BROKER MANUAL - Louisiana REALTORS by linxiaoqin

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									BROKER MANUAL

   LOUISIANA REALTORS®
           P.O. BOX 14780
        BATON ROUGE, LA 70898
 PHONE: 800-266-8538 OR 225-923-2210
          FAX: 225-926-5922
     EMAIL: LRA@LAREALTORS.ORG
     WEBSITE: WWW.LAREALTORS.ORG
                   LOUISIANA REALTORS® BROKER MANUAL
                                      INTRODUCTION
Dear Broker:

The Louisiana REALTORS® is pleased to provide you with a broker manual for your quick
reference. This important tool contains background history and helpful hints on over
fourteen real estate related topics of interest. Also included with this manual are the 1997
legal hotline summaries.

The broker manual is intended to be used for informational purposes, and will give you a
guide to follow, should these topics present themselves within your firm. Each year you will
receive updates to your manual, and be informed of when to delete outdated sections from
your unit.

We hope that you find this tool beneficial as you face these issues in your day to day
business. It is another way that the Louisiana REALTORS® is working to be your partner in
success. Should you have any questions or comments, the Louisiana REALTORS® is
always open to new ideas and comments on all real estate issues and subjects.

Sincerely yours,


Malcolm Young, Jr., RCE, CAE
President
Louisiana REALTORS®
                                  DISCLAIMER
This publication is intended to keep association members abreast of legal issues and
  other developments affecting real estate brokerage and sales, and to supplement
                       educational programs of the association.

 This publication is a source of information for your exclusive use. The association
    cannot warrant the accuracy of the information contained in this publication.

This publication is for informational purposes only and the association members are
  responsible for contacting their own attorneys for advice regarding legal issues.
                           TABLE OF CONTENTS

Introduction/Table of Contents
           Introduction
           Disclaimer
           Table of Contents

Agency Relationships
         Background
         •      Overview of Agency Law
         •      Required Forms
         •      Timing for Disclosure
         •      Contracts

          Recommendations
          •    Suggested Broker Policy
          •    General Office Policies
               ♦     Listing
               ♦     Selling
               ♦     Confidential Information
               ♦     Ministerial Acts

          Addenda
          •    Changes to LREC Rules & Regulations
          •    The Agency Pamphlet
          •    Dual Agency Disclosure Form
          •    Agency Workbook Order Form
          •    Agency Law Changes
               ♦     Definitions
               ♦     Duties of Licensees Representing Clients
               ♦     Fines

AIDS Disclosure
          Background
          •     AIDS Disclosure
          •     Other Stigma

          Recommendations
Anti-Trust
             Background
             Recommendations
             •     Establishing the Commission Rate
             •     Perception vs. Realty
             •     Establishing Other Listing Policies
             •     Relations with Competitors
             •     Commission Splits
             •     Boycotts

             Addenda
             •    Sample Policy Statement

Arbitration/Compliance
            Background
            Recommendations

Employment/Office Policies
        Employment Laws
        •       Civil Rights Act of 1964
        •       Age Discrimination in Employment Act
        •       Americans with Disabilities Act
        •       Civil Rights of 1991
        •       Fair Labor Standards Act
        •       Equal Pay Act

             Sexual Harassment
             •     Policy
             •     Employer Liability
             •     How to Reduce Liability
             •     Suggested Broker Policy Statement

             The Employment Process
             •     Recruiting
             •     Advertisements
             •     Employment Applications
             •     Interviews
             •     Reference Checks
             •     Business Records
             •     Required Posters
          Independent Contractor vs. Employee
          •     Sample Agreement

          Real Estate Assistants

          Directing Commissions to a Corporation

          Addenda
          •    Technology Policies
               ♦     Improper Usage of E-mail
               ♦     No Right of Privacy with E-mail/Penalties
               ♦     Sexually Explicit Messages

Environmental Overview
         Background
         Recommendations on:
         •      Asbestos
         •      Formaldehyde Gas
         •      Lead
         •      Radon Gas
         •      Underground Storage Tanks (UST’s)
         •      Ground Water Contamination
         •      Elector-Magnetic Fields (EMF’s)
         •      Waste Disposal Sites

          Addenda
          •    Environmental Contacts
          •    Environmental Site Assessments
          •    Dry Cleaners
          •    Underground Storage Tanks (UST’s)

Fair Housing
          Background
          •     Fair Housing Laws that Apply to Brokers
                ♦      Federal
                ♦      State

          •     Conduct Prohibited by the Fair Housing Laws

          Recommendations
          •      Program for Compliance
          •      Guide to Developing Fair Housing Partnerships

          Addenda
          •    Frequently Asked Questions
          •    The Fair Housing Partnership Resolution
          •    Guidance for Use of the Model Affirmative Fair Housing
          •    Marketing Plan
          •    The Model Affirmative Fair Housing Marketing Plan
          •    Fair Housing Changes
               ♦      Enforcement by Private Persons

Louisiana Real Estate Commission Regulation Review
          Background & Recommendations On:
          •      Deposits
          •      Account Closing
          •      Maintaining Accounts
          •      Corporations & Partnerships
          •      Transfer of Trust Funds on Sale or Acquisition of Agency
          •      Commissions
          •      Handling of Real Estate Trust Funds
          •      Disbursement of Escrow Deposits
          •      Escrow Disbursement Order

          Addenda
          •    LREC Law Changes
               ♦    Post-Licensing
               ♦    Inactive Licensees

Property Condition Issues
          Lead Based Paint
          •      Background
          •      Recommendations
          •      Addenda
                 ♦      Frequently Asked Questions about Regulations
                 ♦      HUD/EPA Disclosure Regulations
                              Properties to Which the Requirements Apply
                              Effective Date
                              Obligation of Sellers, Lessors & Real Estate
                              Agents
                               Who is an Agent?
                               The Ten Day Testing Period
                               State & Local Requirements
                               Penalties
                               Record Keeping Requirements

                 ♦      Supplement to Lead Based Paint: A Guide to
                        Compliance
                              Resolved Issues
                              Unresolved Issues

           Wood Destroying Insect Report (WDIR)
           •    LPCA Issues New Guidelines
           •    General Information & Conditions Governing the WDIR
           •    Terms & Definitions
           •    Species Which May Infest Wood
           •    The New WDIR Form

           Addenda
           •    New Home Warranty Act Changes
           •    Louisiana Home Inspectors Licensing Law
           •    Formosan Termite Initiative

Property Taxes
          Frequently Asked Questions
          Important Dates
          Addenda
          •      Building Restrictions

Wetlands
           Background
           •     Wetlands Functions
           •     What is a Wetland?
           •     Why is it Necessary to Consider Wetlands?

           Recommendations
           •    Determining the Presence of Wetlands
           •    Section 404 Permits for Wetland Development
           •    Permitting Process Overview
                ♦      Permit Procedure in Louisiana
                ♦      Penalties
                ♦      How the Permit is Processed

         •      Louisiana Coastal Use Certification
                ♦      Limitations

         Addenda
         •    Wetlands Disclosure
         •    Addendum to Agreement to Purchase
         •    Sample Wetlands Determination Request Letter

Legal Hotline Summaries 1998-1999

Contact Index
          US Senators & Representatives
          State Offices
          Federal Agencies
          Related Associations
                       Agency Relationships
Background
      Overview of Agency Law
      Required Forms
      Timing for Disclosure
      Contracts

Recommendations
     Suggested Broker Policy
     General Office Policies
           Listing
           Selling
           Confidential Information
           Ministerial Acts

Addenda
     Changes to LREC Rules & Regulations
     The Agency Pamphlet
     Dual Agency Disclosure Form
     Agency Workbook Order Form
     Agency Law Changes
           Definitions
           Duties of Licensees Representing Clients
           Dual Agency
           Fines
Background:
        On March 1, 1998, the Louisiana real estate profession embarked on a new and
positive direction in which licensees conduct real estate business.

Overview of Agency Law
•   Designated agency is created, which means the real estate agent is working
    FOR the person they are working with in all types of real estate transactions.
•   Dual agency, where the same real estate agent represents both the buyer and
    the seller, is only allowed by informed written consent of all parties to the
    transaction.
•   Agency disclosure rules are simplified by requiring disclosure to be made in a
    form of a pamphlet prescribed by the Louisiana Real Estate Commission.
•   The agency law allows a buyer’s real estate agent work for and the represent the
    interests of the buyer even if the seller pays the commission.
•   Agency law protects clients from “vicarious liability” arising from the actions of the
    real estate agents they hire.

Required Forms
•   An agency disclosure informational pamphlet.
•   A dual agency disclosure form (when applicable).

Timing for Disclosure
      All disclosure informational pamphlets must be given to all clients when a licensee
engages in activities outside of ministerial acts.

Contracts
•   When a dual agency situation occurs, all parties must agree and sign an agency
    disclosure form before any transaction can occur.
•   Each office needs to establish set guidelines and procedures to ensure
    adherence to agency law.
Recommendations
Suggested Broker Policies

HB 98, The Agency Law, will require the following revisions to the listing agreement:

•   Delete the current seller agency disclosure language incorporated in listing
    agreements as required by chapter 34 section 3403 of LREC rules and
    regulations.
•   Devise a method to “designate” an agent within the office to work with each
    client.
•   In addition, agents will be required to provide an Agency Disclosure Pamphlet to
    each customer

General Office Policies on Agency

•   The Broker is adopting Designated Agency, as set forth in Louisiana Agency law,
    as the company agency policy.
•   A sales associate affiliated with the broker (__) may/(__) may not represent both
    the buyer and the seller as a disclosed dual agent in the same transaction.
•   It is the policy of this office that ever licensee read the agency law and become
    familiar with it.

A. Listings

    1. Inform the seller of our policy to provide a designated seller’s agent who will
       exclusively represent the seller in regard to the sale of the property. Advise the
       seller of the designated agency relationship that will exist unless there is a written
       agreement providing for a different brokerage relationship.

    2. Inform the seller that the sponsoring Broker may, when reasonably necessary,
       designate additional agents as legal agent for the seller. Inform the seller that in
       such event, seller will receive written notice thereof.

    3. Provide seller with the Disclosure Brochure and obtain appropriate signatures.

    4. Anyone from our office who sits an open house on behalf of a listing agent/seller (__)
       will / (__) will not be the additional designated agent of the seller.
   5. Inform the seller of our policy to allow the seller’s designated agent to represent both
      the seller and the buyer as a disclosed dual agent on same agent transaction (Delete
      this paragraph if not allowing dual agency).

   6. Advise seller of the Broker’s compensation and that Broker may share compensation
      with brokers who represent buyers.

   7. Obtain from the seller an executed listing contract that designates the seller’s agent.
      Proved seller with Dual Agency Disclosure and obtain seller’s informed written
      consent to be a dual agent.

   8. Inform seller that the sponsoring Broker is available to you for consultation and
      assistance. Inform seller that, as designated agent, you may disclose confidential
      information to the sponsoring Broker or other person specified by the sponsoring
      Broker for purposes of seeking assistance for the client’s benefit. The sponsoring
      Broker or such other person shall keep the information confidential.

   9. Inform seller that other sales associates within the Broker’s office will not be acting
      as legal agents of the seller but may act as a legal agent of the buyer who may
      ultimately purchase seller’s property.

   10. If a dual agency situation does arise, remind seller of his previous permission for
       dual agency and disclose any conflicts of interest that may affect the transaction.

   11. If the agent withdraws from dual agency, disclosure, in writing, of the existence of a
       referral fee must be given to both parties


B. Selling

   1. Broker will enter into a representation agreement with any buyer who wishes to be
      represented by a sales associate affiliated with Broker. The representation
      agreement will specify one or more sales associates affiliated with the broker as the
      buyer’s designated agent for the purpose of assisting buyer in the purchase of real
      estate.

   2. Provide buyer with the Disclosure Brochure and obtain appropriate signatures.
   3. Inform the buyer that the sponsoring Broker may, when reasonably necessary,
      designate additional agents as legal agent for the buyer. Inform the buyer that in
      such event, buyer will receive written notice thereof.

   4. Explain to the buyer that other agents in the office may potentially represent the
      seller – or other buyers who are in competition for the same property – and for this
      reason the buyer does not want to disclose confidential information to agents other
      than his or her designated agent.

   5. Inform buyer that the sponsoring Broker is available to you for consultation and
      assistance. Inform buyer that as designated agent you may disclose confidential
      information to the sponsoring Broker or other person specified by the sponsoring
      Broker for purposes of seeking assistance for the client’s benefit. The sponsoring
      Broker or such other person shall keep the information confidential.

   6. Inform the buyer of our policy to (__) allow / (__) not allow a designated agent for
      buyers and sellers in a same agent transaction to act as a disclosed dual agent and
      obtain buyer’s signature on Dual Agency Disclosure form.


   7. Explain to the buyer that the law allows for agents to show the same property to two
      buyer clients and that it is our policy to do so. When two buyer clients are interested
      in the same property the buyer agent (__) may / (__) may not write and negotiate
      offers from bother buyers.

C. Confidential Information

   1. Inform the client that his/her designated agent has a duty not to disclose confidential
      information relating to the client. Explain to the client that the duty not to disclose
      this information remains until the client authorizes its disclosure or until the
      information becomes public from another source or as long as law does not
      otherwise require the disclosure of the information.

   2. When acting as a seller’s designated agent, inform the seller that the law requires
      you to disclose to the buyer material information relating to the physical condition of
      the property that is not otherwise reasonably discoverable by a buyer.

   3. A designated agent should refrain from disclosing, disseminating or otherwise
      allowing confidential information of a client to be known by those who do not
      represent his or her client.
      a. No discussion of seller’s motives, pricing strategies, urgency or other confidential
         information shall be discussed in office meetings or at any other time in the office.

      b. No discussion of buyer’s qualifications, motivation or urgency, offers made or
         being negotiated shall be discussed in the office.

      c. Agents will inform their clients, or other appropriate parties (lenders, attorneys,
         etc.) not to FAX documents containing confidential information unless they call
         the agent first and the agent is available to retrieve the information in a manner
         sufficient to safeguard the confidentiality of the information.

      d. When posting information for the benefit of the office, no sales prices shall be
         sued where that information is to be seen by others.

      e. Our listing files (__) do / (__) do not contain confidential information (CMA, prior
         offers, etc.) and therefore (__) do / (__) do not need to be secured.

      f. All contract pending files will be secured; either by the administrative staff,
         available only to the designated agent; or by the designated agent themselves.

      g. Closed sales are public information as of the closing date and do not need to be
         secured.

   4. The designated agent or the sponsoring Broker or other person specified by the
      sponsoring Broker who learns confidential information relating to a client during the
      term of a brokerage agreement may not use such information for his or her own
      personal gain.

D. Ministerial Acts

   1. The law considers you to be the legal agent of the party for whom you are working.
      However, in some limited circumstances, the agency law allows a licensee to
      perform certain acts on behalf of a consumer and not be considered the customer’s
      agent.

   2. The agent should provide the consumer with the Disclosure Brochure and obtain
      appropriate signatures.

   3. If the circumstances are such that the consumer either does not need, does not
      seek, or the licensee cannot give representation, and determination should be made
      as to whether ministerial acts can be performed.
4. The agent must disclose to a customer that when performing ministerial acts the
   licensee is not acting as the agent of the customer, by providing the customer with
   written disclosure. This disclosure should be made at a time intended to prevent
   disclosure of confidential information from a customer to the licensee performing
   ministerial acts.
    Changes to LREC Rules and Regulations
    (http://la.realtorplace.com/lrec/rulesandregs/lrecrules/)

Chapter 1. Authority
§101.   Adoption

        A.         The rules and regulations of the Louisiana Real Estate Commission contained herein have been adopted

                   pursuant to and in compliance with R.S. 37:1431 et seq., and any violation of these rules or regulations, or of

                   any real estate licensing law, shall be sufficient cause for any disciplinary action permitted by law.

        AUTHORITY NOTE:                Promulgated in accordance with R.S. 37:1431 et seq.

        HISTORICAL NOTE:               Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                       26:



Chapter 3. Applications for Initial Licenses
§301.   Application

        A.         Every application must be fully completed, notarized and accompanied by the prescribed fees.

        B.         Every initial applicant for a salesperson license must provide an affidavit signed by the sponsoring broker at

                   the time the application is submitted; or

                   1. The salesperson applicant may provide the affidavit signed by the sponsoring broker prior to issuance of

                   the license.

                   2. Upon passing the licensing examination the applicant must, within ninety days, submit to the Commission

                   a statement of sponsorship signed by a licensed real estate broker acknowledging that the broker will serve

                   as the applicant’s sponsoring broker. The Commission, at its discretion, may extend the ninety day period

                   upon a showing that factors beyond the control of the applicant warrants such an extension.

        AUTHORITY NOTE:                Promulgated in accordance with R.S. 37:1431 et seq.

        HISTORICAL NOTE:               Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                       26:

§303.   Broker and Salesperson License Applications

        A. Every applicant for licensing as an individual real estate broker or salesperson shall include with their application

        the following:
          1. Proof of completion of the required real estate educational hours from a real estate school holding a

          certificate of authority from the Commission or certificates or university transcripts indicating completion of

          courses which have been approved by the Commission. Effective January 1, 2000, only those prelicensing

          educational courses completed during the five year period immediately preceding the date of initial

          application for a real estate salesperson or broker license will be granted full credit by the Commission. Real

          estate prelicensing course work completed by an applicant prior to the five year period immediately

          preceding the date of initial application for a salesperson or broker license may be considered by the

          Commission for partial credit toward the initial prelicensing requirement. Any partial credit granted will be

          based on the date(s) of course completion and the applicability of course content to current prelicensing

          requirements. The Commission may accept approved real estate course work obtained in other jurisdictions

          toward fulfillment of prelicensing salesperson and/or broker educational hours. Real estate course work

          obtained from nationally recognized institutes may also apply toward fulfillment of broker prelicensing hours.

          The applicant must apply for and receive approval of such course work from the Commission prior to

          submitting the initial licensing application. Every applicant for a Louisiana real estate license must complete

          an approved course of study consisting of at least thirty classroom hours of course work. Such course work

          shall include study of the Louisiana Real Estate License Law, Commission Rules and Regulations and

          Louisiana Civil Law relating to real estate and any other courses the Commission deems necessary and

          appropriate;

          2. License verification history from each jurisdiction where the applicant has held or currently holds a real

          estate license as a broker or salesperson;

          3. Verification of passing an equivalent real estate licensing examination within the five year period

          immediately preceding the date of application if the applicant is requesting a waiver of the national portion of

          the licensing examination.

B. Every application for a corporation, partnership or limited liability broker’s license shall be submitted by the

qualifying broker designated by the corporation, partnership or limited liability company on a fully completed, notarized

application accompanied by the prescribed fees and the following documents:

          1. Copy of the resolution or other document executed by a principal of the corporation, partnership or limited

          liability company designating the individual real estate broker as its qualifying broker;
                  2. Notarized Affidavit of the Qualifying Broker;

                  3. Copy of the Registration Certificate issued by the Secretary of State;

                  4. Copy of any registration issued by the Secretary of State for any trade name or trade mark to be used by

                  the corporation, partnership or limited liability company in its real estate business activities as a licensee.

        AUTHORITY NOTE:                  Promulgated in accordance with R.S. 37:1431 et seq.

        HISTORICAL NOTE:                 Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                         26:



Chapter 5. Examinations
§501.   Examination Procedure

        A.        Each applicant for a real estate license examination must submit an application to the Commission for a

                  determination of eligibility to take the applicable licensing examination. The responsibility for timely

                  submission of initial licensing applications rests solely with each individual applicant.

        B.        Upon a determination by the Commission that the applicant is eligible to take the licensing examination, an

                  examination authorization will be issued to the applicant. The authorization will be valid for one examination

                  which must be completed within a period of ninety days of issuance. If the applicant does not take the

                  examination within the ninety day period, the applicant must apply to the Commission and receive a new

                  examination authorization prior to scheduling an appointment to take the licensing examination.

        C.        Upon receipt of the examination authorization from the Commission, the applicant is solely responsible for

                  contacting the Commission’s designated national testing service to arrange for an appointment to take the

                  examination.

        D.        Each examination applicant must comply with all examination procedures established by the Commission

                  and its designated national testing service. These procedures will be contained in a licensing information

                  bulletin provided to each applicant with the initial licensing application packet.

        AUTHORITY NOTE:                  Promulgated in accordance with R.S. 37:1431 et seq.

        HISTORICAL NOTE:                 Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                         26:

§503.   Disqualification of Applicants
        A.        Any action by an applicant to use, or attempt to use, to obtain, or attempt to obtain, to supply to others, or

                  attempt to supply to others, specific information on copyrighted test questions appearing on any qualifying

                  examination administered under the jurisdiction of the Commission shall be grounds for denial of a license.

        AUTHORITY NOTE:                Promulgated in accordance with R.S. 37:1431 et seq.

        HISTORICAL NOTE:               Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                       26:

§505.   Prohibited Activities

        A.        Licensees, certificate holders, registrants, and persons employed by or associated with a licensee, certificate

                  holder, registrant, school owner or school director, shall not obtain or attempt to obtain by deceptive or

                  fraudulent means any copyrighted test questions and/or confidential test material used by or belonging to any

                  national testing service under current or expired contract with the Commission for administration of its

                  licensing and certification examinations.

        AUTHORITY NOTE:                Promulgated in accordance with R.S. 37:1431 et seq.

        HISTORICAL NOTE:               Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                       26:

§507.   Failure of Examination

        A.        Any applicant who takes and fails to pass the initial examination may apply to retake the examination by

                  submitting to the Commission a copy of the fail notice and a new examination processing fee within ninety

                  days of the date of failure. Failure to reapply for an examination within the ninety day period will result in

                  closure of the applicant’s file and forfeiture of all fees. Thereafter, the applicant will be required to submit a

                  new application and remit all prescribed fees to be eligible for the licensing examination. The Commission,

                  at its discretion, may extend the ninety day retake period upon a showing that factors beyond the control of

                  the applicant warrant such an extension.

        B.        The failing applicant may continue to retake the examination for a period of one year from the initial

                  examination date, provided the applicant follows the retake procedures as specified in Section 507 of this

                  Chapter. Failure of the applicant to achieve a passing score on both the national and state portions of the

                  licensing examination within the one year period will result in the loss of examination eligibility. The applicant
                  will not be eligible to again apply for the licensing examination until six months after the date of the loss of

                  examination eligibility.

        AUTHORITY NOTE:                  Promulgated in accordance with R.S. 37:1431 et seq.

        HISTORICAL NOTE:                 Promulgated by the Department of Economic Development, Real Estate Commission, LR

26:

§509.   Partial Failure of Examination

        A.        Any applicant who takes an examination and passes only the national or state portion of the examination

                  shall be required to retake only the failed portion. The applicant’s passing score on the passed portion of the

                  examination will be valid for a period of one year from the date of passage. The applicant may apply to

                  retake the failed portion by submitting to the Commission a copy of the fail notice and a new examination

                  processing fee within ninety days from the date of failure. Failure to reapply for an examination within the

                  ninety day period will result in closure of the applicant’s file and forfeiture of all fees. Thereafter, the

                  applicant will be required to submit a new application and remit all prescribed fees to be eligible for the

                  licensing examination. The Commission, at its discretion, may extend the ninety day retake period upon a

                  showing that factors beyond the control of the applicant warrant such an extension.

        B.        Failure of the applicant to achieve a passing result on both portions of the examination within a one year

                  period of the initial examination date will result in the loss of examination eligibility. The applicant will not be

                  eligible to again apply for the licensing examination until six months after the date of the loss of examination

                  eligibility.

        AUTHORITY NOTE:                  Promulgated in accordance with R.S. 37:1431 et seq.

        HISTORICAL NOTE:                 Promulgated by the Department of Economic Development, Real Estate Commission, LR

26:

§511.   Examination Requirement for Out-of-State Applicants

        A.        Any applicant for a Louisiana real estate license who was previously or is currently licensed in another

                  jurisdiction as a real estate salesperson or broker shall be required to take and pass only the state portion of

                  the examination, upon a showing by the applicant that the applicant has passed, within five years of applying

                  for licensing in Louisiana, an equivalent examination in another jurisdiction.

        AUTHORITY NOTE:                  Promulgated in accordance with R.S. 37:1431 et seq.
        HISTORICAL NOTE:               Promulgated by the Department of Economic Development, Real Estate Commission, LR

26:


Chapter 7. Fees
§701.   Refund of Fees

        A.        Except as otherwise provided in these rules and regulations all fees submitted to the Commission are

                  nonrefundable.

        AUTHORITY NOTE:                Promulgated in accordance with R.S. 37:1431 et seq.

        HISTORICAL NOTE:               Promulgated by the Department of Economic Development, Real Estate Commission, LR

26:

§703.   Duration of Fees for Licenses, Certificates and Registrations

        A.        Fees shall cover a period of one calendar year and shall not be prorated.

        AUTHORITY NOTE:                Promulgated in accordance with R.S. 37:1431 et seq.

        HISTORICAL NOTE:               Promulgated by the Department of Economic Development, Real Estate Commission, LR

26:

§705.   Returned Checks

        A.        Payment of any fee with a check which is returned by a financial institution wherein the reason for not paying

                  the check is not a fault of the financial institution shall be grounds for cancellation of the transaction for which

                  the fee was submitted and/or the suspension or revocation of a license, registration or certificate.

        B.        Persons issuing checks to the Commission which are returned by financial institutions for any reason will be

                  notified of the return of the check by certified mail to the address registered by that person with the

                  Commission. Within 10 days from the mailing of the notification, the person issuing the check will remit a

                  certified check, cashier's check or money order payable to the Louisiana Real Estate Commission in the

                  amount of the returned check plus a $25.00 processing fee.

        AUTHORITY NOTE:                Promulgated in accordance with R.S. 37:1431 et seq.

        HISTORICAL NOTE:               Promulgated by the Department of Economic Development, Real Estate Commission, LR

26:



Chapter 9. Renewal Applications
§901.   Timely Renewal of Licenses, Registrations and Certificates
         A.       The responsibility for the timely submission of renewal applications and the payment of the required fees

                  rests solely with each individual licensee, registrant and certificate holder.

         AUTHORITY NOTE:               Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:              Promulgated by the Department of Economic Development, Real Estate Commission, LR

26:

§903.    Non-Renewal of Real Estate Licenses

         A.       No real estate license shall be issued to any associate broker or salesperson until the individual real estate

                  broker license of their sponsoring broker, or, if sponsored by a designated qualifying broker, the corporate,

                  partnership, or limited liability company broker’s license of their sponsoring designated qualifying broker has

                  been renewed.

         AUTHORITY NOTE:               Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:              Promulgated by the Department of Economic Development, Real Estate Commission, LR

26:

§905.    Renewal Application

         A.       A salesperson or associate broker renewal application must be signed by a sponsoring broker.

         AUTHORITY NOTE:               Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:              Promulgated by the Department of Economic Development, Real Estate Commission, LR

26:

§907. Continuing Education Required for Renewal

         A.       The active license of an individual real estate broker or salesperson shall not be renewed unless the broker

                  or salesperson has completed eight hours of approved continuing education course work during the

                  immediately preceding license period. Course work submitted by delinquent renewal applicants may either

                  be obtained in the preceding license period or prior to submission of the delinquent renewal application to the

                  Commission.

         B.       Beginning January 1, 2001, except for purposes of compliance with the Americans with Disabilities Act (ADA)

                  or other similar extenuating circumstances determined by the Commission, correspondence study courses

                  shall not be accepted toward fulfillment of the four hours in mandatory continuing education subjects
                   specified by the Commission unless said courses are certified by the Association of Real Estate License Law

                   Officials (ARELLO) for distance learning purposes.

         AUTHORITY NOTE:                Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:               Promulgated by the Department of Economic Development, Real Estate Commission, LR

26:


Chapter 11. Delinquent Renewal
§1101.   Application for Delinquent Renewal

         A.        Applications for delinquent renewal of broker's or salesperson's licenses and applications for delinquent

                   renewal of timeshare sales registrations shall be accepted by the Commission only during the six-month

                   period immediately following the last December 31 date on which the applicant held a valid license or

                   registration.

         AUTHORITY NOTE:                Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:               Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                        26:

§1103.   Loss of Renewal Eligibility

         A.        Licensees and timeshare sales registrants who fail to renew a real estate license or timeshare sales

                   registration during the six-month delinquent period following the expiration of a license or registration shall

                   apply as and meet all requirements of initial applicants.

         AUTHORITY NOTE:                Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:               Promulgated by the Department of Economic Development, Real Estate Commission, LR

26:


Chapter 13. Broker Affiliation
§1301.   Associate Broker

         A.        A licensed individual real estate broker may become exclusively affiliated as an associate broker with a

                   sponsoring broker.

         AUTHORITY NOTE:                Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:               Promulgated by the Department of Economic Development, Real Estate Commission, LR

26:
§1303.   Notification by Broker Applicants

         A.        Any applicant for licensing as an individual real estate broker who elects, if and when licensed, to become

                   exclusively affiliated with a sponsoring broker shall notify the Commission in writing of the name of the

                   sponsoring broker prior to the issuance of the license. When the applicant is qualified for licensing as a

                   broker, the Commission shall inscribe the name of the sponsoring broker on the license and issue the license

                   to the sponsoring broker.

         AUTHORITY NOTE:               Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:              Promulgated by the Department of Economic Development, Real Estate Commission, LR

26:

§1305.   Notification by Individual Real Estate Broker

         A.        Any individual real estate broker who elects to become exclusively affiliated with a sponsoring broker shall

                   notify the Commission in writing prior to beginning such a relationship and provide the name of the

                   sponsoring broker and the effective date of the relationship. The notification shall be accompanied by the

                   broker's license and the transfer fee. The Commission shall inscribe the name of the sponsoring broker on

                   the license and issue the license to the sponsoring broker.

         AUTHORITY NOTE:               Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:              Promulgated by the Department of Economic Development, Real Estate Commission, LR

26:

§1307.   Escrow Accounts Prohibited

         A.        Any broker who is exclusively affiliated with a sponsoring broker is prohibited from maintaining a sales

                   escrow checking account, rental trust escrow checking account or security deposit trust checking account

                   except as authorized in Chapter 27. All funds received by the associate broker in real estate transactions of

                   any nature will be placed in the custody of the sponsoring broker.

         B.        Associate brokers who were licensed as individual real estate brokers and who maintained sales escrow

                   checking accounts, rental trust escrow checking accounts or security deposit trust checking accounts prior to

                   affiliating with a sponsoring broker may continue to maintain those accounts for the limited and specific

                   purpose of completing pending transactions, as authorized by Chapter 27.

