support.
2012 Recipients
Schoharie County Comm. Action
Schoharie Recovery, Inc.
Better Neighborhood, Inc.
Schenectady Home Furnishing Program
St. Paul’s Center
NAR Disaster Relief (Reserves)
Unity House
The Community Hospice
Saratoga Co. Rural Preservations Veteran’s House
Double H Ranch
$ 250.00
$1,000.00
$1,000.00
$1,000.00
$2,000.00
$2,000.00
$ 500.00
$1,000.00
$2,000.00
$2,000.00
Diana Farrell, a member of GCAR’s Community Relations Committee presents a check from the
Community Outreach Fund to Mary Gay Wood, Regional Director, The Community Hospice.
Across the Association
Officers
The newspaper of the Greater Capital Association of REALTORS®, INC.
451 New Karner Road
Albany, New York 12205
(518) 464-0191 • Fax: (518) 464-0196
“The Greater Capital Association of REALTORS® is a professional
trade association which provides its members with programs
and services which enhance the members‘ ability to successfully
conduct their businesses in a competent and ethical manner,
promotes cooperation among its members, and promotes the
public‘s right to own, use and transfer real property.”
The voice for Real Estate in
New York‘s Capital Region.
Caring • Committed • Community-minded
President – Miguel Berger
President Elect – Albert Picchi
Secretary/Treasurer – Cathy Griffin
Chief Executive Officer – James Ader
Dir. Of Association Svcs. – Laura Burns
World Wide Web page: www.gcar.com
E-mail: [email protected]
Production & Printing:
Foley Publications, Inc. • (800) 628-6983
Graphic Designer:
Jake Fletcher, Foley Publications, Inc.
Advertising Information:
Foley Publications, Inc. • (800) 628-6983
The Greater Capital Association of REALTORS® makes no
warranties and assumes no responsibility for the accuracy
on the information contained herein. The opinions
expressed in articles are not necessarily the opinions of
the Greater Capital Association of REALTORS®.
The Greater Capital Association of REALTORS® does not
necessarily endorse the companies products or services
advertised in the newsletter unless specifically stated.
Directors
Nina Amadon
Marie Bettini
Joseph Farry
Kelly Gardner
Anthony Garufi
Brooke Hackler-Medick
Joel Koval
Mark Phoenix
Cynthia Quade
Lorraine Schindler
Susan Sommers
Peter Staniels
Elise Van Allen
CRMLS Directors
Jason Christiana
Paula Gaies
W. Gregory Gersch
Rory O’Connor
Liz Schultheiss
Barbara Walton
Across the Association
january/february 2013
3
Olszewski v NSBAR:
Code of Ethics’ Article 14
Upheld by Court
An Illinois court has considered
a member’s challenge to discipline
imposed by a REALTOR® association
for a violation of Article 14 of the
National Association of REALTORS®
(“NAR”) Code of Ethics (“Code”).
Donna Harris (“Homeowner”) filed
a complaint with the North ShoreBarrington Board of REALTORS®
(“NSBAR”) against Michael Olszewski,
a REALTOR® (“Challenger”). The complaint alleged that the Challenger had
invaded her privacy in violation of
Article 12 of the Code when there was
a mix-up over keys in a condominium
complex where two units were listed
for sale.
The Challenger responded to the
complaint by having his lawyer write
a letter to the Homeowner, threatening to bring a lawsuit against the
Homeowner for intentional infliction
of emotional distress. A NSBAR hearing panel considered the complaint
against the Challenger, and the panel
determined that the Challenger had
not violated Article 12. However, the
panel did find that the Challenger
had violated Article 14 by sending the
threatening letter to the Homeowner.
For his Article 14 violation, the
Challenger was ordered to take an
ethics course within 6 months. Failure
to comply with the sanction would
result in a $500 fine, and he would still
need to take the course.
