Quarterly: Winter 2003 - GWCAR - Greater Washington Commercial Association of REALTORS

CBQ >> Winter 2003 Issue

National Association of REALTORS^® (NAR) 2003 Legislative Priorities

There are many legislative issues that NAR will be reviewing in 2003. One of the top priorities will be looking at ways to increase the transparency of the real estate transaction.There are three significant developments that could adversely affect the real estate transaction process:

Regulatory reform of the Real Estate Settlement Procedures Act, commonly referred to as RESPA.
Reauthorization of the federal Fair Credit Reporting Act (FCRA) and potential changes involving the use of a consumer's financial information.
The continued difficulty in obtaining affordable property and casualty insurance for residential and commercial properties.

In 2003, NAR will aggressively advocate important initiatives aimed at increasing the transparency of the real estate transaction, thus enabling consumers to better make home purchase decisions and ensuring the efficient and effective operation of real estate finance. Key initiatives will focus on:

Advocating a congressional delay in the implementation of HUD's proposed rule regarding RESPA to permit a full and thorough analysis.
Federal consumer protections requiring the disclosure of insurance and mortgage lending credit scores and the factors utilized in credit and insurance underwriting decisions.
Appropriate remedies that ensure the uninterrupted availability and affordability of property insurance.

NAR will also continue its campaign to stop the banks from entering real estate.

The threat allowing large banking conglomerates to enter real estate brokerage lingers. NAR is adamantly opposed to large banking conglomerates entering real estate brokerage and property management. It has been instrumental in preventing the Federal Reserve Board and U.S. Treasury Department from implementing its proposed rule allowing banks to engage in real estate brokerage. In 2003, NAR will aggressively advocate reintroduction and support of legislation prohibiting banks from engaging in real estate.

Finally, the issue of terrorism insurance remains on NAR's radar for 2003. The events of September 11th resulted in the limitation or exclusion of property and casualty insurance coverage for losses associated with future acts of terrorism. Commercial real estate owners, lenders and investors are now subjected to assuming risks they are not equipped to measure, price or absorb, severely restricting real estate transactions.

Since 9/11 the re-insurance industry has not reinsured any commercial property terrorism policies from primary insurance companies.

As a result primary insurance companies are refusing to underwrite terrorism insurance because they will be forced to assume the insurance risk associated with a terrorist attack. Property owners and managers must either self-insure or pay outrageous premiums for commercial property terrorism insurance.

NAR has taken a position that supports making the Federal Government the re-insurer of last resort for terrorism insurance. NAR will be urging both the House and Senate to finalize promptly the conference negotiations regarding their respective terrorism bills for President Bush's signature.

-Information obtained from the National Association of REALTORS^®
Maryland Association of REALTORS^® (MAR) 2003 Legislative Priorities

Three commercial issues are currently on the radar screen for the 2003 legislature, all of them considered last year. The first is improved licensing reciprocity for commercial transactions. MAR worked with the General Assembly to pass this bill last year, only to have the governor veto it over an unrelated matter. The legislation would effectively waive licensing requirements on a per transaction basis for out of state licensees.

The second issue is taxation on the sale of "controlling interests." This proposal, which MAR helped defeat last year, would impose transfer and recordation taxes on the sale of a controlling interest in a business when the real property of that business exceeds a certain percentage of its value. Some legislators believe this is a loophole that must be closed. Very few states in the country take this view, and such a change would send a poor message to business.

Finally, we expect legislation to be introduced to reassess commercial properties for tax purposes at the point of sale so that local governments may charge higher real property taxes immediately, rather than waiting for the reassessment cycle. MAR believes such a policy is arbitrary and unfair.

-Information obtained from the Maryland Association of REALTORS^®

GWCAR's Public Policy Committee generally follows the legislative agendas set forth by NAR and MAR, as well as advocating for pro-commercial real estate issues at the local level.