Oklahoma Real Estate Commission
Re: Website Notice Regarding SB 673
I am writing to follow up on a conversation my staff had with Executive Director Anne Woody regarding the rules and website notices related to recently enacted Senate Bill 673 ("SB 673") that the Oklahoma Real Estate Commission ("OREC") is considering.
I understand that OREC will not be adopting the "Emergency Rule Additions for 2005" at this time. We commend OREC for that decision because the proposed rule additions would not be consistent with SB 673 and are anticompetitive.
Additionally, Executive Director Woody has asked us to comment on a notice OREC posted on its website on August 24, 2005, relating to SB 673. That notice states "that a listing broker cannot refuse to receive a written offer or counteroffer from another broker, even if the seller instructs the listing broker that he/she wants to receive offers or counteroffers directly."
The posted notice, at least as it relates to transaction brokers, contradicts the letter and intent of SB 673. The initial draft of SB 673 had stated that no party to the transaction - even the seller - could waive certain duties owed by the broker, such as the duty to receive offers. However, the Oklahoma Legislature changed that language and ultimately decided to pass SB 673 with the more limited words "transaction broker" instead of "party." SB 673 now reads, in part: "a transaction broker shall have the following duties and responsibilities, which are mandatory and may not be abrogated or waived by a transaction broker." (emphasis added).
Under the modified language, the transaction broker clearly is not allowed to waive any of the mandatory duties and responsibilities prescribed by SB 673. But, by limiting that waiver prohibition to the transaction broker only, and not to any party to the transaction, SB 673 by its terms now allows the consumer to waive the broker's obligation to receive an offer or counteroffer on his or her behalf, if, for example, the consumer would rather receive the offer directly from the other party.
OREC's notice is also inconsistent with the legislative history of SB 673. According to the Conference Committee Report for SB 673, the Committee "removed language that said duties and responsibilities couldn't be waived by a party to a transaction [because] OREC does not have jurisdiction over consumers, only licensees." Rather than give OREC the power to enforce rules against consumers, the legislature amended the statute to avoid taking away a consumer's right to waive certain duties owed by his/her broker. Given this legislative history, OREC should not now post a notice that denies consumers the ability to waive, in order to reduce costs or have more control over the negotiations, certain responsibilities and duties that transaction brokers must otherwise provide.
As set forth in our letter to the Oklahoma Legislature (copy attached), preventing consumers from purchasing only the services they want would restrict competition for the sale of brokerage services, reduce consumer choice, and cause Oklahoma consumers to pay more for real estate services. In fact, after the Texas Legislature enacted a law that reduced the ability of Texans to pick the specific real estate services they wanted, some Texas brokers raised their prices for limited real estate services and attributed the increase directly to the new law.
We applaud OREC for its efforts to educate consumers and brokers of the changes in the law caused by SB 673. We agree that posting a notice describing the changes in the law will help consumers and brokers make more informed choices. We therefore recommend that OREC post a notice on its website that is consistent with the letter of SB 673 and the intent of the Oklahoma Legislature. We suggest the following language: "Unless the client instructs otherwise, a listing transaction broker cannot refuse to receive a written offer or counteroffer from another broker."
We appreciate this opportunity to present our views and would be pleased to address any other questions or comments regarding competition policies.
cc: Attorney General W.A. Drew Edmondson