Article
14
provides
that
“REALTORS®…shall take no action to
disrupt or obstruct” the professional
standards hearing process. Further,
interpretative Standard of Practice
14-3 explains that Article 14 prohibits
“instituting or threatening to institute
actions for libel, slander, or defamation against any party…[based on] an
ethics complaint.”
The Challenger filed a lawsuit, arguing that Article 14 violated his constitutional right to due process and
equal protection, naming both NAR
and NSBAR in the lawsuit. NAR and
NSBAR filed a motion to dismiss the
lawsuit.
The Circuit Court of Cook County,
Illinois, Chancery Division, granted
NAR and NSBAR’s motion to dismiss
the lawsuit. First, the court considered the Challenger’s constitutional
arguments. Since the constitution
applies to the “state” and not private
organizations, the court found that
NAR and NSBAR could not violate
the Challenger’s constitutional rights.
Thus, the Challenger could not allege
Hurricane Sandy Relief
GCAR members participated in a NYSAR sponsored trip to the region devastated by
Hurricane Sandy. Some of the GCAR members who joined in were (l-r) Libby Reiser, Jill
Bryce, Susan Sommers, Robyn Credo (Dutchess County), Anthony Gagliardi, Barbara
Walton, Virginia O’Brien and Irvin Ackerman.
GCAR’s “crew” was told to rip out and remove everything from a once flooded
basement. It appears they met that goal.
a constitutional violation against
either organization.
Next, the court considered the
Challenger’s other arguments. Illinois
courts are reluctant to interfere in
the disciplinary proceedings of an
organization that an individual voluntarily joins, unless there is a showing:
that the association did not follow its
bylaws; the association’s rules and/or
proceedings violate concepts of fairness; or when an association’s process
was motivated by bad faith.
The Challenger did not allege that
NSBAR had acted in bad faith or did not
follow its bylaws, and so his only argument was that Article 14 was “unfair”.
The court upheld Article 14 against
this challenge, with the judge stating
that he was “persuaded by the broader
policy behind” the Code’s Article 14, as
it serves the dual purpose of protecting the public while also promoting
the reputation of the profession by
encouraging the filing of grievances
with REALTOR® associations. The court
also found that the Challenger had
no right to bring a defamation suit
against the Homeowner. Therefore,
the court dismissed the Challenger’s
lawsuit.
Olszewski v. North Shore-Barrington
Ass’n of REALTORS®, Inc., No. 12CH11329
(Ill. C.C. Ch. Div. Oct. 24, 2012).
4
Across the Association
january/february 2013
Anti-Money Laundering
Guidelines for Real Estate
Professionals Overview
The crime of money laundering continues to be a growing area of concern
in the United States. Therefore, law
enforcement agencies and the financial sector devote considerable time
and resources to combatting these
illegal financial activities. However,
many non-financial businesses and
professions are also vulnerable to
potential money laundering schemes.
Real estate professionals are a category of the non-financial business
sector that may encounter persons
engaging in money laundering activities. The purpose of this fact sheet
and suggested voluntary guidelines
is to increase real estate professionals’ awareness, knowledge, and understanding of the potential money laundering risks surrounding real estate
and enable them to identify practical
measures to mitigate the risks.
What Is Money Laundering?
Money laundering is the process
criminals use to disguise the illegal
origin of their funds. Certain criminal activities generate substantial
proceeds. Legitimizing, or "laundering" this money through the financial
system, is a critical component for
criminals to hide their activities and
not draw attention to their illegally
derived proceeds.
The actual process of money laundering is a three step process that
is initiated by introducing the illegal proceeds into the financial system, e.g., breaking up large amounts
into small deposits or by purchasing
financial instruments, such as money
orders, which is referred to as placement. This is typically followed by distancing the illegal proceeds from the
source of the funds through layers of
financial transactions, referred to as
layering, and finally by returning the
illegally derived proceeds to the criminal from what appears to be a legitimate source, known as integration.