         AUTHORITY NOTE:               Promulgated in accordance with R.S. 37:1431 et seq.
         HISTORICAL NOTE:                Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                         26:



Chapter 15. Transfers and Terminations
§1501.   Transfers

         A.          The transfer of the real estate license of a salesperson or an associate broker in the active status, or the

                     termination of sponsorship of a salesperson or associate broker, will be accomplished by completing a

                     transfer form prescribed by the Commission and paying any required fees.

         B.          The sponsoring broker shall return the license of the salesperson or associate broker to the Commission

                     within five days of the date of execution of the transfer form.

         AUTHORITY NOTE:                 Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:                Promulgated by the Department of Economic Development, Real Estate Commission, LR

26:

§1503.   Exemption from Transfer Fee

         A.          No transfer fee or delinquent renewal fee shall be charged to an associate broker or salesperson who applies

                     for transfer or change of status within sixty days of any of the following circumstances:

                     1.        when the sponsoring broker has died;

                     2.        when the sponsoring broker has failed to renew his license;

                     3.        when the sponsoring broker’s license has been suspended or revoked;

                     4.        when the sponsoring broker’s license is transferred to the inactive status;

                     5.        when the sponsoring broker elects to discontinue the sponsorship of a licensee.

         AUTHORITY NOTE:                 Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:                Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                         26:

§1505.   Transfers on Acquisition or Purchase of Licensed Agencies

         A.          When a licensed agency is purchased or otherwise acquired by another licensed agency, the sponsoring or

                     qualifying broker of the acquiring agency will notify the Commission in writing not later than the second

                     working day following the date of acquisition.
B.   The notification to the Commission will specify the date of acquisition and request the transfer of all licensees

     sponsored by the agency being acquired to the acquiring agency and shall certify continuous errors and

     omissions insurance coverage of all licensees being transferred to the acquiring agency. If the transfer of

     licensees necessitates the payment of fees to the Commission for coverage under the Commission group

     policy, a listing of all licensees to be covered under the policy and a check in payment of the required fees

     will accompany the notification

C.   On receipt of the written notification the licenses of all associate brokers and salespersons will be transferred

     by the Commission to the acquiring agency under the sponsorship of the sponsoring or qualifying broker of

     the acquiring agency, with the effective date of transfer being the date of acquisition as specified in the

     written notice of acquisition.

D.   The sponsoring or qualifying broker of the acquiring agency shall, within two working days following the date

     of acquisition, give written notice to all licensees transferred to the acquiring agency in connection with the

     acquisition.

E.   Associate brokers or salespersons who do not elect to remain with the acquiring agency shall within five days

     after notification advise the sponsoring or qualifying broker of the acquiring agency and request the return of

     their licenses to the Commission. Transfers to a new sponsoring broker will be accomplished in accordance

     with the provisions of this Chapter.

F.   The transfer of the licenses of associate brokers or salespersons who will be terminated by the sponsoring or

     qualifying broker of the acquiring agency will be accomplished in accordance with the provisions of this

     Chapter.

G.   Not later than fifteen days following the date of acquisition, the sponsoring or qualifying broker of the

     acquiring agency will advise the Commission in writing of the status of all licensees formerly sponsored by

     the acquired agency.

     1. The notification will include a listing by category which identifies:

                a.        Each associate broker or salesperson who requested the return of their license to the

                          Commission;

                b.        Each associate broker or salesperson who is being terminated by the acquiring agency;

                          and
                            c.         Each associate broker or salesperson who has elected to remain with the acquiring

                                       agency.

                  2.        The notification will include:



                            a.         The licenses of each associate broker or salesperson who will not remain with the

                                       acquiring agency;

                            b.         Copies of the written notification to and/or from each associate broker and salesperson

                                       as required by this Chapter;

                            c.         A check from the acquiring agency in payment of the appropriate transfer fee for each

                                       licensee who was sponsored by the agency being acquired and who will remain with the

                                       acquiring agency.

         AUTHORITY NOTE:               Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:              Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                       26:

§1507.   Change of Licensing Status

         A.       Individual real estate brokers and salespersons may transfer from active to inactive status or from inactive to

                  active status by completing a transfer form prescribed by the Commission, satisfying the requirements set

                  forth in the Louisiana Real Estate License Law and Rules and Regulations of the Commission, and paying

                  any required fees.

         B.       Corporate, partnership and limited liability company real estate broker’s licenses shall remain in the active

                  license status.

         AUTHORITY NOTE:               Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:              Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                       26:



Chapter 17. Termination Responsibilities
§1701.   Relinquishment of Business Related Property

         A.       Upon termination of a license’s relationship with a sponsoring broker, every salesperson or associate broker

                  shall immediately turn over to the sponsoring broker all business related property obtained from or provided
                  by the sponsoring broker or agency, to include keys to any and all properties listed with the broker whether

                  such keys were provided by the broker or obtained by the licensee during the business relationship.

         AUTHORITY NOTE:              Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:             Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                      26:

§1703.   Relinquishment of Business Related Data

         A.       Upon termination of a business relationship with a sponsoring broker, every salesperson or associate broker

                  shall immediately turn over to the sponsoring broker all listing information, contracts, agency forms, and other

                  business or agency related information, data, or documents obtained from or provided by the sponsoring

                  broker or agency for use by the licensee during the business relationship.

         AUTHORITY NOTE:              Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:             Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                      26:

§1705.   Personal Obligations

         A.       The responsibility for settlement of matters pertaining to financial obligations resulting from the business

                  relationship, including the payment of commissions and dues to professional organizations, rests solely with

                  the parties to the relationship. Any disputes resulting therefrom should be properly addressed through civil

                  litigation.

         AUTHORITY NOTE:              Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:             Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                      26:

§1707.   Report of Alleged Failure

         A.       Any sponsoring broker who alleges failure to comply with §1701 or §1703 of this Chapter by a formerly

                  sponsored salesperson or associate broker shall submit a signed and documented report of such failure at

                  the time the license is returned to the Commission, and provide a copy of the report to the former licensee.

                  The report shall specifically list and identify the business related property or data not relinquished by the

                  formerly sponsored licensee and the signed report shall constitute a written complaint filed with the

                  Commission.
         AUTHORITY NOTE:              Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:             Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                      26:

Chapter 19. Names on Licenses, Registrations, and Certificates; Trade names;
Symbols; and Trademarks
§1901.   Names on Licenses, Registrations and Certificates

         A.       All licenses, registrations and certificates issued by the Louisiana Real Estate Commission will be issued in

                  the name of the legal entity of the applicant.

                  1.        Licenses, registrations and certificates issued to individual real estate brokers, real estate

                            salespersons, timeshare registrants, and real estate school instructors will be issued in the name of

                            the individual person.

                  2.        Licenses, registrations and certificates issued to any corporation, partnership or limited liability

                            company for any purpose will be issued in the identical name of the corporation, partnership or

                            limited liability company as registered with the Secretary of State. No license, registration or

                            certificate will be issued to any corporation, partnership, or limited liability company not registered

                            with the Secretary of State.

                  3.        The name of any broker or salesperson whose real estate license has been revoked by the

                            Commission, with the revocation becoming final and effective on or after February 1, 1995, which

                            in any way represents that the former broker or salesperson is licensed by the Commission to

                            conduct real estate activities requiring licensing in Louisiana, shall not be utilized on any license

                            issued by the Commission.

         AUTHORITY NOTE:              Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:             Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                      26:

§1903.   Trade names

         A.       Licenses, registrations and certificates issued by the Commission will not indicate a trade name of the

                  licensee, registrant or certificate holder unless the trade name is registered with the Secretary of State and a

                  copy of the registration is on file at the Commission.

         AUTHORITY NOTE:              Promulgated in accordance with R.S. 37:1431 et seq.
         HISTORICAL NOTE:             Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                      26:

§1905.   Symbols and Trademarks

         A.       Licensees, registrants and certificate holders are prohibited from using any symbol or trademark in

                  connection with any license, registration or certificate issued by the Commission without first registering the

                  symbol or trademark with the Secretary of State and placing a copy of the registration on file at the

                  Commission.

         AUTHORITY NOTE:              Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:             Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                      26:



Chapter 21. Concurrent Licensing
§2101.   Broker and Salesperson Licenses

         A.       A broker may conduct real estate activity as an individual real estate broker and concurrently be designated

                  as the qualifying broker of one or more corporations, limited liability companies and/or partnerships.

         B.       Associate brokers and salespersons shall not be sponsored by more than one sponsoring broker.

         C.       Licenses as brokers or salespersons, or a registration as a timeshare interest salesperson shall not be

                  issued to or held concurrently by any person. Brokers may not concurrently conduct real estate activities as

                  an individual real estate broker and as an associate broker exclusively affiliated with another real estate

                  broker.

         AUTHORITY NOTE:              Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:             Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                      26:



Chapter 23. Branch Offices
§2301.   Branch Office

         A.       An office located at other than the registered address of a sponsoring or qualifying broker which has been

                  established by the broker or a licensee sponsored by the broker for conducting any real estate activity
                  requiring licensing as a broker or salesperson and which in any way advertises the name of the broker or

                  broker’s company or the telephone number of the licensed broker shall be considered to be a branch office.

         AUTHORITY NOTE:              Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:             Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                      26:


Chapter 25. Advertising
§2501.   Advertisements

         A.       Any advertisement involving the sale, lease or management of real estate by any licensee shall include the

                  name and telephone number of the licensed real estate broker, and may include the name and telephone

                  number of a salesperson or associate broker sponsored by the broker.

         AUTHORITY NOTE:              Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:             Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                      26:

§2503.   Owner Authorization

         A.       No broker or licensee sponsored by said broker shall in any way advertise property belonging to other

                  persons as being for sale or rent or place a sign on any such property offering the property for sale or rent

                  without first obtaining the written authorization to do so by all owners of the property or their authorized

                  attorney in fact.

         AUTHORITY NOTE:              Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:             Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                      26:

§2505.   Accuracy in Advertising

         A.       All advertising shall be an accurate representation of the property advertised. No broker or licensee

                  sponsored by said broker shall use advertising which is misleading or inaccurate or in any way misrepresents

                  any property, terms, value, policies, or services of the business conducted. The advertising shall not include

                  any name or trade name of any franchiser or real estate organization or association of which the licensee is

                  not a member or franchisee.

         AUTHORITY NOTE:              Promulgated in accordance with R.S. 37:1431 et seq.
         HISTORICAL NOTE:              Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                       26:

§2507.   Advertisements of Residential Property

         A.       All printed advertisements for the sale or lease of residential real estate shall indicate the month and year the

                  advertisement is printed, published, or distributed. Advertisements printed or published in newspapers, real

                  estate trade publications and commercial magazines and brochures bearing an issue or publication date will

                  be considered in compliance with this Section.

         AUTHORITY NOTE:               Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:              Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                       26:

§2509.   Advertisements by Franchise Organizations

         A.       Any licensed broker or salesperson affiliated with a franchise organization must disclose to the public that the

                  real estate brokerage firm is independently owned and operated in all advertising.

         AUTHORITY NOTE:               Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:              Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                       26:

§2511.   Agent Owner-Licensed Agent

         A.       A licensed broker or salesperson who offers property in which he or she owns any interest as being for sale

                  or rent shall state in any advertising, and on any sign placed on the property, that he or she is a licensed real

                  estate agent.

         B.       Any licensed broker or salesperson who advertises, or offers to purchase or rent property for his or her own

                  full or partial interest shall state in any advertisement that he or she is a licensed real estate agent.

         C.       Including the term "licensed real estate agent" in any advertisement or on any sign shall be sufficient to

                  satisfy this requirement.

         D.       This Section is not applicable to the sale, rental, or acquisition of property by licensees under a contractual

                  agreement with a licensed Louisiana real estate broker.

         AUTHORITY NOTE:               Promulgated in accordance with R.S. 37:1431 et seq.
         HISTORICAL NOTE:               Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                        26:

§2513.   Appraisals

         A.       No licensee shall offer or advertise any appraisal service to the public in any manner which would create the

                  impression of the licensee being a state certified real estate appraiser unless the licensee has been certified

                  as such in accordance with R.S. 37:3406. Licensees who have not been certified as state certified real estate

                  appraisers shall not describe or refer to any appraisal or other evaluation of real estate located in this state

                  by the term "state certified."

         AUTHORITY NOTE:                Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:               Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                        26:

§2515. Internet Advertising

         A.       A real estate broker advertising or marketing on a site on the Internet must include the following data on each

                  page of the site on which the advertisement appears:

                  1.          The broker’s name as registered with the Commission;

                  2.          The city, state and country in which the broker’s main office is located;

                  3.          The regulatory jurisdiction(s) in which the broker holds a real estate brokerage license.

         B.       A real estate broker using any Internet electronic communication for advertising or marketing, including but

                  not limited to, e-mail, e-mail discussion groups, and bulletin boards, must include the following data on the

                  first or last page of all communications:

                  1.          The broker’s name as registered with the Commission;

                  2.          The city, state and country in which the broker’s main office is located;

                  3.          The regulatory jurisdiction(s) in which the broker holds a real estate brokerage license.

         C.       An associate broker or salesperson advertising or marketing on a site on the Internet must include the

                  following data on each page of the site on which the licensee’s advertisement or information appears:

                  1.          The associate broker’s or salesperson’s name;

                  2.          The name of the licensee’s sponsoring broker as the name is registered with the Commission;

                  3.          The city, state and country in which the sponsoring broker’s main office is located;
                   4.        The regulatory jurisdiction(s) in which the associate broker or salesperson holds a real estate

                             license.

         D.        An associate broker or salesperson using any Internet electronic communication for advertising or marketing,

                   including but not limited to e-mail, e-mail discussion groups, and bulletin boards, must include the following

                   data on the first or last page of all communications:

                   1.        The associate broker’s or salesperson’s name;

                   2.        The name of the licensee’s sponsoring broker as the name is registered with the Commission;

                   3.        The city, state and country in which the sponsoring broker’s main office is located;

                   4.        The regulatory jurisdiction(s) in which the associate broker or salesperson holds a real estate

                             license.

         AUTHORITY NOTE:                Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:               Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                        26:


Chapter 27. Escrow and Trust Account
§2701.   Sales Escrow Checking Account

         A.        Each resident broker who accepts any monies on behalf of a client in connection with the sale of real estate

         shall open and maintain a sales escrow checking account in a financial institution in the state of Louisiana. All sales

         escrow accounts shall be titled in the identical wording as stated on the broker's license and the wording "Sales

         Escrow Account" shall be imprinted on all checks and bank statements issued in connection with this account. Except

         as otherwise provided in this chapter, all monies received by a broker in connection with the sale of real estate shall be

         deposited in this account.

         AUTHORITY NOTE:                Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:               Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                        26:

§2703.   Rental Trust Checking Accounts

         A.        Each resident broker engaged in the collection of rental payments on behalf of clients shall open and

                   maintain a rental trust checking account in a financial institution in the state of Louisiana. All rental trust

                   accounts shall be titled in the identical wording as stated on the broker's license and the wording "Rental
                   Trust Account" shall be imprinted on all checks and bank statements issued in connection with this account.

                   Except as otherwise provided in this Chapter, all monies collected as rental payments from or on behalf of

                   clients shall be deposited into this account.

         AUTHORITY NOTE:                Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:               Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                        26:

§2705.   Security Deposit Trust Checking Account

         A.        Each resident broker engaged in the collection of rental security or damage deposits in connection with

                   property management activities on behalf of clients shall open a security deposit trust checking account in a

                   financial institution in the state of Louisiana. All security deposit trust accounts shall be titled in the identical

                   wording as stated on the broker's license and the wording "Security Deposit Trust Account" shall be

                   imprinted on all checks and bank statements issued in connection with this account. Except as otherwise

                   provided in this Chapter, all monies collected as rental security deposits from or on behalf of clients shall be

                   deposited into this account.

         AUTHORITY NOTE:                Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:               Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                        26:

§2707.   Account Affidavit

         A.        When requested to do so by Commission personnel, a broker shall execute and submit to the Commission

                   an affidavit attesting to the existence, location and account number of a sales escrow checking account,

                   rental trust checking account, or security deposit trust checking account, and authorizing and empowering

                   the Commission or its representatives to examine, inspect, and/or copy the records of the account. All such

                   affidavits shall be submitted to and received by the Commission within five days following such a request.

         AUTHORITY NOTE:                Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:               Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                        26:

§2709.   Non-Resident Brokers
         A.       Each non-resident broker shall open and maintain sales escrow checking accounts, rental trust checking

                  accounts and security deposit trust checking accounts as specified for resident brokers. The accounts may

                  be opened and maintained at a financial institution in the state of Louisiana or in a financial institution in the

                  state in which they reside.

         AUTHORITY NOTE:               Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:              Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                       26:

§2711.   Branch Office Accounts

         A.       A broker may open additional sales escrow checking accounts, rental trust checking accounts, and security

                  deposit trust checking accounts to accommodate business transacted out of the branch offices.

         AUTHORITY NOTE:               Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:              Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                       26:

§2713. Signatory Rights on Checking Accounts

         A.       An individual real estate broker who maintains a sales escrow checking account, a rental trust checking

                  account or a security trust checking account shall be an authorized signatory on each account maintained

                  and the individual real estate broker shall be responsible for the proper maintenance and disbursal of the

                  funds in the accounts. Granting authority to sponsored licenses and/or employees of the broker to sign

                  checks on the accounts does not relieve the individual real estate broker of this responsibility.

         B.       The qualifying broker of a licensed corporation, partnership or limited liability company shall be an authorized

                  signatory on sales escrow checking accounts, rental trust checking accounts and security deposit trust

                  checking accounts maintained by the licensed entity and the qualifying broker shall be responsible for the

                  proper maintenance and disbursal of the funds in the accounts. Granting authority to sponsored licensees,

                  principals and/or employees of the licensed entity does not relieve the qualifying broker of this responsibility.

         AUTHORITY NOTE:               Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:              Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                       26:

§2715.   Additional Accounts
         A.        Where the interest of the principal parties to a particular transaction or series of transactions would be served

                   thereby, and with the prior written consent of the principal parties, a broker may open an additional sales

                   escrow checking account, rental trust checking account or security deposit trust checking account in any

                   financial institution in the state of Louisiana or the state in which a non-resident broker resides and deposit

                   therein all monies received in trust on behalf of those parties pursuant to that particular transaction or series

                   of transactions.

         AUTHORITY NOTE:                Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:               Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                        26:

§2717.   Non-Interest Bearing Checking Accounts

         A.        Every sales escrow checking account, rental trust checking account or security deposit trust checking

account shall be opened as a non-interest bearing checking account unless all parties having an interest in the funds to be

deposited therein have agreed otherwise in writing.

         AUTHORITY NOTE:                Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:               Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                        26:

§2719.   Personal Funds in Escrow and Trust Checking Accounts

         A.        A sum not to exceed $2500.00 may be kept in each sales escrow checking account, rental trust checking

                   account, and security deposit trust checking account, which sum shall be specifically identified and deposited

                   to cover bank service charges relating to the accounts.

         B.        A broker may, in connection with property management activities, keep funds in excess of $2500.00 in a

                   rental trust checking account for the temporary, limited and specific purpose of enabling the broker to satisfy

                   financial obligations for or on behalf of clients.

         AUTHORITY NOTE:                Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:               Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                        26:

§2721.   Withdrawal
A.   No monies received and deposited into a sales escrow checking account, rental trust checking account, or

     security deposit trust checking account shall be withdrawn for any purposes except:

     1.       Upon mutual written consent of all parties having an interest in the funds;

     2.       Upon Commission order;

     3.       Upon court order;

     4.       For the purpose of depositing monies into the registry of the court in a concursus proceeding;

     5.       For the purposes of depositing the funds with the Commission pursuant to Chapter 29;

     6.       To disburse funds from a sales escrow checking account to the appropriate party upon a

              reasonable interpretation of a contract for the sale of real estate;

     7.       For the purpose of returning the funds to a buyer at the time of closing;

     8.       To cover the payment of service charges on sales escrow checking accounts, rental trust checking

              accounts, and security deposit trust checking accounts with such payment being made from funds

              deposited into the accounts by the broker;

     9.       Upon approval by the Commission in connection with the sale or acquisition of a licensed entity;

              and

     10.      To comply with the provisions of R.S. 9:3251 or any other state or federal statute governing the

              transfer of rents, security deposits or other escrow funds.
         AUTHORITY NOTE:                Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:               Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                        26:

§2723.   Deposits

         A.         Any money received in connection with a real estate transaction involving the sale, lease or management of

                    real estate shall be deposited into the appropriate sales escrow checking account, rental trust checking

                    account or security deposit trust checking account of the listing or managing broker unless all parties having

                    an interest in the funds have agreed otherwise in writing.

         AUTHORITY NOTE:                Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:               Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                        26:

§2725.   Account Closing

         A.         No sales escrow checking account, rental trust checking account, or security deposit trust checking account

                    may be closed until such time as all deposits therein have been properly disbursed according to law. Every

                    broker shall notify the Commission in writing of the closing of any sales escrow checking account, rental trust

                    account checking or security deposit trust checking account within ten days following the date the account is

                    closed.

         AUTHORITY NOTE:                Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:               Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                        26:

§2727.   Maintaining Accounts

         A.         Upon revocation, suspension or lapse of his license for any reason, or upon bankruptcy, a broker shall

                    continue and maintain his sales escrow checking accounts, rental trust checking accounts, and security

                    deposit trust checking accounts until such time as all deposits therein have been properly disbursed

                    according to law.

         AUTHORITY NOTE:                Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:               Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                        26:
§2729.   Corporations, Partnerships and Limited Liability Companies

         A.       Every licensed corporation, partnership and limited liability company shall open and maintain sales escrow

                  checking accounts, rental trust checking accounts, and security deposit trust checking accounts as specified

                  for resident and nonresident brokers. All funds received from or on behalf of clients in any real estate

                  transaction conducted by the corporation, partnership, or limited liability company as a licensee shall be

                  deposited into these accounts.

         AUTHORITY NOTE:               Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:              Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                       26:

§2731.   Transfer of Trust Funds on Sale or Acquisition of Agency

         A.       When a licensed agency is sold or otherwise acquired by another licensed agency the sponsoring or

                  qualifying broker of the acquiring agency will advise the Commission in writing of the name of the agency

                  acquired and the anticipated date of the transfer of trust funds. The letter notifying the Commission of the

                  acquisition will specify the account numbers of the sales escrow checking accounts, rental trust checking

                  accounts, or security deposit trust checking accounts from which the funds will be transferred and the

                  account numbers of the accounts into which the funds will be deposited.

         B.       A letter jointly signed by the sponsoring or qualifying brokers of the agency being acquired and the acquiring

                  agency requesting that approval be granted for the transfer of funds will accompany the notification to the

                  Commission.

         C.       The transfer of funds shall not be accomplished until written approval has been granted by the Commission

                  in accordance with §2721.A.9 of this Chapter.

         D.       Within five working days following the transfer of funds a letter jointly signed by the sponsoring or qualifying

                  brokers of the agency being acquired and the acquiring agency will be forwarded to the Commission

                  certifying that all trust funds have been transferred. The letter will include the following:

                  1.        A certification that all sales escrow checking account, rental trust checking account, and security

                            deposit trust checking account funds have been transferred to and received by the acquiring

                            agency;
                  2.        A certification that supporting documents for all trust funds have been delivered to and received by

                            the acquiring agency;

                  3.        A listing of all sales escrow checking account, rental trust checking , or security deposit trust

                            checking accounts from which a transfer was made and the amount of funds transferred from each

                            account;

                  4.        A listing of all sales escrow checking accounts, rental trust checking accounts, and security deposit

                            trust checking accounts into which funds were deposited and the amount of funds deposited into

                            each account.

         E.       The sponsoring or qualifying broker of the agency being acquired will close the escrow accounts and trust

                  accounts from which the funds were transferred within ten days following the transfer of funds and advise the

                  Commission in writing when such action has been completed.

         AUTHORITY NOTE:               Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:              Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                       26:

§2733.   Change of Licensing Status

         A.       An individual real estate broker who elects to become exclusively affiliated with a sponsoring broker, and an

                  active broker transferring to an inactive status, shall continue to maintain their sales escrow checking

                  accounts, rental trust checking accounts and security deposit trust checking accounts until such time as all

                  deposits therein have been properly disbursed according to law. As of the effective date of relationship with a

                  sponsoring broker, or transfer to inactive status, no further trust funds shall be placed in the accounts. The

                  transferring broker shall advise the Commission in writing within five working days of the effective date of the

                  transfer to the new status of the amount of funds in each escrow or trust account maintained, and the

                  approximate date each account will be closed.

         AUTHORITY NOTE:               Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:              Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                       26:


Chapter 29. Disbursement of Escrow Deposits
§2901.   Escrow Disputes
         A.      When a broker determines or has knowledge that a dispute exists as to the ownership or entitlement of a

                 deposit or funds held in a sales escrow checking account, as a result of a real estate sales transaction, it

                 shall be the obligation of the broker holding the funds to immediately notify in writing all of the parties and

                 licensees involved of the dispute, and within 90 days of the scheduled closing date, or determination or

                 knowledge that such a dispute exists, whichever shall first occur, to do one of the following:

                 1.        Disburse the funds upon the written and mutual consent of all of the parties involved;

                 2.        Disburse the funds upon a reasonable interpretation of the contract which authorizes the broker to

                           hold such funds. Disbursement may not occur until 10 days after the broker has notified, in writing,

                           all parties and licensees;

                 3.        Through a concursus proceeding, deposit the funds into the registry of any court of competent

                           jurisdiction and proper venue;

                 4.        Deposit the funds including original promissory notes, with the Louisiana Real Estate Commission

                           along with a request for an escrow disbursement order. This request shall include the names and

                           last known addresses of the principals to the agreement, a copy of the purchase agreement, all

                           forms required by the Commission, and copies of any other documents which may have some

                           bearing on the dispute. NOTE: In the event that the dispute is to be heard by the Commission, it

                           will require that the agents and/or brokers appear before the Commission at its regularly scheduled

                           meeting at which the dispute will be heard;

                 5.        disburse the funds upon the order of a court of competent jurisdiction.

         AUTHORITY NOTE:              Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:             Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                      26:

§2903.   Escrow Disbursement Order

         A.      The Louisiana Real Estate Commission upon receipt of a request for an escrow disbursement order:

                 1.        Shall immediately cause the funds accompanying said request to be deposited in an interest

                           bearing escrow checking account pending final disposition;

                 2.        May commence an investigation by its staff of the dispute;
                     3.        May, upon completion of an investigation, consider the investigative findings and at a regular or

                               special meeting issue an escrow disbursement order providing for the disposition and allocation of

                               funds which are being held in escrow and are in dispute;

                     4.        May call an adjudicatory hearing before issuing an escrow disbursement order; or

                     5.        May deposit the disputed funds into a concursus proceeding in any court of competent jurisdiction

                               and proper venue.

         AUTHORITY NOTE:                  Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:                 Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                          26:


Chapter 31. Reporting of Changes of Address or Telephone Number by Licensees,
Registrants and Certificate Holders
§3101.   Reporting

         A.          Every licensee, certificate holder and timeshare registrant shall report any changes in the business or

                     residence address or telephone number to the Commission in writing within ten days of the change.

         AUTHORITY NOTE:                  Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:                 Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                          26:

§3103.   Changes in Data Provided by Corporations, Partnerships and Limited Liability Companies

         A.          Corporations, partnerships and limited liability companies licensed as real estate brokers shall file all reports

                     required by any agency of this state when due and shall notify the Commission at the time of the filing of the

                     reports of any information in the reports which would constitute a change in the information filed with the

                     Commission by the licensed broker prior to the submission of the required reports.

         AUTHORITY NOTE:                  Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:                 Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                          26:

Chapter 33. Compensation
§3301.   Full Knowledge

         A.          Licensees shall not accept compensation from more than one party without the written acknowledgment of all

                     parties to the transaction.
         AUTHORITY NOTE:               Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:              Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                       26:


Chapter 35. Disclosure by Licensee
§3501.   Licensee as Principal in a Real Estate Transaction

         A.       A licensee acting as a principal in a real estate transaction, whether individually or through any entity in

                  which he or she has an interest, shall disclose his or her status as a licensed real estate agent to all other

                  principals in the real estate transaction, in writing, prior to entering into any real estate contract.

         AUTHORITY NOTE:               Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:              Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                       26:


Chapter 37. Agency Disclosure
§3701.   Agency Relationships in Real Estate Transactions

         A.       Effective March 1, 1998, agency relations in real estate transactions will be governed by Chapter 4 of Code

                  XV of Title 9 of the Louisiana Revised Statutes of 1950, comprised of R.S. 9:3891-3899.

         AUTHORITY NOTE:               Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:              Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                       26:

§3703.   Agency Disclosure Informational Pamphlet

         A.       Licensees shall provide the agency disclosure informational pamphlet to all parties to a real estate

                  transaction involving the sale or lease of real property.

         B.       The agency disclosure informational pamphlet may be obtained from the Commission in a form suitable for

                  use by licensees in reproducing the pamphlet locally. Licensees are responsible for ensuring that the

                  pamphlets are the most current version prescribed by the Commission and that reproductions of the

                  pamphlet contain the identical language prescribed by the Commission.

         C.       Licensees will provide the agency disclosure informational pamphlet to prospective sellers/lessors and

                  buyers/lessees at the time of the first face-to-face contact with the sellers/lessors or buyers/lessees when
                  performing any real estate related activity involving the sale or lease of real property, other than a ministerial

                  act as defined in LSA-R.S. 9:3891(12).

         D.       Licensees providing agency disclosure informational pamphlets to prospective sellers/lessors and

                  buyers/lessees shall insure that the recipient of the pamphlet signs and dates the receipt included in the

                  pamphlet. The licensee providing the pamphlet shall sign the receipt as a witness to the signature of the

                  recipient, and the licensee will retain the signed receipt for a period of five years.

         E.       In any circumstance in which a seller/lessor or a buyer/lessee refuses to sign the receipt included in the

                  agency disclosure informational pamphlet, the licensee shall prepare written documentation to include the

                  nature of the proposed real estate transaction, the time and date the pamphlet was provided to the

                  seller/lessor or buyer/lessee, and the reasons given by the seller/lessor or buyer/lessee for not signing the

                  receipt. This documentation will be retained by the licensee for a period of five years.

         AUTHORITY NOTE:               Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:              Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                       26:

§3705.   Dual Agency Disclosure

         A.       The dual agency disclosure form will be used by licensees acting as a dual agent under R.S. 9:3897.

         B.       The dual agency disclosure form shall be obtained from the Commission in a form suitable for use by

                  licensees in reproducing the form locally. Licensees are responsible for ensuring that the form is the most

                  current version prescribed by the Commission and that reproductions of the form contain the identical

                  language prescribed by the Commission.

