October President Barbara Palmer. President-Elect John Hickey. Secretary/Treasurer Betty Danner. Immediate Past President Candace Bradfield

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2 REALTOR is the official monthly newsletter of the Santa Cruz County Association of REALTORS provided as a member service to inform, educate and update REALTOR and Affiliate members on local, state and national news, as well as the Association s calendar of events. Santa Cruz County Association of REALTORS 2525 Main Street, Soquel, CA (831) (831) (fax) 2012 BOARD OF DIRECTORS President Barbara Palmer President-Elect John Hickey Secretary/Treasurer Betty Danner Immediate Past President Candace Bradfield Directors Sandy Kaplan Morgan Lyng Frank O. May John T. Peterson Anne Marie Sorcenelli Lauren Spencer Bettsy Tyler Carol VanAusdal Chief Executive Officer, SCCAR & Executive Director, SCAORHF Kathy Hartman, RCE President s Message - page 3 Store Sale - page 4 Legislative Watch - page 5 Dues Notice - page 5 Legal Notes - page 6 A Taste of Santa Cruz - pages 7 & 8 Government Affairs Director Report - page 9 Education Offerings - page 10 Affiliate Notes - page 10 MLS Update - page 11 MLS Snapshot - page 12 New Members - page 13 Calendar - page 13 Member Services Director, Director of Education & Professional Services Norma I. Milete Advertising, Communication & Marketing Director Andrea Harbert Government Affairs Director Dale Gray Administrative Assistant Leslie Flint Bookkeeper Linda Zoccoli ADVERTISING INFORMATION For advertising and deadline information, please contact SCCAR. 2

3 Celebrate and Discover In October! Barbara Palmer 2012 SCCAR President Bailey Properties, Inc A Taste of Santa Cruz You have an opportunity to give back to your industry by helping local families and have fun at the same time. Eight years ago a group of members from the Santa Cruz County Association of REALTORS, along with association staff, created an event, A Taste of Santa Cruz. REALTOR and Affiliate members partnered with restaurants and filled the Cocoanut Grove with great food, fun and celebration. This event was an overwhelming success! Leadership of our Housing Foundation then presented first time homebuyer program ideas to the California Association of REAL- TORS Housing Affordability Fund, and each time received grants for over $40,000. All the money collected is used to meet the mission of the Santa Cruz Association of REALTORS Housing Foundation: Bridging the gap to homeownership. All funds are used for local first time home purchasers and any REALTOR member of our Association can apply on behalf of their client. More information about the grant programs can be found at wonderful music, relax with old friends, and meet new ones. This is a great time to thank our affiliate members for their support throughout the year. C.A.R. Update There are 3 California Association of REALTOR meetings each year. Our Association sends Directors to represent our interests and bring back information from these meetings. On October 19 th the Directors will report to membership the decisions and outcome of the October meeting. They will cover Risk Management Issues, report on new forms, changes in MLS, and update on legislative issues. Knowledge is power, and this meeting will provide the latest pieces of information that you may need for your next transaction, as well as contribute to making our REALTOR organization stronger by your participation. This year A Taste of Santa Cruz will be held in October for the first time, on Thursday, October 25 th. I urge you to purchase your ticket early because space is limited, and celebrate with your community. Tickets can be purchased at or at the Association office. Oktoberfest Music, brats and beer will be served on the patio of our Association on Thursday, October 11 th. This annual event, Oktoberfest, is sponsored by our affiliate members. Stop by after tour and enjoy 3

4 ON SALE FOR OCTOBER Your Guide to the RPA-CA This guide contains: 2010 changes to the agreement to create, modify, cancel, or close a transaction to identify, explain, understand, and remove contingencies $21 each (Normally $25) complete all mandatory and recommended disclosures ensure all commissions are paid in full and on time contract 4

