SUMMER IS HOT ENOUGH . . . . STAY COOL, KNOW THE RULES
Be Informed on Regulation Changes

Before you sign the next contract, make sure you are in compliance with the new regulations. This newsletter will summarize all of the major regulation changes. Most of the regulation changes took effect on April 6, 2001. One regulation, relating to criminal background checks on all applicants, takes effect on July 1, while the revised Seller's Disclosure of Property Condition Form, Agency Disclosure Form and listing and purchase contract changes take effect on September 1, 2001.

All of the regulation changes can be viewed on our website at www.krec.ky.gov. We have the actual language that can be downloaded as well as what we call the "strike-through" version. The "strike-through" version allows you to see what was deleted from a regulation and the changes that were made to that regulation.

REGULATIONS THAT TOOK EFFECT ON APRIL 6, 2001

201 KAR 11:011 (Definitions)
The maximum closing gift has been raised from $50 to $100. Earnest money deposits should be deposited within three (3) business days of creation of a contract. This was raised from two (2) days.

201 KAR 11:040 (Contracts & financing provisions)
The terms "exact" and "precisely" have been removed from the regulatory requirement which says what the financing terms and encumbrance amounts should be in contracts. Licensees are still required to set forth the manner in which the purchase shall be financed, the amount of any encumbrance and whether the same is to be underwritten by the seller, a commercial institution or otherwise. These requirements shall be stated in writing.

201 KAR 11:062 (Retention of records)
Brokers are now required to retain records for five (5) years rather than four (4). Seller Disclosure Forms and Agency Disclosure Forms are specifically listed as forms required to be retained.

201 KAR 11:090 (Instruments prepared by licensees)
The term "copy" replaces "duplicate original." Licensees must still deliver these copies to signing parties when the licensee prepares a document.

201 KAR 11:105 (Owner's consent & authorization)
The new regulation says that a written listing is needed when a broker advertises to the general public. General public was added to this regulation to clarify that word of mouth promotion is permissible. Also, a broker must now have written consent before placing a sign on a listed property. Before, the broker just needed the consent of the property owner.

201 KAR 11:121 (Improper conduct)
Licensees must disclose in writing on the contract or lease all referral fees accepted for referring consumers relative to insurance, financing, goods, or services. This requirement does not include referral fees from other brokers or agents for referring the real estate client to you -- only service providers to whom you refer your clients or customers.

The fiduciary duties owed to the licensee's client are now specifically listed. These are the duties of: loyalty, obedience to lawful instructions, disclosure, confidentiality, reasonable care and diligence and accounting.

Under guaranteed sales plans, the term "licensee" is changed to "broker" for accuracy.

201 KAR 11:145 (Salesman's duties when terminating affiliation with broker)
"Employment" is changed to "affiliation" for accuracy and these changes do not alter licensee standard of conduct.

201 KAR 11:161 (Repeal of 11:160)
This regulation repeals 201 KAR 11:160. That regulation was redundant and unnecessary. By repealing this regulation, it does not alter licensee standard of conduct.

201 KAR 11:170 (Private school approval)
Real estate schools must include a statement in the application given to prospective students that a criminal conviction may prevent a candidate applying for licensure from obtaining a real estate license. Failure to do so may result in suspension of an approved school's certification.

201 KAR 11:190 (Prima-facie case)
This regulation incorporates the requirement that the complaint must allege a prima-facie case or it will be dismissed without being forwarded to the licensee. The aggrieved party shall be given ten (10) days to file a written supplement to the complaint before the matter can be dismissed by the Commission.

201 KAR 11:210 (Licensing, education and testing requirements)
Applicants who submit information from a non-United States institution will need to have their transcript or diploma translated if requested by the Commission. The applicant shall also submit a notarized letter from the reviewing institution's representative indicating the school curriculum is equivalent to a GED or high school diploma.

Course approval procedures have been detailed and added to this regulation. Appeal provisions for rejected courses are also outlined in this regulation. If you need more information, please reference the actual language on our website.

201 KAR 11:230 (Mandatory continuing education)
The minimum hours for an educational course were increased from two (2) to three (3) hours. Six (6) total hours are still required each year for licensees who are subject to the continuing education requirements. Remember, three (3) of the six (6) hours must be in law.

201 KAR 11:245 (Property management procedures and guidelines)
The term "agent" was changed to "licensee" throughout this property management regulation.