         C.       Licensees shall insure that the dual agency disclosure form is signed by all clients at the time the brokerage

                  agreement is entered into or at any time before the licensee acts as a dual agent; but in no event later than

                  when a purchase agreement is entered into by the clients.

         AUTHORITY NOTE:               Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:              Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                       26:

Chapter 39. Presentation of Offers and Counter Offers

§3901.   Timely Presentation of Offers and Counter Offers
         A.       All written offers and counter offers for the purchase of real estate shall be presented to all buyers and/or

                  sellers for their consideration and decision immediately, without delay.

         B.       The licensee who prepares an offer or counter offer in a real estate transaction shall insure that the time of

                  day and date the offer or counter offer was signed by the offering party are included in the document.

         C.       The licensee who presents an offer or counter offer in a real estate transaction shall insure that the time of

                  day and date the offer or counter offer was accepted, rejected or countered are included in the document.

         AUTHORITY NOTE:              Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:             Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                      26:

§3903.   Negotiations in Exclusive Agency Contracts

         A.       Negotiations concerning property listed exclusively with a broker shall be carried on with the listing broker or

                  agent designated by the listing broker, not the owner, except with the expressed consent of the listing broker.

         B.       Negotiations with a buyer who has entered into an exclusive buyer agent contract with a licensed broker shall

                  be carried on with the licensed broker, or agent designated by the licensed broker, not the buyer, except with

                  the express consent of the licensed broker.

         AUTHORITY NOTE:              Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:             Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                      26:

§3905.   Cooperative Transactions

         A.       Licensees receiving written offers or counter offers in cooperative transactions shall annotate the offers or

                  counter offers to indicate the time of day and date the offers or counter offers were received.

         AUTHORITY NOTE:              Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:             Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                      26:

§3907.   Rejection of Offers and Counter Offers

         A.       All written offers and counter offers presented to a seller and/or buyer and not accepted shall be clearly

                  marked as rejected and signed by the seller and/or buyer. In any circumstance in which a seller and/or buyer

                  refuses to sign a rejected offer or counter offer, the licensee making the presentation of the offer or counter
                   offer shall annotate this fact indicating the time of day and date of the rejection of the offer or counter offer by

                   the seller and/or buyer. A copy of the rejected offer or counter offer signed by the seller and/or buyer, or a

                   copy of the rejected offer or counter offer bearing the annotation of the licensee, shall be provided to the

                   buyer and/or seller, and the rejected offer or counter offer shall be returned to the prospective buyer and/or

                   seller within five days after the signature or annotation is affixed to the document.

         AUTHORITY NOTE:                Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:               Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                        26:

§3909.   Broker's Authority to Reject Offers or Counter Offers

         A.        In the event the owner (seller) is not available and grants authority to the listing broker to reject an offer or

                   counter offer, the listing broker or a licensee designated by the listing broker shall mark the offer or counter

                   offer as rejected and sign the offer or counter offer as such in lieu of the owner (seller), but the listing broker

                   or licensee designated by the listed broker shall nevertheless forward a copy of the rejected written offer or

                   counter offer to the owner (seller) for his signature acknowledging the rejection of the offer or counter offer.

                   The copy of the rejected offer or counter offer signed by the owner (seller) shall be retained in the files of the

                   listing broker. In the case of a cooperative transaction, the cooperating listing broker shall provide a copy of

                   the rejected offer or counter offer bearing the signature of the owner to the cooperating selling broker within

                   five days after the signed rejection is received from the owner.

         AUTHORITY NOTE:                Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:               Promulgated by the Department of Economic Development, Real Estate Commission, LR

26:



Chapter 41. Investigations and Hearings
§4101.   Complaints

         A.        Complaints alleging violations of the Louisiana Real Estate License Law and/or Rules and Regulations of the

                   Commission shall bear the signature of the complainant or that of his or her legal representative before any

                   action will be taken thereon by the Commission.

         AUTHORITY NOTE:                Promulgated in accordance with R.S. 37:1431 et seq.
         HISTORICAL NOTE:             Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                      26:

§4103.   Addition of Respondents to Investigations

         A.       If during the conduct of an investigation documented probable cause is established indicating that violations

                  of the Louisiana Real Estate License Law and/or Rules and Regulations of the Commission have been

                  committed by licensees, timeshare registrants, or certificate holders other than the licensee, timeshare

                  registrant, or certificate holder against whom the original complaint was made, the additional licensees or

                  timeshare registrants may be added as respondents to the investigation in the absence of any written

                  complaint alleging such violation.

         AUTHORITY NOTE:              Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:             Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                      26:

§4105.   Executive Director May Authorize Investigation

         A.       Upon documented probable cause, the executive director of the Louisiana Real Estate Commission may

                  issue written authorization to investigate apparent violations of the Louisiana Real Estate License Law and/or

                  the Rules and Regulations of the Commission.

         AUTHORITY NOTE:              Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:             Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                      26:

§4107.   Adjudicatory Proceedings

         A.       When, as a result of an investigation, it appears that violations of the Louisiana Real Estate License Law may

                  have been committed by a licensee, registrant or certificate holder, the violations may be adjudicated through

                  informal or formal adjudicatory proceedings.

                  1.        Informal Adjudicatory Proceedings

                            a.        The complaint may be concluded informally without a hearing by the Commission on the

                                      recommendation of the hearing examiner and the concurrence of the executive director.

                            b.        A preliminary notice of adjudication will be issued to advise the respondent of the

                                      violation or violations alleged and to advise the respondent that the matter can be
     resolved informally should the respondent desire to admit to committing the act or acts

     specified and submits a written request that the matter be resolved informally.

c.   A hearing officer will be appointed by the executive director to conduct an informal

     hearing with the respondent.

d.   The informal hearing will be attended by the case investigator, or in the absence of the

     case investigator, the chief real estate examiner, who will respond to questions

     concerning the investigation which resulted in the allegations, and the hearing examiner,

     who will inform the hearing officer of the administrative, jurisdictional, and other matters

     relevant to the proceedings. No evidence will be presented, no witnesses will be called

     and no formal transcript of the proceedings will be prepared by the Commission.

     Statements made during the informal proceedings may not be introduced at any

     subsequent formal adjudicatory proceedings without the written consent of all parties to

     the informal hearing.

e.   Following an admission by the respondent at the informal hearing that violations were

     committed as alleged, the hearing officer may enter into a recommended stipulations and

     consent order to include the imposition of any sanctions authorized by the Louisiana Real

     Estate License Law. In the written document the respondent must stipulate to having

     committed an act or acts in violation of the Louisiana Real Estate License Law or the

     Rules and Regulations of the Commission, accept the sanctions recommended by the

     hearing officer, and waive any rights to request a rehearing, reopening, or

     reconsideration by the Commission, and the right to judicial appeal of the consent order.

f.   If at the informal hearing the respondent does not admit to having committed the act or

     acts specified, does not accept the sanctions recommended by the hearing officer, or

     does not waive the specified appellate rights, the alleged violations shall be referred to a

     formal adjudicatory hearing.

g.   If the respondent does execute a stipulations and consent order, the executive director

     shall submit the document to the Commission at the next regular meeting for approval
                                    and authorization for the executive director to execute the consent order in the name of

                                    the Commission.

                           h.       The actions of the Commission relative to all consent orders shall be noted in the

                                    minutes of the meeting at which the consent order is considered and at which

                                    authorization is granted to the executive director to execute the order in the name of the

                                    Commission.

                           I.       Any consent order executed as a result of an informal hearing shall be effective on the

                                    date approved by the Commission.

                  2.       Formal Adjudicatory Proceedings

                           a.       All formal public adjudicatory hearings shall be conducted under the auspices of R.S.

                                    37:1456 and Chapter 13 of Title 49 of the Louisiana Revised Statutes.

                           b.       The order issued by the Commission pursuant to any formal public adjudicatory

                                    proceeding shall become effective on the eleventh day following the date the order is

                                    issued by the Commission and entered into the record at the proceedings.

                           c.       The date of entry is the date the order is issued by the Commission and entered into the

                                    record at the formal adjudicatory proceedings.

                           d.       If a request for rehearing, reopening, or reconsideration of the order of the Commission is

                                    timely filed and denied by the Commission, the order of the Commission shall become

                                    final on mailing of the notice of the Commission’s final decision on the request.

         AUTHORITY NOTE:            Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:           Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                    26:

§4109.   Appellate Proceedings

         A.       Rehearings

                  1.       An order of the Commission shall be subject to rehearing, reopening or reconsideration by the

                           Commission on receipt of a written request from a respondent. An application for rehearing,

                           reopening or reconsideration must be postmarked or received at the office of the Commission

                           within ten days from the date of entry of the order rendered by the Commission.
                  2.        The request shall be reviewed by the Commission attorney for compliance with the Administrative

                            Procedures Act. A finding by the Commission attorney that the request does not establish grounds

                            for rehearing, reopening or reconsideration shall result in a denial of the request.

         B.       Judicial Review

                  1.        Proceedings for judicial review of an order issued by the Commission may be instituted by filing a

                            Petition for Judicial Review in the Nineteenth Judicial District Court in the parish of East Baton

                            Rouge.

                  2.        In the event a request for rehearing, reopening or reconsideration has been filed with the

                            Commission, the party making the request shall have thirty days from the final decision on the

                            request within which to file a petition for judicial review.

                  3.        If a request for rehearing, reopening or reconsideration is not filed with the Commission, the

                            Petition for Judicial Review must be filed in the Nineteenth Judicial District Court within thirty days

                            after the mailing of the order of the Commission.

         AUTHORITY NOTE:              Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:             Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                      26:

§4111.   Stay of Enforcement

         A.       The filing of a petition for judicial review by a respondent licensee does not itself stay enforcement of an

                  order issued by the Commission. A stay of enforcement will be granted only when directed by the court

                  conducting a judicial review of adjudication.

         AUTHORITY NOTE:              Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:             Promulgated by the Department of Economic Development, Real Estate Commission, LR

26:

§4113.   Costs of Adjudicatory Proceedings

         A.       On a finding that a respondent has committed the violations as alleged in any formal or informal adjudicatory

                  proceedings, the Commission may assess the respondent the administrative costs of the proceeding, as

                  determined by the Commission. Payment of these costs shall be a condition of the reinstatement of any

                  license, registration, or certificate issued by the Commission.
         AUTHORITY NOTE:                Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:               Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                        26:


Chapter 43. Licensee, Timeshare Registrant, and Certificate Holder Responsibilities
§4301.   Knowledge of the Law

         A.        It shall be the duty of all licensees, certificate holders, and timeshare registrants to have knowledge and be

                   aware of all laws regulating the real estate industry in Louisiana including, but not limited to, these rules and

                   regulations and the Louisiana Real Estate License Law as set forth in Chapter 17, Title 37 of the Louisiana

                   Revised Statutes.

         AUTHORITY NOTE:                Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:               Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                        26:


                                        Chapter 45. Franchise Operations
§4501.   Registration of Franchise Name

         A.        Unless registered in Louisiana with the Louisiana Real Estate Commission as hereinafter specified, no

                   person, partnership, limited liability company, or corporation shall offer for sale, lease, rent, or use in any

                   way, any franchise name to be publicly utilized or used by a licensed Louisiana real estate broker.

         AUTHORITY NOTE:                Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:               Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                        26:

§4503.   Registration of Franchise Operation

         A.        Unless registered in Louisiana with the Louisiana Real Estate Commission as hereinafter specified, no

                   person, partnership, limited liability company, or corporation engaged in a franchise operation of real estate

                   brokerage firms shall operate in Louisiana.

         AUTHORITY NOTE:                Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:               Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                        26:

§4505.   Application for Registration
         A.       Any person, partnership, limited liability company, or corporation which intends to operate or do business as

                  a franchiser of real estate brokerage firms in Louisiana shall make application to the Louisiana Real Estate

                  Commission for registration. Applications for registration shall contain the following information and

                  supporting documents:

                  1.           Name, address, and whether the applicant is a person, partnership, limited liability company, or

                               corporation;

                  2.           Partnership and limited liability company - the names and addresses of all partners or principals;

                  3.           Corporation - names and addresses of officers and members of the board of directors and the

                               place of incorporation;

                  4.           Partnership, limited liability company, or corporation - a certified copy of the articles of

                               incorporation or the document establishing the partnership or limited liability company;

                  5.           A certified, audited financial statement disclosing the current financial condition of the applicant;

                  6.           A statement of the business activities of the applicant, including a description of the franchise

                               agreement to be used in connection with the Louisiana real estate brokers, and a list of the states

                               in which the franchiser is qualified to do and/or is doing business.

         B.       Upon receipt of the application for registration, the Commission may require such additional information as it

                  deems necessary.

         AUTHORITY NOTE:                 Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:                Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                         26:

§4507.   Agent for Service of Process

         A.       If the applicant is not a resident of Louisiana, it shall appoint a licensed active Louisiana individual real estate

                  broker to act as the applicant's agent for the service of all judicial process or legal notices directed to such

                  applicant. Service upon the agent so designated shall be equivalent to personal service upon the applicant.

         AUTHORITY NOTE:                 Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:                Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                         26:

§4509.   Annual Registration
         A.        If the requirements set forth herein are met the Commission shall register the franchiser for a period of one

                   year. The franchiser shall then renew each year by furnishing the Commission with all information as would

                   modify or change the information previously submitted.

         AUTHORITY NOTE:               Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:              Promulgated by the Department of Economic Development, Real Estate Commission, LR

26:

§4511.   Renewal Requirements

         A.        Each application for renewal by a franchiser shall be submitted on or before January 15 of each year and

                   shall reflect the information required by the Commission for the preceding year.

         B.        Any application for renewal by the franchiser shall also include the name and address of any licensed

                   Louisiana broker that is operating under a franchise agreement with the franchiser.

         AUTHORITY NOTE:               Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:              Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                       26:

§4513.   Penalty

         A.        Any person, partnership, limited liability company, or corporation which operates in Louisiana as a franchiser

                   of real estate brokerage firms, without the specific authority to do so as granted by the Louisiana Real Estate

                   Commission, shall be subject to a penalty of the refusal by the Commission to allow said person, partnership,

                   limited liability company, or corporation to operate or do business in Louisiana for a period of at least one

                   year.

         AUTHORITY NOTE:               Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:              Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                       26:

§4515.   Violations of Law

         A.        The Commission shall have the power to withdraw any registration and/or issue a cease and desist order,

                   after a hearing, to any franchiser that is subject to these rules and regulations, upon determination that any

                   federal or state law or Commission regulation has been or will be violated.

         AUTHORITY NOTE:               Promulgated in accordance with R.S. 37:1431 et seq.
         HISTORICAL NOTE:                 Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                          26:


Chapter 47. Waiver of Renewal Requirements
§4701.   Veteran Waiver

         A.          Licensees who are inducted into military service or those licensees in the military who are transferred out of

                     state shall, upon furnishing appropriate evidence of their honorable service, be entitled to renewal of their

                     licenses, without penalty, provided application is filed within six months following discharge. The provisions of

                     this Section shall extend to spouses of persons described hereinabove who were licensed at the time of such

                     induction or transfer.

         AUTHORITY NOTE:                  Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:                 Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                          26:


Chapter 49. Reciprocity
§4901.   Licensing

         A.          The Commission may enter into a reciprocal agreement with the appropriate authority of any other state to

                     permit any resident of that other state who is licensed there as a real estate broker or salesperson to obtain

                     an equivalent Louisiana nonresident license and engage in the real estate business in Louisiana if that other

                     state agrees to similarly grant a nonresident license to any Louisiana resident broker or salesperson and

                     permit the licensee to engage in the real estate business in that other state.

         AUTHORITY NOTE:                  Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:                 Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                          26:

§4903.   Requirements for License

         A.          Any person residing in and licensed as a real estate broker or salesperson in a state whose appropriate

                     authority has entered into a reciprocal agreement with the Commission shall be granted an equivalent non-

                     resident license by the Commission upon applying and complying with the following requirements:

                     1.        Providing the Commission with sufficient proof of his licensing by his resident state;

                     2.        Paying all fees prescribed for an equivalent Louisiana resident license;
                  3.          Filing an irrevocable Appointment of Agent for Service of Process with the Commission appointing

                              the executive director as the licensee’s agent for service of process in all matters arising out of or

                              in conjunction with any real estate activities conducted by the licensee in Louisiana;

                  4.          Corporation - procuring a certificate of authority to do business in Louisiana from the Louisiana

                              Secretary of State and providing the Commission with a copy; and

                  5.          Partnership or limited liability company - procuring a certificate of registry as a foreign partnership

                              from the Louisiana Secretary of State and providing the Commission with a copy.

         AUTHORITY NOTE:                Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:               Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                        26:

§4905.   Nonresident Licensee

         A.       The nonresident licensee is bound, in all respects, by the provisions of the Louisiana Real Estate Licensing

                  Law (R.S. 37:1431, et seq.) and these regulations.

         AUTHORITY NOTE:                Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:               Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                        26:


Chapter 51. Out-of-State Broker Cooperation
§5101.   Broker Cooperation

         A.       A Louisiana broker may cooperate with a licensed broker of another state in the sale, lease or management

                  of real property located in Louisiana within the limits provided in the Louisiana Real Estate License Law and

                  Rules and Regulations of the Commission under the following conditions.

                  1.          The sale, lease or management shall be handled under the direct supervision and control of the

                              Louisiana broker who shall take full responsibility for all actions of the out-of-state broker. All

                              advertising of any kind must contain the names of both the Louisiana licensed broker and the out-

                              of-state broker. The out-of-state broker may place a sign on real property located in Louisiana with

                              the written consent of the Louisiana licensed broker.

                  2.          Any monies collected on behalf of others shall be maintained in the Louisiana broker's sales

                              escrow checking account, rental trust checking account or security deposit trust checking account
                             unless all parties having an interest in the funds to be deposited therein have agreed otherwise in

                             writing.

                   3.        In each instance herein where a Louisiana broker enters into a cooperating agreement with an out-

                             of-state broker for the sale, lease or management of Louisiana real property, the Louisiana broker

                             must file one copy of a cooperating agreement with the Louisiana Real Estate Commission prior to

                             the property being advertised, shown, or any contract taken. A written cooperating agreement

                             describing the property involved must be filed for each separate transaction. This agreement must

                             contain verbiage wherein both the Louisiana broker and the out-of-state broker agree to sign all

                             written reports and contracts and comply with the Louisiana Real Estate License Law and Rules

                             and Regulations of the Commission in all respects.

                   4.        Any fee or commission received as a result of a cooperative transaction shall be paid to the

                             Louisiana broker who will, in turn, compensate the out-of-state broker. The percentage of fees or

                             commission to be received by the Louisiana broker and the out-of-state broker shall be negotiable

                             between the two parties and shall be agreed upon, in writing, by the parties in their cooperative

                             agreement.

         AUTHORITY NOTE:                Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:               Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                        26:

§5103.   Referral Fees

         A.        A licensed broker in this jurisdiction may divide or share a real estate commission with a licensed broker in

                   another jurisdiction whenever the licensed broker in the other jurisdiction acts only as a referral agent who is

                   not involved in the actual negotiations, execution of documents, collections of rent, management of property,

                   or other real estate brokerage activity in a real estate transaction which involves more than the mere referral

                   of a client or customer to the licensed broker of this jurisdiction.

         AUTHORITY NOTE:                Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:               Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                        26:

§5105.   Jurisdiction Over Out-of-State Activities
         A.       The Commission shall have the power to impose any sanction permitted by this law on any licensee of this

                  jurisdiction who performs or attempts to perform any of the acts of a licensee on property located in another

                  jurisdiction without first having been properly licensed in that jurisdiction or otherwise having fully complied

                  with that jurisdiction's laws regarding real estate brokerage.

         AUTHORITY NOTE:               Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:              Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                       26:


Chapter 53. Real Estate Schools
§5301.   Education Division

         A.       The Louisiana Real Estate Commission does hereby create the Education Division which shall be

                  responsible for real estate school, instructor, and continuing education vendor certification. The Education

                  Division shall administer on behalf of the Commission all regulations, laws and other matters pertaining to

                  real estate education programs under the jurisdiction of the Commission.

         AUTHORITY NOTE:               Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:              Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                       26:

§5303.   Approval of Schools

         A.       The following regulations apply to real estate schools seeking approval to conduct a course of education in

                  real estate subjects for prelicensing requirements as prescribed under R.S. 37:1460.

         AUTHORITY NOTE:               Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:              Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                       26:

§5305. Course Curriculum

         A.       The Commission shall require certified real estate schools to follow model curriculum guidelines established

                  by the Commission in courses offered for salesperson and broker prelicensing credits.

         B.       Courses of instruction offered by certified real estate schools shall be designated as follows:

                  1.          Real Estate 101—90 hour course in real estate principles/practices;

                  2.          Real Estate 201—90 hour basic fundamentals review for broker applicants;
                   3.         Real Estate 202—30 hour course on Louisiana License Law, Rules and Regulations of the

                              Commission and Louisiana Civil Law;

                   4.         Real Estate 203—30 hour broker responsibilities course.

         C.        The Commission may approve real estate course work obtained through colleges, universities, nationally

                   recognized institutes or other sources for credit toward the salesperson or broker prelicensing requirement.

                   No waiver will be granted for Real Estate 202 and Real Estate 203 when required as a condition of licensing;

                   however, the Education Division may authorize the substitution of course work obtained from other

                   educational sources if it is determined that such courses are equivalent to the content requirements of Real

                   Estate 202 or Real Estate 203.

         AUTHORITY NOTE:                Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:               Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                        26:

§5307.   Certificate of Authority

         A.        No person shall operate a real estate school from which the Commission will accept a certificate of

                   completion in satisfaction of prelicensing requirements unless such person applies for and is granted a

                   certificate of authority in good standing issued by the Commission.

         B.        No certificate of authority shall be issued or renewed for any school applicant holding a real estate broker

                   license whose school is designed, intended and/or primarily used for instruction of that same broker/owner’s

                   future salesperson or broker affiliates.

         C.        Each applicant for a certificate of authority to operate a real estate school shall comply with the following:

                   1.         file with the Commission a fully completed application on forms prescribed by the Commission and

                              accompanied by appropriate fees as provided in R.S. 37:1443;

                   2.         submit with the application three letters of reference from responsible parties which provide

                              information relating to the applicant’s integrity, character, and/or qualifications and experience in

                              real estate or related education;

                   3.         at application, or prior to final approval of the certificate of authority, and for each renewal period

                              thereafter, furnish proof of coverage of a school surety bond as issued by an insurance company
                            authorized to do business in this state, conditioned for the protection of the contractual rights of

                            those real estate students attending said school and in the amount of $10,000.00;

         D.       The Commission shall issue a certificate of authority to operate a real estate school upon a determination

                  that the applicant has met all requirements of certification.

         E.       Certificates of authority issued under this Section shall be valid for a maximum of one year and shall expire

                  on December 31 of each year.

         F.       Failure to submit a timely application for renewal of a certificate of authority by December 31 may result in an

                  assessment of a delinquent penalty as provided in the Louisiana Real Estate License Law. The period for

                  delinquent renewal of an expired certificate of authority will be limited to the six-month period immediately

                  following the expiration date of the certificate of authority. Thereafter, the application will be treated as an

                  initial application insofar as fees and filing information are concerned.

         G.       Real estate schools shall not schedule courses which will extend beyond December 31 unless renewal of the

                  certificate of authority has been applied for and approved by the Commission.

         H.       All Louisiana state and private colleges and universities where a real estate course is given in a regular

                  curriculum are exempt from filing for this certificate of authority. The Commission reserves the right to

                  require compliance with all requirements of this Section, except for assessment of application fees, from

                  those courses offered through continuing education divisions of colleges and universities.

         I.       State vocational-technical schools or parish school boards which conduct courses in real estate and receive

                  certification from the Commission shall meet all requirements required of proprietary schools except for

                  application fee requirements.

         AUTHORITY NOTE:               Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:              Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                       26:

§5309.   School Owners and School Directors

         A.       Each approved school shall designate a school director who shall be responsible to the Commission for all

                  aspects of operations of the school, to include the specific courses of education to be conducted and

                  submission of reports and other information required or requested by the Commission.
         B.        School directors shall coordinate school branch locations and disseminate information pertaining to changes

                   in the license law, rules and regulations, or policies of the Commission to all staff, instructors, and school

                   employees.

         C.        School owners and school directors shall cooperate with Commission personnel in all matters pertaining to

                   the administration of the school and shall appear and testify under oath at any hearing held by the

                   Commission when requested to do so.

         AUTHORITY NOTE:                Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:               Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                        26:

§5311.   Instructor Qualifications

         A.        Except for guest lecturers, persons instructing at a state certified school must be state certified by the

                   Commission or hold an equivalent certification or designation acceptable to the Commission.

         B.        Any applicant applying for a state certified real estate instructor certificate shall file an application with the

                   Commission in such form as prescribed by the Commission and accompanied by appropriate fees as

                   prescribed in R.S. 37:1443, provide proof of passing a real estate instructor assessment examination

                   specified by the Commission, and possess at least one of the following qualifications:

                   1.         a bachelor's degree with a major in real estate from an accredited college or university;

                   2.         a bachelor's degree from an accredited college or university and at least two years experience in

                              the real estate business;

                   3.         a real estate broker's license and a minimum of five years experience in the area of proposed

                              study;

                   4.         a Juris doctorate degree or the equivalent from an accredited law school and a minimum of three

                              years experience in the area of the proposed study;

                   5.         two years experience as a qualified instructor or professor in the business, finance or economics

                              department of an accredited college or university; or

                   6.         any qualifications which in the opinion of the Commission constitutes the equivalent of one or any

                              combination of the above mentioned qualifications.
         C.       An instructor certificate shall be issued only after a determination has been made by the Commission that the

                  applicant has met the requirements of certification.

         D.       Instructor certificates issued under the provisions of this section shall be valid for a maximum of one year and

                  shall expire on December 31 of each year.

                  1.        Failure to renew an instructor certificate by December 31 may result in the assessment of a

                            delinquent penalty as provided in the Louisiana Real Estate License Law. The period for

                            delinquent renewal of an instructor certificate will be limited to the six-month period immediately

                            following the expiration date of the certificate. Thereafter, the application will be treated as an

                            initial application insofar as fees and filing information are concerned.

                  2.        Any application for renewal of an instructor certificate must be accompanied by proof of the

                            applicant’s successful completion of eight hours of continuing education course work approved by

                            the Commission and completed during the current certification period.

         AUTHORITY NOTE:               Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:              Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                       26:

§5313.   Guest Lecturers

         A.       Persons selected by approved schools to instruct as a guest lecturer in an approved prelicensing course

                  shall meet at least one of the following qualifications:

                  1.        A college or university professor in real estate, finance, economics, or a related field;

                  2.        A specialist with a degree or professional designation with expertise in the specific topic of

                            instruction;

                  3.        A licensed real estate professional with at least five years experience in the area of proposed

                            instruction.

         B.       Guest lecturers shall not be utilized as instructors in prelicensing courses pertaining to the Louisiana Real

                  Estate License Law or the Rules and Regulations of the Commission.

         C.       Guest lecturers shall not be used by approved schools as staff instructors. The Commission may require

                  that guest lecturers teaching on a regular basis be required to apply for and obtain certification as a real

                  estate instructor under §5311 of this Chapter.
         AUTHORITY NOTE:               Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:              Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                       26:

§5315.   School Facilities

         A.        Every school shall utilize facilities meeting the following standards.

                   1.        The premises, equipment and facilities of the school shall comply with all local, city, parish and

                             state regulations, such as fire codes, building and sanitation codes.

                   2.        The school shall provide adequate space, seating, equipment, and instructional material to

                             accommodate the number of students enrolled and in attendance.

         B.        Facilities are subject to inspection by representatives of the Commission prior to approval or subsequent

                   thereto during regular school hours.

         AUTHORITY NOTE:               Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:              Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                       26:

§5317.   School Records

         A.        Real estate schools shall maintain accurate and properly indexed records on all students for at least a five

                   year period after course completion and shall make those records available for inspection upon request of

                   the Commission or its representatives.

         B.        Real estate school records shall include, but are not limited to, the following information:

                   1.        Complete name and address of each student;

                   2.        Total classroom hours and title(s) of courses undertaken by each student;

                   3.        Dates of attendance at those courses by each student;

                   4.        Test scores or pass/fail indication for each student;

                   5.        Copy of student contract.

         AUTHORITY NOTE:               Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:              Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                       26:

§5319.   Tuition/Fees and Student Contract
         A.      Each real estate school shall enter into a written contract with each of its students.

         B.      The tuition and fees charged by the school for a specific course of instruction shall be clearly set forth in each

                 student's contract, and a copy of the contract, signed by an authorized representative of the school, shall be

                 provided to the student immediately after the contract is signed by both parties.

         C.      If additional fees are to be charged for supplies, materials or required books, these charges shall be clearly

                 itemized by the school in the student contract, and such supplies, materials or books shall become the

                 property of the student upon payment.

         AUTHORITY NOTE:             Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:            Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                     26:

§5321.   Course Reporting Requirements
         A.        Real estate schools shall submit, in a timely manner, information concerning schedules, class locations,

                   attendance reporting affidavits and other related information as required by the Commission. The

                   Commission will provide each school with the necessary forms and instructions for reporting course

                   scheduling and completion.

         AUTHORITY NOTE:                  Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:                 Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                          26:

§5323.   Certificates of Completion-Classroom Hours

         A.        Each real estate school shall provide an individual certificate of completion or comparable completion

                   verification to each student only upon successful completion of a course of study. Such verification shall

                   include student name, date of completion, course level, number of hours completed, and shall be signed by

                   the school director or an authorized designee.

         B.        No certificate of completion shall be accepted from any real estate school that is not in good standing with

                   the Commission on the date of certificate issuance.

         C.        Credit shall not be given for any classroom hour consisting of less than fifty minutes of instruction and/or

                   study. A classroom hour is defined as sixty minutes, of which fifty minutes are instruction. The prescribed

                   number of classroom hours may include time devoted to examinations which are considered to be part of the

                   course. Real estate schools shall not give credit to any student for completing more than eight hours of

                   instruction in one calendar day.

         D.        In compliance with requirements of the Americans with Disabilities Act (ADA), alternative methods of course

                   delivery are permitted to accommodate students with special needs. Such alternative arrangements shall be

                   documented by the school and reported to the Commission prior to the beginning of the course.