5 Dale Fendorf LGR Committee Chair On August 31, Lori Smith and Patrick Rooney, from the Santa Cruz County Assessor s Office spoke to the LGR Committee about the Williamson Act. The Williamson Act has received some attention in the media over the past couple years as the state government has been wrestling with funding of this program. The California Land Conservation Act of 1965, commonly referred to as the Williamson Act, enables local governments to enter into contracts with private landowners for the purpose of restricting specific parcels of land to agricultural or related open space use. The mechanism is a rolling term 10 year contract (unless either party files a notice of non-renewal the contract automatically renews for an additional year). In return, landowners receive property tax assessments which are much lower than normal because they are based upon farming and open space uses as opposed to full market value under Proposition 13. Local governments receive an annual subvention payment of foregone property tax revenues from the state via the Open Space Subvention Act of When the Williamson Act contract is signed, it is good for a ten year period. After the first year of the ten year contract, it is good for a period of ten years, one more year is automatically added to the term of the contract so that is always valid for ten years. If a property does nothing to stop it, the automatic renewal will go on indefinitely. Under the process of non-renewal, the Proposition 13 value is gradually restored over a ten year period. This gives the property owner an amortized tax increase of 10% per year. On a state wide basis about 15 million acres are enrolled in the Williamson Act program, with about 17,000 acres in Santa Cruz County. The protected acres are assessed based on economic rent per acres which reflects three components (1. yield rate, 2. tax rate, 3. risk). The assessed valuation is based on the lower of the Proposition 13 value or Williamson Act calculated value. Yes, there are some farm lands that have been under the same family ownership for generations, have a low Proposition 13 value, and are still in the Williamson Act. Generally, only prime farm land zoned for commercial agriculture is eligible for the Williamson Act, and the final determination of eligibility is made by the planning department. As a result of the Williamson Act, counties saw property tax revenue decline, with this decline being more pronounced in rural counties. The state backfilled these lower revenues with what have been named subvention funds. These funds, distributed directly to counties and which once totaled $38 million, have diminished over the last four years with the budget crisis that has befallen California. Those counties most adversely affected by the funding reductions include; Fresno County ($5 million), Kern County ($4 million), Tulare County ($3.4 million), Kings County ($2.2 million), San Joaquin County ($1.8 million) and Merced County ($1.2 million). In Santa Cruz County, the subvention payment has been approximately $25,000. Since the Williamson Act funding is not a huge budget item in Santa Cruz County, it appears the program may continue. However, the Santa Cruz County Board of Supervisors will decide in the near future the possibility of non-renewing their Williamson Act contracts, which could begin the 10-year process of farmers seeing their property taxes increase, which the LGR Committee will be following closely. We value you as a member of the Santa Cruz County Association of REALTORS and strive to provide you with great service and member benefits. Please be aware that your 2013 membership dues are being mailed to you November 1, Payment is due on or before December 31, After this date late fees may apply. Your dues include local (SCCAR), state (C.A.R). and national (NAR) fees and give you access to all the benefits these three organizations have to offer such as, REAL- TOR trademark, zipforms, education and networking opportunities, legislative advocacy, legal hotline, Member Value Plus program, affinity programs, online and print publications and much, much more. Additionally, by paying your dues by the December 31, 2012 deadline you will automatically be entered into our 2013 Dues Billing Contest. The winner of this contest will win their SCCAR dues back! We look forward to serving you and providing you with exceptional service in 2013! Check Status of Your Voter Registration Don't remember if you're registered to vote? Need to check what name you're registered under or what political party you're registered with? Check Here 5