Deposits must be made "without unreasonable delay" -- a defined term meaning "within three (3) business days of the creation of an executory contract for the sale or lease of real property."

Property management records must be retained for five (5) years. This is increased from the previous four (4) year requirement.

201 KAR 11:420 (Internet advertising)
This new regulation explains what should be contained in a real estate company's Internet home page, a licensee's Internet home page and a licensee's property advertisement.

The home page of a real estate company whose principal business location is in Kentucky shall display the following:

• 1. The company's full name or name of principal broker as recorded with KREC
• 2. Street address for the principal office
• 3. Phone number for principal office

A real estate company based outside Kentucky shall display the following on their home page

• 1. The company's full name or the name of the principal broker as recorded with KREC
• 2. Street address for the principal office
• 3. Phone number for the principal office
• 4. A statement indicating principal broker is licensed in Kentucky

A Kentucky licensee with a principal business address in Kentucky shall display the following on their homepage:

• 1. Licensee name
• 2. Principal broker or real estate company name recorded at KREC
• 3. Street address and phone number of principal business location

A Kentucky licensee with a principal business address outside Kentucky shall display the following on their home page:

• 1. Licensee name
• 2. Principal broker or name of real estate company as recorded with KREC
• 3. Statement indicating licensee holds a Kentucky license
• 4. Street address and phone number for licensee's principal business location
• 5. The regulatory jurisdiction of the licensee's principal business address if that address is located outside of Kentucky

A real estate Internet real property advertisement of a licensee, or offer or solicitation to provide brokerage services by a licensee related to marketing or identifying real property for sale or lease, shall display the following:

• 1. Name of the licensee advertising the property or advertising or marketing the service
• 2. The name of the real estate company or the name of the principal broker with whom the licensee's license is held

REGULATIONS THAT TOOK EFFECT JUNE 7, 2001

201 KAR 11:071 (Repeal of 201 KAR 11:070)
This regulation repealed the regulation which only allowed a principal broker to employ a sales associate whose residence was located inside a fifty (50) mile radius of the broker's main or branch office. Technological advancements of the past decade have made this regulation obsolete. Advancements in the field of real estate have made it possible for a principal broker or managing broker to supervise a licensee from a distance beyond 50 miles.

201 KAR 11:440 (Personal Assistant Duties)
This regulation is explained in full detail on page 9 of this newsletter.

REGULATION TAKING EFFECT JULY 1, 2001

201 KAR 11:430 (Criminal background check)

Effective July 1, 2001, all persons applying for a Kentucky real estate license (including applicants for a sales associate's license, a broker's license and applicants for a reciprocal license) shall submit proof of an FBI Identification Records Check to the Commission as part of the application for a real estate license. Applicants must request the forms from the FBI. Then, the applicant must take the form to the police department in order to be fingerprinted. The Commission has determined that most county sheriff's departments, some city and county police departments or any state police post should be able to take your fingerprints. If the returned criminal background check reveals either a misdemeanor in the past five (5) years or a felony at any time, the applicant must notify the Commission within five (5) days. The Commission will investigate the conviction and either order a hearing or allow the applicant to proceed without a hearing.

The Commission recommends that applicants apply for the background check about 6 - 8 weeks before taking the examination. Applicants may take the test as long as they have completed the fingerprint process and have mailed their request to the FBI for the background check to be completed. As always, applicants must complete all required coursework before taking the examination.

On pages 7 & 8 of this newsletter, you will find a perforated form explaining in detail this new requirement. Please tear it out and keep it for reference. Principal brokers should post this notice in their office.

REGULATIONS TAKING EFFECT SEPTEMBER 1, 2001

KAR 11:250 (Listing and purchase contracts)
There have been some changes made to the listing and purchase contracts regulation as well. The most significant change is to Section 3, dealing with back-up offers. After September 1, 2001, licensees should use the new language found in that regulation, which states that the second offer "is a back-up offer." Please review the language prior to September 1, 2001 in order to familiarize yourself with the new provision. The Commission wanted to simplify the language used for these types of offers. Also, licensees are now required to put the date and time for all signatures and all initialed changes on a listing contract. This way, there will never be any confusion as to what provisions all parties agreed to and what time those changes occurred, as timing can sometimes be very crucial in a real estate deal.