         AUTHORITY NOTE:                  Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:                 Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                          26:

§5325.   Prohibition Against Recruiting

         A.        No person shall at any time, while on the premises of a certified real estate school, discuss the sponsorship

                   of any student by any licensee of the Commission. Schools shall display the following statement in
       classrooms where prelicensing courses are being taught and the school director shall insure that the

       instructor of each orientation session read the following statement to the students at the beginning of the

       session: “No person shall discuss the sponsorship of any student by any licensee of the Commission while

       on the school premises, or by any means, verbal or written, conduct any activity which in any way relates to

       the future sponsorship of any student by any licensee of the Commission.”

B.     Unless an exemption has been applied for and granted by the Commission as specified in this section, an

       applicant for a real estate license cannot, for a period of one year after successful completion of real estate

       prelicensing education, be licensed with the sponsoring broker of an owner, instructor, guest lecturer or

       member of the administrative staff of the real estate prelicensing school attended by said applicant.

       Applicants for licensing may request a waiver of this regulation provided the following conditions are met:

       1.        An application for exemption shall be submitted on an affidavit form provided by the Commission

                 and contain a notarized statement from applicant and sponsor attesting to the fact that their

                 decision to affiliate was in no way influenced by said broker's affiliation with a state certified real

                 estate school;

       2.        Request shall be received and acted upon by the Commission at least ten days prior to the

                 applicant’s enrollment in a scheduled prelicensing course of study. Waiver of the ten-day

                 requirement will be granted only upon a determination by the Commission that extenuating

                 circumstances prevented the timely filing of the exemption request.

C.     No brokerage firm may operate a real estate school under the same legal entity as the brokerage firm.

D.     No real estate school shall be operated in an office that is also utilized for the operation of a brokerage firm.

       For the purpose of this rule, operation by a real estate school shall mean the conducting or doing business

       in any manner including, but not limited to, the holding of classes, the instruction of students, the use of

       telephone lines, the occupying of office space, and the enlistment, solicitation and/or recruitment of potential

       students or licensees.

E.     No real estate school may provide any name or list of names of any potential licensee(s) or student(s)

       whether potential or enrolled in any real estate school to anyone other than the Louisiana Real Estate

       Commission.

AUTHORITY NOTE:            Promulgated in accordance with R.S. 37:1431 et seq.
         HISTORICAL NOTE:             Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                      26:

§5327.   Change of Address

         A.       Every certified real estate school, school director and certified real estate instructor shall report any change

                  in the address or phone number of a business residence to the Commission within 10 days of the change.

         AUTHORITY NOTE:              Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:             Promulgated by the Department of Economic Development, Real Estate Commission, LR

26:

§5329.   School Advertising

         A.       Advertising by certified schools shall be clear, concise and accurate. All advertisements shall be in the name

                  of the real estate school as certified by the Commission and shall include the school’s certificate of authority

                  number assigned by the Commission.

         B.       Any advertising which includes price quotes for a course shall accurately reflect total costs including any

                  books and materials required for the course.

         C.       The Commission may require that a school furnish proof of any of its advertising claims. Retractions of

                  unfounded advertising claims may be ordered by the Commission. Such retractions shall be published in the

                  same manner as the original claim and be paid for by the violator.

         D.       Real estate school advertising shall not be combined with any advertisement of a real estate brokerage

                  business or vice versa.

         E.       Certified real estate schools shall not advertise or offer any guarantee to pass the state real estate licensing

                  examination.

         AUTHORITY NOTE:              Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:             Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                      26:

§5331.   School Inspections

         A.       Real estate schools certified by the Commission shall be subject to review and periodic audits by official

                  representatives of the Commission. Representatives may observe classroom activities, evaluate course

                  content, instructor proficiency, and/or audit school reporting/attendance records to insure that courses are
                  being conducted in accordance with the provisions set forth in R.S. 37:1460 and this Chapter. If the school is

                  determined to be deficient in any of these areas, a deficiency report specifying the areas of deficiency and a

                  date by which the deficiencies are to be corrected will be provided to the school by the Commission. Any

                  school receiving a deficiency report shall correct any deficiencies noted by the date designated by the

                  Commission.

         AUTHORITY NOTE:              Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:             Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                      26:


Chapter 55. Real Estate Post Licensing and Continuing Education Vendors
§5501.   Vendor Approval

         A.       The following regulations apply to entities seeking approval to conduct educational courses to meet real

                  estate post licensing and continuing education requirements.

         AUTHORITY NOTE:              Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:             Promulgated by the Department of Economic Development, Real Estate Commission, LR

26:

§5503.   Application

         A.       Any entity desiring to act as an approved real estate post licensing and/or continuing education vendor shall

                  file an application with the Commission. Each initial application shall be fully completed, notarized and

                  accompanied by the following:

                  1.        A financial statement of the person, partnership, corporation or legal entity which is seeking an

                            approved education vendor certificate;

                  2.        Three letters of reference from responsible persons with information relating to applicant's integrity,

                            character, responsibility and/or qualifications and experience in real estate education;

                  3.        Appropriate fees as required;

                  4.        Name, address and biographical information on each proposed instructor;

                  5.        Complete information on each proposed course offering; and

                  6.        Any additional information as requested and deemed necessary by the Commission.

         AUTHORITY NOTE:              Promulgated in accordance with R.S. 37:1431 et seq.
         HISTORICAL NOTE:             Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                      26:

§5505.   Bond Requirement

         A.       Each initial and renewal applicant for an approved post licensing and/or continuing education vendor

                  certificate shall obtain and file with the Commission proof of coverage of a $5,000.00 surety bond as issued

                  by an insurance company authorized to conduct business in this state. The bond shall be in favor of the state

                  of Louisiana and conditioned for the protection of the contractual rights of those students attending post

                  licensing and/or continuing education courses of said vendor. In cases where state certified prelicensing real

                  estate schools apply for and obtain a post licensing and/or continuing education vendor certificate, the

                  school’s required $10,000.00 surety bond may be used to satisfy the requirements for prelicensing, post

                  licensing and continuing education bond coverage.

         AUTHORITY NOTE:              Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:             Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                      26:

§5507.   Application Review

         A.       An initial application shall be reviewed and acted upon no later than thirty days from the date the application

                  is received at the Commission office. If the application is rejected, the applicant may appeal the decision to

                  the Commission. If such an appeal is made, the applicant will be required to appear before the Commission

                  at a regularly scheduled meeting to speak on behalf of and to respond to questions and concerns pertaining

                  to the application. If the application is denied by the Commission no further appeal will be granted.

         AUTHORITY NOTE:              Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:             Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                      26:

§5509.   Application Approval

         A.       Upon approval of any initial application for an approved vendor certificate, the Education Division shall assign

                  an approved vendor number to the person, partnership, corporation or legal entity granted approved vendor

                  status. The approved vendor number shall appear in any advertisements of approved courses by the vendor.

         AUTHORITY NOTE:              Promulgated in accordance with R.S. 37:1435.
         HISTORICAL NOTE:                Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                         15:1057 (December 1989).

§5511.   Application Denial

         A.       When an applicant has been convicted of forgery, embezzlement, obtaining money under false pretenses,

                  larceny, extortion, conspiracy to defraud, or theft, or has been convicted of a felony or a crime involving

                  moral turpitude in any court of competent jurisdiction, such untrustworthiness of the applicant, and the

                  conviction, may in and of itself be sufficient grounds for refusal of a certificate.

         B.       When an applicant has made a false statement of material fact on his application, such false statement may

                  in and of itself be sufficient grounds for refusal of a certificate.

         C.       Previous revocation of a real estate license held by an applicant shall also be grounds for refusal to grant a

                  certificate.

         D.       In addition to the grounds for denial of an application specified in A through C of this Section, an application

                  for an approved vendor certificate may be rejected if the applicant fails to qualify in one or more of the

                  following areas:

                  1.           Financial stability of applicant;

                  2.           Experience and capability of entity requesting approved vendor certificate;

                  3.           Experience and capability of proposed instructors;

                  4.           Suitability or quality of proposed course offerings.

         AUTHORITY NOTE:                 Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:                Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                         26:

§5513.   Certificate Renewal

         A.       Approved vendor certificates shall be granted on a calendar year basis, expiring on December 31 of each

                  year. Failure to submit a timely application for renewal by December 31 shall result in an assessment of a

                  delinquent penalty. The period for delinquent renewal of an approved vendor certificate will be limited to the

                  six-month period immediately following the expiration date of the certificate. Thereafter, the application will

                  be considered as an initial application insofar as fees and filing information are concerned.

         AUTHORITY NOTE:                 Promulgated in accordance with R.S. 37:1431 et seq.
         HISTORICAL NOTE:               Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                        26:

§5515.   Eligibility of Courses

         A.        Post Licensing

                   1. Approved post licensing courses must be open to the public. Each course acceptable for credit toward

                   fulfillment of the thirty-hour post licensing requirements for salespersons or brokers must be a minimum of

                   four hours in length and require passage of an examination on course contents as conditions for receiving a

                   post licensing certificate.

                   2. Approved continuing education courses which do not require an examination will not be considered

                   toward post licensing requirements.

                   3. Approved schools and vendors shall not incorporate post licensing instruction and hours with prelicensing

                   and/or continuing education instruction and hours.

         B. Continuing Education

                   1. Approved continuing education courses must be open to the public. Courses accepted for credit toward

                   the continuing education requirement shall consist of a minimum of two hours of instruction and may include,

                   but are not limited to, the following subject areas:

                              a.        Appraisal;

                              b.        Finance;

                              c.        Taxes;

                              d.        Zoning;

                              e.        Louisiana Real Estate License Law/Commission Rules and Regulations;

                              f.        Environmental quality;

                              g.        Federal Laws Affecting Real Estate (Includes HUD and Fair Housing Regulations);

                              h.        Property Management.

         C.        Each course registered with the Commission shall expire on December 31 unless updated, submitted for

                   renewal by the approved vendor, and approved for renewal by the Commission. The vendor shall notify the

                   Commission of any changes in course material which may substantially alter a course offering.

         AUTHORITY NOTE:                Promulgated in accordance with R.S. 37:1431 et seq.
         HISTORICAL NOTE:             Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                      26:

§5517.   Requirements for Submission of Additional Course Approval Requests by Approved Vendors

         A.       Approved education vendors shall apply for and receive approval for any new courses to be offered by the

                  entity prior to advertising or offering the course to licensees. Each additional course application shall be

                  accompanied by the following items:

                  1.        Applicable filing fees;

                  2.        Complete information on proposed course including title, course description, length of course,

                            outline, and , for post licensing only, a copy of the course final examination.

                  3.        Name, address and resume’ of each proposed instructor, if applicable.

         B.       If a request for additional course approval is rejected, the vendor may appeal the decision to the

                  Commission. No additional review fee will be required for such an appeal. If the request is denied by the

                  Commission no further appeal will be granted.

         AUTHORITY NOTE:              Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:             Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                      26:

§5519.   Post Licensing and Continuing Education Course work by Correspondence

         A.       Approved education vendors shall apply for and receive approval of correspondence study course(s) prior to

                  any public offering. Passage of an examination is a requirement for all post licensing courses. Passage of an

                  examination is not a requirement for classroom continuing education courses; however, licensees choosing

                  to complete their continuing education through correspondence or distance learning courses will be required

                  to comply with specific course completion verification procedures applicable to correspondence or distance

                  learning courses. Each correspondence course application shall be accompanied by the following items:

                  1.        Applicable filing fees;

                  2.        Complete information on proposed course, including title, course description, length of course,

                            outline, and a copy of the required test.

         B.       Applications for approval of correspondence courses shall comply with the following where applicable.

                  1.        Written correspondence courses
     a.       A workbook consisting of a minimum of 20 typed pages, not smaller than 8½”x 11" in

              size, per two hours of continuing education correspondence study credit or a workbook

              consisting of a minimum of 40 typed pages, not smaller than 8 ½ x 11 in size, per four

              hours of post licensing education is required. If the course meets only the minimum of

              pages, the type cannot be larger than 12 point. Minimum standards require that

              paragraphs may be indented not more than 10 spaces and a maximum of one line of

              space may appear between paragraphs. Charts and graphs are not to be included in the

              required minimum page total. The top margin of the page cannot exceed 1¼”, the

              bottom margin 1½”, and the side margin 1". The Commission reserves the right to

              approve an offering which marginally meets the minimum page requirement. Such

              approval will be based on a determination that the time period required to complete the

              course exceeds the credit hours requested based on the technical nature of the subject

              matter.

2.   Audio/visual correspondence courses

     a.       Video taped material may be submitted for approval as a complete course offering or in

              conjunction with written correspondence. The applicant shall provide a complete written

              transcript of any video taped material submitted for approval.

     b.       Audio only courses shall be formatted in segments consisting of taped lecture of at least

              two hours for continuing education purposes or at least four hours for post licensing

              purposes. The applicant shall submit a written transcript of the taped lecture with each

              request for audio approval.

3.   Computer generated correspondence courses

     a.       Computer generated correspondence courses will be considered for approval provided

              the applicant submits course materials in the exact format to be offered for education

              credit.

     b.       The Commission, at its discretion, may request a written transcript of a proposed

              computer generated course offering prior to a final determination of the suitability of the

              course for education credit.
         4.        Other distance learning education

                   a.        Distance learning education courses may be considered for approval provided the

                             courses meet the conditions for delivery specified in the standards for distance education

                             established by the Association of Real Estate License Law Officials (ARELLO) and

                             provided the course content is in a real estate subject approved by the Commission for

                             post licensing or continuing education credit for Louisiana licensees.

C.       Every correspondence course for post licensing or continuing education shall require students to complete a

         written test consisting of a minimum of twenty multiple choice questions with four possible choices (a,b,c and

         d) for each two hours of continuing education credit or a minimum of forty multiple choice questions with four

         possible choices (a,b,c and d) for each four hours of post licensing credit. The written assignment or test a

         student submits for grading shall include the following statement:

         I certify that I have personally completed this assignment.



     Student’s Signature                                         Date

D.       All courses submitted for approval shall be in the exact format in which they will be sold to licensees for post

         licensing or continuing education credit.

E.       No changes will be made to approved correspondence course material without the prior written approval of

         the Commission.

F.       Education vendors shall:

         1.        Have the student’s name, social security number, address and payment prior to the student

                   receiving the course;

         2.        Not grade any written assignment or examination if it is presented for grading before the time frame

                   for course completion has been reached;

         3.        Not grade any test which does not contain the signed certification required by paragraph C, above;

         4.        Certify students as successfully completing a course only if the student completes any required

                   written assignments and pass the required examination on course content;

         5.        Issue certificates containing the following information to students completing education by

                   correspondence:
                             a.        Complete name of approved vendor and LREC vendor code;

                             b.        Name and social security number of student completing course;

                             c.        Specific course title;

                             d.        Number of hours of education received;

                             e.        Date of course completion;

                             f.        Signature of verifier of course completion;

                             g.        Indication that student successfully completed examination on course content;

                             h.        Correspondence study completion noted with the notation, “correspondence” or “C”.

         AUTHORITY NOTE:               Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:              Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                       26:

§5521.   Post Licensing and Continuing Education Instructor Qualifications

         A.        With the exception of guest lecturers, only those persons meeting at least one of the following qualifications

                   will be permitted to instruct approved post licensing and continuing education courses on a regular basis:

                   1.        A state certified real estate instructor holding a current certificate;

                   2.        A college or university professor in real estate, finance, business, economics, or related field; or

                   3.        A specialist with a degree or designation and experience teaching the subject(s) of proposed

                             instruction;

                   4.        A licensed real estate professional with at least five years experience in the area of proposed

                             instruction.

         B.        Guest lecturers shall not be utilized as instructors in courses pertaining to the Louisiana Real Estate License

                   Law or the Rules and Regulations of the Commission.

         AUTHORITY NOTE:               Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:              Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                       26:

§5523.   Prohibition of Recruiting

         A.        No person shall, at any time, while on the premises or facilities where an approved education course is being

                   taught, discuss the sponsorship of any student by any licensee of the Commission. Approved vendors shall
                  display the following statement in classrooms where continuing education courses are being taught: “No

                  person shall discuss the sponsorship of any student by any licensee of the Commission while on these

                  premises, or by any means, verbal or written, conduct any activity which in any way relates to the future

                  sponsorship of any student by any licensee of the Commission.”

         AUTHORITY NOTE:               Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:              Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                       26:

§5525.   Course Fees

         A.       When fees are charged for an approved course offering, vendors shall enter into a signed written agreement

                  with each individual stipulating the cost of the course and the vendor’s refund policy.

         AUTHORITY NOTE:               Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:              Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                       26:

§5527.   Course Completion Verification and Reporting Requirements

         A.       Each approved vendor shall provide written verification of attendance to each course participant and shall

                  provide the Commission, on a monthly basis, attendance verification on each participant. Approved vendors

                  may be required to use a standard certificate as specified by the Commission. Verifications shall include,

                  but may not be limited to, the following:

                  1.        Complete name of approved vendor and LREC vendor code;

                  2.        Name and social security number of participant;

                  3.        Specific course title;

                  4.        Number of hours completed;

                  5.        Date and, if applicable, an indication of successful completion of an examination on course

                            content;

                  6.        Signature of verifier of the course completion;

                  7.        When applicable, correspondence study completion noted.

         B.       Approved vendors shall submit to the Commission monthly schedules of course offerings and attendance

                  verification reports on each completed course. Such schedules shall be submitted to be received by the
                  Commission at least ten days prior to the beginning of each month. The information is to be submitted on

                  forms provided by the Commission.

         AUTHORITY NOTE:              Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:             Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                      26:

§5529.   Record Keeping

         A.       Approved vendors shall maintain, for five years, attendance records on each person completing an approved

                  course offering. In cases where a participant requires a duplicate of an attendance/verification record, it is

                  the responsibility of the vendor to provide a proof of completion verification to the participant. Reasonable

                  fees, if assessed for duplicate records, are to be determined by the vendor.

         B.       Approved vendors shall maintain properly indexed information on each approved offering, including all

                  records of attendance/verification reports submitted to the Commission.

         AUTHORITY NOTE:              Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:             Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                      26:

§5531.   Inspection or Monitoring of Approved Vendors/Courses

         A.       Commission representatives may audit any approved course offering to determine adequacy of course

                  presentation, content and compliance with post licensing and/or continuing education regulations.

         B.       Commission representatives may inspect vendor records during regular business hours to determine

                  compliance with record keeping requirements specified in this Chapter.

         AUTHORITY NOTE:              Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:             Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                      26:

§5533.   Prelicensing Schools Offering Post Licensing and Continuing Education Courses

         A.       In addition to prelicensing courses, any state certified real estate school may offer post licensing and

                  continuing education courses, provided the school applies for and receives approved continuing education

                  vendor status. No additional initial or renewal fees will be required of the school; however, filing fees for

                  each additional course approval request will be required as provided in R.S. 37:1443.
         B.      A separate Louisiana Real Estate Commission vendor code will be assigned to the school upon compliance

                 with post licensing and/or continuing education requirements.

         AUTHORITY NOTE:            Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:           Promulgated by the Department of Economic Development, Real Estate Commission, LR

                                    26:

§5535.   Advertisement
         A.       All advertisements by approved vendors shall state the exact name of the vendor as registered

                  with the Commission and the LREC vendor code number assigned by the Commission.

         AUTHORITY NOTE:              Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:             Promulgated by the Department of Economic Development, Real Estate

                                      Commission, LR 26:

§5537.   Change of Address

         A.       Any change in the address or telephone number of the administrative offices of an approved

                  vendor shall be reported to the Commission within ten days of the effective date of such change.

         AUTHORITY NOTE:              Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:             Promulgated by the Department of Economic Development, Real Estate

                                      Commission, LR 26:

§5539.   Post Licensing and Continuing Education on an Individual Basis

         A.       The Commission will consider for credit, on an individual basis, course work completed by

                  licensees through non-approved providers including, but not limited to, colleges and universities,

                  national appraisal organizations, the societies, institutes and councils of the National Association of

                  REALTORS® , National Association of Real Estate Brokers, and federal, state and local

                  governmental entities.

         B.       Licensees seeking approval for course work obtained through non-registered vendors/providers

                  shall apply for such approval by submitting documentation of attendance, hours completed, date of

                  attendance, and detailed course content information and, if applicable, verification of successful

                  completion of an examination on course content.

         C.       The Commission may approve, on a one time basis, courses offered by entities not registered as

                  approved vendors with the Commission. Such approvals may be granted to no more than three

                  specific locations per non-registered vendor and shall be limited to two courses per non-registered

                  vendor within a one year period. Non-registered vendors requesting approval beyond this limit will

                  be required to submit an application and receive approval as an approved vendor to be eligible to

                  offer additional courses for post licensing and/or continuing education credit. Entities requesting
                   approval under this provision shall comply with specific application and reporting procedures

                   required by the Commission.

         AUTHORITY NOTE:                    Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:                   Promulgated by the Department of Economic Development, Real Estate

                                            Commission, LR 26:

§5541.   Commission Sponsored Seminars - Continuing Education Only

         A.        As required by law, each year the Commission will provide annual continuing education courses

                   sufficient to satisfy the mandatory continuing education requirement at no additional cost to the

                   licensee.

         B.        Funds for the Commission sponsored programs are derived from the Real Estate Research and

                   Education Fund as provided in R.S. 37:1464.

         C.        Licensees attending Commission sponsored seminars shall comply with all attendance

                   requirements and shall not engage in conduct that is abusive, threatening or in any way degrading

                   the representatives of the Commission who have been assigned to monitor the seminars, or to any

                   other person present at the seminar. Licensees who engage in such conduct, shall be directed to

                   immediately leave the premises and a written report of the incident will be completed and

                   submitted to the Commission.

         AUTHORITY NOTE:                    Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:                   Promulgated by the Department of Economic Development, Real Estate

                                            Commission, LR 26:

§5543.   Seminar Instructor Qualifications

         A.        Instructors teaching Commission sponsored seminars shall qualify in one of the following

                   categories:

                   1.          A state certified real estate instructor's certificate in good standing with the Commission;

                   2.          A college or university professor in real estate, finance, business, economics or related

                               field; or,

                   3.          A specialist with a degree or designation with at least five years experience in the area of

                               proposed course instruction.
         AUTHORITY NOTE:               Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:              Promulgated by the Department of Economic Development, Real Estate

                                       Commission, LR 26:

§5545.   Minimum Length of Courses

         A.        Courses of instruction for continuing education purposes will not be approved by the Commission if

                   the total instruction time is less than two hours. Courses of instruction for post licensing purposes

                   will not be approved by the Commission if the total instruction time is less than four hours. Time

                   devoted to breakfasts, luncheons, dinners or other refreshments shall not be counted as instruction

                   time.

         B.        Credit shall not be given for any classroom hour consisting of less than fifty minutes of instruction

                   and/or study. A classroom hour is defined as sixty minutes, of which fifty minutes are instruction.

                   The prescribed number of classroom hours may include time devoted to examinations if a required

                   part of the course. Vendors shall not grant credit to any student for completing more than eight

                   hours of instruction in one calendar day.

         AUTHORITY NOTE:               Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:              Promulgated by the Department of Economic Development, Real Estate

                                       Commission, LR 26:

              a.   The licenses of each associate broker or salesperson who will not remain with the acquiring

                   agency;

              b.   Copies of the written notification to and/or from each associate broker and salesperson as required

                   by this Chapter;

              c.   A check from the acquiring agency in payment of the appropriate transfer fee for each licensee

                   who was sponsored by the agency being acquired and who will remain with the acquiring agency.

         AUTHORITY NOTE:               Promulgated in accordance with R.S. 37:1431 et seq.

         HISTORICAL NOTE:              Promulgated by the Department of Economic Development, Real Estate

                                       Commission, LR 26:

                                                   ***END OF DOCUMENT***

                                                         Dated 12-07-99
Addenda
Agency Law Changes

Definitions

        “Dual agency” means an agency relationship in which a licensee is working
with both buyer and seller or both landlord and tenant in the same transaction. A
relationship will not constitute dual agency if the licensee is the seller of property he
owns or if the property is owned by a real estate business of which the licensee is
the sole proprietor and agent. A relationship will not constitute dual agency if the
licensee is working with both landlord and tenant as to a lease, which does not
exceed a term of three years and the licensee is the landlord.

Duties of Licensees Representing Clients

       Nothing in this Chapter or in Chapter 17 of Title 37 shall be construed as to
require agency disclosure with regard to a lease that does not exceed a term of three
years and under which no sale of the subject property to the lessee is contemplated.

Dual Agency

        A licensee shall not be considered acting as a dual agent if the licensee is
working with both buyer and seller, if the licensee is the seller of property he owns or
if the property is owned by a real estate business of which the licensee is the sole
proprietor and agent. A relationship will not constitute dual agency if the licensee is
working with both landlord and tenant as to a lease, which does not exceed a term of
three years and the licensee is the landlord.

Fines

        The Commission may censure a license, registrant or certificate holder or
conditionally or unconditionally suspend or revoke any license, registration or
certificate issued. The Commission may also levy any fines or impose civil penalties,
not to exceed five thousand dollars.
                           AIDS Disclosure
AIDS Disclosure
      Background
             AIDS Disclosure
             Other Stigma
      Recommendations
Background:
       Agency disclosure, property condition disclosure – what other kinds of
disclosures do real estate professional need to make to customers? How about
stigmas such as murders, suicides, or AIDS? Do these factors need to be disclosed
during the real property transaction?

       The NATIONAL ASSOCIATION OF REALTORS® defines stigmatized
property as: “a property that has been psychologically impacted by an event which
occurred, or was suspected to have occurred, on the property, such even being one
that has no physical impact of any kind.”

       In other words, when dealing with a stigmatized property, real estate agents
are not dealing with facts about physical characteristics – they are dealing with fears
of a potential purchaser. The most common events associated with stigmatized
property are murders, suicides and criminal activity. Stigmatized property also
includes property in which a current or former occupant has been infected with HIV
or diagnosed with AIDS.

AIDS Disclosure

       The 1988 Fair Housing Act Amendments established the handicapped, which
includes people diagnosed with AIDS, as a new protected class. It is now illegal to
discriminate against people with handicaps just as it is illegal to discriminate on the
basis of race, color, religion, sex, national origin or familial status.

         According to the Department of Housing and Urban Development (HUD), it is
illegal for real estate agents to make unsolicited disclosures that a current or former
occupant of the property has AIDS. If a prospective purchaser directly asks an agent
if a current or former occupant has AIDS, and the agent knows this is in fact true,
HUD advises that the agent should not respond. NAR advises that the agent
respond as follows:

       It is the policy of our firm not to answer inquires of this nature one way or the
other since the firm feels that this information is not material to the transaction. In
addition, any type of response by me or other agents of our firm may be a violation of
the federal fair housing laws. If you believe that this information is relevant to your
decision to buy the property, you must pursue this investigation on your own.
Other Stigmas

         Although federal law provides guidelines for handling AIDS disclosures, there
are still “Grey” areas surrounding disclosures of other stigmas. When a property
defect is physical, disclosure is mandatory in most states. When the defect is an
emotional stigma, however, disclosure becomes dependent on materiality. The
following guidelines are designed to help a listing agent, when faced with information
regarding a potential stigma, determine whether or not a stigma is material to a
particular real estate transaction.
Recommendations:
Step #1, Determine whether the information is fact or fiction.

        Investigate the sources of the information, e.g., check newspaper accounts,
talk to neighbors, etc. Separate rumor from reality. If the stigma is based on rumor
and not on fact, you are under no obligation to disclose. If, on the other hand, the
stigma turns out to be factual, e.g., there was in fact a murder, you should proceed to
the next step.

Step #2, Determine materiality.

       To analyze the materiality of a stigma, you should ask yourself this question:
would knowing about the stigma affect the willingness of most people to buy the
property or reduce the amount of money they would pay for the property?

         Most stigmatized property cases involve stigmas that are less sensational
than say a multiple-murder. Less sensational stigmas may or may not impact on the
market value of the property. However, it is your job to make an analysis of what a
reasonable person would do with this information. Would a reasonable person be
willing to buy the property knowing about the stigma? Or, would a reasonable
person pay less for the property knowing about the stigma?

      If, at this point in the analysis, the answer is yes to either question, you have
concluded that the stigma is a material fact which should be disclosed.

Step #3, Consult state law.

       Louisiana law on psychologically impact property provides;

       § 1468. Psychologically impact property

       A. The fact or suspicion that a property might be or is psychologically
          impacted, such impact being the result of facts or suspicions, including but
          not limited to:

              (1) That an occupant of real property is, or was at one time, suspected
                  to be, infected or has been infected with Human Immuno-
                  deficiency Virus or diagnosed with Acquired Immune Deficiency
                  Syndrome, or any other disease which has been determined by
                  medical evidence to be highly unlikely to be transmitted through
                  the occupancy of a dwelling place; or

              (2) That the property was, or was at any time suspected to have been,
                  the site of a homicide, or other felony or a suicide;

       Is not a material fact or material defect regarding the condition of real estate
       that must be disclosed in a real estate transaction.

Step #4, Discuss disclosure with the sellers.

        Go back and talk to the sellers about what you have determined. Walk them
through you analysis and show them why this particular factor may make a
difference in the sale of their property.

        If the sellers agree to disclose the stigma, make the disclosure judiciously. It
is not necessary to disclose information about a stigma to those who simply express
interest in the property. The best time to disclose is at the contract proposal stage.
Present the subject as one more relevant piece of information about the property and
use simple non-threatening language.

        If the sellers disagree and refuse to disclose what you have determined to be
a material factor regarding the property, you will need to give up the listing. Because
the sellers are your clients, you cannot disclose information that they have specified
should remain confidential without violating one of the duties inherent in your agency
relationship with them. However, you may also be in violation of the basic duty to
disclose material factors that affect the value or desirability of the property. The best
way to handle this dilemma is to give up the listing.

Conclusion

       Remember that property stigmas are emotional issues that need to be
handled carefully. To reduce the legal risks in this area, it is essential that real
estate agents: understand the issues associated with stigmatized property, know
pertinent federal and state laws, and know how to evaluate facts and make informed
decisions about disclosure.
                                  Anti-Trust
Anti-Trust
       Background
       Recommendations
             Establishing the Commission Rate
             Perception vs. Reality
             Establishing Other Listing Policies
             Relations with Competitors
             Commission Splits
             Boycotts
       Addendum
             Sample Policy Statement
Background:
        The purpose of the antitrust laws is to protect competition and prevent
monopolies. Real estate brokers vigorously compete to secure an inventory of
listings to offer for sale. Once the contest for the listing is settled, brokers regularly
cooperate with one another to identify a ready, willing and able buyer. This dual
tradition of competition and cooperation, unique to the real estate profession,
presents frequent opportunities for antitrust misconduct. The real estate brokerage
business is under constant scrutiny, and any anticompetitive conduct is likely to be
defected and prosecuted. In today’s business environment, antitrust sensitivity is a
prerequisite for survival.

