Demographic shifts from retiring baby boomers and the increase of millennials buying homes will have the most profound impact on the real estate industry in the coming years, according to a new survey of real estate professionals from the Counselors of Real Estate. CRE's survey identifies the issues that will have the most significant impact on real estate near and long-term. Read More
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A new analysis released by Paul Coomes, senior economic adviser to the Kentucky Chamber of Commerce, shows job levels are starting to return to pre-recession levels in Louisville and other parts of the state.
Coomes analyzed new job and wage growth data released by the U.S. Bureau of Labor Statistics recently through its Quarterly Census of Employment Wages. He found that the highest levels of growth were in Lexington, Louisville and the Bowling Green and Hopkinsville areas of Western Kentucky. Read More
It only takes one offensive post on social media to maim the reputation of a business.
Earlier this month, two police offers were shot during a traffic stop in Hattiesburg, Miss. Following the incident, a Mississippi Subway restaurant employee posted a photo of herself in her work uniform on Facebook in an apparent celebration of the killings. The woman, according to news reports, wrote the following status with her photo: "2 police officers was shot in hattiesburg tonight! GOT EM," followed by three handgun emojis. Read More
NAR's sample policy for brokers
What challenges will you encounter within 3-5 years? NAR's Strategic Thinking Advisory Committee considers threats to agents, brokers, associations, MLSs, and NAR in the just-released Danger Report. NAR engaged the services of leading industry author and visionary Stefan Swanepoel to help research and write the report. It purposely does not provide any solutions but seeks to encourage an industry wide conversation about the most pressing challenges before laying a foundation for the formulation of solutions. Read More
A Massachusetts appellate court has considered a potential class action lawsuit brought against a broker by former salespeople alleging that they were misclassified as independent contractors.
A group of real estate salespeople (“Salespeople”) who were formerly associated with real estate brokerages (collectively, “Brokerages”) brought a class action lawsuit against the Brokerages for allegedly misclassifying the Salespeople as independent contractors instead of employees. Based on this alleged misclassification, the Salespeople claimed that there were violations of the state’s wage payment laws, including minimum wage and overtime requirements, and other penalties for the misclassification. Read More
From the Massachusetts Association of REALTORS®
On June 3, 2015, the Supreme Judicial Court issued its decision in Monell v. Boston Pads, LLC. The Court upheld the Suffolk County Superior Court ruling, affirming that real estate brokers and salespersons have the ability to affiliate as either independent contractors or employees.
Win for Consumers and Real Estate Industry
This decision is a win for consumers and the entire real estate industry because real estate brokers and salespersons will still be able to work as independent contractors. Affiliating as an independent contractor has been the backbone of the profession for more than 100 years.
“We are pleased that the Massachusetts Supreme Judicial Court affirmed the pro-consumer choice by real estate professionals to affiliate as either independent contractors or employees.” said 2015 MAR President Corinne Fitzgerald, broker-owner of FITZGERALD Real Estate in Greenfield. “This relationship has worked for generations and it is what consumers have come to expect regarding agent entrepreneurship and availability. We’re glad the choice will continue.”
What You Need to Know
REALTORS® may continue to affiliate as either independent contractors or employees. Brokers and salespeople who engage their sales agents as independent contractors should continue to follow the advice of legal counsel, including using and adhering to the provisions of a written Independent Contractor Agreement.
The case was originally heard before the Suffolk County Superior Court and a decision was issued in July 2013. The case dealt with the issue of whether real estate salespersons, who agreed to be treated as independent contractors, should be treated as “employees” for purposes of Massachusetts wage and hours laws by virtue of the Massachusetts Independent Contractor Statute. Had the plaintiffs been successful in this claim, this could have potentially converted all real estate agents into employees. The Superior Court held that the existing practice of brokers and salespersons affiliating as independent contractors is consistent with state law. Further, brokers and salespersons may affiliate as either an independent contractor or as an employee, and the Independent Contractor Statute does not govern the relationship between brokers and licensed real estate agents.
The Supreme Judicial Court affirmed the Superior Court’s judgment, thereby upholding the lawfulness of independent contractor status among Massachusetts sales agents.
Stephen Perry and Robert Kutner of Casner & Edwards, LLP represented the defendant-brokers. The Massachusetts Association of REALTORS®, along with the Greater Boston Real Estate Board, filed an amicus brief (“friend of the court brief”) in support of the defendant-brokers. The brief, authored by Philip S. Lapatin of Holland & Knight LLP, clearly explained why the Court should uphold the Superior Court’s ruling. Specifically, the brief argued that overturning this decision would be inconsistent with the legislature’s intent to allow for brokers and salespersons to affiliate as independent contractors and that it is important for practitioners and consumers that brokers and agents continue to have the ability to choose to affiliate as independent contractors or as employees.