201 KAR 11:350 (Seller's disclosure of conditions form)
There were three major changes made to the Seller's Disclosure Form. Under the Section entitled Foundation/Structure/Basement, a new question was added asking the seller to disclose if they have experienced, or are aware of, any water or drainage problems with regard to the crawl space. Another question was added to the "Miscellaneous" section asking if the house has ever been damaged by fire or other disasters, such as tornadoes or hail.

The third item added to the form is a provision allowing the licensee to fill out the form if requested by the owner. However, the Commission does not recommend licensees do this.

201 KAR 11:400 (Agency disclosure)
There is a completely new Agency Disclosure Form that will take effect on September 1, 2001. This form has been redesigned to simplify the agency disclosure process. First of all, there will now be only one step in giving out the forms. The Commission has combined the Consumers Bulletin and the Agency Disclosure Form into one, two-page document. This way, consumers can learn about the types of agency available, but the licensees do not have to go through a 2-step process any longer.

All licensees will fill out Section A, the top portion of the form, at the beginning of the real estate transaction. The second portion of the form, Section B, will be filled out only when that licensee actually becomes a dual agent. If no dual agency is ever created, then the bottom half of the form does not have to be completed or distributed among the parties.

The theory behind this new form is that a consumer needs to know two things when dealing with a real estate licensee. First, the consumer needs to know what relationship he or she has with his agent, i.e., buyer's agent, transaction broker, etc. Second, in a dual agency situation only, a consumer needs to know if a special or long-standing relationship exists between his or her agent and the other party to the transaction. Therefore, the Commission has redesigned the Agency Disclosure Form to provide just this information. This change will result in less paperwork and fewer forms being handed out and traded among parties.

The Commission recommends that licensees attend training this summer to learn about the new form and that principal brokers establish training procedures to alert their agents to the new requirements for agency disclosure. The new form is very different from the previous one and will, therefore, require some training and education prior to implementation.

Comments from the Chair
by: Ron Smith, Chairman

As Chairman, it is easy to stay informed of the newest regulation changes and happenings at the Commission. As a licensee, I realize it might not always be as easy. This newsletter is one very important line of communication; however, since it only comes out every four months, it isn't the quickest way to stay informed. In my opinion, our most valuable source of communication is our website.

The information available on our website is not only helpful, it is updated on a daily basis. The staff at the Commission is in constant contact with our webmaster, Dr. Don Bodley. Once Dr. Bodley receives the latest information or changes, it is updated on our website usually within the hour. As you can see, Dr. Bodley is an extremely valuable tool in the successful communication between the Commission and the licensees of Kentucky.

In addition, Dr. Bodley provides the Commission with monthly statistics on usage patterns to our site. He lets the Commission know which links you visit most frequently and when you are logging on. One very interesting statistic is the increasing number of hits our website is receiving. In June of 2000, our site received an average of 406 hits per day. In May of 2001, the site received an average of 1,355 hits per day. In other words, the traffic tripled in less than one year.

The most requested page on our website is the Catalog of Available Online Documents. From contracts and educational information to change forms and reciprocal information, almost anything you need to know is available on this catalog. I recommend that all licensees download this catalog and keep it handy.

Another heavily visited link lately is the Index of Regulation Changes. This link has been very helpful to licensees want-ing to keep abreast of regulation changes. All of the regulation changes are currently listed by effective date for easy reference.

As an aside, I am always amazed by the number of hits our website receives from overseas. In May of 2001 we had 110 hits from Germany, 46 hits from Australia and 45 hits from Japan. I guess people across the world are interested in keeping up with our accomplishments.

In closing, if you haven't already, log on to our website at www.krec.ky.gov. It is the best way to stay attuned to changes at the Commission. If you have any suggestions or comments about the website, please do not hesitate to call the Commission.

From the Director's Desk
by: Norman Brown, Executive Director

Through a grant to the University of Louisville and Dr. Jack Morgan, the Commission has recently completed the development of a curriculum for high school students entitled "Home Sweet Home" that outlines the value of home ownership, good credit and the like. Because of my background in education, I knew there was a need for this type of course throughout the state, and I knew that Dr. Morgan excels not only in the development of high quality courses but also in the implementation of those courses once they are produced.

In addition, from my experience with my own daughters, I knew that young people need to learn at an early age about the importance of good credit, saving for a down payment and budgeting. Finally, we have been hearing over the years that many states are experiencing significant decreases in licensing, so we thought this course would also serve as a tool to promote the industry. Perhaps some of these students will want to choose real estate as a career, as many of you have.