Federal Antitrust Law

       The Sherman Act is the foundation of federal antitrust law. It is the statute
upon which most federal antitrust litigation is based. Section 1 of the Sherman Act
simply states that:

       Every contract, combination in the form of trust or otherwise, or conspiracy, in
       restraint of trade... is hereby declared illegal.

       The literal language of the Sherman Act sets forth two basic elements of any
Section 1 violation. For a violation, there must be:

       (1) a contract, combination or conspiracy (2) that restrains trade

        A contract, combination or conspiracy element is satisfied whenever two or
more individuals or entities carry out a common scheme or plan. If adherence to a
common scheme or plan can be shown, the only remaining issue is whether or not
the effect of the scheme or plan is to restrain trade.

       The Supreme Court held shortly after the Sherman Act was passed, the Act
did not literally prohibit every contact that restrained participants in the marketplace,
since such a result would have outlawed all commercial contracts. Instead, the
Sherman Act on prohibits those contracts or combinations that unreasonably restrain
trade.

       The Supreme Court eventually identified certain types of restraints as so
inherently anticompetitive that adverse effects on trade are presumed without a need
for the plaintiff to introduce any evidence of the restraint’s impact on the market.
Such restraints are called per se offenses because its unreasonableness is
presumed. Accordingly, in a per se case, the only issue which determines whether a
defendant violated the Sherman Act is if he actually participated in the conspiracy.

       There are two per se restraints that are of vital concern to real estate
brokers:

       •   Conspiracies to fix prices; such as real estate commissions; and
       •   Group boycotts

        These restraints may arise in several areas: in relations with customers and
clients; relations with competitors; and relations with other service providers.
Recommendations:
        The primary areas of antitrust concern when dealing with customers and
clients are commission rates and other listing policies.

Establishing the Commission Rate

        One of the most fundamental decisions any business must make is
establishing the price it will charge for products or services. Real estate brokerage
firms are no different. Each firm must establish the fee it will charge for professional
services rendered when helping a client to arrange a successful real estate
transaction. In most cases, this fee is in the form of a commission. A commission is
the charge to a seller for successfully procuring a ready, willing and able buyer for
the seller’s property on terms set forth in a listing agreement, or other such terms as
the seller is willing to accept. Another form of commission is the charge to the buyer
by the buyer’s agent for assisting the buyer in locating and acquiring suitable
property.

       The antitrust concern relating to the determination of commissions in
conspiracy to fix prices. As was mentioned earlier, price-fixing is one of the two
primary per se offenses with which real estate brokers must be concerned. A broker
must take care to avoid even implying that he has discussed and/or reached
agreement on fees with other brokers. Salespeople must exercise similar caution to
avoid implications that their firm is part of price-fixing conspiracy.

Perception Versus Reality

        Real estate brokers must constantly remind themselves that the outcome of
courtroom trials in general, and antitrust trials in particular, do not necessarily
depend upon what actually happened at the time an alleged violation occurred.
Rather, the outcome of trials depends entirely upon what the judge or jury believes
happened during the relevant time period. Moreover, price fixing or other antitrust
conspiracies are rarely put into effect or proven by direct evidence of an agreement,
such as a document signed by all parties to the conspiracy. Rather, they are more
often proven by inferences drawn from the action of competitors, such as private
discussions about prices and subsequent uniformity of prices charged by the
participants in those discussions. As a result, antitrust compliance programs are
concerned, as much with avoiding conduct that created the appearance of
conspiracy as with conduct actually constitutes such a conspiracy.
      The keys to avoiding antitrust vulnerability based upon the fees a broker firm
charges for professional services rendered to a client are to:

       •    Establish the fees unilaterally without consultation or discussion with
            persons affiliated with any other competing firm;

       •    Insure that when the company’s brokers or salespeople discuss fees with
            actual or potential clients they use words that indicate to the listener that
            the services were priced independently and judiciously avoid words
            suggesting otherwise.

        When a firm is determining its commission or fee structure, it must
understand that antitrust conspiracies have been found without any evidence that
alleged conspirators actually consulted with each other before making a competitive
business decision, such as establishing a fee structure. It has been held to be
sufficient for one competitor to announce to one or more other competitors his
intention to take a particular action when the competitors then adopted the same
course of action within a short period of time. The announcement can be construed
as an invitation to conspire, and the subsequent action by the other competitors can
be construed as an acceptance of this invitation. An inference of conspiracy can be
drawn even if the other competitors had each already decided independently to
implement the particular policy, but had not already actually done so.

        It is therefore imperative that brokers never discuss, or even reveal, their
intentions concerning fees, or other competitive business activities, with or to
competitors. Such actions will “taint,” not only the subsequent decisions made by
the broker who raised the subject, but also the decisions of all other competitors to
whom the discussions or announcements were directed. Not only must brokers
avoid any discussions that could imply that commissions or commission splits are
the result of collusion, but they should also take positive steps to establish that their
commission rates and splits are determined unilaterally. Such supporting
documentation might include:

        •   Spread sheets to show business reasons for an increase;
        •   Memo to licensees explaining reasons for increase;
        •   Discussions with attorney prior to increase; and
        •   Maintenance of correspondence and appointment loges that show that
            other firms were not consulted.
        Once pricing decisions are made, the firm’s salespeople must present them to
clients in a manner that confirms that the fees were established independently. This
means never responding to a question about fees by referring to the pricing policies
of other competitors, or to a policy of a local association of REALTORS® that
supposedly prohibits or discourages price competition. Licensees should never use
statements like:

       “This is the rate every firm charges.”

       “I’d like to lower my commission, but no one else in the MLS will show your
       house unless the commission is __%.”

       “Commission rates are pretty standard.”

         Salespeople who make these statements put themselves and the firm in
jeopardy. Brokers and salespersons must learn to explain and, if necessary defend
their firm’s prices and other competitive business decisions in terms that are
consistent with competition, not conspiracy. If the firm cannot or will not reduce its
commission upon a client’s request, salespeople should point out the value of the
services the client will receive for the fee charged, and how these services will most
likely lead to a transaction at a fair price within the shortest period of time. A fast and
efficient transaction can often save a client much more than the commission
expense.

Establishing Other Listing Policies

       Commission rates are not the only “prices” that can be fixed by competing
real estate brokers. The term “price fixing” covers agreements to fix and economic
term of a listing agreement such as the length of a listing, the type of listing
accepted, or the formula upon which compensation will be based.

         When a firm has established listing policies, care must be taken to avoid
implying that they were not established unilaterally. Under no circumstances should
a client be told that the firm’s terms must be accepted because “this is what all
brokers do,” or “no one else will cooperate unless you accept the listing on these
terms,” or “I’d like to shorten the listing term, but if I do the MLS won’t accept the
listing.”

      Firms with company listing policies must make sure that salespeople are
prepared to explain the policies to clients in terms of how these policies will help the
client achieve his real estate goals. If a firm’s policies cannot be explained in these
terms, competitive forces will ultimately compel the firm to modify its policies, or
alternately, drive it out of business. The purpose of antitrust laws is to preserve the
efficient operation of these competitive market forces, for the ultimate benefit of the
consumer.

Relations with Competitors

        Antitrust is also an issue in a broker’s relationship with his competitors. Two
primary areas of antitrust concern when dealing with competitors are commission
splits and boycotts.

Commission Splits

       A per se illegal price fixing conspiracy can involve not only the prices a firm
charges customers or clients, but also the prices it may be willing to pay for goods
and services. More specifically, listing brokers traditionally compensate the
cooperative efforts of other brokers by paying the successful cooperating broker a
portion of the commission received from the seller, often called a commission “split.”

        Conspiracies among competitors to fix the compensation paid for the
cooperative efforts of other brokers are also per se illegal. For this reason, brokers
must determine their cooperative compensation policies in the same unilateral and
independent manner that they establish the commission or fees charged to clients.
Listing and cooperating brokers may, of course, frequently have occasion to discuss
or negotiate the compensation they will pay to each other. These negotiations,
however, should take place before an offer to purchase has been procured by the
cooperating office and should never include representatives of a third office.

         If a licensee is asked to compare his firm’s commission split policies with
those of other firms, the licensee should indicate that the amount of cooperative
compensation is designed to maximize the incentive of cooperating offices to sell the
listing. On the other hand, a licensee who works for a firm which offers a lesser
amount to cooperating firms than may be “typical” for that market must be prepared
to explain why this difference will not detract from the objective of attracting the
efforts of cooperating brokers and securing a satisfactory transaction in the shortest
amount of time.
Boycotts

        A practice which is in a sense directly at odds with cooperation is boycotting.
Along with price-fixing, boycotting is often deemed a per se offense of particular
party. Group boycotts occur when two or more businesses agree to refuse to deal
with another competitor in order to force a change in the competitor’s behavior, or to
drive the competitor out of business. When addressed as a per se violation of the
antitrust laws, an alleged conspirator has no opportunity to offer pro-competitive or
other justifications for the conduct.

       The typical boycott allegation in the real estate brokerage business is that two
or more firms have agreed to refuse to cooperate, or to cooperate on less favorable
terms, with a third firm, usually a discount, alternative or a buyer’s broker. The
purpose of the boycott, either explicitly or implicitly, is to eliminate the firm as
competitor in the market, or cause them to abandon their discount or alternative
marketing strategies. The antitrust laws are clear in stating that boycotts such as
these are per se illegal.

        As with price fixing conspiracies, real estate brokers or salespeople who act
as if there is a conspiracy among competitors not to cooperate with another
competitor, or to deal with them only on terms established by the conspirators, are
just as vulnerable to an antitrust lawsuit as those who actually do conspire.
Salesperson comments that create inferences of boycott conspiracies include:

       “Before you list with XYZ Realty, you should know that nobody works on their
       listings”

       “The MLS will not accept their listings because they charge a flat fee.”

       “If they were truly professional, they would not allow part-timers to work for
       them.”

       “I bet they’d drop their ‘discount’ program if we told them they couldn’t market
       our listings.”

        Brokers whose salespeople make comments such as these to buyers, sellers
or persons affiliated with other firms, will find their ability to adjust the terms and
conditions upon which they cooperate with other firms severely restricted. While a
broker is free to unilaterally choose to lower the compensation offered to a discount
or alternative firm, if he does so only after discussing the “problem,” even casually,
with other firms, the inference can be drawn that this action was pursuant to a
conspiracy to boycott the other firms. This is especially true if, as is often the case,
other firms in the market make similar contemporaneous decisions to lower their
compensation offers to the same firm.
Addendum
      Anti-Trust Compliance Policies of _____________________

       1. The commission rates of our firm are based upon the cost of the services
we provide, the value of these services to our clients and competitive market
conditions.

       2. Salespersons affiliated with this firm shall not participate in any discussion
with any person affiliated with or employed by another real estate firm concerning the
commission rates charged by this firm, or any other real estate firm in our
community.

         3. When soliciting a listing, or negotiating a listing agreement, no salesperson
affiliated with this firm shall make any reference to a “prevailing” commission level in
the community, the “going rate,” or any other words or phrases that suggest that
commission rates are uniform or “standard” within our marketing area.

         4. The amount of subagency compensation, or “commission split,” offered by
this firm to cooperating brokers is determined by the level of service we can expect a
cooperating office to perform, and the amount of compensation necessary to induce
cooperation under prevailing market conditions. Subagency compensation, or
commission splits, are not intended, and may not be used, to induce or compel any
other real estate firm in our marketing area to raise or lower the commission they
charge to their client.

         5. When soliciting or negotiating a listing agreement, no salesperson
affiliated with this office shall disparage the business practices of any other real
estate firm, not suggest that this office, or any other office, will not cooperate with
any other real estate firm. Listing presentations shall focus exclusively upon the
level of service and professionalism provided by this office, the results we have
achieved for other clients, and the value the client can expect to receive for the fees
we charge. Potential clients should be invited, and encouraged, to compare the
value of our services to those of any other real estate firm in our marketing area.
Likewise, any salesperson who is invited by a potential client to compare our
services with those of any other real estate firm should do so by emphasizing the
nature and quality of the services we provide.
       6. Whenever a salesperson is unsure about the proper way to respond to the
concerns of an actual or potential client or customer, or whenever a salesperson has
been present during an unauthorized discussion of fees or commissions, he should
contact his principal broker or sales manager immediately. IF necessary, the broker
manager will consult our firm’s attorney.

I have read, understand, and agree to abide by, the policies and procedures set forth
above.

                                    _______________________________________
                                    (Name of Salesperson)

Dated: __________________
                     Arbitration/Compliance
Arbitration/Compliance
        Background
        Recommendations
Background:
Frequently Asked Questions About Arbitration

1. What is arbitration?

      Arbitration is an informal hearing in front of a neutral third party, the arbitrator,
who discovers the facts of the dispute through testimony and documents, then
renders a final determination of the dispute, called an arbitration award.

2. How does the arbitration process work?

The basic structure of an arbitration process is as follows:

       •   If permitted under state law, parties to a real property transaction pre-
           commit to submitting their disputes to either binding or non-binding
           arbitration

       •   A dispute arises and a request for arbitration is made to the arbitration
           company. This request may be accompanied by a written complaint.

       •   Notice is given to the other relevant parties with a request for a response
           to the complaint.

       •   A list of qualified arbitrators is provided to the parties. Each party notes
           arbitrators that are acceptable to them. The arbitrator lists are matched
           and the arbitrator/s are appointed. There is usually an option to have one
           to three arbitrators on the panel.

       •   The arbitrators shall notify all parties to the dispute of the time and place
           for the hearing. Parties are also notified that they may be represented by
           legal counsel.

       •   Prior to the hearing, limited discover is allowed.

       •   During the hearing, each party may open with a statement of their position
           relative to the dispute. Testimony from witnesses may be heard and the
           witnesses cross-examined. Documents in support of a position are also
           received at this time.
       •   The hearing ends. The arbitrators render the award within a specified
           time period following the hearing.

3. How does arbitration differ from litigation?

     Arbitration is generally more relaxed, informal, faster and less expensive than
litigation. Discovery is usually limited to the production of relevant documents and
testimony from key witnesses. Like mediation, arbitration hearings are private and
only include the parties, attorneys, and witnesses relative to the dispute.

4. What is the difference between binding and non-binding
   arbitration?

    With binding arbitration, the parties agree to accept the arbitration award as the
final resolution of the dispute. With non-binding arbitration, parties generally have a
set period of time whereby they can set aside the award and proceed to litigation.
However, if at the end to the specified time period, the award is not rejected, the
award then becomes binding.

5. If a party signs a contract or an addendum that contains an
   arbitration clause, is the party required to arbitrate if a dispute
   arises?

    Definitely, yes. It is important for all parties to understand the ramifications of
committing to the arbitration process before the contract containing an arbitration
clause or addendum is signed. Once the contract is signed, not only are the parties
required to arbitrate the dispute, but in cases of binding arbitration, they have
committed to accept arbitration as the final arena for resolution of the dispute and
are precluded from litigating at a later date.

6. What types of disputes can be arbitrated?

    Almost any type of real estate dispute can be arbitrated, but, litigation may be the
best alternative for disputes criminal in nature or those that would benefit the real
estate industry by setting legal precedence.

7. Who pays for arbitration?
   Parties may negotiate their own arrangements. However, most parties split the
fees equally.

8. How much does arbitration cost?

    The cost of the arbitration depends on the size of the claim, the complexity of the
issues, and the arbitrator (For an example of the fee schedule, contact the Louisiana
REALTORS®).

9. Can a final arbitration award be appealed?

    An arbitration award can only be appealed on very narrow grounds, including
bias on the part of the arbitrator/s, exclusion of material evidence, and extreme
procedural violations.
Recommendations:
        The Louisiana REALTORS® has adopted the National Association of
REALTORS® Dispute Resolution System (DRS) Arbitration Program. If you wish to
arbitrate under this system, you should follow the steps outline below:

Step 1:

       Obtain a copy of the Association’s arbitration rules and procedures.

Step 2:

        Include the Association-approved arbitration clause or attach the approved
arbitration addendum with all of the firm’s listing agreement forms, buyer
representation forms, and purchase agreement forms.

Step 3:

       Educate all people about the arbitration process and the Association’s rules
and procedures.

       Because binding arbitration precludes parties from ever litigating the dispute,
real estate brokers and salespeople need to be certain that their explanation of the
process to potential clients/customers does not result n the unauthorized practice of
law. Part of the educational process should include an education session about how
to explain arbitration to potential clients/customers without engaging in the
unauthorized practice of law. This education session should be developed in
conjunction with legal counsel so that it complies with Louisiana law.

Step 4:

       Maintain arbitration packets for all potential clients/customers. These packets
should contain:

       •   An informational brochure on the Association’s arbitration program with a
           clear statement that encourages individuals to seek legal counsel prior to
           committing to binding arbitration.

       •   A copy of the Association’s arbitration rules and procedures.
       •   The name of the Association’s approved arbitration company and fees.

       •   The form to be completed to initiate arbitration; this form should note to
           where the form should note to where the form should be forwarded, i.e.,
           the Association or directly to the arbitration company.

       •   The informational packet should be provided to all potential
           clients/customers before they sign an agreement that includes an
           arbitration clause or addendum.

Step 5:

        When a dispute arises, because of the adversarial nature of the arbitration
process, direct all inquiries to the arbitration company. If you are initiating the
arbitration request, complete the form and submit it to the designated party on the
form. The arbitrator will contact all named parties and schedule the arbitration
hearing in accordance with the Association’s rules and procedures.

Step 6:

       Prepare for the arbitration hearing. In many cases, you will want to be
accompanied by legal counsel. Be certain that both you and your counsel
understand the arbitration process. Use the time prior to the hearing to prepare
witnesses and to gather relevant documents. Limited discovery may be initiated
between the parties and most likely will involve the exchange of documents. Most
importantly, work with legal counsel to prepare the opening and closing statements
and to anticipate questions and arguments from opposing parties.
                    Employment/Office Policies
Employment Laws
      Civil Rights Act of 1964
      Age Discrimination in Employment Act
      Americans with Disabilities Act
      Civil Rights Act of 1991
      Fair Labor Standards Act
      Equal Pay Act

Sexual Harassment
      Policy
      Employer Liability
      How to Reduce Liability
      Suggested Broker Policy Statement

The Employment Process
      Recruiting
      Advertisements
      Employment Applications
      Interviews
      Reference Checks
      Business Records
      Required Posters

Independent Contractor vs. Employee
      Sample Agreement

Real Estate Assistants

Directing Commissions to a Corporation

Addenda
     Technology Policies
           Improper Usage of E-mail
           No Right of Privacy with E-mail/Penalties
           Sexually Explicit Messages
Employment Laws:
       The legal duty not to discriminate on the basis of race, color, religion, sex,
national origin or age (40 or older) applies to a broker’s employment practices. In
addition to the various anti-discrimination statues, brokers may be subject to the
payment of minimum wages and overtime imposed by the Fair Labor Standards Act
and the mandates of “equal pay for equal work” under the Equal Pay Act.

Civil Rights Act of 1964

         The principal statute governing employment discrimination is Title VII of the
Civil Rights Act of 1964, as amended. Title VII makes it unlawful for an employer to
discriminate as to hiring, firing, compensation, terms, conditions or privileges of
employment on the basis of race, color, religion, sex or national origin. It also forbids
employers from limiting, segregating or classifying employees in any way that tends
to deprive any individual or employment opportunities or adversely affect his
employment status because of race, color, religion, sex or national origin. Title VII
applies to any private employer in an industry affecting interstate commerce with at
least fifteen (15) employees.

Age Discrimination in Employment Act

       The Age Discrimination in Employment Act (ADEA) prohibits discrimination
against individuals age40 and over on the basis of age. This Act applies to any
private employer engaged in an industry affecting interstate commerce with at least
twenty (20) employees.

Americans with Disabilities Act

      The Americans with Disabilities Act (ADA) prohibits discrimination based
upon disability. The ADA’s statutory definition of “disability” contains three prongs:

       1. A physical or mental impairment that substantially limits one or more
          major life activity of an individual;

       2. A record of such an impairment; or

       3. Being regarded as having such impairment.
         The Equal Employment Opportunity Commission regulations define “major life
activities” as functions such as caring for oneself, performing manual tasks, walking,
seeing, hearing, speaking, breathing, learning, standing, sitting, lifting, reading and
reaching.

       The ADA’s vagueness and ambiguities can make compliance with the ADA
troublesome. Thus, employers should approach the ADA cautiously when dealing
with any personnel decision that might implicate the ADA.

Civil Rights Act of 1991

       The Civil Rights Act of 1991 is another federal statute that impacts the
employment relationship and makes punitive damages and jury trials available to
alleged victims of employment discrimination based on sex, disability or religion.

Fair Labor Standards Act

        The Fair Labor Standards Act (FLSA) contains minimum wage, maximum
hour and child labor provisions. There are three basic tests to determine whether an
individual is covered by the Act. If any one of the tests is satisfied, the Act applies.
The first two tests look at the activities of the employee to determine overage,
whereas the third test focuses on activities of the business enterprise.

        Under the first test, an employee is covered if he is engaged in interstate
commerce. An employee is considered to be engaged in interstate commerce if he
regularly uses any of the instruments of interstate communication such as mail or
telephone, purchases or orders goods from other states, handles goods received
from other states or travels across state lines in the performance of his duties.
“Goods” include reports, contracts, credit instruments and letters. Second, coverage
is provided to any employee engaged in the production of goods for interstate
commerce. Under the third test, any employee of an enterprise engaged in the
production of goods in commerce or which uses instrumentalities of interstate
commerce in its business is covered. This “enterprise” test would include employees
of real estate firms provided the firm’s gross income amounts to $500,000 or more
per year and the interstate commerce requirement is met.

Equal Pay Act
      The Equal Pay Act prohibits any wage disparity on account of sex in
substantially equal jobs. The Act is applicable to any employer subject to the Fair
Labor Standards Act.
Sexual Harassment:
       According to Section 703 of Title VII of the Civil Rights Act of 1964, sex
discrimination in the workplace is illegal. In a 1986 landmark decision, in the case of
Meritor Savings Bank v. Vinson, the United States Supreme Court held that sexual
harassment is a form of illegal discrimination and that employees have the right to
work in an environment which is free from sexual harassment. But what exactly is
sexual harassment and what impact does it have in the real estate office today?

       The Federal Equal Employment Opportunity Commission (EEOC) defines
sexual harassment as:

        Unwelcome sexual advances, requests for sexual favors, and other verbal or
physical conduct of a sexual nature...when (1) submission to such conduct is made
either explicitly or implicitly a term or condition of an individual’s employment; (2)
submission to or rejection of such conduct by an individual is used as the basis for
employment decisions affecting such individual, or; (3) such conduct has the
purpose or effect of unreasonably interfering with an individual’s work performance
or creating an intimidating, hostile or offensive working environment.

          The Supreme Court has stressed two important factors for sexual harassment
claims:

          •   No tangible job benefit has to be lost in order to bring a sexual
              harassment claim; and

          •   Sexual harassment can consist of two types: quid pro quo and hostile
              environment

       Quid pro quo is defined as requiring an employee to submit to sexual activity
to obtain a tangible job benefit. In general this means requiring an employee to
provide sexual favors in return for a raise, promotion or in order to maintain their job.

       A hostile environment exists when an employee makes sexual requests,
gestures, remarks, etc., to another employee and thereby creates a hostile
environment in which the target employee must work. If a claim of hostile
environment is raised, employers must argue either that the activity did not take
place at all or the activity was welcome by the employee bringing the claim.
Sexual Harassment Policy

        Adoption of a general anti-discrimination policy by a company is not sufficient
to protect it from a sexual harassment claim. The Supreme Court held that
companies must have and enforce a policy which addresses the issue of sexual
harassment to afford the employer protection if a sexual harassment claim should
arise. Note, however, that it is not necessary for an employee to follow the
company’s complaint procedures process prior to filing a claim in court.

Employer Liability

        When faced with a sexual harassment claim, employers would often argue
that they were not liable because they were unaware that any sexual harassment
activity existed. The Supreme Court held that, an employer must have policies and
procedures in place for an aggrieved person to follow should sexual harassment
exist. Under EEOC Guidelines, employers are strictly liable for the acts of their
supervisory employees and their actions “regardless of whether the employer know,
should have known, authorized or even forbade such acts.” Consequently,
employers are automatically liable for quid pro quo harassment. If, however, the
acts are committed by a non-supervisory employee, such as in a hostile environment
situation, the employer is only liable for acts the employer knew or should have
known about. In other words, supervisors and managers’ actions directly bind their
employer. A person is considered a supervisor if they perform supervisory duties,
even though they may not possess the authority to hire or fire.

How to Reduce Liability

        A sexual harassment policy should be developed and enforced, with the
assistance of your legal counsel. Every worker in the office should be provided with
a copy of the policy and acknowledge, in writing, that they read and understand the
policy. Keep the acknowledgements on file. The policy should consist of:

       •   An explanation of what constitutes sexual harassment.

       •   Names of individuals to whom sexual harassment claims should be
           reported including individuals other than the direct supervisor.

       •   A statement that no retaliation will occur to anyone bringing forth an
           alleged sexual harassment claim.
       •   Investigatory procedures to follow when sexual harassment is alleged.

       •   Disciplinary action to be taken against those employees who file a false
           sexual harassment claim.

        When an employer has actual notice of a hostile working environment, either
through a complaint by the victim or because of the open and notorious nature of the
hostile environment, the employer should take prompt and effective remedial action
to avoid liability under Title VII. Upon receiving notice of a hostile working
environment an employer should:

       •   Act promptly.

       •   Conduct a thorough and fair investigation.

       •   Take actions to stop any harassment.

       •   Focus remedial action on the perpetrator and not the victim.

       •   Consider punitive actions to deter future harassment.
      Suggested Broker Policy Statement on Sexual Harassment

       Because harassment is a serious offense, the (firm name) will deal with
these issues in the strictest terms, which may include termination if you are found to
have engaged in such conduct. The (firm name) policy states that the following
people may not harass you: co-workers, supervisors, any member of the firm, any
guest, or visitor to the firm. If you believe you have been harassed, please bring the
problem to the attention of your supervisor and provide names of other individuals.
You do not have to put your claim in writing, but it is helpful to provide details about
dates, times, places, and witnesses to the harassment.

         All complaints will be investigated promptly by (provide name of individual).
The identity of the employee making the complaint as well as the identity of the
individual accused of sexual, ethnic, racial, or religious harassment will be kept
strictly confidential. Information regarding the charge will not be made known to
anyone who is not directly involved either as a party, or a member of the
investigatory team. Witnesses interviewed will be provided only such information as
is necessary to elicit from their observations and other relevant information.

        No one may retaliate against you if you file a charge of harassment against
them. The (firm name) will make ever effort to prevent possible retaliation against
you under such circumstances. If your complaint of harassment is found to be totally
and completely without basis, appropriate measures may be taken against you. This
should not discourage you from making a complaint if you believe you have been a
victim of sexual, racial, or ethnic harassment.
The Employment Process:
Recruiting

       Recruiting is the first step of the employment process and first area of
potential legal exposure. This exposure can result from allegedly “hiring away”
another’s employee, from violation of a valid restrictive covenant, from the use of
recruitment methods that fail to inform minorities and women about work
opportunities or from advertisements of job openings that indicate a preference on a
prohibited basis such as sex or race.

       Some states recognize a legal cause of action for tortious interference with a
business relationship, or “hiring away” of another’s employee. Louisiana, however,
generally does not recognize a cause of action for tortious interference with a
contract in the context of “hiring away” another’s employees.

         An employer must exercise caution when hiring an employee who is subject
to a valid restrictive covenant such as a noncompete agreement, because the
restrictive covenant may limit the employee’s ability to perform. For example, the
restrictive covenant may prevent the employee from competing with the former
employer or from soliciting the former employer’s customers. Louisiana courts,
however, will not enforce such covenants unless the covenants strictly comply with
Louisiana statutory authority, due to the restraints the covenants impose on an
individual’s freedom.

        The National Association’s Code of Ethics formerly contained an Article that
prohibited a REALTOR® from soliciting the services of an employee or independent
contractor of another REALTOR® without providing prior notice to that REALTOR®.
The purpose of this Article of the Code of Ethics was to discourage salespeople from
breaching their agreements with a broker and to prevent REALTORS® from inducing
salespeople to breach such agreements. This Article was deleted from the Code of
Ethics in 1982 and brokers can no longer rely on this ethical obligation to protect
them from the “hiring away” of these salespeople.

Advertisements

       When preparing advertisements for job openings, do not use any words that
indicate a preference that is prohibited by law. For example, the use of masculine or
feminine terms in advertisements, such as the term “salesman,” would constitute an
unlawful expression of sex preference. Use terms that are considered sexually
“neutral” such as “salesperson” or “sales agent.” Also avoid use of phrases such as
“young and aggressive salesperson” or “recent graduate” which indicate a
preference for youth. Finally, always add “Equal Opportunity Employer” to all ads.

Employment Applications

        The objective to be achieved through an employment application is to elicit
only that information necessary to make an informed decision about the applicant’s
qualifications while avoiding inquiries which are unlawful or could constitute evidence
of an unlawful objective. It is reasonable for an applicant to assume that all
questions on an application are there for a reason and that hiring decisions are made
on the basis of the answers given. Therefore, the only questions that should appear
on an application are those necessary to obtain information to evaluate an
applicant’s qualifications for a job. Asking other questions leaves the employer
vulnerable to charges of discrimination. For example, do not ask for date of birth or
age. Do not ask about arrest records which is considered improper because
members of minority groups tend to be arrested proportionately more often than
other persons. And, do not ask where an applicant or his parents were born or of
what country he is a citizen, although it is permissible to inquire whether an applicant
is a United States citizen or possesses a visa which permits him to work in the
United States.

       It is not permissible to ask “do you have any handicaps?”. However, it is
permissible to inquire whether an applicant has any handicap that would prevent him
from performing the job. If the response is “yes,” an employer may have a duty to
make reasonable accommodations for qualified applicants who can perform the
primary functions of the job under the Americans with Disabilities Act.

       Do not ask the applicant’s marital status. It is acceptable to ask whether the
applicant has any responsibilities that might prevent him from meeting work or
attendance schedules. Such questions, however, must be asked of all applicants.