Generally speaking, most money
laundering activities are concentrated in the financial sectors. Therefore,
banks and other financial institutions
are subject to anti-money laundering/
counter-terrorist financing (AML) laws
and regulations, primarily the Bank
Secrecy Act (BSA), and have safeguards
in place to help detect and mitigate
money laundering activity. But other
industries, such as real estate, can also
be exposed to questionable business
practices and be utilized as a vehicle for
money laundering activities.
The Role of Real Estate Agents
As a general matter, the real estate
agent’s AML risk is substantially mitigated by the fact that the great majority of real estate transactions involve
regulated entities such as banks and
non-bank mortgage companies, which
have BSA obligations. However, when
a transaction steps outside the norm
or in cases where certain risk factors
are present, as detailed below, a real
estate agent faces an elevated chance
of encountering a possible moneylaundering scheme and should consider taking measures to address the
risk.
As a real estate professional, knowledge of how real estate transactions
normally progress and the resulting ability to recognize and evaluate
whether variances from the norm may
signify an enhanced AML risk is an
important way real estate agents can
help to mitigate AML risk in real estate
transactions. This requires brokers and
agents to be aware of how real estate
transactions may be used in illegal
financing schemes and what steps
should be taken to detect and deter
those activities.
Being familiar with the signs of
money laundering activity in the real
estate market will help real estate
agents to:
A real estate transaction can be
used in any one of the three stages
of money laundering. For example, if
an individual purchases a home and
uses illegal funds as part of the down
payment, this would be considered
integration.
1. Identify potential money laundering activities;
2. Take appropriate steps to mitigate
the money laundering risk; and
3. If necessary, alert the proper
authorities to help deter and
mitigate the use of real estate in
money laundering schemes.
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Lawrence McGann
Guidelines
Law enforcement and financial
experts have identified some of the
warning signs of money laundering
activity in connection with real estate.
By familiarizing oneself with these voluntary guidelines, real estate agents
can assist and help minimize the risk
of real estate becoming a vehicle for
money laundering activities.
Know Your Business
Every broker and agent should be
aware of certain characteristics of a
real estate transaction that may be
indicative of illegal financing activities. A real estate agent’s familiarity
with the normal course of business
will help them to identify any unusual
or suspicious patterns. Law enforcement, regulators and the international
community have identified multiple
money laundering risk factors. In general, these risk factors (red flags) can
be grouped in the three categories:
country/geographic, customer, and
transaction risk.
Geographic Risk:
Geographic risk may arise because
the customer and/or the source of the
customer’s funds are located in a jurisdiction that has a weak AML regime,
supports or funds terrorism, or has a
high degree of political corruption.
Although there is no definitive list of
such jurisdictions, one good source is
the list of jurisdictions subject to sanctions of the Office of Foreign Assets
Control (OFAC) of the U.S. Treasury
Department. OFAC administers and
enforces economic and trade sanctions based on U.S. foreign policy and
national security goals.
OFAC-administered sanctions can
be either comprehensive or selective,
and generally restrict or prohibit dealings (including business and financial
activities) by U.S. persons or in the
United States that involve countries
(or persons) subject to OFAC sanctions. Countries subject to comprehensive OFAC sanctions include Iran,
Cuba, and Syria. The names of individuals, groups, and entities subject
to OFAC sanctions are generally listed
on OFAC’s List of Specially Designated
Nationals and Blocked Persons.
Customer Risk:
•Location of property in relation to
the buyer.
•Is there a large unexplained geographic distance between the
two?
•Unusual involvement of third parties.
PHONE: 518-937-2952
WWW.SPIREINSPECTIONS.COM
•Titling a residential property in the
name of third party; for example,
a friend, relative, business associ-
ate, or lawyer. Use of legal entities
(corporations, LLCs or partnerships) that obscure the identity of
the person who owns or controls
them without a legitimate business explanation.
•High-ranking foreign political officials or their family members.
Transaction Risk:
•Under or over-valued properties.
•For example, is the property owner
selling the property for significantly less than the purchase
price?
•Does the seller seem disinterested
in obtaining a better price?