As of January 2001, 94 teachers have already been trained to teach the course. In addition, 34 schools and 22 school districts have already received a copy of the curriculum. What's more, a total of 1,116 students had already learned some or all of the curriculum by that date. That figure represents 1,116 possible future clients!

The feedback about the program has been overwhelming. On a scale of 1-5, the average rating of the course has been a 4.69. Both students and teachers alike feel that it is a practical and useful tool in teaching our high-school-aged students about important economic tools for their futures.

The following are some actual comments we have received. One teacher stated that her students "appreciated being introduced to schoolwork that was directly helpful in their daily lives." Another teacher indicated that the course is "tops!" and added that "it efficiently covers the important points of practical economics." One teacher stated that the course encouraged students to think of real estate as a possible future occupation.

Students have been similarly impressed with the practicality and importance of the curriculum. For example, one student indicated that he now "understands how hard it has been for [his] mom" to run their household. Yet another student said that, after the course, he realized that the "overall expenses that it takes to run a household are tremendous."

We know that, as this course continues to be taught, more and more teachers will want to be trained to present it to their classes. We are very proud of the course and of the work that Dr. Morgan and his staff have done. We hope that, if you have a high-school-aged student, you will tell his or her teacher about the course and get the teacher on board. We think it will prove invaluable to our young people, to our industry and to our schools.

Brokerage Management Update

The Commission is still working on the regulation that will mandate the completion of a brokerage management course by all candidates for a broker's license. We anticipate this regulation will not become effective until at least January 1, 2002. Please watch for more details in the next newsletter.

Criminal Background Requirements to Obtain a
Kentucky Real Estate License

The criminal background check requires that ALL persons applying for a Kentucky real estate license (including applicants for a sales or broker's license and applicants for a reciprocal license) on and after July 1, 2001 to submit proof of an FBI Identification Records Check to the Commission as a part of the application for a real estate license. This record must indicate that there have been no felony convictions at any time or any misdemeanor convictions with the previous five-year period. This notification has been perforated in this newsletter so that it can be torn out and posted for easy reference.

The legal references for this requirement are: KRS 324.045 (4) & 201 KAR 11:430 -Effective July 1, 2001 Both can be viewed on the Commission's website at www.krec.ky.gov.

Some examples of misdemeanors which may be subject to a Commission investigation include: DUI, sexual assault, certain theft charges, and certain drug convictions. In general, speeding and minor traffic violations would not be misdemeanors. Some serious traffic violations could be misdemeanors.

The bulleted items will explain when the report is due and with what types of applications. Any applicant who will be taking the sales associate or broker examination on or after July 1, 2001 must include a criminal background report or a license will not be issued.

Any applicant who submits an application for a reciprocal license on or after July 1, 2001 must include a criminal background report or a license will not be issued. A postmark deadline will be enforced.

Why is the Commission now requiring a background check? There are several reasons. Currently the Commission can only take someone's word that they don't have any felony convictions. Licensees have access to people's homes and often times, are alone with unprotected consumers. Many other states have indicated that they find an average of ten (10) applicants a month who fail to disclose felony convictions prior to application. Also, the Commission feels that this will prevent potentially unqualified or dangerous people from taking actions which would harm the real estate industry's reputation.

Where can I obtain the necessary FBI forms? To obtain the fingerprint card forms, call the Louisville office of the FBI at 502-583-3941, Extension 3844. (Fax number 502-569-3869) Ask for the information on obtaining an identification record check.

Who will take my fingerprints? Some local law enforcement agencies, most county sheriff's departments, some city and county police departments, or any state police post may be able to take your fingerprints. In Louisville, the Department of Corrections located at the county jail on Sixth Street handles fingerprinting services for the Jefferson County Sheriff's Department. Be sure to take the FBI fingerprint card with you and complete the additional personal information requested on the card. Some law enforcement agencies may charge a fee for fingerprinting services. The cost may vary.

How long does this process take? Approximately 4-6 weeks, upon submission of the fingerprint card to the FBI. Thus, you should apply for the criminal background report at least 6-8 weeks before you plan to take the examination or submit an application for a license by reciprocity.

What should I do if my report is clear? The report will be mailed directly to you. Keep the report. It must be attached to your application and submitted with the other documents that are required to obtain your license.

