Volume X, Number 1 - February 2005
In this bulletin:
Capitol Hill Visit and Spring Business Meetings Approaching Soon!
The CCIM Institute will have the Spring Business Meetings in Chantilly,
Virginia beginning Saturday, April 17 prior to the Capitol Hill Briefing/Orientation
and Visit on April 19-20. Your CCIM Institute and Institute of Real Estate
Management (IREM) colleagues along with members of the REALTORS® Commercial
Alliance (RCA) from the NATIONAL ASSOCIATION OF REALTORS® will unite
to fortify our success in getting our issues and concerns in the industry
across to legislators on Capitol Hill. This is an exciting opportunity
to take part in one of the most influential activities we will have in
the federal legislative process!
Contact your chapter’s Capitol Hill Visit Day Coordinator to find
out if a meeting with your elected official(s) has been scheduled and inform
the Coordinator you are planning on attending! The Coordinator is responsible
for contacting the corresponding IREM Chapter to determine the coordination
and scheduling of meetings with elected representatives. After meetings
are scheduled, the Coordinator is to contact the CCIM Legislative Liaison
with meeting times and attendees. The Liaison is managing a master list
of attendees and meetings. Please contact Vijay Yadlapati, CCIM Legislative
Liaison, at (312) 329-6033 or njarmusz@cciminstitute.com if you have any
questions.
Victory on Groundbreaking Tort Reform Legislation!
The Class Action Fairness Act of 2005, S. 5, passed in the House
on February 18, 2005 by a vote of 279-149 with six not voting.
The bill was adopted in the Senate the week prior and is now expected
to go to President Bush where it will be signed into law.
Since the introduction of tort reform legislation, it has taken five Congresses
to get the language passed through both chambers. Abuses in the class action
tort system is a contributing factor to the rising cost of insurance which
poses undue financial and accessibility burdens of liability coverage on
the professional community.
At the 2004 Capitol Hill Visit, tort reform legislation was a priority
issue for the real estate industry. Our goal was to help restore the availability
of liability coverage at realistic rates for the commercial real estate
community through reform of the existing tort system. As such, the CCIM
Institute strongly supports the movement of large class action law suits
from state jurisdiction to be heard and considered in federal courts.
For more information on our statement of policy, download the CCIM
Institute Statement of Public Policy.
Keeping Banks Out of Real Estate Still a Priority
Legislation has again been introduced to prohibit banks from entering
into real estate brokerage or property management. HR 111 and S 98
were introduced in the first weeks of the 109th Congress. Last year,
Congress passed a one-year prohibition on banks in real estate, but
a permanent ban has continued to be out of reach. The CCIM Institute
will be working in partnership with NAR to encourage enactment of
the legislation this year.
Republican Leadership Call Bankruptcy Reform a Priority
The Republican leadership of the House and Senate have included bankruptcy
reform legislation to their short-list of priorities for the start
of the 109th Congress. The Senate is already moving forward with
a bill, which could be on the Floor for debate in early March. There
are four CCIM Institute-supported provisions in the bill. These include:
eliminating the cap on single-asset bankruptcies; providing protections
for shopping center owners; closing the loophole which allows rental
housing tenants to avoid eviction; and allowing homeowner and condo
association fees to be non-dischargeable. If the Senate can pass
a clean bill (with no controversial amendments) the House is expected
to quickly pass the bill and send it to the President for his signature.
Final FTC FACT Act Disposal Rule
Effective June 1, 2005, the final rule of the Fair and Accurate Credit
Transactions Act of 2003 requires the proper disposal of consumer
report information by individuals and businesses who possess these
documents for business purposes. Dubbed the FACT Act, the rules by
the Federal Trade Commission (FTC) stipulate “reasonable measures” to
be taken for safety against unauthorized access to sensitive consumer
information.
The rule largely affects commercial real estate brokers, mortgage brokers,
property managers and landlords; however, any REALTOR® who contains
this information, whether in paper or electronic form, must comply with
the disposal procedures as indicated in the regulations in the act of discarding
the material.
Property managers are not required to perform new recordkeeping procedures
nor are there new standards of practice for businesses or individuals who
already perform protective measures against outside acquisition of sensitive
consumer information. CCIM Institute believes that the proposed rule is
reasonable and encourages its implementation.
Federal Banking Agency rules will take effect July 1, 2005.
If you are subject to FACT Act disposal requirements, you can find the
rules printed in November 24, 2004 edition of the Federal Register (69
FR 68690).
Do-Not-Fax Legislation
With the inception of the 109th Congress, reintroduction of legislation
on the Junk Fax Prevention Act is expected to make its way to the House
notwithstanding last sessions’ unsuccessful attempt to get it passed.