        It is appropriate to ask about membership in professional associations but not
social or religious clubs that reveal religion, national origin or other no-job-related
factors.

       All applications should contain language whereby the applicant authorizes the
company to conduct a thorough investigation into the accuracy of the information
provided by the applicant.
       Do not accept applications where there are no positions available. Any
review of a firm’s hiring practices conducted in connection with a charge of
discrimination will take into consideration total applicant flow – whether those
applicants were qualified or not and regardless of whether there were any job
openings at the time the application was received.

Interviews

        When conducting employment interviews the goal once again is to elicit only
that information necessary to make informed employment decisions and avoid
questions that are not job-related. The same questions that are inappropriate for
inclusion on an application form are equally inappropriate for an interview.

        Be certain that each question asked in an interview has a direct relation to the
qualifications required for the job. For example, when interviewing for real estate
salespeople, ask questions pertaining to their experience and training in real estate,
attitudes toward selling, and views and expectations of their real estate career. It
may be helpful to outline in advance specific areas of inquiry to assure that the
interview is as effective as possible.

Reference Checks

         Reference checks are commonly used in making employment decisions and
constitute a legitimate source of job-related information. They are also a potential
source of litigation. If a former employer fives out information that the former
employee deems harmful or derogatory, the former employer is might be sued for
slander or libel. The employer would then be required to prove the truthfulness of
the statement to avoid liability. If the prospective employer refuses to hire someone
on the basis of information obtained through a reference check, it could also lead to
litigation. Therefore, caution should be exercised both when giving out information
on former employees, or requesting information on prospective employees.

        The company might want to establish a policy that it will only respond to
written inquiries and that all responses will also be written. This type of a policy will
help limit any misunderstanding or misinterpretation of the question asked and the
response provided. Additional protection is afforded by obtaining the employee’s
written consent to the release of information to third parties and only releasing what
has been authorized. A different approach which also limits legal exposure is to
adopt a policy limiting the information provided to verification of employment, dates
of employment and position held.

       When seeking references, remember that questions that cannot be asked of
the applicant directly cannot be asked of a former employee. Request only job-
related information such as length of employment, performance, specific
responsibilities and skills, and reason for termination.

Business Records

        There are certain business records an employer must keep to comply with
federal laws such as the Fair Labor Standards Act (FLSA), Title VII of the Civil Rights
Act of 1986 and the Age Discrimination in Employment Act (ADEA). In addition,
many states have laws requiring employers to maintain certain records for specified
lengths of time. It is an employer’s responsibility to keep necessary records and to
assure that they are accurate. Please refer to these referenced statutes if they apply
to you to determine the current record keeping requirements.

Required Posters

       Several state and federal laws or regulations require that employers covered
by particular statutes display posters which advise employees of their rights under
the law. Posters that may be required by federal law are:

       •   Your Rights Under the Fair Standards Act

       •   Equal Employment Opportunity is the Law

       •   Job Safety and Health Protection

       These posters may be obtained free of charge from regional offices of the
United States Department of Labor.

      In addition to the possible need to display one or more of the federal posters,
employers may also have poster obligations under state laws. Posters are
commonly required of employers to state worker’s compensation or minimum wage
laws.
Independent Contractor vs. Employee
         The real estate profession has always placed great value on the qualities of
self-reliance, individual motivation and personal independence, which are
characteristic of its members. As might be expected. Substantial portions of all real
estate brokers have structured their businesses to accommodate independent
contractor salespeople. Still others operate with both independent contractors and
employee salespeople.

       The relationship established between a broker and sales associate may fall
into one of three categories:

       •   Employee

       •   Common-law Independent Contractor

       •   Statutory Independent Contractor

       Historically, the determination of whether a sales associate was an employee
or independent contractor was made under common law rules. Under the common
law, a sales associate generally is deemed to be an employee if the broker has the
right to control and direct not only the result to be accomplished, but also the details
and means by which the result is accomplished. Thus, the most important factor
under the common law is the degree of control or right of control which the broker
has over the manner in which the sales associate operates.

        While under common law, the presence or absence of a right of control is said
to be the sole consideration in determining whether the status of a salesperson is
that of an employee or independent contractor, twenty factors are taken into
consideration by the Internal Revenue Service. For example, the form in which a
salesperson receives his compensation is taken as a significant indicator of whether
that salesperson is an employee or an independent contractor, even though the
manner of compensation would appear to have little, if any, relation to the manner in
which the salesperson executes his responsibilities. Other examples of factors not
directly bearing upon control that are considered include the assumption of business
expenses and insurance coverage by the broker. While many factors are applied, no
one factor is determinative of whether a salesperson is an employee or an
independent contractor. Rather, many factors are weighed and evaluated in light of
one another before a conclusion can be reached.
       Due in part to the difficulty that frequently arose in the application of these
factors by the Internal Revenue Service, Congress is 1982 created a new category
of independent contractor for federal tax purposes known as a “statutory non-
employee” or “statutory independent contractor.”

         To qualify as a statutory independent contractor, the following three (3)
criteria must be met:

       1. The sales associate must be a licensed real estate agent.

       2. Substantially all of the sales associate’s remuneration for the services
          performed as a real estate agent must be directly related to sales or other
          output rather than to the number of hours worked.

       3. A written agreement must exist between the sales associate and the
          person for whom he works, which agreement must provide that the sales
          associate will not be treated as an employee with respect to such services
          for federal state tax purposes.

       The three-part statutory test addresses the independent contractor issue for
federal tax purposes only. The statute does not control whether a sales associate is
an employee or an independent contractor under the various state laws governing
worker’s compensation, unemployment compensation or state income taxation.
These determinations continue to be governed by state statute or judicial decision.

        If a salesperson is a statutory independent contractor for federal tax purposes
but a common-law independent contractor for state tax purposes, the broker must
adhere to the standards applicable to the most restrictive of the two types of
relationships which, in most instances, will be that of the common-law independent
contractor.

        A broker should decide the manner in which he wishes to operate his real
estate business and then select the type of broker/agent relationship best suited to
that framework. The broker must remember that his office operations and treatment
of specific agents should be consistent with the type of relationship selected.

       A broker may determine that his interests are best served by hiring agents as
employees rather than independent contractors when the right to control the method
by which results are accomplished is of utmost concern. See the Summary Chart
Comparison of Employee/Common Law and Statutory Independent Contractors on
page 12 for additional information.

       If a broker chooses this relationship, he must become fully knowledgeable
about employment laws.

Employment/Independent Contractor Agreements

        Some state require that brokers have a written agreement with each
salesperson. In addition to meeting legal requirements, there are many advantages
to having a written agreement with salespeople. It is a method to specify clearly the
obligations of each party, and thereby minimize misunderstandings that can arise
from unwritten agreements. For example, the agreement can detail and memorialize
compensation agreements, including a statement regarding payment of commissions
on pending transactions upon departure of the sales associate. It can also include a
provision to assure adequate notice of departure by the salesperson. There can be
a clause specifying what, if any, records, files or other documents or information, can
be removed by salespersons upon termination.

       In sum, a contract will serve to foster a better understanding between a
broker and his salespeople, and minimize the possibility of eventual disagreement
over the subjects covered by the contract.

        The many benefits that result from a written agreement between a broker and
his salespeople will be diminished significantly, however, unless the broker conducts
a periodic review of the terms of the agreement with each salesperson. Such a
review should occur at least annually for the purposes of assuring awareness of the
terms, providing an opportunity to make any necessary changes, and confirming that
the agreement accurately reflects the true nature of their relationship.

       A sample independent contractor agreement is included in this section. You
should have it reviewed by your legal counsel to assure it is appropriate for your
intended use. Alternatively, you may wish to have your attorney draft a specific
agreement for use in your office.

        An additional method of documenting the relationship between a broker and
his salespeople is by use of a company policy manual. These manuals cover basic
operations of the office, and may include topics such as business dress and conduct,
keys and where they are located, procedures for long distance calls, advertising
policies, including yard signs, “just listed” and “new neighbor” cards, office equipment
and supplies, requirements for auto insurance, brokerage fees and sales
commissions, referral fees and postage costs.

        It is not common for a broker to enter into a written contractual relationship
with an administrative employee such as a receptionist, secretary or bookkeeper. It
may, however, be useful to have a policy manual for these employees which covers
policies such as pay periods, paid holidays, vacations and the scheduling thereof,
sick days, hours of work, including overtime, dress code and employee benefit plans.

       While not required by law, an item that should be included in any office policy
manual is a statement setting forth the firm’s position on equal employment
opportunity. Such a statement of policy, could be as simple as:

       The _________________ company has been and is fully committed to equal
       Opportunity, both in principle and as a matter of policy. Our employment
       policies and practices require that we provide equal opportunity to all
       applicants, independent contractors and employees, without regard to race,
       color, religion, sex, or national origin, age or disability.

       While the use of a policy manual will serve to simplify day to day operations,
employers must be aware of a growing judicial trend which holds that statements
made in a policy manual may constitute a legally enforceable contract. For example,
statements in employee manuals that employees will only be discharged for cause
have been held to constitute binding legal obligations on the employers. It may be
possible to avoid the impact of these state court rulings by incorporating a disclaimer
of any contractual commitments into the policy manual. Legal guidance should be
obtained regarding the status of the law in your state on this issue and what steps
must be taken to avoid making any undesirable legal commitments.
Sample Agreement
Employment Agreement

       This Employment Agreement (the “Agreement”) is entered into this day of
       , 20 , by and between   (“Broker”) and        (“Salesperson”).

        Broker is engaged in business as a general real estate broker in
        , among other places, and is qualified to and does operate a general real
estate business and is qualified to and does procure the listings of real estate for
sale, lease or rental, and prospective purchaser, lessees and renters thereof and has
and does enjoy the good will of, and a reputation for fair dealing with the public; and

        Broker maintains an office in        , State of Louisiana, properly equipped
with furnishings and other equipment necessary and incidental to the proper
operation of its business, and staffed with individuals capable of serving the public as
a real estate broker; and

       Salesperson is engaged in business as a licensed real estate salesperson
and has enjoyed and does enjoy a reputation for fair and honest dealing with the
public as such; and

       It is deemed to be the mutual advantage of Broker and Salesperson to form
the association as set forth in this Agreement.

It Is Agreed:

         1. Listings and Cooperation. Broker shall make available to Salesperson all
current listings of the office, except such as Broker for valid and usual business
reasons may place exclusively in the temporary possession of some other
salesperson. Broker may, upon request, assist Salesperson in his or her work by
advice and instruction. Broker shall provide to Salesperson full cooperation in every
way possible. Nothing herein shall be construed to require that Salesperson accept
or service any particular listing or prospective listing offered by Broker; nor shall
Broker have any right or authority to direct that Salesperson accept or service any
Broker have any right or authority to direct that Salesperson accept or service
particular parties, or restrict Salesperson’s activities to particular areas. Broker shall
have no right, except to the extent required by law, to direct or limit Salesperson’s
activities as to hours, leads, open houses, opportunity or floor time, production,
prospects, reports, sales, sales meetings, schedules, services, inventory, time off,
training, vacation, or other similar activities.

         2. Use of Facilities. Salesperson may share with other salespeople all the
facilities of the office now located at    , in         , Louisiana.

         3. Efforts by Salesperson. Salesperson shall work diligently and with his or
her best efforts to sell, lease or rent any and all real estate listed with Broker, to
solicit additional listings and customers for Broker, and otherwise promote the
business of serving the public in real estate transactions to the end that each of the
parties to this agreement may derive the greatest profit possible. Broker agrees that
thereby Broker obtains no authority or right to direct or control Salesperson’s
activities, except as may be required by the statute of the State of Louisiana and the
rules and regulations of the Louisiana Real Estate Commission, and Salesperson
assumes and retains discretion for methods, techniques and procedures in soliciting
and obtaining listings and sales, rentals or leases of listed property.

       4. Conduct of Business. Salesperson shall conduct his or her business in
such a manner so as to maintain and to increase the good will and reputation of
Broker and Salesperson and shall conform to and shall abide by all laws, rules and
regulations and codes of ethics that are binding upon or applicable to real estate
brokers and real estate salespeople.

        5. Compensation of Salespersons. The compensation of the Salesperson
shall be based upon a proportionate share of the commissions charged by the
Broker for services rendered in real estate transactions in which the Salesperson
may be involved. When Salesperson shall perform any service pursuant to this
Agreement, whereby a commission is earned, the commission shall, when collected,
be divided between Broker and Salesperson pursuant to the schedule set out in
Exhibit “A,” a copy of which is attached hereto and incorporated herein by this
reference, and which Salesperson acknowledges he or she has received. Broker
shall advise Salesperson of any special contract relating to any particular transaction
which Salesperson may undertake to handle. In the event of special arrangements
with any client of Broker or Salesperson on property listed may apply, such rate of
division to be agreed upon in advance by Broker and a service, or claim to have
done so, the amount of commission over that accruing to Broker shall be divided
between the participating salespeople according to agreement between them, or in
the absence of an agreement, in no case shall Salesperson be personally liable to
Broker for any commission, but, when the commission shall have been collected
from the party or parties for whom the services were performed, Broker shall hold it
in trust for Salesperson and Broker to be divided according to the terms of this
Agreement.

       6. Payment of Commissions. The division and distribution of earned
commission as set out in paragraph 5 of this Agreement shall take place as soon as
practicable after collection of such commission from the party and parties for whom
the services may have been performed.

        7. Expenses. Broker shall not be liable to Salesperson for any expenses
incurred by Salesperson for any expenses incurred by Salesperson or for any of his
or her acts, nor shall Salesperson be liable to Broker for office help or expenses.
Salesperson shall have no authority to bind Broker unless specifically authorized in a
particular transaction. The expenses of attorneys’ fees, multiple listing fees, costs,
title expenses, and similar fees or expenses which must, by reason or necessity, be
paid from the commission or are incurred in the collection of or the attempt to collect
the commission, shall be paid by the parties as provided for in this agreement in the
division of the commission or as otherwise agreed to by the parties. Suits for
commission shall be maintained only in the name of the Broker.

         8. Termination. This Agreement and the association created hereby may
be terminated by either party at any time, upon written notice given to the other, but
the rights of Salesperson to any commissions which accrued prior to such notice
shall not be divested by the termination of this Agreement. Upon termination, all
listing and prospects shall be those of Broker, as its sole property, and Salesperson
shall return all listings, manuals and materials, forms and sales literature loaned to
Salesperson by Broker.

       9. Unfair Advantage. Salesperson shall not, after the termination of this
Agreement, use to his or her advantage, or the advantage of any other person, firm
or corporation any information gained for or from the files or business of Broker.

        10. Legal States and Responsibilities. It is intended that the relationship
established hereby is one of independent contractor and not that of servant,
employee, joint venturer, agency or partnership. It is understood as follows:

(a)    The Broker has the right to control the result of the work and not the means or
methods for accomplishing the result.
(b)    The Salesperson shall pay any amounts due as a result of the Federal
Insurance Contributions Act (FICA), the Federal Unemployment Act (FUTA, and
federal or state income tax in regard to the Salesperson’s earnings and to furnish
proof of said payment in a form reasonably requested by Broker.
(c)    The Salesperson shall not be required to meet any sales quota.
(d)    The Salesperson shall be entitled to engage in any other kind of work,
besides real estate sales or leasing for any other person.
(e)    The Salesperson may hire other people to assist with clerical and accounting
work as needed.
(f)    The company manual does not contain any mandatory rules.
(g)    The Broker shall not make appointments for Salespersons or determine
whether appointments are kept.
(h)    No draw or other form of minimum income shall be provided by Broker to the
Salesperson.
(i)    Salesperson shall not be treated as an employee with respect to the services
performed hereunder for federal tax purposes.
(j)    The Salesperson will not be treated as an employee with respect to the
services performed by such Salesperson as a real estate agent for all Louisiana tax
purposes, including, but not limited to, income tax, unemployment insurance tax, and
workman’s compensation.
(k)    All of the Salesperson’s remuneration (whether or not paid in cash) for the
services performed as a real estate agent will be directly related to sales or other
output rather than to the number of hours worked.

       IN WITNESS WHEREOF, the parties hereto have signed or caused this
contract to be signed, all on the day and date first above written.

                                   BROKER:

                                   Printed Name:
                                   Title:

                                   SALESPERSON:

                                   Printed Name:
                                   Title:
Real Estate Assistants
Background:
        The Louisiana Real Estate Commission receives several requests a week
relative to the question of what types of activities can be carried on by unlicensed
clerical workers and “real estate assistants.” The later term appears to apply to
person who are hired by real estate salespersons and associate brokers, sometimes
without the knowledge and often not under the supervision of their sponsoring
brokers, pursuant to an independent contractor agreement. Their duties vary, as do
the methods by which they are compensated for their services. Louisiana licensees
are urged to review the current edition of the Louisiana Real Estate Reference
Manual for specific information, but in general the following guidelines apply:

A secretary or assistant CAN:
1. Answer the phone and forward calls to a licensee;
2. Submit listings and changes to a multiple listing service;
3. Follow up on loan commitments after a contract has been negotiated;
4. Place signs on property listed;
5. Order items of routine repair as directed by licensee;
6. Prepare flyers and promotional information for approval by licensee and
   supervising broker;
7. Type contract forms as directed by licensee and supervising broker;
8. Act as courier service to deliver documents, pick up keys, etc;
9. Schedule appointments for licensee to show listed property;
10. Secure documents (public information) from the courthouse, sewer district, water
    district, etc;
11. Have keys made for company listings;
12. Write ads as directed by licensee and;
13. Be at an open house for security purposes.

A secretary or assistant CANNOT:
1. Host open houses;
2. Prepare promotional materials or ads without the review and approval of licensee
   and supervising broker;
3. Show property listed for sale;
4. Answer any questions on listings;
5. Discuss or explain a contract, listing or other real estate document with anyone
   outside the firm;
6. Work as a licensee/secretary in one firm and do real estate related activities with
   that firm, while licensed with another firm;
7. Be paid on the basis of real estate activity, such as a percentage of commission,
   or any amount based on listings, sales, etc.;
8. Negotiate or agree to any commission, commission split management fee or
   referral fee on behalf of a licensee.

        Licensees are advised to review LA. R.S.37: 1431 (7) (a) through (h), which
describes those activities that require a real estate license. LA. R.S.37: 1446 (C)
specifically prohibits associate brokers and sales persons from paying or offering to
pay any commission or valuable consideration to anyone for performing any of the
acts reserved for licensees, and LA. R.S.37: 1455 A (1) gives the Louisiana Real
Estate Commission the authority to censure, suspend, or revoke a real estate license
for violation of the License Law. Consequently, should there be a problem, it is not
only this licensee employing the unlicensed assistant whom may be in jeopardy, it is
also that licensee’s sponsoring broker. For this reason, sponsoring brokers may find
it beneficial to establish uniform policies within their agencies on what activities may
be performed by these personnel.
Directing Commissions to a Corporation
Background
         During the 1997 regular legislative session, a bill passed that will allow
associate brokers and salespersons to direct their commission checks to be paid to
an unlicensed corporation. The associate broker or salesperson must be the sole
officer, director or shareholder of that unlicensed corporation.

Suggested Broker Policy
       Have your associate broker or salesperson consult a legal counselor or a
CPA for advice about setting up a corporation. Information on establishing a
corporation may also be obtained from the Secretary of State at 1-800-259-0001 or
225-922-2675.

Sample Form for Brokers to Use When a Licensee Requests Commissions be
Paid to a Corporation
       I, __________________________ (Name of licensee), request that my
commissions be paid to ________________________________(Name and address
of corporation), or which I am the sole director, shareholder, and officer. If there is a
change in the directorship, ownership or shares or officers, I will notify
______________________ (Name of Broker) of any said changes within _____
days of the effective date of the change.

Licensee _____________________________                     Date: _________________
                  (Signature)
Broker      _____________________________                  Date: _________________
                     (Signature)

Please check with your legal counsel before implementing any procedures for
payment of commissions to a corporation. This form is strictly for
informational purposes only.
Addenda
Employment/Office Policies

Technology Policies

Improper Usage of E-mail
       E-mail is not to be used for personal, private or non-business matters or to
communicate person, private or non-business matters. Anything that might be
construed as harassment of offensive to others based on race, color, religion, sex
age, disability, familial status or national origin should not be communicated.

No Right to Privacy/Penalties
        There shall be no right of privacy with respect to E-mail of Internet access. All
passwords must be shared with the principal/managing broker. If there is a violation
of the above, he/she is subject to discipline, including termination.

Sexually Explicit Messages
        There shall be no printing, displaying, downloading or sending of any sexually
explicit message, images, cartoons or jokes. If a person receives these, they should
advise the sender that they are not permitted to receive such information.
                     Environmental Overview
Environmental Overview
       Background
       Recommendations on:
          Asbestos
          Formaldehyde Gas
          Lead
          Radon Gas
          Underground Storage Tanks (UST’s)
          Ground Water Contamination
          Electro-Magnetic Fields (EMF’s)
          Waste Disposal Sites
       Addenda
          Environmental Contacts
          Environmental Site Assessments
          Dry Cleaners
          Underground Storage Tanks (UST’s)
Background
        Environmental hazards and conditions are of increasing concern in real estate
transactions and to the parties and real estate professionals involved in such
transactions. The reason for this is the serious impact some environmental
problems can have on the health and well-being of occupants or users of the
property, and the fact that the presence of environmental hazards can substantially
affect the value, salability and use of real property. In some cases the cost of
correction or removal of environmentally hazardous substances or conditions
required by law, safety or prudential considerations may exceed the value of the
property. In other cases, the cost of correcting an environmental problem (often
referred to as remediation) may not be as dramatic, but the risks to property
occupants or users of failing to discover and resolve an environmental problem may
be serious.
        Litigation regarding environmental hazards may involve property owners,
tenants, real estate agents and their clients and customers. Agents may be subject
to claims that they should be held liable for not discovering or disclosing facts
pertaining to hazardous substances or conditions which, it is claimed, they should
have recognized and reported. Lenders, too are becoming increasingly concerned
and cautious about the environmental condition of properties purchased with
mortgage loans they may make.
        In many ways, the risks of environmental problems associated with real
estate are similar to the issues confronting real estate professional in the context of
avoiding misrepresentation of more common features or conditions of property. This
primary concern is that a purchaser may not fully be aware of or understand the
condition of the property, and it may be less desirable to him than he thought
because of the unknown condition. The purchaser may seek to hold the real estate
professional liable for damages based on the claim that the agent had a duty to
disclose and/or identify the problem to the purchaser before he became obligated to
or complete the transaction.
        There are also important differences from the typical misrepresentation case.
In the case of environmental concerns, the typical problems may be unfamiliar to real
estate buyers and sellers and, in many cases, even to real estate professionals
themselves. The problem of discovering the existence, nature or extent of an
environmental problem is often more difficult than in the more common case of
ordinary property defects, and may require special testing and/or the retention of
specially qualified experts. Also, the remediation of environmental problems may be
more difficult, more costly, more time-consuming, or it may be simply difficult to find
firms qualified to perform such work.
       To minimize the risk of liability which might arise as a result of the presence of
unrecognized environmental defects of real property, and to appropriately fulfill their
legal and ethical duties and responsibilities to clients and customers, real estate
agents should:
•      Be aware that environmental problems and issues may affect real estate and
       result in liability for sellers, brokers and agents
•      Learn and know the nature of the most common environmental problems
       affecting real estate, including the kinds of hazards presented to occupants
       and users of affected properties and the warning signs or “red flags” which
       indicate that such problems may be or are present
•      Discuss with the seller any indications that an environmental problem may be
       present, and reach an understanding and agreement on a course of action in
       correcting the problem and disclosing the concern to potential buyers in the
       course of marketing the property
•      Be sure to disclose to potential property purchasers any environmental
       problems with a property that are known to be present, or any indications that
       certain problems may or are likely to be present. This includes sharing any
       environmental assessments that have been performed.
•      Be aware of and comply with all duties and obligations imposed on real estate
       professionals or otherwise related to real estate and real estate transactions
       under local, state and federal regulations and requirements.
•      Be prepared to provide to concerned clients and customers information about
       environmental issues and hazards, such as the brochures, pamphlets and
       other publications issued by federal, state or local government agencies on
       such matters. Such publications usually describe how to identify or test for
       environmental problems and how to remediate problems that are found to
       exist.

      This section provides a basic description of the most common environmental
hazards and defects as well as more specific guidance on how brokers and agents
can deal with and avoid or minimize their liability arising out of such problems.
Recommendations
ASBESTOS
What it is
        Asbestos is a mineral fiber widely used in the past as thermal insulation
because of its excellent fire and sound retardant qualities. The presence of intact
asbestos-containing material is not, in itself, a health hazard. A health hazard may
occur, however, when asbestos-containing material are distributed by physical
destruction, direct impact or mere decay and, as a result, asbestos fibers are
released into the air. This most often happens to asbestos-containing materials that
are “friable” – that is, those that crumble easily to the touch. Minute asbestos fibers
which thereby escape into the air may be inhaled and cause various types of cancer
as well as the degenerative lung disease known as asbestosis.

What to look for
        Asbestos may be found in acoustical tiles, cement, floor tiles, roofing
materials and insulating materials that are sprayed or wrapped on pipes and boilers.
Like most environmentally hazardous substances, specialized and highly technical
experience, knowledge and equipment is necessary to conduct the testing necessary
to confirm the presence of asbestos or to determine whether health hazards form
asbestos-containing materials may be evident from a visual inspection. Four
common types of materials often contain asbestos:
•       A fluffy, cotton-candy like material sprayed on ceilings or walls as a fire
        retardant
•       A granular, cement-like plaster that was either sprayed or troweled on walls
        and ceilings for fireproofing and soundproofing purposes
•       Wallboard used for insulation that has sprayed or troweled on material behind
        it
•       Pipe or boiler insulation that may be felt-like or cement-like in appearance or
        may look like fibrous wrapping paper

What to do if you believe asbestos is present
        Remind the owner or occupants to use care to insure that the material is not
disturbed (scraped, sanded drilled through, etc.). Suggest further investigation to
determine whether the material contains asbestos fibers. Environmental consultants
or state and local health or environmental protection officials can perform testing to
determine if the material contains asbestos, and to assess whether an asbestos-
related hazard exists or not. Inform parties to the transaction that you suspect or
know asbestos is present. This allows the parties to seek more factual information
from qualified sources and get advice on how to address the problem based on the
facts that are currently known or later determined.

FORMALDEHYDE GAS AND UFFI
What it is
         Formaldehyde is a gas emitted by a variety of common household materials
including, most particularly, the thermal insulation known as Urea-Formaldehyde
Foam Insulation, or UFFI. Formaldehyde is also emitted by material used in
plywood, furniture, carpeting, and draperies.
         When formaldehyde gas is released into building interiors, it may cause
problems ranging from minor complaints of eye, nose and throat irritation to
potentially serious health effects. It is important to note, however, that the most
serious of these problems are not ordinarily caused by levels of formaldehyde gas
commonly present in homes, and that different people react quite differently to
exposure to various levels of formaldehyde gas.
         The Consumer Product Safety Commission banned the installation of UFFI in
1982. An appeals court overturned the ban, but in doing so specifically noted that
such reversal did not exonerate formaldehyde, and UFFI in particular, of health-
based concerns. Formaldehyde gas is generally recognized as a health threat or
irritant, but there is dispute over whether such problems arise as a result of the
amount of gas emitted by properly installed UFFI.

What to look for
        Insulation containing formaldehyde was a popular type of insulation in older
homes, though it was also used in new construction. It is estimated that
formaldehyde-type insulation was installed in a half-million homes in the U.S.
Formaldehyde insulations often cannot be identified by sight, but it was generally
installed by “blowing” it into walls and other spaces and insulation installed in that
fashion during the relevant time period may be suspected of being UFFI.

What to do if you suspect the presence of UFFI
•      Testing of the indoor air for formaldehyde can be done where a client or
       customer believes that action is necessary or if UFFI or other formaldehyde
       emitting compound may be present
•      Inform the seller of the need to consult the appropriate health authorities or
       other experts, and likewise disclose to buyers where formaldehyde is known
       or believed to be present. In some cases, removal of gas-emitting insulating
       material may also be necessary.
LEAD
What it is
        Lead is a heavy metal that is hazardous to health if ingested or inhaled.
Lead can be extremely toxic. It impairs the physical and mental development of
children and aggravates high blood pressure problems in adults. The EPA, the
Department of Housing and Urban Development (HUD), and the Consumer Product
Safety Commission (CPSC) have all moved to take action to restrict public exposure
to lead and to prevent further discharge of lead into the atmosphere.

What to look for
         The concern about lead poisoning in housing arises principally from the
presence of lead-based paint and lead plumbing. Although the manufacture of lead-
based paint was banned in 1978, it is estimated that between thirty and forty million
older homes around the country contain lead-based paint. Thus, older homes, and
particularly those were there is decaying, flaking or peeling pain, raise special
concerns regarding the potential presence of lead-based paint hazards. Exposure to
lead poisoning primarily occurs by ingesting flakes of lead-based paint released by
peeling or flaking paint, or by inhaling dust particles that are released into the air
when paint is removed by sanding, scraping, heating or other methods.
         Lead poisoning can also occur from drinking water that has been
contaminated by lead plumbing or plumbing materials, such as lead solder. The
existence of lead-based paint or lead plumbing in a particular property can be
determined only by testing of the paint or water supply.
         Effective in 1996, federal law requires agents involved in sale or lease
transactions of residential property constructed prior to 1978 to insure that the seller
or lessor complies with his obligation to provide prospective buyers or tenants with
an EPA/HUD-published brochure on lead-based paint hazards. The brochure,
entitled “Protect Your Family from Lead in Your Home,” is available from EPA or
HUD. The results of any tests done to detect the presence of lead-based paint or
lead-based hazards must also be provided to buyers and tenants, and the known
presence of any such hazards must be disclosed. Buyers and tenants will also have
up to 10 days to test the premises for lead-based paint if they choose to do so.
Specific warning language pertaining to lead-based paint must also be included in
sales contracts. The laws of a number of state or local jurisdictions may also impose
additional requirements. For more detailed information see the special section on
lead based paint in the property conditions section.

What to do if you observe a “red flag”
•      Be sure to observe and comply with all requirements of federal, state and
       local law pertaining to lead-based paint
•      Inform the seller of the possible and significance of lead hazards
•      Inform the potential buyer of any concerns you may have about the possible
       presence of lead-based paint based on your own observations
•      Provide the parties with information about lead-based paint hazards, including
       that which describes testing and remediation or any problems that may be
       identified

For more information, see the special section on lead based paint.