What is the cost and where do I send it? Send the completed FBI fingerprint card and a certified check or money order, payable to the Treasury of the United States, in the amount of $18 to:

Federal Bureau of Investigation
Criminal Justice Information Services Division
SCU MOD D2
1000 Custer Hollow Rd.
Clarksburg, WV 26306

What if I know I don't have any convictions? You are still required to submit proof of a FBI Identification Records Check. Even if you know you don't have any convictions, it is still a good idea to request your criminal background check as early as possible to avoid any potential for delay.

What happens if I have a conviction? You must submit the criminal background report to the Commission within five days of receipt of the FBI identification record. The Commission will investigate the matter and require that you complete a Privacy Act Waiver and will begin an investigation into the conviction. Following the completion of the investigation, the applicant will either be allowed to continue with the education and testing process to apply for a license or directed to appear before the Commission for a hearing.

If a conviction is noted, how long will the Commission's investigation process take? Approximately 60-90 days depending upon how quickly all of the documents are returned to the Commission and the backlog of cases.

May I take the test after I have completed my coursework and submitted my request for the criminal records check? YES, as long as you have completed the fingerprint process and have mailed your request to the FBI for the background check to be completed. When you call to make a reservation for the examination, the testing service will ask whether you have been fingerprinted and have applied for the FBI criminal background check.

IMPORTANT NOTE: Regulation 201 KAR 11:210 (4) requires that all exam candidates apply for their license within 60 days of the examination date. If you delay requesting the background report and take the exam without having applied to the FBI for the criminal check, your test scores can be invalidated. Remember that the final background report must be attached to your application for a license and applicants must apply for their license within 60 days of the date of their examination. See Regulation 201 KAR 11:210 (4). If you take the examination without having fulfilled this requirement, you may run the risk of having your scores invalidated, thus requiring a retest.

Persons with any felony conviction or certain misdemeanors (within the last five years) SHOULD NOT enroll in classes and/or pay tuition or fees for courses or take the examination until the Commission has determined your eligibility for a license. If you continue with classes and take the test, you do so at your own risk.

If you have further questions, please call or write the Commission office.
Kentucky Real Estate Commission
10200 Linn Station Rd., Suite 201
Louisville, KY 40223
Phone: 502-425-4273 or Toll Free at: 1-888-373-3300
Fax: 502-426-2717
Website: krec.ky.gov

PERSONAL ASSISTANT GUIDELINES
201 KAR 11:440 - EFFECTIVE JUNE 7, 2001

A new regulation has been implemented which changes the duties that an unlicensed assistant can now perform. Below is a summary which specifically explains what an unlicensed assistant can and cannot legally do.

OPEN HOUSES - An unlicensed assistant may host an open house - which includes distributing literature, greeting guests, procuring signatures on a sign-in sheet and serving refreshments -- so long as the seller or lessor agrees to this in writing and the supervising licensee directs the assistant to hold the open house in his or her stead. This regulation allows the personal assistant to do certain specific activities but does not in any way allow the assistant to show the property or to answer any questions about the property. Any and all questions should be directed to the licensee and only the licensee can actually show the property to prospective purchasers or lessees.

OPENING PROPERTY - An unlicensed assistant may also copy a key for a property under the supervision and direction of the licensee. An assistant may legally open the door for any purpose relative to the transaction so long as the supervising licensee receives the consent of the owner. However, the regulation states that, when the assistant opens the property, he or she is prohibited from answering any questions relative to the property and/or showing the property to any consumers. Again, this regulation does not give the personal assistant the ability to show the property or answer questions relative to the property - it is designed simply to allow the personal assistant to aid the licensee by opening the door for inspectors, appraisers, repairmen and the like.

GENERAL PUBLIC INFORMATION - An unlicensed assistant may also provide four, specific pieces of general public information, namely: 1) whether a house is listed with the company; 2) whether the real estate is under contract; 3) whether a transaction has closed; and 4) the listing price of the property. An assistant can give out other information, such as square footage, number of rooms, etc., only in writing so long as the supervising licensee consents to the disclosure of the information and the disclosure will not violate the licensee's fiduciary duties to the client. [Note: this is different than the definition of "general public information" used before the regulations were passed. The definition is narrower now and does not include any and all information found on a Fact Sheet.]