6 Is a Designated Officer of a Corporate Broker Personally Liable to Third Parties for Failure to Supervise? Teresa V. Rein Bosso Williams, APC In the recent case of Sandler v. Sanchez (2012) 206 Cal.App.4th 1431 [142 Cal.Rptr.3d 771] individual lenders ("Lenders") brought an action against a real estate brokerage corporation ("Corporate Broker") and the Brokerage Firm's designated officer/broker ("Designated Officer") in his personal capacity. According to the complaint, a licensed agent of the Corporate Broker ("Agent") solicited the Lenders and convinced them to loan $600,000 to a development company to finance improvements to an eight-unit apartment building for the purpose of converting the units to condominiums. The Agent had represented that, once the improvements were made and the condominium conversion completed, the property would be worth in excess of $5.5 million, more than enough, even with a first deed of trust of $2.75 million held by another lender, to secure the Lender's loan. The Agent, however, did not reveal that the $600,000 loan was insufficient to finance the necessary repairs for the condominium conversion; the property did not have sufficient equity to provide collateral for a second trust deed securing the note; and the primary lender had refused to extend the first note, which was imminently due, resulting in foreclosure by the holder of the first trust deed and leaving the Lenders' note unsecured. In addition, the Agent used $300,000 of the loan proceeds, which he obtained by amending the escrow instructions, for his personal expenses. The complaint asserted a cause of action for breach of fiduciary duty against the Designated Officer in his personal capacity, even though the Designated Officer did not play any role in the transaction. The complaint alleged that the Designated Officer owed the Lenders a duty in accordance with Business and Professions section to supervise the Brokerage Firm's employees, including the Agent. The complaint further alleged that had the Designated Officer fulfilled his duty to supervise, he would have learned about the Agent's material misrepresentations and either disclosed them to the Lender or canceled the loan transaction. Business and Professions Code section (a) makes a licensed individual real estate broker who is the designated officer of a corporate broker responsible for the supervision and control of the corporate broker s employees: codified in Business and Professions Code section is owed to the corporation, but not to third parties. Accordingly, breach of section by the Designated Officer is grounds for administrative discipline by the licensing entity and perhaps an action by the corporation for indemnification, but not an action by third parties such as the Lenders. The Sandler Court approved the dismissal of the cause of action against the Designated Officer in his personal capacity. In arriving at its decision, the Sandler Court rejected the 9th Circuit Court of Appeals decision of Holley v. Crank (9th Cir. 2005) 400 F.3d 667, which had arrived at the opposite conclusion, finding that designated officers are personally liable for a failure to supervise: The statutory provisions regulating the real estate profession, particularly after the 1979 amendment with its legislative history, places a direct, personal responsibility on the designated officer/broker of a real estate corporation to supervise the salespersons to assure compliance with the state and federal laws. This personal obligation is independent from that of the normal responsibilities of a corporate officer or of the corporation itself. This is a direct personal responsibility on the part of the officer/broker that is subject to disciplinary action affecting that officer/broker's personal broker's license. The Sanchez Court refused to follow the Holley decision, stating that the Court is not bound by the federal court decision interpreting California law; and finding that the reasoning of the Holley decision is "unpersuasive". Although legal commentators have opined that the federal court decision in Holley, and in particular its claim that the legislative history of supports imposing personal liability on the designated broker of a corporation, is probably wrong, the question of the personal liability of a designated officer is far from established. And although the Sandler decision was favorable to the Designated Officer in finding that the Designated Officer has no personal liability to a third party, the Designated Officer could have personal liability if he is sued for indemnity by his Corporate Broker for his failure to supervise. (a) The officer designated by a corporate broker licensee pursuant to Section shall be responsible for the supervision and control of the activities conducted on behalf of the corporation by its officers and employees as necessary to secure full compliance with the provisions of this division, including the supervision of salespersons licensed to the corporation in the performance of acts for which a real estate license is required. The Sandler Court was asked to decide whether a designated officer s failure to supervise a corporate employee will subject the officer to direct personal liability to third parties for harm caused by his or her failure to supervise. After a detailed review of the legislative history and relevant court cases, the Court held that the Designated Officer s duty to supervise 6

7 Tasty Tickets are Now on Sale! Your 'A Taste of Santa Cruz' 2012 ticket gives you access to a plethora of scrumptious tastes and delicious sips, a chance to win an ipad and meet the Derby Girls, shopping from over 100 items in our silent auction all while enjoying the awesome tunes of West Coast Soul and The Angelic Misfits...and at an affordable price! The Housing Foundation s 8th annual 'fun' fundraising event is being held Thursday, October 25th at the Cocoanut Grove, 5:30-9 pm. All proceeds benefit low income first time home buyers in our county. Visit for event details. Good Times Coastal Homes Santa Cruz Sentinel Aldo's Harbor Restaurant Beauregard Vineyards Bruno's BBQ Bruzzone Family Vineyards burger. Carmona's BBQ Deli/Catering Casablanca Inn & Bistro Chaminade Coastal Culinary Personal Chef Cowboy Diner Dessert First Fresh Prep Kitchens Goose's Goodies Hollins House Jenna Sue's Café Johnny's Harborside KISS Catering Le Cigare Volant Michael's on Main MJA Vineyards Monterey Bay Caterers Nut Kreations Paradise Beach Grille Pleasure Pizza Pono Hawaiian Grill Santa Cruz Ale Works Seabright Brewery Seascape Foods Solaire Süda The True Olive Connection Trout Gulch Vineyards Uncommon Brewers Woodstock's Pizza Zameen Mediterranean Cuisine Alain Pinel REALTORS American Dream Realty Bailey Properties, Inc. Bank of the West Bay Area Floors Blue Adobe Mortgage CHASE David Lyng Real Estate Fidelity National Home Warranty Frank O. May & Associates Friday Realty McNair Real Properties Monterey Bay Properties On Q Financial Opes Advisors Pajaro Valley Association of REALTORS Prospect Mortgage Real Estate Eight Three One RPM Mortgage Santa Cruz Home Finance Santa Cruz Properties Seabright Mortgage Sunset REALTORS The Hotel Paradox Thunderbird Real Estate WIN Home Inspection Xchange Solutions 7