•Use of large amounts of cash.
•Buyer brings actual cash to the
closing.
•The purchase of a property without
a mortgage, where it does not
match the characteristics of the
buyer.
•While rules and regulations governing the financial sector are
designed to detect situations
where large amounts of cash
are being introduced, real estate
agents should keep this factor in
mind when evaluating whether a
transaction seems suspicious.
•Property purchases inconsistent
with the individual’s occupation or
income.
•Is the property being purchased
significantly beyond the purchaser’s means?
•Immediate resale of the property.
•Especially if the sale entails a significant increase or decrease in
the price compared to the prior
purchase price, without a reasonable explanation.
•Speed of transaction (without reasonable explanation).
•Unusual source of funding.
•Example: use of third-party funds
to purchase a property where
it doesn’t make sense, i.e. thirdparty is not a parent, sibling, etc.,
use several different sources of
funds without logical explanation,
funding coming from a business
but property not being held in
business’ name, or purchase of
property doesn’t match the business’ purpose.
•Purchases being made without
viewing the property, no interest
in the characteristics of the property.
•Any other activities which demonstrate suspicious behavior and do
continued on page 7
Across the Association
5
How to Talk About the
Mortgage Interest Deduction
•As the leading advocate for housing
and homeownership, NAR firmly
believes that the mortgage interest deduction (MID) is vital to the
stability of the American housing
market and economy.
•NAR is actively engaged to ensure
that the nation’s 75 million home
owners will continue to receive
this important benefit, and we will
remain vigilant in opposing any
plan that modifies or excludes the
deductibility of mortgage interest.
•If we continue to worship at the
altar of tax rates, we ignore what’s
really important – protecting the
wealth of hard-working Americans.
er economy under stress, destroying wealth accumulation that is the
foundation for a healthy middle
class.
adversely affect the wealth of middle- and lower income families and
make it harder for them to achieve
their dreams of homeownership.
•Americans want the MID. In fact, in
an NAR survey by Harris Interactive
of 3,000 homeowners and renters,
nearly three-fourths of homeowners and two-thirds of renters said
the mortgage interest deduction
was extremely or very important to
them.
•Reducing or eliminating the MID
could tip the economy into another recession resulting in further job
losses for the country, and could
effectively close the door on the
American dream.
•The wealth of most middle-class
American families is connected to
their home. Millions of Americans
bought their homes with the
understanding that mortgage
interest is tax-deductible, and
many of them have steadily paid
down their mortgages to build
equity in their home. Eliminating
or reducing the MID would destroy
the hard-earned equity of all home
owners, independent of their tax
filing status.
•Comparing tax systems of other
countries to the U.S. is comparing
apples and oranges – there are
so many variables that influence
homeownership rates.
•Progress has been made recently in
bringing stability to the housing
market – any changes to the MID
now or in the future could place
the housing market and the broad-
•Reducing or eliminating the MID is a
de facto tax increase on homeowners.
•Home owners already pay 80 to 90
percent of U.S. federal income tax,
and this share could rise to 95 percent if the MID is eliminated.
•One thing that is indisputable is that
removing the MID in the U.S. will
Agents...
•The MID facilitates home ownership by reducing the carrying costs
of owning a home, and it makes
a real difference to hard-working
American families.
Get your own Real Estate app
branded to you
•Many middle-class homeowners
base their annual financial planning on tax breaks such as the
mortgage deduction.
•The ability to deduct the interest
paid on a mortgage can mean
significant savings at tax time. For
example, a family who bought a
home this year with a $200,000,
30-year, fixed-rate mortgage,
assuming an interest rate of 4.5
percent, could save nearly $3,500
in federal taxes when they file next
year.
Smart Phone penetration
surpassed 50% this year and
more than half of the users
use their phone to go online.1
Everyday more home
shoppers are using their
phone to locate listings. Route
those calls and emails to you!
App Functions:
All calls and emails (no matter who the listing agent
is) go to you!