The bills’ sponsors in conjunction with the broad-based Fax Coalition
made significant headway through the Senate although the amended version
of the bill contained a rider to establish a Federal Commission on Boxing
that did not have the support of key members of the House. As the 108th
Congress came to a close in December, the Senate passed the amended bill
but it was stymied in the House the final day of adjournment.
Can Spam Rule Finalization
The Federal Trade Commission (FTC) has solidified its criteria
for defining the “primary purpose” of an electronic
mail message under the CAN-SPAM Act of 2003 (Controlling the
Assault of Non-Solicited Pornography and Marketing Act). The
rules will be effective March 28, 2005; REALTOR® associations
and real estate professionals who send emails defined for commercial
use will be subject to its provisions at that time.
Tenants in Common (TIC) Workgroup Update
The CCIM Institute is working in conjunction with the National
Association of REALTORS® (NAR)Tenants in Common (TIC) work
group to provide those in the TIC industry with clarification
on when interests concern real estate transaction versus securities.
The focus of last months meeting on January 11, 2005 with NAR President
Al Mansell and the Chief Counsel of the Securities and Exchange Commissions
Division of Market Regulation was to discuss the sanctioning of REALTORS® to
participate in a fee-splitting arrangement from TIC securities transactions
between brokers/dealers and real estate licensees.
President Mansell’s case rested on three main points including: in
view of the fact that deeds are structured within the deal, TIC transactions
are considered real estate; according to current laws in all 50 states,
the transfer or sell of property must be brokered by a body with a real
estate license; and it is beneficial to have REALTORS® involved in
TIC transactions due to their expertise and ability to provide clients
with proper direction based on their property needs.
The Securities and Exchange Commission requested NAR staff to construct
a strategy to resolve the question of REALTORS® involvement in TIC
securities transactions. The CCIM Institute will keep members updated with
further developments of this issue.
Association Health Plan
In an effort to resolve the issue of inadequate health insurance
coverage among working families, a bill in support of the Association
Health Plan (AHP) has been reintroduced in the House this session.
AHPs are structured to allow small business owners and the self-employed
to jointly purchase a more affordable health care package.
Backed by President Bush along with a team of bipartisan legislators, The
Small Business Health Fairness Act (H.R. 525) will be considered in upcoming
weeks after its passage through the House Education and Workforce Committee
chaired by Rep. John Boehner (R-OH).
REMIC Meeting
Members of the Real Estate Mortgage Investment Conduits (REMIC) Coalition
met the first week of February with IRS officials to address regulatory
changes presented through workings of upcoming legislation.
Modernized REMIC language seeks to ease the rules governing loan modifications
that have previously had a dulling effect on the securitization of commercial
loans. For more information on REMIC and other policy issues affecting
the commercial real estate industry, download the CCIM
Institute Statement of Public Policy.
Great Minds Think Alike, Right? When Dissent Arises in a Coalition
A member active in legislation in all levels of government has
worked to build both broad-based industry coalitions to address
the full range of regulatory and legislative issues and specialized
issue-specific coalitions. In the past, state legislators had called
attention to the fragmentation within the real estate industry
in his state. The commercial real estate and property management
industries responded by forming a state-wide legislative coalition,
in which this member actively participates. When a new historic
buildings demolition ordinance was introduced in the member’s
hometown, a coalition was organized to develop a unified commercial
real estate industry response to the issue, which raised serious
private property rights concerns.
In the beginning, few members of the organizations compromising the coalition
were aware of the proposed ordinance and knowledgeable about the underlying
issues. When city staff spoke on the ordinance at association chapter meetings,
there was little or no opposition to the ordinance, leading city staff
to assume that the chapters endorsed the ordinance. As a coalition, the
groups quickly developed a necessary grasp of the ordinance and engineered
a coalition response to managing the legislative outcome. The member has
lead the coalition in drafting new ordinance language that mitigates the
concerns of the coalition on the parts of the ordinance believed to infringe
on private property rights. A collateral benefit of forming this issue-specific
coalition is that the member organizations have opted to continue the role
of the coalition to monitor and respond to other regulatory and legislative
issues.
To avoid dissent, when assembling a coalition, establishing a consensus
within your organization is imperative before incorporating additional
groups into the coalition. Confirm everyone is knowledgeable on the issue
and holds the same position. Then, work with stakeholders outside of your
organization to form single issue coalitions.
2005 CCIM Institute Legislative Affairs Subcommittee Leadership
Chair, Stephanie Short, CCIM
Vice Chair, Lou Nimkoff, CCIM
CCIM Institute Legislative Staff
Charles Achilles, IREM VP Legislation & Research, (312) 329-6020, cachille@irem.org
Vijay Yadlapati, CCIM Legislative Liaison, (312) 329-6033, njarmusz@cciminstitute.com
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