2003 Legislative Report
REALTORS® enjoyed strong, bipartisan support for all of our legislative priorities in the 2003 session. Our success is a testament to the depth of our grassroots program, the power of RPAC, and the intensity of our lobbying efforts.
Key legislative victories include:
* Broadened Liability Protection for REALTORS®
* Improved License Renewal and Reinstatement Process
* Changes to Continuing Education Requirements for New Affiliates and Brokers
* Conditional Zoning Proposal Defeated
* Greater Flexibility for Vacation Lodging Services
* Continued Focus on Predatory Lending by Legislature, Administration
Broadened Liability Protection for REALTORS®
Governor Bredesen signed into law a bill to prohibit lawsuits against a real estate licensee based on reports or opinions prepared by home inspectors, mortgage brokers, termite inspectors, engineers, surveyors, or geologists. The bill also prohibits lawsuits based on information included in the Residential Property Condition Disclosure, unless the licensee is a signatory to the form. The bill, which received unanimous approval from both chambers, was sponsored by Sen. Ron Ramsey (R-Blountville) and Rep. Dennis Ferguson (D-Kingston).
Improved License Renewal and Reinstatement Process
Legislation that clarifies the authority of the Tennessee Real Estate Commission (TREC) to reinstate licenses was approved unanimously by the House and Senate and has been signed by the governor. The proposal was sponsored by Sen. Steve Southerland (R-Morristown) and Rep. Dennis Ferguson (D-Kingston).
The bill was amended to include language recommended by TREC to increase penalty fines for licensees who fail to timely submit all prerequisites for license renewal. Under this new law, licensees who fail to submit all documentation and fees for license renewal by the November 1 deadline may face a penalty fee of up to $50 per month that the documentation and fees are late. If the license expires, and the licensee applies for reinstatement, TREC may reinstate the license without re-examination and assess a penalty fee of up to $100 per month.
Changes to Continuing Education Requirements for New Affiliates and Brokers
TAR supported two legislative proposals from TREC regarding continuing education requirements for new affiliates and brokers.
The first bill requires the 30-hour Course for New Affiliates to be completed within six months, rather than one year, following licensure. In 2005, this course will become a pre-licensure requirement.
The second bill requires brokers licensed after January 1, 2005, to complete 16 hours of continuing education every two years. Both bills were sponsored by Sen. Curtis Person (R-Memphis) and Rep. Tré Hargett (R-Bartlett).
Conditional Zoning Proposal Defeated
Legislation that would have authorized cities statewide to exercise conditional and contract zoning was defeated in a House committee this year. The proposal came from the City of Brentwood, but was opposed by the Williamson County Association of REALTORS®.
Greater Flexibility for Vacation Lodging Services
Ending a fight that has spanned two legislative sessions, REALTORS® and representatives of the Vacation Lodging Services (VLS) industry reached a compromise this year that will allow VLS firms broader options in regard to escrow account requirements while maintaining protections for consumers and property owners.
Changes to the law include a provision allowing the substitution of an irrevocable letter of credit or equivalent security in place of an escrow account. Such an arrangement would be available only to established VLS firms and would be subject to the approval of TREC. Another provision allows for speedier disbursement of rental income to owners of vacation property.
Continued Focus on Predatory Lending by Legislature, Administration
In the fall of 2002, a legislative study committee toured the state to hear testimony about abusive practices in the mortgage lending industry. They returned to Nashville in January and filed several bills aimed at prohibiting “predatory lending.” Despite prolonged efforts to craft a consensus bill, consumer and industry advocates were unable to reach a compromise.
Ultimately, Commissioner of Financial Institutions Kevin Lavender asked lawmakers for more time to enforce laws already on the books. The House and Senate approved legislation extending the life of the Special Joint Committee on Predatory Lending. The issue is sure to make a return to the spotlight in 2004.