MISCELLANEOUS - An unlicensed assistant's photo can appear in advertisements, so long as it is clear that the person is not licensed. The unlicensed assistant may also contact consumers for the purpose of setting an appointment. An unlicensed assistant may receive confidential information regarding a transaction so long as he or she does not disclose this information to anyone other than the supervising licensee.

UNLAWFUL ACTIVITIES BY PERSONAL ASSISTANTS - Unlicensed assistants may not: negotiate the terms of a contract or lease; complete offers or contracts; disclose confidential or non-public information about a property; attend a real estate closing without a supervising licensee present; access information that requires membership in a trade organization if the supervising licensee is not a member of that industry trade group; write or place advertisements without the licensee's review; express material opinions about a real estate transaction to anyone other than the supervising licensee; interpret contractual language for anyone; represent to others that he has a real estate license; or perform any activity that requires a real estate license.

DUTIES OF SUPERVISING LICENSEE - A supervising licensee is primarily responsible for the actions of the personal assistants working for him. The principal broker must assign one licensee - either himself or one or more of his agents - to supervise each personal assistant. The principal broker must inform all personal assistants under his company of the regulations and statutes governing their behavior and activities and establish a procedure so that all assistants will be properly trained. The supervising licensee is required to provide adequate supervision to his assistants and to be reasonably accessible to his assistants so that they can contact him with any questions or problems concerning pending transactions.

A word of caution: unlicensed personal assistants, by definition, are not licensed. If a problem arises which constitutes a violation of licensing laws, the supervising licensee and/or the principal broker may be held responsible for that violation by the Commission - not the unlicensed personal assistant. Therefore, it is advisable to train and supervise your assistants to the fullest extent possible and to screen them to ensure their ability to abide by the statutes and regulations. It is your license - protect it as best you can!

ACTIVE LICENSEES WHO HAVE NOT RENEWED FOR 2001/2002 The Commission has not received renewal payments for the following active licensees. If your name appears on this list and you want to renew your license, please contact the Commission's licensing department at (502)425-4273 or toll free at 1-888-373-3300. Please note that this list is as of June 5, 2001.

RRobert E. Acree Connie S. Allen Steve B. Bartlett Larry K. Baumgardner Bonnie L. Bennett Bryan E. Beverly Orville R. Bierl William W. Blackburn Pauline R. Boynton Melissa R. Bozell W. W. Brooks, Jr. James R. Campbell Laura L. Clark John A. Clarke Walter L. Claycomb Donald L. Cole Milton Cole Brenda G. Coley Johnny W. Coley Opha L. Collins C. Brooke Coombs Frank J. Corso Glen D. Craig Tracey Crutcher Albert B. Cummins Joel P. Dant Charles O. Davis William C. Dawson William A. Dean John T. Denton, Sr. Frederick C. Dolt, Jr. Harry T. Downs

Richard Driver Sterling A. Durst Charles D. Edmonson Larry R. Fears, Jr. Walter R. Ferrell Nathaniel L. Fine Jeffrey J. Forbes Mary E. Fromme Jack D. Frost Dorothy Gehling Jack C. Goins Robert J. Grennes William J. Hadden Earl Hamm Linda T. Hayden Irvin Hayek James W. Hendricks Joseph P. Hines Douglas C. Hinger Kathleen Hoskins Harney Howard Michael L. Irvan Laban P. Jackson Stephen B. Jelen Alexander S. Johnston Terri M. Kalb Alice Kovach Steve H. Kroeger Barbara K. Lawson-Toelke George J. Lehmann, III Charles Leifer Mattie T. Lowe

Billy J. Lycans Marie G. Manter Luisha A. McArdle-Smith Richard L. McDougall Lauretta D. Meyers Edward A. Mills Charles Monroe David M. Moore Leslie H. Moore Timothy W. Moore Gina L. Muller James D. Naylor Stephen C. Nester Marty W. Nicholas Jim Nobbe Sylvia A. Norwood Janice L. Owens James L. Pfister Charles Prothro Richard M. Rheinhardt Valerie E. Roach John M. Russell Jim Schmidt Rachel Schneider Mark T. Sneed Patricia A. Snell Stephen C. Stanley Theresa G. Stanley Martina E. Stevens Arch F. Sutherland Jill Swafford Donald C. Taylor