This app will enable end users to search for all
MLS listings via IDX (Paragon) by address, city/
town, state, zip code, property type, min/max
price, beds, baths, distance radius and MLS#.
It geo-locates the user to help them find the
closet houses (if they wish). Users can save their
favorites.
•The MID benefits primarily middleand lower income families:
Marketing Distribution Tools
that are included.
•65 percent of families who claim the
MID earn less than $100,000 per
year.
• Personalized text code
(so you can text your app to prospects).
•91 percent who claim the benefit
earn less than $200,000 per year.
• QR code (to use in print marketing).
•More than 70 percent of the mortgage interest payments claimed
as deductions is on returns filed
by people with incomes between
$60,000 to $200,000, according to
the IRS. Only about 1.4 percent of
the total is claimed by taxpayers
earning $1 million or more.
• Short URL (easier to type into mobile browser
so user can download your app)
• Downloader Page (a great tool so users can
download app from website or blog).
• We also provide a “sniffer” code so that all
website traffic from a mobile phone will be redirected to download your app.
• Statistics and maintenance. Acess to a personal
dashboard to track usage of your app and it’s
statistics.
•Normally, nearly nine out of 10
home buyers must borrow money
to buy a home. For people who
don’t have hundreds of thousands
of dollars in savings to buy a home
outright, tax benefits like the MID
help them begin building their
future through home ownership.
Investment
The most used real estate site in the
Capital Region now has a Mobile App!
•It’s ridiculous to say that the MID is
suddenly part of the deficit problem – the MID has been part of
the federal tax code for nearly 100
years.
Download
Now!
•Is focusing solely on tax rates a better goal than protecting the wealth
of the middle class? We think not.
•Replacing the MID with a tax credit
or lowering rates would not necessarily reduce taxes for the middle
class. And there is no guarantee a
tax credit or reduced rates would
remain in place in the future.
$50 one time
$9.99 per month
Setup
Maintenance
Copyright © SMARTER AGENT.™ All rights reserved.
The App is in all major App stores:
Android, IOS (iTunes) and Blackberry,
or use this convenient QR code for use
on smart phones.
See for yourself
Contact the Times Union for more information.
Anne Curcurito
Susan Lynch-Smith
John Sorensen
1
2
454-5310
454-5388
454-5019
http://pewinternet.org/Reports/2012/Cell-Internet-Use-2012.aspx
Our vendor partner.
Craig Eustace
Susan Quine
454-5529
454-5026
LV25994
»
6
Across the Association
january/february 2013
Welcome New Members
REALTOR®
(principal)
Tracy L. Chenette,
TLC Realty Group LLC, Loudonville
John H. Janke,
Advanced Property Management,
Schenectady
Susan Rizzo,
Principal 1923 LLC, Albany
Lisa A. Walsh,
Capital Tech Real Estate Group
LLC, Troy
AFFILIATE
Cathie Wright,
United Building Maintenance,
Albany
REALTOR®
(non-principal)
518 Realty
Phil Pisani
John Paul Sbardella
Capital Tech Real Estate Group
Donna Neary Hart
CMK & Associates Real Estate
Peter D. Dworman
Krista L. Sondrup
CMN Real Estate
Christina Cusano
Alex Mills
Coldwell Banker Prime Properties
Elyane Brooks
Danette Dee DeCoste
Matthew Guidarelli
Shelda Hemerding
Matthew Johnson
Charles Nightingale
Cook Realty LLC
Sarah Cusano
Exit Elite Realty Group
Takata Brown-Felix
Exit Realty
Kristin Smith
Home Buyers Best Realty LLC
Lisa Trefethen
Hunt Real Estate ERA
Sonia Harder
Daniel Lesage
Keller Williams Capital District
Betsy Kapner
Keller Williams Realty Saratoga
Springs
Kenneth Root
Monticello
Christian Malanga
Realty USA.Com
Heather M. Bordeaux
Karen E. Charbonneau
Matthew Coleman
Janice W. DeGennaro
Rachel Derikart
Gary Frosell, Jr.
