January/February 2013 - Greater Capital Association of REALTORS
Transcription
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. Spire Inspections offers... • Full Service Inspection Company • Certified Radon Specialist • Licensed Pest Technician • Flexible Scheduling • Same Day Report 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 1 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 2 Tuesdays per month 10 a.m. – 11 a.m. NEW, EXPANDED HOURS! Listen live at NYSAR.com. Monday-Friday 9 a.m. – 3p.m. Call 518.436.9727 with your questions. Note: NYSAR’s Legal Hotline and NYSAR radio show do not provide a client-lawyer relationship. For confidential legal advice, consult an attorney. QRM SEMINAR Congress passed a law intended to prevent future banking collapses. Federal regulators have taken that law and created a new rule called Qualified Residential Mortgage (QRM) What Does It Mean? What are the Impacts? Join us to find out more… January 17, 2013 12:00 Noon - 1:00pm GCAR | 451 New Karner Rd. No charge to Attend-Join us for lunch! Call 464-0191 to reserve your spot or online at www.gcar.com Lunch sponsored by Rich Norelli & Homestead Funding 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. Need a Buyer for Your High End Property? Reach Affluent Buyers in NYC and Long Island! 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E L MP Cover New York City — $750 • 2 million readers • 1 million circulation • 67 newspapers Contact Your NYC Real Estate Experts, Megan or Darcy, for more information SA 518-464-6483 [email protected] • New York City has the most high net worth people in the country.* • No region has more of the nation’s most affluent neighborhoods than Long Island… with estimated household median income of between $234,000 and $242,000.** Cover Long Island — $500 • 1 million readers • 470,000 circulation • 83 newspapers Contact Your Long Island Real Estate Experts, Amy or Anita, for more information • NYC and Long Island are the perfect areas to promote your luxury properties, lakefront properties or weekend retreats! * Source: The Cities Where America’s Wealthiest People Live, forbes.com ** Source: America’s Most Affluent Neighborhoods, forbes.com NYPS [email protected] 518-464-6483 [email protected] THE www.nynewspapers.com SELL YOUR HOME FASTER, EASIER, AND L E S S E X P E N S I V E LY ! 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