Disciplinary Actions

JACKIE W. MATTINGLY
(HARRODSBURG) CASE NO. 97-0001:
Violation: Mr. Mattingly was found in violation KRS 324.160 (1) (r) for: 1) submitting to a consumer's attorney a Seller's Disclosure Form bearing the forged signatures of those consumers; 2) representing the form to be an accurate copy of the Seller's Disclosure form signed by the consumers at closing, knowing that the form was forged; and 3) misrepsenting the events which took place at the closing to the consumer's attorney and Mattingly's principal broker. He was also found in violation of KRS 324.160 (1) (q) for failing to deliver to the consumer an accurate copy of the Seller's Disclosure Form completed and signed by the seller at any point in time prior to the closing, in violation of KRS 324.360.
Disposition: Mr. Mattingly's license was suspended for a period of one (1) year beginning June 3, 2001. He shall also pay a $500 fine as a condition of continued licensure, and his license shall not be reinstated until the fine has been paid.

ROBERT E. GREENWELL
(LOUISVILLE) CASE NO. 99-0164:
Violation: Mr. Greenwell stipulated to a violation of KRS 324.160(1)(q) for violating 201 KAR 11:245, Section 2(6) while managing rental property for a client.
Disposition: The Commission reached a settlement agreement with Mr. Greenwell, and he agreed to pay restitution to the Complainant in the amount of $4400.00 and to have his license suspended for a period of thirty (30) days.

WILLIAM E. SMITH
(LOUISVILLE) CASE NO. 99-0173:
Violation: Mr. William Smith was found in violation of KRS 324.160(1)(r) for conduct which constitutes improper, fraudulent or dishonest dealing. Mr. Smith took inside information from a mortgage broker about a piece of real property being sold at a very low price and then proceeded to use that inside information to purchase the property even though a consumer was attempting to purchase the property at the same time.
Disposition: The Commission suspended Mr. Smith's license to broker real estate in this state for a period of one (1) year.

STEVEN BACHMANN
(CINCINNATI, OH) CASE NO. 96-0140:
Violation: Mr. Steven Bachmann failed to appear at his hearing to answer the charges filed against him. The Commission found Mr. Bachmann in violation of KRS 324.160 (1) (r) for improper sexual advances towards a client.
Disposition: The Commission entered an Order of Default against Mr. Bachmann and issued a formal reprimand against Mr. Bachmann for this misconduct.

NANCY BROGHAMER
(UNION) CASE NO. 01-0022:
Violation: Ms. Broghamer stipulated to a violation of 201 KAR 11:121, Section 1(2) for offering a $1,000 inducement to the general public through an advertising flier.
Disposition: The Commission entered into a settlement agreement with Ms. Broghamer and she agreed to accept a formal reprimand from the Commission and to attend six (6) hours of continuing education. T.W. SHORTT
(ELIZABETHTOWN) CASE NO. 98-0114:
Violation: Mr. Shortt stipulated to a violation of KRS 324.160(6) for failing to adequately supervise one of his sales associates, Robert F. Lee.
Disposition: Mr. Shortt had already been ordered to pay restitution to the Complainant in this matter in Hardin Circuit Court, and the Commission accepted this payment as restitution/discipline in this matter.

New Seller's Disclosure and Agency Disclosure Forms

The Commission will mail new Seller's Disclosure and Agency Disclosure Forms to all principal brokers around the first week of August. Also included in this package will be summaries of the changes and a frequently asked questions section. Remember, the new forms will be mandated for use on and after September 1, 2001. Keep in mind that the current forms should be used up until the September 1st effective date. Copies of the new forms can be obtained on our website at www.krec.ky.gov. You can download the Seller Disclosure Form on either 8 1/2" x 11" or 8 1/2" by 14"

Farewell

The Commissioners and Staff would like to say fond farewell to Karen Fanning. She accepted a position with the Cabinet for Families and Children, effective May 1, 2001. Karen worked in the Commission's licensing department for almost four years and will be missed by all of her co-workers. We extend our best wishes for her continued success.

Announcing

Michelle Gary, who formerly worked as a paralegal, will be transferring to the licensing department. Ms. Gary has been employed at the Commission since September of 1996, working closely with General Counsel Jeff Blair in the legal department. She was instrumental in the completion of the regulation package summarized in this newsletter. Michelle's new responsibilities will include processing new real estate applicants, and reciprocal applications and assisting licensees wishing to reinstate their licenses. Michelle says: "I am excited about my new position and look forward to working with licensees and consumers to assist them in the real estate process." Best wishes, Michelle, in your new position.