Brian A. Hanrahan
Patricia Phelan
The Polsinello Group
Gilah Moses
Doreen Ross Associates
Julia Hermosina Johnson
Metro World Properties
Margaret M. Teater
Miranda Real Estate Group
Christopher Boulant
Linda Lee DiVietro
Christopher Gillette
Prudential Manor Homes
Latasha W. Bosh
Tracy L. Bove
Janet M. Cloutier
Jennifer Eitleman
Kara Lynn Mattice
Louise Paquette-Wells
Ryan Puckey
Loraine A. Robichaud
Brooke N. Salamida
Meng Wu
Sterling Homes
Jacob Bowman
Cindi Cox
Thomas J. Real Estate
Kristine Petruso
Weichert, REALTORS®, Northeast
Group
Haytham T. Bajouwa
Purdy Realty
Elizabeth Purdy Mars
Pyramid Brokerage Company
Austin Lee
Living Well Realty
Helen Kim
McNeary Realty, Inc.
Tammy S. Kalker
27559 GCAR NYSAR-Legal 5x8 cmyk_Layout 1 11/5/12Shannon
9:52 AM E.
Page
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Scheidt
N E W Y O R K S TAT E A S S O C I AT I O N O F R E A LT O R S ®
GCAR Lunch
And Learn
“I don’t know what I’d do without
NYSAR’s Legal Hotline!
...it provides immediate and accurate
answers to many questions...”
Laurene Curtin, NYSAR member for 27 years
YOUR LEGAL
RESOURCE
Reduce your risk with authoritative legal information on a
wide variety of real estate law issues available through:
FREE LEGAL HOTLINE
518.436.9727
NYSAR RADIO
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Across the Association
Association Awarded Damages for
Violation of Court Order
A Pennsylvania court has considered the amount of damages that a
REALTOR® association could receive
for a member’s violation of a prior
court order.
In 2007, Thomas Wilkins (“Broker”)
filed a lawsuit against the Pike/
Wayne Association of REALTORS®
(“Association”) after the Association
removed some of the Broker’s listings from the Association’s multiple
listing service (“MLS”) that were from
non-MLS participants. The parties
entered into a settlement agreement
(“Stipulation”) that the parties filed
with the court. In the Stipulation, the
Broker agreed to: abide by the MLS’s
rules; provide the Association with
verification of listing agreements; and
would only place listings into the MLS
secured on behalf of the Broker.
Following the Stipulation, the
Association believed that the Broker
was once again submitting listings
of nonmembers. When he submit-
ted these listings, he listed himself
as the co-listing agent and refused to
provide copies of the listing agreements to the Association. When the
Association began deleting these listings from the MLS, the Broker filed
a motion seeking to enforce the
terms of the Stipulation. In response,
the Association filed a motion seeking judgment in its favor as well as
enforcement of the Stipulation.
The Court of Common Pleas of Pike
County, Pennsylvania ruled in the
Association’s favor and ordered the
enforcement of the settlement agreement. The court rejected the Broker’s
argument that because he owned the
firms from which he submitted listings, he therefore owned the listings
and could submit the listings even
though the actual listing broker had
not paid subscriber fees. The Broker
was not the listing agent for those listings, and only listings from subscribers could be submitted to the MLS.
Instead, the court found that the
Stipulation required the Broker to
abide by the MLS rules. Since the MLS
rules barred the submission of listings from nonmembers, the Broker
had violated the MLS rules and so
violated the Stipulation. Therefore, the
court ordered the enforcement of the
Stipulation against the Broker.
In a subsequent hearing, the court
considered the amount of damages that the Association was entitled to receive for the Broker’s contempt of the Stipulation. First, the
court awarded the Association its
actual costs incurred for the breach
of the Stipulation as follows: $5200,
an amount estimated to equal the
amount of staff time incurred investigating the matter; $301, fees incurred
for investing for such things as copying; and $3005, for cost incurred for
staff attending court proceedings.