- Massachusetts Supreme Judicial Court Decision
- Case information on Monell v. Boston Pads, LLC, including the amicus brief filed by the Massachusetts Association of REALTORS®
- Oral Arguments from Monell v. Boston Pads, LLC
- Information on Independent Contractors from the National Association of REALTORS®
- Suffolk County Superior Court Decision
- Information on Monell v. Boston Pads, LLC and Independent Contractors from the Massachusetts Association of REALTORS®
Gov. Steve Beshear recently announced Area Development magazine, a leading economic development trade publication, has recognized Kentucky with a Silver Shovel Award, recognizing the Commonwealth as one of the most successful states in creating jobs and securing investments in 2014.
In the summer 2015 issue, Area Development magazine awarded Silver Shovels in four population categories, with Kentucky’s honor coming in the 3-to-5 million population tier. The awards are based on a state’s top 10 job-creation and investment projects that began to materialize in the previous year. Kentucky’s top projects resulted in nearly 4,000 new and retained jobs and more than $1 billion in investments.
The Silver Shovel is the latest good news for Kentucky economy. Last year, companies announced the most business investment in the Commonwealth since the state began tracking that information nearly 30 years ago. In March, the Commonwealth earned Site Selection magazine’s Governor’s Cup award for the most economic development projects per capita in 2014. Read More
Earlier this week, the federal consumer watch dog, the Consumer Financial Protection Bureau (CFPB) announced a grace period for enforcement of the TILA-RESPA Integrated Disclosure (TRID) regulation that will affect how numerous real estate closings are performed. Although a definite testing or "grace" period was not stated and is currently open-ended, the Mortgage Bankers Association believes it is likely to last at least until the end of 2015.
Recent REALTOR®’ efforts to get clarification into new truth in lending rules, and insight into the delays these changes might cause for consumers, appear to have paid off. Letters from both the House and Senate, led by Kentucky Representative Andy Barr, and signed by over 275 other members of Congress including all six of Kentucky's U.S. House delegation, provided enough concern over the August 1 deadline that the CFPB took notice.
There are a few major points to consider with the TRID regulation as it stands:
1. The "grace" period does not delay the deadline.
But exactly how long is the grace period? The CFPB did not officially delay the August 1 deadline for compliance, however, the CFPB says it will work with lenders who have made a good-faith effort to comply and ease the transition into the new rules. Apparently, though, it might not be through the end of the year as Congress suggested in their letters. Richard Cordray, director of the Consumer Financial Protection Bureau, did say the agency will be sensitive to progress made by those working to meet the new requirements since lenders were not able to test their systems prior to the deadline.
2. The CFPB has a number of resources available for lenders (and others in the industry) to review in preparation of the deadline.
According to the CFPB, there have been many steps taken, and more to come, that support the implementation of the rule throughout the industry. Many of these are highlighted in the CFPB response letter to Congress and a fact sheet for consumers is posted on the CFPB website that outlines what the rule means to closings.
3. The biggest concern for consumers and real estate professionals are the triggers that re-start a three-day period allowed for the review of documents.
First, if the lender increased the annual percentage rate by more than 1/8 of a percentage point on a fixed rate loan or 1/4 of a percentage point on an adjustable rate loan (decreases in APR would not trigger a delay); second, if the lender adds a prepayment penalty; or, third, if the lender changes the loan product, (for example from a fixed rate loan to an adjustable loan.)
The triggers for the three-day review are a key concern, especially for consumers, since they could cause additional closing delays. The worry was that even small deviations in information provided might start a chain reaction of delays.
Even though the announcement from the CFPB is a net win but less than what some Members of Congress requested, the added clarity was a welcome first step forward according to NAR President Chris Polychron.
In a statement released by NAR, Polychron said "the action announced by the CFPB is a welcome first step toward clarifying the changes coming to real estate closings August 1. NAR appreciates the 'sensitivity' offered by the CFPB to companies making a good-faith effort to comply with the new TILA-RESPA Integrated Disclosure regulation. We will continue to work with the CFPB to minimize any possible market disruptions or uncertainty when the rule takes effect, to address any implementation issues and minimize costly closing delays for home buyers and sellers during the busiest transaction season for real estate."