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9 From the desk of Dale Gray Government Affairs Director Desalination Vote On November Ballot Clarified & Seeking Nominations For LCRC at SCCAR Desalination Vote On November Ballot Clarified There appears to be some confusion regarding the ballot dates/years. The Santa Cruz City Council, at its July 24 th meeting, accepted the City Clerk's certification that a sufficient number of signatures were collected to place a charter amendment measure on the ballot for the November 6, 2012 general election. This will require a two-step voting process. IMPAC. All members must pay the RAA, or dedicate the funds to issue funding only. The funds for the assessment cannot be disbursed for federal campaigns. Thirty percent of these funds are distributed to the Local Association (SCCAR). The Assessment was first billed to REALTOR members in the 2011 dues billing cycle. C.A.R. explained the purpose for the RAA prior to the billing cycle to REALTOR membership as: First, a vote in November is to amend the City's Charter with language that would require a second vote for approval to construct the desalination project after completion of the environmental review in June or November A "yes" or "no" vote on the charter amendment should not be considered a vote "for" or "against" the construction of the proposed desalination project. The City Council had already adopted an ordinance in March 2012 that allows City residents to vote on the desalination project in June or November Additionally, Soquel Creek Water District officials are also discussing options on how District customers can also vote on the proposed project. The proposal is expected to affect 135,000 people in three cities because it would be built by Santa Cruz and Soquel water districts. Seeking Nominations For LCRC at SCCAR The Local Candidate Recommendation Committee (LCRC) is seeking nominations for consideration for the three (3) open twoyear term Trustee positions. If you are interested, or know someone who might be, please submit the name, contact information, and reason for consideration to dale@mysccar.org. The Trustees are charged with interviewing, assessing and recommending local candidates, including state and federal candidates from the Santa Cruz County area. Unlike the busy 2012 year, 2013 will be a quieter time for the LCRC Trustees. Rest assured that it will be busy again in 2014 with increased pressure for funding needs in 2013 and Funding For Candidates & Issues REALTOR Action Fund is a voluntary contribution raised year round, with the largest percentage coming during the dues billing. Any level of contribution is accepted, but the recognized levels range from $49-$5,000. At the beginning of each year SCCAR determines how its portion of the funds are split between Local Candidate Recommendation Committee (LCRC) and Local Issues Mobilization Political Action Committee (Local IMPAC). REALTOR Action Assessment (RAA) is a $49 assessment that is part of the C.A.R. membership dues. Similar to the RAF, SCCAR can determine how these funds are split between LCRC and Local 9 O The influence of REALTORS has diminished. C.A.R. s California Real Estate Political Action Committee (CREPAC) used to be ranked in the top 10 of the state s PACs. It now ranks 37th. O C.A.R. s Political Action Committees (PACs) consistently have been outspent by numerous special interest groups that often are in opposition to issues supported and represented by C.A.R. O For nearly 10 years, C.A.R. s dues have remained unchanged. O Given today s challenging legislative environment and the ongoing threats facing the real estate industry, C.A.R. would be remiss if it did not take action at this critical time and raise C.A.R. s legislative profile at all levels. O Increasing C.A.R. s profile at the local, state, and national levels requires a great deal of resources especially funding to ensure the interests of REALTORS are well-represented. In addition to candidates, SCCAR s Local Government Relations Committee (LGR) is the watch dog for local issues affecting REALTORS, real estate and private property rights. A portion of your contribution to REALTOR Action Fund (RAF) each year is used, when needed, to support and communicate our position. Your involvement and your contributions are greatly appreciated! Green Tip of the Week Clean your fridge s coils Cleaning the back of your fridge--the coils and electric circuitry--increases energy efficiency. A refrigerator with dirty coils works harder, and uses 25 percent more energy compared with a fridge with clean coils. To clean the coils: Disconnect the power; pull the unit away from the wall; remove the grill covering the coils; and use a vacuum cleaner or a bottle brush to clean.