Next, the court considered the
other damages that the Association
january/february 2013
7
was entitled to receive for the breach
of the stipulation. The court looked
at the listings which violated the
Stipulation. The Broker claimed that
the submission of three of the 13 listings in question was due to clerical
error. For the remaining 10 listings,
the court assessed damages of $140/
listing for each of the listings, or a total
of $1400 in damages. The court also
assessed damages of $750 in attorney
fees for the amount incurred by the
Association’s attorney in investigating and prosecuting the breach of
the Stipulation. Therefore, the court
awarded the Association $10,656 in
damages.
Wilkins v. Pike/Wayne Assoc. of
REALTORS®, No. 1573-CIVIL-2007 (Pa. Ct.
of C.P., Pike Cty. Jan. 11, 2012). [Note:
This opinion is not published in an official reporter and therefore should not
be cited as authority. Please consult
counsel before relying on this opinion.]
continued from page 4
not make professional or commercial sense based on the agent’s
familiarity with the real estate
industry and the normal course of
business.
What Real Estate Professionals
Can Do to Mitigate Risk
The presence of a single risk factor,
or even multiple factors, does not necessarily mean the purchaser or seller is
engaging in money laundering activities. The role of real estate agents is
to be familiar with these risk factors,
and exercise sound judgment based
on their knowledge of the real estate
industry, and when a combination of
these factors truly raises a red flag,
know the proper action to take.
Know Your Customer/Customer
Due Diligence (CDD)
This is a critical component of the
role real estate professionals can
play in helping to identify and combat money laundering. Knowing an
agent’s true customer and understanding their interest and planned
use for a property will help agents
evaluate a situation where one or
more red flags are raised.
The process by which the real estate
agent forms a reasonable belief that
he/she knows the true identity customer and is then able to assess AML
risk, is commonly referred to as knowyour-customer or customer due diligence (CDD). In cases where red flags
are present, the agent should apply
increased levels of CDD, which could
include the following:
1. Obtain additional information, a
driver’s license, passport or other
reliable identification document,
to confirm the true identity of the
customer.
2. If a legal entity is involved, such
as a corporation or LLC, take additional measures to identify who
actually controls or owns the entity and take risk based measures
to verify the identity of the owner.
This is commonly referred to as
beneficial ownership information.
3. Obtain other appropriate information based on the agent’s
experience and knowledge to
understand the customer’s circumstances and business.
In addition, depending on the size
of the firm, it may be appropriate for
the agent to notify and discuss with
senior management the higher risk
customer or a particular situation that
raises red flags, and to monitor the
relationship if there are a series of
transactions with the customer.
Reporting Suspicious Activity
When confronted with suspicious
activity, real estate agents always have
the option of reporting the information to local law enforcement or the
FBI.
In addition, agents may also consider filing a suspicious activity
report, or SAR, which is reported to
the U.S. Treasury’s Financial Crimes
Enforcement Network (FinCEN). SARs
are primarily designed for use by
financial institutions and are a significant tool for enforcement agencies to
combat money laundering. Real estate
professionals are not required to file a
SAR, but should be aware of the availability of this tool to the extent that
they have reasonable suspicion that a
transaction may be a vehicle for illegal
financing activity.
The electronic SAR form is available
at: http://bsaefiling.fincen.treas.gov/
main.html.
For further information or assistance regarding how to file a SAR, real
estate professionals may call FinCEN’s
Regulatory Helpline 1-800-949-2732.
It is important to note that while
the Bank Secrecy Act contains a safe
harbor shielding financial institutions
from civil liability in connection with
the filing of a SAR, there is no precedent to suggest that the safe harbor
would extend beyond financial institutions to real estate professionals.
Therefore, a real estate agent should
be prudent and file a suspicious activity report only after thoroughly evaluating the circumstances surrounding
the suspicious activity, and additionally should consider consulting an
attorney on the matter prior to filing
a SAR. Otherwise, a real estate agent
could subject themselves to civil liability as a result.