RADON GAS
What it is
        Radon is a radioactive gas produced when certain naturally occurring
materials decay. When inhaled, radon particles may be deposited in the lining of the
lung where they damage lung tissue and may transform normal cells into cancer
cells. Long term exposure to radon thus increases one’s risk of lung cancer. This
risk increases with the amount of radon gas to which one is exposed and the length
of time that exposure continues.

What to look for
        Radon, in amounts that can be hazardous to human health, can be found in
any home. Well-insulated and energy efficient homes tend to experience higher
levels of radon gas that other homes because the radon becomes trapped inside the
house and cannot escape to the open atmosphere, were it is harmless. Radon
enters into homes through minute openings in the foundation above the ground,
such as cracks in the basement floor or walls, slab or opening commonly built
around plumbing. It can also enter through well water. Radon contamination has
been found to be a problem in certain homes and schools, but ordinarily is not a
problem in the upper floors of commercial, high-rise buildings.
        Testing of a home is the only way to determine if it has elevated levels of
radon. You may be able to obtain clues as to the likelihood of the presence of radon
from local, state, and federal environmental and health officials or from information
about nearby homes. The absence of elevated levels in even adjacent homes,
however, does not establish that elevated levels are not present in any particular
home.
        The most simple radon test involves putting an activated charcoal filter
canister in the basement for three to seven days and then returning it to a laboratory
for analysis. The “alpha-track” sampler test method involves leaving he device in the
home for a longer period, ranging from thirty days to as long as one year, before it is
returned to a laboratory for analysis. Other testing methods are also available,
including “continuous monitors” which provide results within 24 to 48 hours. The
USEPA maintains a list of radon testing contractors who have satisfied certain EPA
standards. You can obtain a copy of that list from any regional EPA office, or from
most state radon program offices. Information about radon mitigation (removal)
contractors who have satisfied certain EPA standards is also available.
        USEPA has also published a pamphlet specifically directed at radon in the
context of the home sale transaction: The Homebuyers and Sellers Guide to Radon,
copies of which can be obtained from the EPA. Another EPA radon publication of
more general nature is A Citizen’s Guide to Radon.

What to do if the presence of radon is known or suspected
•     Disclose to potential purchasers any known elevated levels of radon in the
      home.
•     Recommend that the seller consider testing the home for radon at the tie the
      home is listed and marketing or the home begins. If the seller has had radon
      test conducted, disclose the results of that test to any potential buyers.
•     Inform the seller and buyer that remediation techniques for reducing elevated
      levels of radon are available. These involve “sealing” the basement to
      prevent further radon entry and/or installing ventilation devices. Remediation
      costs range from a few hundred dollars to a few thousand dollars.
•     Obtain the EPA publications on radon from your regional EPA office.
      Providing prospective purchasers with copies of such publications permits
      them to make an informed choice about a home in which the presence of
      radon is known or suspected.

UNDERGROUND STORAGE TANKS
What they are
        Underground storage tanks are, as their name suggests, buried tanks which
contain, or previously contained, liquids or other materials which may be hazardous
if discharged freely into the ground. Because such tanks or the piping associated
with operation of the tanks often deteriorates and leaks, they represent a potentially
immense national problem. The EPA estimates that there are between 1.5 and 2
million underground storage tanks currently in use and a significant number of
abandoned tanks. Only a small percentage of these are protected against corrosion,
and EPA estimates that there are 100,000 leaking tanks with the number quickly
rising. The presence of underground storage tanks on a property can represent a
serious potential problem and source of liability for the owner, since leaking storage
tanks pose severe contamination problems for soil and water supplies. Even a slow
leak of one gallon per day can contaminate the water of a 50,000 person community
to the point of endangering public health.
        Federal law requires certain specific action with respect to particular types
and sizes of tanks, whether they are currently being used or abandoned. Many
states and some local jurisdictions have also adopted laws and regulations
addressing underground tanks and any possible contamination of the surrounding
site, so be sure also to check laws and regulations in your state. Where a tank
exists, the seller should be sure to comply with all applicable requirements which, in
some cases, means the removal of abandoned tanks.

What to look for
        A physical examination of the property may provide clues to the possible
presence of one or more underground tanks, since such tanks usually have an air
vent that sticks out of the ground above the tank.
        Real estate agents don not possess the technical expertise needed to
accurately predict or determine the presence or condition of an underground storage
tank on a property. Oil sheens in wet areas, piping or vents sticking out from the
ground, or trances of concrete, metal or asphalt that may indicate former commercial
use of the property may all suggest the presence of an underground tank.
Particularly where such indicators are observed, the seller should be questioned
concerning any knowledge he/she may have about the presence of such tanks.

What to do if you know or suspect there is a problem
•     Consult with the seller to determine whether underground storage tanks are
      known to be present on the property.
•     Seek whatever information may be available from the seller if you observe
      any indication that a tank may be present.
•     Be sure the buyer is made aware of the results of your inquiries.
•     If you learn that a property does or may contain an underground storage tank,
      or if you know a gasoline station or fuel oil distribution center was formerly
      located on the property, you should advise the buyer that he may be prudent
      to have further investigation performed by a qualified environmental
      consultant or, where available, a government environmental protection
      department that will perform such an investigation.

       Closure of UST’s in Louisiana is accomplished through the oversight of the
Louisiana Department of Environmental Quality (“LDEQ”) underground Storage Tank
Division (“UST”). If a UST is to be closed, the LDEQ must be notified by the UST
owner at least thirty (30) days prior to closure by submitting to the UST Division (of
the LDEQ) a “Notification of Intent to Perform Closure or Change-In-Service to an
Underground Storage Tank System” form which may be obtained from the UST
Division. The submitted form is invalid if work is not performed within ninety (90)
days of submission.
        The UST regulations require that a contractor begin used to perform a UST
closure or change in service must employ an individual who holds a current LDEQ
certificate for closure. The employee must be present at the site and exercising
supervisory authority during the closure process.
        Another key regulatory requirement is that before closure or change in service
is completed, an assessment must be made for the site for the possibility of
contamination. A guidance document, Underground Storage Tank Closure/Change-
In-Service Assessment Guidelines can be obtained from the LDEQ which provides
an overview of the closure process for petroleum underground storage tanks.
Contact the UST Division at 225-765-0243 for a copy. The above are only a few key
points for consideration. All parties involved with UST closures should first contact
the UST Division before any work is undertaken.
        Louisiana Department of Environmental Quality regulations regarding UST’s
are found in the Louisiana Administrative Code, Environmental Quality Regulations,
at LAC 33:XI.101 et seq. These regulations can be found at
http://www.deq.state.la.us on the LDEQ homepage.
        The National Association of REALTORS® (NAR) does not have specific
policy pertaining to USTs. However, NAR policy states that “Provisions should be
included in legislation and regulation to relieve intermediaries of liability when they
are unknowingly involved in property transactions where hazardous waste has been
generated, stored or disposed.”
        In the 105th Congress, Rep Dan Schaefer (R-CO) has introduced H.R. 688,
which would require at least 85% of funds appropriated to the EPA from the Leaking
Underground Storage tank (LUST) Trust Fund be distributed to the states. No action
has occurred on this bill, and NAR has not developed a position on this legislation.
NAR will continue to work with EPA to address any issues of concern to the real
estate industry. For information on the progress of this bill contact Hoe Maheady
(202-383-1097) or Russell Riggs (202-383-1259), with the National Association of
REALTORS®.

GROUNDWATER CONTAMINATION
What it is
       Ground water is the supply of fresh water under the earth’s surface.
Groundwater sources are the principal water supply for approximately 50% of all
residences either through on-site wells or the wells of a municipal or private water
company. Groundwater contamination may occur when groundwater, used as
drinking water supply, is also subject to discharge of pollutants from irrigation,
industrial activities, permitted or unpermitted waste disposal or other potential
contaminants. Clean-up of contaminated groundwater is very difficult, if not
impossible, and is almost always beyond the economic reach of individual property
owners.

What to look for
      Typical sources of groundwater contamination include:

•      Leaking underground storage tanks and pipelines
•      Faulty septic systems
•      Hazardous and nonhazardous landfills
•      Excessive road de-icing
•      Run-off of agricultural pesticides and fertilizers
•      Mining activity

        Real estate agents do not ordinarily possess the technical knowledge or
expertise needed to make a judgment about the quality of the drinking water or the
likelihood that it has been or will be contaminated. Visual inspection of the property,
may, however, reveal “red flags” pointing to or suggesting typical potential sources of
contamination, such as, for example, vent pipes for underground storage tanks.
        In addition to visual inspection, you should familiarize yourself with the area
surrounding a property and maintain an awareness of reports of groundwater
contamination from common sources such as commercial establishments, industrial
parks, gasoline stations or any widespread use of pesticides or fertilizers near the
property.

What to do if you believe there may be a groundwater problem
•     Consult the local or parish health department for information about
      groundwater quality.
•     Tell the seller that you suspect a problem exists and why; expect that any
      known or suspected problem must be disclosed to prospective buyers.
•     Recommend testing by an expert, as this is the only sure way to determine
      whether or not groundwater is contaminated.

        Most water testes for “common” chemicals are inexpensive and can be
conducted by a private laboratory, although real estate agents are ordinarily not
qualified to determine what tests may be necessary. If there is reason to suspect
industrial contamination, the parties should be advised to consult local, state, or
federal environmental officials or other experts for the more complex and often costly
testing which the possibility of such problems may warrant.

ELECTROMAGNETIC FIELDS (EMF’S)
What they are
       Electromagnetic fields are sources of electric and magnetic energy which are
created whenever electric current is flowering, such as in the use of electrical
appliances or the transmission of electricity. Common sources of EMFs in the home
are various electrical appliances (electric lights, toasters, clocks, electric blankets,
hairdryers) and electric transmission and residential distribution lines.
       Research to determine the effects of human exposure to EMFs has been
ongoing for years, and continues today. To date, the results of that research is
inconclusive, and does not establish either that EMFs are or are not harmful to
human health.

What to look for
        Because of the equivocal nature of the research results, it is uncertain
whether real estate professionals have any legal or professional duty or obligation to
“look for” or disclose anything which might suggest the possibility of exposure to
EMFs. While close proximity to overhead power transmission lines tends to indicate
the possibility of EMF exposure on a particular site, the specific facts and
circumstances are decisive in determining whether EMFs are in fact present and, if
so, the strength of such fields present on the property. Moreover, common
household appliances can and may create an equally or more significant EMF
exposure problem.

What to do if you suspect there is a problem
        There are presently no federal laws and believed to be no state or local laws
requiring real estate professionals or property owners to disclose the presence or
possibility of EMFs on a property. Until the research advances further and
establishes conclusively the risks, if any, of EMF exposure, real estate professional
are probably best advised to equip themselves with information and publications to
provide to parties expressing concern about EMFs. Such publications may be
available from federal, state or local government agencies, and from private sources
such as power companies (Bonneville Power Co., and the Electric Power Research
Institute, in particular). These publications provide useful information about the
potential hazards EMFs may pose, and strategies that can be employed to reduce
any such risks.
Waste Disposal Sites
What they are
          Waste disposal sites may be authorized landfills used for disposing of
community waste, landfills approved to receive industrial and agricultural hazardous
wastes, unauthorized and illegal dump sites used by “midnight dumpers”, or simply
sites previously subject to industrial uses where wastes or other hazardous materials
were intentionally or accidentally discharged on the site. State and federal law
comprehensively regulate the generation, flow and disposal of hazardous and other
solid wastes. But there are thousands of known and unknown hazardous waste
sites that may be presenting a public health hazard by contaminating water and soil.
          The potential presence of hazardous wastes or other contaminants on
property poses certain economic and practical risks also. The Comprehensive
Environmental Recovery, Conservation and Liability Act (“CERCLA” also known as
the “Superfund” law) imposes on current and most prior owners of certain severely
contaminated properties the obligation to clean up such properties or to bear the
financial responsibility for cost incurred by the government in cleaning up such
properties or to bear the financial responsibility for cost incurred by the government
in cleaning up the contamination. Although the Act contains an “innocent purchaser”
defense to such liability, the nature and requirements of that defense are imprecisely
stated in the Act, making it difficult for one to take advantage of the protection from
liability provided by that defense. Where such liability exists, the costs of property
clean up can be staggering, making lenders often unwilling to make loans on
properties which are or may be contaminated. Many states, including Louisiana,
have adopted similar legislation, enforced by their state environmental agencies.

What to look for
        Visual inspection of the property may identify red flags of problematic dump
sites that warrant further inquiry or investigation. Be vigilant for:
•       Depressions, mounds or soft spots that could indicate the possible presence
        of landfill
•       Tanks, vessels, piles of drums, etc. located above or below ground
•       Traces of concrete, metal or asphalt that could indicate prior commercial use
•       Ravines or earth embankments that could indicate former dumping on the site
•       Discoloring of soil or stressed vegetation that may be caused by
        contamination

What to do if you believe there may be a problem
•     Review any available information regarding former uses of the property.
      Aerial photographs from various geographic surveys can provide snapshots
       of property use over time.
•      Consult the EPA or your state environmental agency for information about
       known waste disposal sites in the area that may affect the property, such as
       EPA-designed (or state-designed) Superfund sites.
•      If either through physical inspection or research you uncover a “red flag”,
       advise potential purchasers of the information you have obtained and
       recommend that they seek expert assistance and appropriate investigation
       and testing to determine whether a site has been contaminated.
•      You should also recommend that the parties to the transaction involving a
       suspected hazardous waste site consult with state and federal environmental
       protection officials or local health and planning officials for information about
       any problems affecting the property.

       If property is suspected of being a waste disposal site leave detailed
inspection to an environmental professional. The Louisiana Department of
Environmental Quality, Inactive and Abandoned Sites Division maintains a list of
hazardous waste sites located across the state and is an excelled source of
information. If remediation of any site is to be undertaken, then the Inactive and
Abandoned Sites Division MUST be notified prior to any work at the site.
Addendum
Environmental Contacts
Federal Governmental Offices
U.S. Environmental Protection Agency (EPA)
Public Information Center
401 M. Street SW
Washington, DC 20460
202-260-7751
U.S. Department of Housing and Urban Development (HUD)
415 7th St. SW
Washington, DC 20410
202-708-1422
Office of Energy and the Environment
U.S. Department of Housing and Urban Development
Washington, DC 20410
RCRA/Superfund Hotline
800-424-9346 (Outside of Washington, DC)
Toxic Substances Control Act (TSCA) Information Services
(Also provides information on the EPA asbestos programs)
202-554-1404
Consumer Product Safety Commission
CPSC Western Regional Center
600 Harrison, Rm. 245
San Francisco, CA 94107
EPA Regional Office
Region 6
1445 Ross Ave.
Dallas, TX 75202
214-665-6444
State Contact
Louisiana Department of Environmental Quality (LDEQ)
7290 Bluebonnet Blvd.
Baton Rouge, LA 70810
225-765-0741
Environmental Site Assessments
        An Environmental Ste Assessment (“ESA”) is a tool being used with
increasing frequency in real estate transactions. By having an ESA preformed, a
prospective purchaser can obtain important information regarding the site, including
the prior history of the site (e.g., was the use of the site for industrial purposes),
environmental issues which must be addressed before the sale, and any
environmental conditions which could limit the future use of the property.
        An additional factor is that by performing an environmental assessment the
purchaser can obtain remediation liability protection from state and federal
authorities under certain circumstances. Legal counsel should be consulted to
determine if these circumstances are present.
        An environmental professional normally conducts ESA’s in accordance with
American Society for Testing and Materials (“ASTM”) Standards, e.g., ASTM
Standards on Environmental Site Assessments for Commercial Real Estate.
Standards E1527 and E1528.
        A Phase I ESA can involve onsite inspections and record reviews including a
review of all relevant records, visits to the property for both discussions with property
owners and tenants and a walk down of the site. Depending on the situation, state
and federal environmental personnel might also be interviewed.
        If a Phase I ESA reveals the possible presence of hazardous substances then
a Phase II ESA is performed. A Phase II ESA involves taking soil, water and/or air
samples and having the samples analyzed by a laboratory. The environmental
professional then evaluates the sample results and usually provides a report
outlining what action should be taken at the site, including whether remediation is
needed and if reporting of site environmental conditions to state and federal
environmental authorities is required.
        The trend across the country and in Louisiana is to base remediation
decisions on risk based factors. A “risk analysis” analyzes such factors as chemicals
present at the site, media contamination levels and exposure pathways to both the
population at large and the environment. Based on a series of calculations of risk, a
determination can be made on what, if anything needs to be done to address the
environmental conditions at the site. This approach bases any decision involving
remediation on scientific principles and not popular opinion.
        In summary, an ESA is a useful tool to buyers and sellers of property. An
ESA provides a clear picture of environmental conditions at a site, and under certain
circumstances can provide environmental remediation liability protection against
state and federal agencies.
Dry Cleaners
        In recent years, concerns have arisen regarding properties where commercial
dry cleaning operations have been present.
        State and federal environmental laws strictly regulate present dry cleaning
operations by this has not always been the case. In addition, environmental
concerns over dry cleaning operations have not always been understood as well as
today.
        The process of dry cleaning involves cleaning garments through the use of a
dry cleaning solvent and a detergent. No water is used in the process hence, “dry
cleaning” came to describe the process.
        It is the dry cleaning solvents that give rise to environmental concerns.
Normally one or two types of solvents are used for dry cleaning purposes; a
chlorinated hydrocarbon solvent (perchlorethylene) and to a lesser degree, a
petroleum base solvent. Today, dry cleaning solvent wastes are reduced through
solvent recycling and better management practices. However, in prior years, dry
cleaning solvents were not always recycled, nor were they potential environmental
problems caused by disposal or sloppy handling of the spent solvents understood.
        Perchlorethylene (sometimes call “perc”) has a density greater than that of
water and is insoluble in water. These properties along with other chemical
characteristics of perchlorethylene make it an extremely pervasive environmental
contaminant. When introduced to soil, perchlorethylene will “sink” through soil until it
reaches ground water. This ability to migrate through soil makes remediation of sites
contaminated with perchlorethylene both expensive and difficult. Spread of
contamination over a wide area is also possible. Remediation of perchlorethylene
spills can be very expensive.
        Property should always be checked for a history of dry cleaning operations,
both on the property in question and nearby. If such a search reveals evidence of
dry cleaning operations, then consultation with an environmental professional is
advised.

Underground Storage Tanks
       Regulation of underground storage tanks (“UST”) in Louisiana is overseen by
the Louisiana Department of Environmental Quality (“LDEQ”). Until recently, The
Underground Storage Tank Division of the LDEQ administered the program.
However, the LDEQ organizational structure was recently re-engineered; there is no
longer an Underground Storage Tank Division. Functions of the Division have now
been reassigned across all of the LDEQ.
       The reassignments are as follows:
•      Tank Closures – Surveillance Division
•      Underground Storage Tank Trust Fund Operations – Fiscal Services
•      Tank Registrations – Permitting Division
•      UST Site Remediation – Remediation Services Division

        In most situations financing on properties, containing UST’s is not available
unless the UST’s are closed out, which means either removal or closure in place,
with removal the preferred option. Before a UST is closed out, the LDEQ must be
notified prior to the closure by submitting to the Remediation Services Division a
completed Notification of Intent to Perform Closure or change-In-Service to an
Underground Storage Tank System form.
        In order to perform UST closure in accordance with LDEQ regulations, the
contractor performing the closure must employ an individual who holds a current
LDEQ closure certification. Failure to use a contractor who employs an employee
with such a certification could entail performing aspects of the closure over again.
        A list of contractors who employ certified closure employees can be obtained
from the Surveillance Division. To pay for the cost of closure, the Underground
Storage Tank Fund administered by the LDEQ may disburse funds for the site UST
closure under certain circumstances. To determine whether the circumstances are
applicable to the property in question, an environmental professional with knowledge
of UST closure should be consulted.
        An additional guidance document to aid in understanding the overall process
of closure of a UST can be obtained from the LDEQ. This document is titled
Underground Storage Tank Closure/Change-In-Service Assessment Guidelines.
        UST’s can impact property. Anytime a property transaction potentially
involves a UST an environmental professional and/or the LDEQ should be consulted.
                               Fair Housing
Background
      Fair Housing Laws that Apply to Brokers
           Federal
           State
      Conduct Prohibited by the Fair Housing Laws
Recommendations
      Program for Compliance
      Guide to Developing Fair Housing Partnerships
Addenda
      FAQ
      The Fair Housing Partnership Resolution
      Guidance for Use of the Model Affirmative Fair Housing
      Marketing Plan
      The Model Affirmative Fair Housing Marketing Plan
      Fair Housing Changes
           Enforcement by Private Persons
Background
Fair Housing Laws that Apply to Real Estate Brokers

Federal Law
The body of federal law that is commonly called the fair housing laws consists of the
Civil Rights Act of 1866, 42 U.S.C. e1982 (hereinafter “the 1866 Act”), and Title VIII
of the Civil Rights Act of 1968, 42 U.S.C. e3601 et seq. (hereinafter “Title VIII).

The 1866 act provides that:
      All citizens of the United States shall have the same right, in ever State and
      Territory, as is enjoyed by white citizens thereof to inherit, purchase, sell,
      hold, and convey real and personal property.

       In 1968 Jones V. Mayer, the United States Supreme Court held that the 1866
Act prohibits all forms of racial discrimination in real estate, whether committed by
government or private parties. Persons suing under the 1866 Act are entitled to
recover actual and punitive damages, and their attorney’s fees and cost.
       Title VIII is a comprehensive fair housing law that addresses not only racial
discrimination, but also discrimination on the basis of religion, color, national origin,
sex, handicap and familial status. Title VIII prohibits five different types of
discrimination:
•      Refusals to sell or rent, or otherwise making unavailable a dwelling because
       of a prohibited classification
•      Discrimination in terms, conditions or privileges of sale or rental, or in the
       provision of services in connection therewith
•      Use of advertising that expresses a preference for persons of a particular
       race, color, religion, sex, national origin, handicap or familial status
•      Representations of a dwelling not available for sale or rent, when in fact the
       dwelling is available
•      Attempts to include a person to sell or rent a dwelling by referring to the
       prospective entry of persons of a particular race, color, sex, religion, national
       origin, handicap or familial status

        In addition to prohibiting specific practices involving the sale or rental of
dwellings, Title VIII also prohibits discrimination in financing of housing, or red lining,
as well as discrimination in access to Boards of REALTORS® multiple listing
services, or other services, organizations, or facilities that relate to the business of
selling or renting dwellings.
         The federal government has broad authority to enforce Title VIII. In 1988,
Congress amended Title VIII to add handicapped persons and families with children
as protected classes, and also to strengthen dramatically the enforcement
procedures under Title VIII. A person who believes they are a victim of a
discriminatory housing practice may bring an action directly in federal court and
recover actual and punitive damages, as well as their reasonable attorney’s fees and
costs. Also, the United States Attorney General may secure injunctive relief and
damages for victims of discrimination, together with civil penalties of $50,000 for the
first offense, and $100,000 for any subsequent offense.
         In addition to suing directly in federal court, an aggrieved person, which is a
person who believes he or she has been a victim of discrimination, may file a
complaint with HUD. HUD will attempt to resolve the complaint through conciliation,
but HUD also will investigate the complaint to determine whether or not there is a
reasonable cause to believe that a violation has occurred. If reasonable cause is
found, HUD will issue a charge against the respondent. The respondent, aggrieved
person, and HUD have twenty days to determine whether to resolve the charge
before a HUD administrative law judge (ALJ) or before a federal district judge. The
matter will be removed to a federal and district judge if any one of the parties with the
right to remove the matter so elects. If no election is made, and the case proceeds
before a HUD ALJ, then the case will be prosecuted by a HUD attorney. If the case
is removed to a federal district court, then an attorney for the Department of Justice
will prosecute the case.
         Both ALJs and federal courts may award the aggrieved person actual
damages, and issue injunctions to prevent any further discriminatory practices. An
aggrieved person may recover attorney’s fees as well in either forum. If the
respondent is found to have committed a discriminatory housing practice, a HUD
ALJ may also assess civil penalties, if necessary, to vindicate the public interest.
These penalties are limited to $10,000 if there are no prior offenses, $25,000 if there
is one prior offense within five years and $50,000 if there are two prior offenses
within seven years. But if the same individual, rather than the same firm committed
the prior offenses, then the additional penalties may be imposed without regard to
the time limitations. If the case proceeds in federal court, a judge does not have
authority to impose civil penalties, but the judge may impose punitive damages in
favor of an aggrieved person shown to have been injured by a discriminatory
housing practice. These punitive damages, intended to punish the defendant, are no
longer limited by statute to $1,000.

State Law Offers Additional Protections
       In 1991, the Louisiana legislature passed the Louisiana Open Housing Act
(ACT) (La. R.S. 51:2601, et seq.) which has been deemed substantially equivalent
with the Federal Fair Housing Act (42 USC 3601 et seq.). This law was passed in
response to the growing concern that the citizens of Louisiana were being denied
housing unfairly. The Act, § 2602 (a), states in part:

       The legislature finds and declares that persons in this state who seek a place
       to live should be able to find such housing whenever it is available. Further,
       in may localities there may be housing shortages. All persons should
       therefore be able to compete for available housing on an open, fair, and
       equitable basis, regardless of race, color, religion, sex, handicap, familial
       status or national origin.

The Louisiana Department of Justice (Department) has been given the responsibility
of administering and enforcing the Act. The Department receives individual housing
complaints either from HUD itself or directly from the field. Final administrative
disposition of the complaint must take place within one hundred days, unless it is
impractical to do so. [LAC 16:I.101(C)]. Disposition of a complaint may entail
conciliation between the parties or a determination by the Department that
reasonable cause exists to file suit on behalf of the complainant. There may also be
a finding of no reasonable cause, at which time the complaint will be dismissed.
        The Department is Louisiana’s resource for fair housing education,
investigation and enforcement. For more information, a toll-free hotline has been
established to answer fair housing questions, to schedule fair housing seminars, and
provide a mechanism for persons to file discrimination complaints. To speak to a
professional regarding the fair housing laws or to request additional fair housing
pamphlets and/or posters, please call 1-800-273-5718.

Conduct Prohibited by the Fair Housing Laws
Refusal to Sell or Rent
        Any refusal to sell or rent a dwelling because of race, color, sex, religion,
national origin, handicap, or familial status violates Title VIII. A refusal to sell can
include employing more stringent qualification criteria for minority than non-minority
prospects. Title VIII only applies to discrimination in the sale or rental of dwellings.
The 1866 Act applies to the sale of rental of any type of real estate, but only applies
to discrimination based upon race.

Racial Steering
       Title VIII prohibits five specific forms of discrimination, as well as other
conduct that has the effect of making housing otherwise unavailable because of
race. This includes racial steering. Racial steering is conduct designed to influence
a person’s housing choice based upon race, religion, sex, color, national origin,
handicap or familial status. The classic example of racial steering is a real estate
agent directing minority prospects to integrated or all minority neighborhoods, and
white prospects to all white neighborhoods. Evidence of steering is often gathered
through the use of testers, and the testers often bring suits challenging steering
themselves, or the fair housing organizations that employ them.

Blockbusting
       Blockbusting, also known as panic peddling, refers to the suggestion during
an effort to solicit a listing that the seller should sell or otherwise dispose of his or her
property because persons of a particular race, religion, sex, national origin, color,
handicap or familial status are moving into the neighborhood. Title VIII specifically
prohibits blockbusting. While the anti-blockbusting provision of Title VIII has been
held to require a specific reference to race in the listing solicitation, real estate
brokers should exercise caution when engaging in listing solicitation in
neighborhoods known to be experiencing racial transition.

Advertising
        Title VIII prohibits the use of advertising that indicates a preference for
applicants or prospects of a particular race, religion, sex, color, national origin,
handicap, or familial status. HUD regulations require the prominent display of HUD’s
fair housing poster containing a fair housing slogan and logo. Posters are available
from HUD area offices.
        Following are advertising guidelines issued by HUD regarding
acceptable/unacceptable advertising phrases:

Race, color and national origin
-Unacceptable: Wording that describes the housing, the current or potential
residents and neighbors or neighborhood in racial or ethnic terms, e.g., white family
homes, no Irish
-Acceptable: Racially neutral terms, e.g., master bedroom, rare find, desirable
neighborhood

 Religion
-Unacceptable: Ads with blatant phrases, e.g., no Jews, Christian home. Ads that
use the legal name of an entity containing a religious reference, e.g., Roselawn
Catholic Home, or a religious symbol such as a cross.
-Acceptable: Secular terms such as Merry Christmas, Happy Easter, or images of
Santa Clause, and Easter Bunny, or a St. Valentine’s Day graphic.
Sex
-Unacceptable: Ads that indicate a sexual preference, e.g., males/females only
apply
-Acceptable: Commonly used physical descriptions of housing units that are not
preferential or limiting terms, e.g., mother-in-law’s suite, bachelor apartment

Handicap
-Unacceptable: Ads that disallow handicap accessories, e.g., no wheelchairs
-Acceptable: Phrases which describe a property’s features, services, facilities or
neighborhood (e.g., great view, fourth floor walk up, walk in closets, jogging trails,
walking distance to bus stop)

       As a rule of thumb, ads should focus on property descriptions itself,
rather than the potential buyer. Stating that a property is near a jogging trail
(focusing on the location) is much more acceptable than saying it’s great for joggers
(focusing on the potential buyer).

Ad Placement
        Using advertising media in selective publications can also lead to
discriminatory results and may violate the Fair Housing Act. For example, problems
may arise when an advertisement is placed in a particular geographic or zoned
editions of major metropolitan newspapers or in smaller newspapers that reach a
particular segment of the community. Be consistent with the properties and
communities advertised in each paper when advertising in several small newspapers
that have different audiences.

Use of Models
        Caution should be exercised when using human models in real estate
advertising. Under certain circumstances, the exclusive use of white models has
been held to communicate a preference for white applicants or prospects. While
Title VIII does not contain an affirmative obligation to choose human models in direct
proportion to the racial composition of the marketplace, a real estate broker is well
advised when using human models in advertising to make special efforts to use
minority as well as white models.