10 Education & Professional Development Register Online by visiting our Education Calendar or our Online Registration Center "How to Think Outside the Box" Help Senior Buyers Purchase a Home With a Reverse Mortgage! Wednesday, October 10, 12:30-1:30 Cost: Free Instructor(s): Galen Call, CSA Reverse Mortgage Specialist, Treehouse Mortgage Group Join us for a Special Free Lunch and Learn session on how to help 62 years + and older buyers purchase a home using a reverse mortgage. REALTORS interested in helping seniors and Certified Senior Real Estate Specialists especially will benefit from attending this informative class. If you even have an interest in learning how to help a family member or friend, don't miss this seminar. A credit card is required to secure a seat. Your card will be charged a $15 No Show fee if you fail to cancel at least 24 hours prior to the day of the class. MLS Source App Training Tuesday, October 16, 1:00-2:30 pm Cost: Free to SCCAR Members with RSVP MLS Source, free to all MLSListings subscribers, is Northern California s only direct-from-the-mls real estate App. It provides the most accurate, up to date, and comprehensive real estate listing data in Northern California. Attend this training session and learn how to utilize this free business tool. Essentials of Matrix Monday, October 22, 10:30 am -12:00 pm Cost: Free to SCCAR Members with RSVP This 90 minute course will provide you with the basic skill requirements for the Matrix search application. Upon completion you will have learned: application navigation, inputting search queries, map search, reporting & results options, driving directions, adding search fields, saving searches, ing & printing. Mastering Matrix Monday, October 22, 1 2:30 pm Cost: Free to SCCAR Members with RSVP This course will provide you with advanced skill levels for the Matrix search application. Upon completion you will have learned: sorting results, statistics from results, CMA s from results, area statistics, customizing results, building hotsheets, ing results, auto ing. SCCP Class 8 Geology, Biology, and Climate Wednesday, October 24, 9:30 a.m p.m. Cost: SCCAR members $20, non-members $35 Instructor(s): Gary Griggs, Director, Institute of Marine Sciences UCSC, Chris Gordeon, Geo-Disclosure, Kathy Lyons, Biotic Resources Group This class will cover the main areas in Santa Cruz County of biological sensitivity; species protection; and protected species. "Work-around" solutions when developing sites with animal or plant protection. Discussion of visual warning signs that a site might have geological issues; biotic zones; and Fish and Game concerns. We are offering this course to individuals who are not signed up for the entire series; therefore, seating is very limited. Unless otherwise stated, all Education & Professional Development offerings are held at the SCCAR offices at 2525 Main Street, Soquel, CA Affiliate News Dennis Spencer, 2012 Affiliate Chair WIN HomeInspection dspencer@wini.com Fall is in the air, football has started, and baseball is coming to its climactic close. This can only mean one thing: it s time for the annual Santa Cruz County Association of REALTORS Oktoberfest! On Thursday, October 11, from 4pm to 6pm at the Association there will be barbequed brats and beer, music and beer, socializing and beer, and a friendly yet competitive stein holding contest. The cost to attend is only $5.95 and includes a variety of barbequed sausages and beverages. Last year s event was well attended with a great group of people enjoying the sunshine on the back patio. The winners of last year s stein holding contest were Jose Mendoza and Jennifer Watson who both displayed strong shoulders and unwavering determination. Hopefully they ll return to defend their titles. Randy Turnquist manned the barbeque pit and turned out sausages cooked to perfection, while the accordion player performed traditional Oktoberfest themed songs. We re ready to celebrate the season so please come and join us for a fun afternoon of networking and socializing. Please call the Association at to register or go online. Walk-ins are always welcome so bring a friend from your office too! This annual event is brought to you by the SCCAR Affiliate Committee, sponsors, volunteers, and Association staff. 10

11 MLSListings moving to online e-bills October 1 Traditional paper billing has gone the way of typewriters and rotary dial telephones, and MLSListings is following suit by moving to online billing to reduce its use of paper and provide an easier and more secure way for subscribers to pay for their MLS- Listings subscription. to be sure that agents have an address listed in the My Info section. While we re going green with our invoices, agents still can opt to print their bill and mail in a check. Simply send it to: Beginning Oct. 1, 2012, MLSListings is discontinuing paper invoices and will exclusively use e-bills. Subscribers who currently receive paper billing are being notified in separate communications through Oct. 1 with details about how the process works and what they must do to ensure they receive their bills. The easiest way to be sure there is no loss in invoice communications is to simply log in to Pro.MLSListings.com and click on Pay My Bill and choose the invoice option. In addition, it is important MLSListings Inc. ATTN: Finance Department 350 Oakmead Parkway, 2nd Floor Sunnyvale, CA Paying online is easy and will save time and money. By using our online payment system, payments are credited the same day, so it s applied to your account quickly. Payments made online are convenient, too: we now offer auto pay so there is no need to buy a stamp. It s secure, fast and easy, and our staff is here to help. Best of all, it s free! 11

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13 REALTOR Members American Dream Realty Angel Huerta Bailey Properties Rachel Shaffer Debbie Bennett Elaine Page Joseph Poulos Cassidy Turley/BT Commercial Reuben Helick Michael Schoeder CRU Residential,Inc. Kristina Hanson 13 Intero RE Services Eugene Blefari (secondary) Pamela Minnis (secondary) Keller Williams Realty Patricia Canton Terri Woods Main Street REALTORS Larry Judkins The Office of Sue Kaufmann Sue Kaufmann AFFILIATE Members Treehouse Mortgage Galen Call, Reverse Mortgage Specialist