Form 8300
A Form 8300 must be filed by a business that receives more than $10,000
in cash in the course of a single transaction or two or more related transactions. It is not a SAR and is not used
to report suspicious activity. Form
8300 is an information report that is
required to be filed by any trade or
business (such as a car or boat dealer)
that receives in excess of $10,000 in
cash in a single transaction. Therefore,
if for any reason a real estate agent
or broker receives more than $10,000
in cash from a buyer or seller in the
course of a real estate transaction, the
form must be filled out and filed, and
can be found at http://www.irs.gov/
pub/irs-pdf/f8300.pdf.
Cash, for purposes of this require-
ment, includes cash equivalents
such as cashier’s checks, bank drafts,
money orders. If the cash equivalent
instrument is for more than $10,000,
the transaction will be reported by
the issuing bank, and the agent does
not need to also file a Form 8300. If,
however, an agent receives a cashier’s
check or other cash equivalent of less
than $10,000, but which in combination with other cash or cash equivalents totals more than $10,000, a Form
8300 must be filed.
Conclusion
While the illicit finance risk for real
estate agents is often mitigated by
the involvement of financial institutions already subject to strict AML
laws, the use of real estate in money
laundering schemes continues to be
an area of concern to the government.
Adherence to these voluntary guidelines will help the real estate agent
identify potential money laundering
risks. These voluntary guidelines will
also help real estate agents be effective partners with enforcement agencies in detecting and addressing the
use of real estate in illegal financing
activities.
8
Across the Association
january/february 2013
Member Update
2013 WCR Officers Installed
Congratulations are extended to REALTOR® Merle L. Whitehead, Jr., RealtyUSA.
com, on his being inducted into the Council of Real Estate Brokerage Managers’
(CRB) Hall of Leaders. He is the 14th person so honored. The presentation was
made during the REALTORS® Conference & Expo in Orlando, FL.
Congratulations to REALTORS® David and Tammy DiCara, RE/MAX Park Place,
on the birth of their son Dominic.
Sympathies are
extended to:
The 2013 officers of the Capital Region Chapter of the Women’s Council of
REALTORS® were installed at a luncheon December 7th at which Congressman
Chris Gibson provided the keynote address.
REALTOR® Jennifer Vucetic received the oath of office from Supreme Court
Justice Ann Crowell while Kelly Campbell, 2013 president of the NYS Women’s
Council of REALTORS® installed the rest of the governing board. Installed were
REALTOR® Michele Massaroni, president-elect; REALTOR® Brooke Hackler,
membership marketing chair; Daniela Bigalli, secretary; and Kristyn Kamber,
treasurer.
Recognized by the local chapter for special honor were REALTOR® Brooke
Hackler, 2012 REALTOR®-of-the-Year; Michael Heath, Affiliate –of-the-Year; and
REALTOR® Diana Farrell, Entrepreneur-of-the-Year.
REALTOR® Diane Biernacki, RealtyUSA.com on the death of
her daughter Cheryl Biernacki Evola.
The family of REALTOR® Nikki Hart, Hart Real Estate, on her
death.
The family of REALTOR® Thomas Kennedy, Thomas P.
Kenney Realty, on his death.
REALTOR® Timothy Kircher, 518Realty.com on the death of
his father, former REALTOR® Harold “Bud” Kircher.
NYSAR’s Director of Communications Salvatore Prividera
on the death of his mother Kathryn Prividera followed two
weeks later by the death of his stepfather David Eaton.
REALTOR® Merle L. Whitehead, Jr., RealtyUSA.com, on the
death of his father Merle.
(l-r) Shown at WCR’s Installation Luncheon Michele Massaroni, Brooke Hackler, Blaise
DiBernardo of NYSAR, Jennifer Vucetic, Kelly Campbell, Daniela Bigalli and Kristyn Kamber.
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