Handicapped Discrimination
       The definition of handicap includes both physical and metal handicaps.
Specifically included, according to HUD regulations, are alcoholics and persons with
the HIV virus, AIDS or other diseases that cannot be transmitted by casual contact
(For more information on AIDS Stigmas see the “AIDS” section). On the other hand,
Title VIII specifically excludes from the definition of handicap persons who are
current abusers of controlled substances, and persons who present a current threat
to the health, safety, or property of others. HUD regulations state that real estate
brokers or agents may not inquire whether a person has a handicap, or the extent of
any handicap, in evaluation a person’s qualifications to buy or rent a dwelling. A
broker or agent may, however, ask questions about a prospect’s rental history so
long as the same questions are asked of every prospect. For example, a broker may
inquire whether a prospect
•       will be able to meet the requirements of ownership or tenancy
•       is a current illegal abuser of or addict of a controlled substance
•       has been convicted of the illegal manufacture or distribution of a controlled
        substance

       Title VIII prohibits property owners from refusing to permit handicapped
occupants of a dwelling to make reasonable modifications to a unit, at the tenant’s
expense, to allow the handicapped tenant to fully enjoy the premises. The property
owner may, however, condition modifications to the interior of the unit on the tenant’s
agreement to restore the unit to its original condition when the handicapped person’s
occupancy ends. The property owner may also require that all modifications be
done in a safe and workmanlike manner. Examples of reasonable modifications that
would have to be permitted are:
•      installation of grab bars around bath tubs and toilets
•      widening of a door to permit passage of a wheelchair
•      installation of flashing light in lieu of a door bell
•      relocation of environmental controls

        In addition to requiring the tenant to agree to pay for the modification and
restoration of the unit, a property owner may, where appropriate, create an escrow
account into which the tenant will pay a monthly amount necessary to cover the cost
of restoring the interior modifications made by the tenant. While permissible, such
escrow accounts should be used only where the modifications are unusual, and the
expense of restoration is significant. HUD has made clear that it will carefully review
the necessity of any escrow account that is the object of a discriminatory housing
practice allegation.
        Title VIII also requires property owners to make reasonable accommodations
in any rules or regulations governing the housing development that are necessary to
permit the tenant to fully enjoy the premises. Examples of reasonable
accommodations that would have to be permitted are:
•       the allowance of a seeing eye dog, notwithstanding a no pet rule
•      assignment of a parking space to a handicapped tenant near a building
       entrance
•      notwithstanding a first-come, first-serve policy governing tenant parking
•      waiver of a rule banning vans in a building parking lot when a van is
       necessary to a handicapped person’s transportation

       Title VIII further provides that all covered multi-family dwellings that are
available for first occupancy after March 13, 1991, meet certain basic accessibility
and adaptability requirements.
       HUD regulations also define first occupancy to mean the building’s first use
for any for residential use, and are first used for residential purposes after Mary 13,
1991. Simply put, the first occupancy requirement limits the applicability of the
design and construction requirements only to new construction.
       The design and construction requirements which covered multi-family
dwellings must meet are:
•      public and common use areas that are readily accessible to and usable by
       handicapped persons
•      doors designed to allow passage into and within all premises that are
       sufficiently wide to allow passage by a wheelchair
•      the inclusion of the following features of adaptable design:
                      an accessible route into and through the unit
                      reinforcements in bathroom walls to allow later installation of grab
                      bars around the toilet, tub, shower, stall and shower seat, where
                      provided
                      usable kitchens and bathrooms such that an individual in a
                      wheelchair can maneuver about the space
                      light switches, electrical outlets, thermostats, and other
                      environmental controls in accessible locations

       HUD’s regulations further state that design and construction requirements do
not apply to townhouses or other cluster arrangements without elevators where four
or more single family homes share common walls, and each individual dwelling has
two or more stories. In short, HUD has defined a ground floor unit to mean units
where the entire unit is on the ground floor.

Families with Children
       Familial status means a parent or guardian in the legal custody of children
under the age of eighteen, and pregnant women. While Title VIII prohibits
discrimination based on familial status, the statute does not preempt reasonable
state or local regulations limiting the number of persons who may occupy a particular
dwelling. HUD regulations further provide that when state or local law does not
include occupancy limitations, property owners may adopt their own limitations,
provided that such limitations do not operate unreasonably to limit or exclude
families with children.
         HUD regulations further assert that property owners may not establish dual-
purpose facilities where certain sections of a housing complex are reserved for
adults only and other sections for families with children. Such policies would be
analyzed under the same standard as if the segregation were on the basis of race.
On the other hand, HUD regulations state that Title VIII is not intended to limit the
ability of property owners to develop an implement reasonable rules relating to the
use of facilities associated with dwellings, such as weight rooms, swimming pools or
saunas that are based upon health or safety considerations.
         Notwithstanding Title VIII’s prohibition on discrimination against families with
children, Title VIII specifically authorizes the exclusion of children from housing for
older persons. Housing for older persons includes any housing provided pursuant to
a state or federal program designed to accommodate the needs of senior citizens.
         Additionally, the owner must publish and adhere to policies and procedures
that demonstrate intent to provide housing to persons fifty-five years of age or older.
Such policies and procedures would include advertising used to market the
development, lease provisions, and the development’s rules and regulations.
         The property owner must also provide significant facilities and services
designed to meet the physical or social needs of older persons. HUD regulations
provide a non-exclusive list of examples of such significant facilities. They include:
•        social and recreational programs
•        continuing education
•        information and counseling
•        and accessible physical environment
•        emergency and preventative health care programs
•        congregate dining facilities
•        transportation to facilitate access to social services
Recommendations
Program for Compliance
An effective fair housing compliance program consist of four basic components:
•      the firm’s public commitment to fair housing
•      agent education and training in methods that insure compliance with the fair
       housing laws
•      regular and systematic documentation of the firm’s practice of affording equal
       opportunity and
•      service identification and correction of failures in performance

The Firm’s Public Commitment
        All REALTORS® and REALTOR-ASSOCIATE®’s are bound by the
REALTOR® Code of Ethics, which requires REALTORS® to provide equal
professional services to all persons. The Code, however, does not represent the
firm or the manager’s personal commitment to fair housing. A personal commitment
includes, among other things, a commitment to the HUD/NAR Voluntary Affirmative
Marketing Agreement (VAMA) and the affirmative advertising, commitment includes
the conscientious use of the HUD fair housing poster, slogan and logo n all offices,
and on all appropriate advertising. It also includes involvement in, or cooperation
with, a local Community Housing Resource Board (CHRB), which HUD appoints
within the jurisdiction of each Board of REALTORS® that signs the VAMA, and
service on the Equal Opportunity Committee of a Board of REALTORS®.
        Some may feel these affirmative actions are unnecessary because they
merely reflect what the law already requires and their company has not experienced
any fair housing complaints. These are not valid reasons to avoid public
commitment to fair housing compliance. There is no obligation for a plaintiff, a tester
or a fair housing agency to give advance warning before it files a complaint, and
adoption of a compliance program only after a complaint has been files will be
properly viewed as self-serving and not reflecting a true commitment. In addition,
everyone is presumed to know his or her legal obligations. Thus, simply
acknowledging awareness of one’s legal duty will not defeat a pattern or practice
case, or even a claim for punitive damages. The conduct necessary to overcome
these claims is outward, overt and resolute programs designed affirmatively to insure
compliance with the law.

Agent Education and Training
       A commitment to fair housing compliance that is not coupled with agent
education and training is, at best, a commitment in name only. At worst, it is a
meaningless commitment because the doctrine of respondent superior will render
the company liable for the discriminatory acts of its agents whether or not the
company itself has committed to fair housing compliance.
        Agents must know that stereotyping and prejudice have no place in the
marketing of real estate. They must be taught that qualification criteria that are non-
discriminatory acts on their face are to be applied uniformly. They must be warned
that subjective judgments about whether a prospect will fit into a neighborhood
cannot be a basis for failing to show a particular listing. Agents must also know that
all prospects are to be treated courteously and professionally, and given equivalent
service and assistance during any showings, and in completing rental applications or
offer forms. Finally, agents must clearly understand that the failure to adhere to
these policies will be ground for their dismissal, and that prospective agents who will
not commit to these policies will not be hired.
        Even the most thorough fair housing training program will fail if the corporate
culture does not place high value on it. This means that the company’s officers, or
the principal of the firm, must take the program seriously. If management does not
take the program seriously, neither will the agents. A company must make
noncompliance with fair housing obligations strictly taboo, not merely a calculated
risk of doing business.

Documentation of the Firm’s Fair Housing Compliance Policy
        When confronted with an allegation of a discriminatory housing practice,
especially one grounded upon the use of testers, a real estate broker or agent, or
their legal counsel, is likely to be presented with detailed written records in which the
complaints have identified the specific conduct of the agent that has led to the
charge. At a minimum, the complaints will have their own vivid recollection to the
events that occurred.
        The real estate broker or agent, on the other hand, may have only a hazy
memory of the prospect as one of hundreds encountered in the last month or year.
The broker or agent, in all likelihood, will have no written records to refresh their
recollection or establish that the prospect was in fact afforded equal professional
service.
        For this reason, it is imperative that brokers instruct their agents to keep
records of the name, address, telephone number and race of prospects, as well as
their stated requirements for housing and the price they can afford. To the extent
prospects are willing to see several properties that satisfy their criteria, the agent
should record the address of the properties offered to the prospects, whether they
were shown, and where they were shown. A form for this purpose is the Equal
Service Report that is provided as part of the HUD/NAR VAMA.
        Properly used, the Equal Service Report, or its equivalent, should provide a
strong defense against a charge of steering or disparate treatment. In addition to the
Equal Service Report, agents should be instructed to keep records of qualifying
information and when an offer was received. If any standard practices were not
followed, or if additional qualifying information was required, the agent should record
the reasons why deviations from regular office policies occurred. These records
should be kept for at least two years, and in most instances, longer. State statutes
of limitations determine the applicable limitation period under the 1866 Act or actions
under state law.
        Brokers should also consider developing a brochure that can be given to all
prospective tenants. The brochure should inform the prospect of laws requiring
equal opportunity in housing and the firm’s commitment to those policies. A
brochure developed by NAR for this purpose is “What Everyone Should Know about
Equal Opportunity in Housing.”
        Brokers should also develop, and encourage agents to use, a follow-up
survey to send to all prospective tenants who, after two weeks, cease to be in active
contact with the firm. The survey should ask the prospect to provide certain data
concerning how they were served by the firm. The data should provide an early
warning of a potential complaint. It should also provide a critique of an agent’s
performance in terms of affording equal service. Finally, it should alert the firm to
reasons why a prospect found alternative housing, and permit the firm to adjust its
own marketing strategies as appropriate.

Identifying and Correcting Failures in Performance
         Identifying and correcting failures of performance by agents may be the most
difficult component of a fair housing compliance program for a broker to implement.
But it is probably the most important. While a second chance is available in almost
every other walk of life, it is not available as a means to avoid legal liability,
especially under the fair housing laws.
         Brokers must be alert to subtle indications that agents are insensitive to their
fair housing responsibilities. Agents who use racial slurs, or make excessive use of
racial, ethic or sexual humor will very likely carry these attitudes into their business
affairs. Short cuts, such as qualifying prospects on a hit or miss basis may also
indicate an agent’s insensitivity to his or her responsibilities. Brokers who observe
this type of behavior should address it immediately. Simple laziness or sloppiness
can result in a finding of disparate treatment. Agents who engage in this conduct
should be counseled, put on notice that this behavior must change, and if necessary,
asked to leave the firm.
Guide to Developing Local Fair Housing Partnerships
Foreword

         Martin Luther King, Jr., said that “people hate each other because they fear
each other; they fear each other because they do not know each other. They do not
know each other because they… are separated from each other.”
         It is impossible to put a price tag on the damage housing discrimination does
to the individual, the neighborhood, the city and the nation. The segregation of
African Americans, Latinos and Asians is immediately apparent in every major city,
while the segregation of people with disabilities, families with children and different
religious groups is less apparent.
         Housing remains a quality of life issue and the right to choose where we live
is as important as the right to equal education, employment opportunity and the right
to vote. Fair Housing historically has been the last civil right to be recognized and
the most difficult to secure. When President Lyndon Johnson signed the Civil Rights
Act of 1964 into law, fair housing was not included and protection from housing
discrimination remained a dream. It took the assassination of Martin Luther King, Jr.,
and the sight of smoke rising from the neighborhoods bordering the Capitol, to end a
filibuster on the Senate floor and bring about the enactment of the Fair Housing Law
of 1968.
         Fair housing continues to be one of the most challenging problems facing the
nation and it cannot be separated from the larger issues of justice and opportunity.
President Clinton in announcing his new Race Initiative challenged Americans to
realize that the “divide of race has been America’s constant curse,” and that “the
struggle to overcome it has been a defining part of our history.” The President has
called for “One America” where people are able to live and work together.
         For over 20 years, REALTORS® have actively pursued the achievement of
fair housing through a Voluntary Affirmative Marketing Agreement (VAMA) with HUD.
The VAMA helped to elevate the importance of fair housing across the nation and
resulted in REALTORS® leading the housing industry in its commitment to fair
housing.
         The Department of Housing and Urban Finance (HUD) and the National
Association of REALTORS® (NAR) decided after 20 years that a new approach was
needed to build upon the VAMA’s success. REALTORS® no longer needed an
agreement to follow the law and to live up to the principles of fair housing. The new
HUD/NAR Fair Housing Partnership builds upon the past while looking to the future.
         The HUD/NAR Fair Housing Partnership also affirms the President’s vision of
Americans working together to stamp out housing discrimination and finally end the
separation, isolation, and mistrust which it creates.
       The late Supreme Court Justice Thurgood Marshall said “that while laws can
remove barriers they cannot change peoples hearts; only building bridges of
understanding and tolerance can do that.”
       The actions proposed in this Partnership Guide represent an important step in
building a bridge to ensure One America. The freedom and dignity of choosing
where we live is a choice every American must have.
Introduction

        The 1960s saw and end to legal segregation. People of all racial and ethnic
groups were able to attend the same schools, drink from the same water fountains,
and live in the same neighborhoods. However, the reality is that in many
communities de facto racial segregation still exists. This is especially so in places
where people live and work.
        Any review of America’s metropolitan areas shows that African-Americans,
Latinos, Asian-Americans and other minorities tend to live outside predominantly
white communities. The situation often reflects decisions made by individuals
belonging to specific racial groups to live in non-racially-mixed communities. It can
also reflect continuing discrimination in the nation’s housing markets.
        If current demographic trends continue, the racial and ethnic mix of America
is going to become even more diverse. The challenge ahead is to ensure that
neighborhoods and communities reflect these trends, and that all people regardless
of race or color have freedom to choose the home and neighborhood of their choice.
Fair Housing activities, whether through enforcement, education, voluntary programs
or a combination of these, respond to a dream unrealized and the vision of a housing
market free from discrimination.
        HUD and NAR entered into their first Voluntary Affirmative Agreement in
1975, and after several revisions and renewals, the VAMA expired in December of
1996. The VAMA sought to encourage individual real estate firms to take
appropriate steps to ensure that their agents followed the fair housing law. The
VAMA also encouraged REALTORS® and real estate firms to support the spirit of the
fair housing law through a variety of equal housing opportunity programs including
outreach, advertising, equal employment practices, safeguards against racial
steering and other steps, that helped housing to be marketed on an equal
opportunity basis.
        As successful and well intended as the VAMA was, it often placed process
ahead of results and often worked against its objective of affirmatively furthering fair
housing. The VAMA required endless reports and records on the status of member
REALTOR® firms to a degree that left many important fair housing issues
unaddressed.
        The new HUD/NAR Fair Housing Partnership is results oriented and gives far
less attention to process. The new Partnership focuses on the identification and
eradication of housing discrimination in our communities. Because housing
discrimination issues and priorities differ from community to community, the new
national partnership is intentionally flexible and fluid. The HUD/NAR Partnership
recognizes that fair housing is a collaborative endeavor requiring shared involvement
by partners in activities such as training, self-testing, public education, affirmative
marketing and the promotion of housing choice and opportunities across racial and
ethnic lines.
        The HUD/NAR Fair Housing Partnership is founded on the principle of
providing support for and focusing attention on the implementation of local
community initiatives. At the national level, HUD and NAR will regularly meet to
identify national issues and concerns, develop joint strategies and actions to address
housing discrimination, and review successes. In this ongoing fluid and flexible
arrangement, the partnership’s determinations and actions on fair housing will likely
change from year to year.
        Because of the varying issues and differing circumstances in local
communities, no specific model for a local partnership was developed by HUD and
NAR. NAR, local associations and HUD field offices are encouraged to develop
local fair housing partnerships based on the following principles of the national
partnership:
•       Sharing responsibility for the achievement of fair housing
•       Identifying fair housing issues and concerns
•       Developing measurable strategies and actions to address identified issues
        and concerns
•       Evaluating the success of actions taken
•       Determining future strategies and actions based on that evaluation

Why a Partnership

        Fair Housing is at a turning point in history. Advocates and industry leaders,
who once sat almost exclusively at opposite ends of a settlement table, increasingly
sit side by side in the negotiation of partnership agreements to fight housing
discrimination and to encourage diverse communities. The theme of “partnership”
most accurately describes the activities of fair housing advocates and housing
providers alike.
        Partnership by definition means that one party is cooperating with another in
a joint venture or challenge, and that they are doing so through an arrangement in
which each party has equal status and a high degree of independence. Partners to
the arrangement, also share common responsibilities and obligations.
        Great strides have been made in opening housing markets, in giving all
Americans an equal opportunity to live wherever they choose. Unfortunately, the
need to vigorously enforce fair housing laws remains as urgent today as ever;
housing discrimination, although less obvious and pervasive than in years past still
exists.
        Fair housing strengthens families and stabilizes communities. It encourages
homeownership and through homeownership, it encourages savings and investment,
economic and civil responsibility and provides greater opportunity for personal
control and family security. Expansion of home ownership through fair housing
strengthens the economy and creates jobs.
       Americans must all work together to end housing discrimination. The Fair
Housing Act is stronger, and a better place for all to live.

Why a Partnership: The REALTOR® Perspective

         The right to own, transfer and use real estate and housing is the underlying
mission of the National Association of REALTORS®. Discrimination impedes that
right by denying people access to the ownership and use of housing and inhibiting
real estate professionals whose business is built on the ability of all people to buy,
sell, lease and occupy real estate. Fair housing laws, which protect these rights,
need strong enforcement. REALTORS® accept and expect that the law will be
enforced. In fact, many REALTORS® are exercising their rights under the Fair
Housing Act and their responsibilities as real estate professionals by filing complaints
and helping others file complaints alleging housing discrimination.
         The National Association of REALTORS® entered into the Fair Housing
Partnership with HUD in recognition that REALTORS® are committed to fair housing
and will seek training to learn how to put that commitment into practice. This
commitment, coupled with enforcement of the law, will work to help REALTORS®
consistently provide equal housing opportunities. REALTORS® continue to have
experiences where a seller, buyer, lender, attorney, city official or someone else
seeks to take action which would violate fair housing laws. These actions impede
the ability of REALTORS® to do their jobs and they harm the very communities in
which REALTORS® live and work. All of these factors led to the development of a
new relationship on fair housing, a partnership.
         It is important that the Association of REALTORS® coordinate fair housing
activities with HUD. HUD is charged by the Fair Housing Act to work with housing
industry organizations and community groups on fair housing education and
voluntary programs. As our national partner, HUD is committed to this model. With
offices in every state, HUD is in a position to recruit involvement of others—
especially fair housing groups and government agencies that receive HUD funds.
HUD has access to a great deal of information on discrimination occurring in the
housing market. Because we are in partnership nationally, state and local
Associations should first explore ways to develop partnership activities with HUD
offices.
         REALTORS® already work in coalition on many issues, and have, through the
REALTOR® Association, participated in partnerships in support of fair housing
legislation such as that requiring continuing education in fair housing for real estate
licensees. The REALTOR® role in supporting fair housing carries with it a
responsibility to assure that fair housing efforts and rules will be effective in the
housing marketplace. REALTORS® know the real estate market, but may not be
knowledgeable on all the intricacies of fair housing. Fair housing advocates are not
always knowledgeable on real estate. A partnership between REALTORS® and
advocates provides a unique opportunity to design solutions which will have a
substantive impact and be effective in the market.

Why a Partnership: HUD’s Perspective
        The HUD/NAR Fair Housing Resolution establishes a renewed partnership
between HUD and the National Association of REALTORS®. It is an example of the
Department’s execution of the Congressional directive in Section 809 of the Fair
Housing Act to “work out programs of voluntary compliance and of enforcement.”
        HUD and REALTORS® were achieving their best voluntary fair housing
results when HUD and local REALTORS® were engaged in partnership activities that
were not simply tied to the VAMA. It was where HUD and NAR, at the local level,
were rightly recognized as leaders among other Federal agencies and housing
groups in the ongoing struggle against housing discrimination.
        The new HUD/NAR Partnership accepts that REALTORS® want to obey the
law. It acknowledges that shared responsibility to achieve fair housing is the way of
the future. The Resolution rejects the notion of adversity and views it as being
outdated and without relevancy. The Resolution is consistent with the way HUD is
changing, HUD is becoming mission focused, community based, customer oriented,
and results directed.
        The HUD/NAR Partnership Resolution is the new way to approach fair
housing. The resolution is not punitive in its language or intent. It provides a new
proactive way to help shape the future of fair housing. The Resolution places a new
emphasis on constructive solutions to fair housing issues within individual
communities, and it buttresses the efforts of the National Partners in
homeownership, as they move to implement the “Opening Markets” component of
their national strategy.
        HUD can find a valuable resource in the Association of REALTORS®. NAR
has over 1700 local associations that participated in the VAMA and in other fair
housing programs for more than 20 years. REALTORS® often lead fair housing
efforts in their communities. REALTORS® also produce and sponsor credited fair
housing training programs and publish and distribute helpful fair housing literature
and guidance materials. REALTORS® remain the public’s primary source of
information on home buying.
        NAR has worked well with HUD to educate its members about fair housing
law and responsibilities. NAR and HUD can now work together to recruit other
organizations to national and local partnership efforts. Some of the organizations
include: local fair housing advocacy groups, civil and human rights organizations,
units of state and local governments, especially community development and
planning offices, housing non-profits, and housing industry groups.

Using the REALTOR® Fair Housing Declaration

         The new Fair Housing Partnership provides REALTORS® with a great deal of
flexibility in developing fair housing practices. The ability to address fair housing in a
manner that best fits a real estate firm’s business environment and style provides
exciting opportunity, but raises many questions about the best way to take
advantage of the opportunity. REALTORS® are encouraged to use the Fair Housing
Declaration adopted by the National Partners to promote fair housing to the public
and within their individual firms.
         REALTORS® are not asked to sign a document with HUD to demonstrate a
commitment to fair housing. That commitment is part of the REALTOR® Code of
Ethics, real estate license requirements and the laws of the land. Because there is
no document to sign, there is no list or form outlining what ever REALTOR® should
do.
         Instead, NAR and HUD developed a declaration of federal fair housing
principles. This Fair Housing Declaration is available to any REALTOR® to use to
promote fair housing to the public and within the firm. The declaration contains the
following principles:

•      Provide equal professional service without regard to the race, color,
       religion, sex, handicap, familial status, or national origin of any
       prospective client, customer, or of the residents of any community. This
       is required by law and training is available from NAR. The equal service
       model calls for the use of systematic procedures, using objective information,
       letting the customer set the limits, and offering a variety of choices. This
       commitment is included in the declaration as a basic principle of fair housing.

•      Keep informed about fair housing law and practices, improving my
       clients’ and customers’ opportunities and my business. Fair housing
       education is an ongoing process. A basic fair housing course is a
       prerequisite, but must be supplemented because the law and community
       concerns change over time. Updates may be obtained from many sources
       including newsletters, classes, newspaper articles, discussions with
       community fair housing leaders, and office fair housing meetings. NAR’s fair
       housing course – Fair Housing – Opening Doors to Equal Opportunity
    contains several modules – from an introduction to fair housing to one tailored
    for brokers.

•   Develop advertising that indicates that everyone is welcome and no one
    is excluded; expanding my client’s and customer’s opportunities to see,
    buy or lease property. The law prohibits discriminatory advertising. You
    can take this one step further by using inclusive advertising that indicates
    everyone is welcome. For example, you may not use human models of only
    one race in a series of ads without risking a violation. Many advertisers have
    responded by not using human models at all. If you consciously use human
    models of multiple races in integrated settings you are indicating that
    everyone is welcome.

•   Inform my clients and customers about their rights and responsibilities
    under the fair housing laws by providing brochures and other
    information. Letting clients and customers know about their fair housing
    rights and responsibilities is an important step towards ending discrimination
    in the housing market. Informed customers can better recognize
    discrimination and address it. The information also reduces the likelihood that
    you will be asked to discriminate or face a discriminatory decision by a client
    or customer.

•   Document my efforts to provide professional service, which will assist
    me in becoming a more responsive and successful REALTOR®.
    Documentation is important not only for risk management, but also to assist
    you in learning where you can improve. Documentation also provides you
    with tools to help you solicit repeat business and gives you invaluable clues
    into market trends.

•   Refuse to tolerate noncompliance. Noncompliance with fair housing laws
    impacts your ability to do business. Find ways to address those who appear
    to be violating the law and help them understand the importance of fair
    housing to your business – and theirs. If discrimination continues, you cannot
    in any way be associated with it. As a last resort, make sure any customers
    or clients who have been victim to the discrimination know how to file a
    complaint alleging discrimination. Remember that the law protects you too,
    and you may file complaints on your own behalf. Use the Code of Ethics to
    educate fellow REALTORS® as well.
•      Learn about those who are different from me, and celebrate those
       differences. We live in an increasingly diverse nation. By the year 2010,
       nearly 1/3 of our nation’s population will be minority. We are not a melting pot
       and there are real differences in our cultures – not only based on race and
       ethnicity. It is important to learn about the differences between people and
       celebrate how those differences contribute to out society.

•      Take a positive approach to fair housing practices and aspire to follow
       the spirit as well as the letter of the law. Treat fair housing in a positive
       light – fairness and equal opportunity are key elements of a real estate market
       where there are no barriers to the ownership, use or transfer of real estate.
       Discrimination is an impediment; fair housing is the positive answer to
       discrimination. The spirit of the law is to provide for fair housing, which
       means a free and equal choice based on complete information on the market.
       That is our business and we should be about the spirit of fair and open
       housing markets, not just following the letter of the law.

•      Develop and implement fair housing practices for my firm to carry out
       the spirit of this declaration. A commitment to principles cannot be
       complete unless we have procedures in place and in use to address how
       those principles are to be implemented. Nothing substitutes for clear
       procedures outlining how we do business. These procedures can and should
       be tailored for you and your firm and should be flexible to meet your needs as
       well. Sample procedures are available in the NAR Fair Housing Handbook.

       REALTORS®, working individually, in their firms, and through the association,
can make the REALTOR® Fair Housing Declaration relevant to the fair housing
issues REALTORS® and the community face every day.

Conclusion

        The HUD/NAR Fair Housing Partnership represents a significant commitment
by the National Association of REALTORS®, to take an aggressive role in eliminating
housing discrimination. NAR realizes that America is becoming an increasingly
multiethnic and multiracial society and that new policies and strategies are required
to foster, access, mobility and opportunity in housing for all of its people.
        The new HUD/NAR partnership represents the future and it seeks to undo the
pattern of separate and unequal housing that is widespread throughout America.
Housing discrimination places a devastating burden on racial minorities. The U.S.
Supreme Court has found that housing discrimination can also harm whites, for it
violates their rights to associate with minorities.
       The success of the new Partnership will depend upon the extent to which it is
enthusiastically and successfully embraced in local communities, by NAR, HUD,
policy makers, activists and regular citizens. The vision of the Partnership is that
one day neighborhoods and communities will no longer be known as the white,
black, Latino or Asian neighborhood or community, but simply as a neighborhood
and a community.
Addenda
Frequently Asked Questions

1.     I want to show support for Fair Housing. Do I have to use the Fair
       Housing Declaration contained in the Fair Housing Partnership
       resolution? Do I sign it? May I change it?

         NAR and HUD encourage REALTORS® to adopt the REALTOR® Fair
Housing Declaration. The declaration contains a broad set of fair housing principles.
The importance of the declaration is the affirmative declaration in support of fair
housing. There is no requirement to use the declaration, and there is no requirement
that it be signed. You may make changes to the declaration, but, if so, it should no
longer be called the REALTOR® Fair Housing Declaration.

2.     What does the line in the Fair Housing Declaration about “Celebrating
       Differences” mean? I thought we were supposed to treat everyone
       equally.

       We are a diverse nation and people have many different cultures. The law
prohibits us from discriminating on several bases, including race and national origin.
Understand the cultural variables and celebrating our diversity enables us to better
serve customers and clients from different cultures. We continue to provide equal
professional service, but do so in a way that shows respect for the cultural, racial and
ethnic background of all people.

3.     A number of our members are builders and developers and signed the
       VAMA in lieu of developing Affirmative Fair Housing Marketing Plans.
       What do they need to do now if they want to offer FHA financing for
       their project, and what can I offer these members that they can’t get
       elsewhere?

      The ending of the VAMA also ended the ability of firms to reference their
REALTOR® VAMA status in lieu of developing individual Affirmative Fair Housing
Marketing Plans. Any new developments where FHA financing is offered will not be
approved by HUD unless there is an Affirmative Fair Housing Marketing Plan. A
Model Affirmative Fair Housing Marketing Plan has been approved by HUD and NAR
for REALTORS® to use.
4.     The local HUD office wants our Board to hurry up and sign the new
       partnership agreement. How do we do that?

        There is no specified agreement for the Board to sign with the local HUD
office. The national Fair Housing Partnership encourages local HUD offices and
REALTOR® Associations to enter into similar partnerships. You should meet with
the HUD representative and discuss your shared goals and identify actions to
address specific issues. Once this is done, you can decide whether a formal
agreement between the Board and the local HUD office is needed.

5.     Now that the VAMA has ended, does this mean my firm doesn’t have to
       worry about fair housing education and office procedures any more?
       I’m really glad I don’t have to keep Equal Service Reports anymore.

        The VAMA was a voluntary program and contained a set of valuable fair
housing practices, including fair housing education. The Fair Housing Act is still the
law of the land and actions which result in housing discrimination can trigger a fair
housing complaint. Penalties for violating fair housing laws can be severe, including
the loss of a real estate license. Good, ongoing fair housing education is one of the
best tools available to avoid the risk of violating the law. Record keeping, like the
Equal Service Report Form, provides additional tools for a broker to monitor the
firm’s agents and to use when defending against a complaint.
The Fair Housing Partnership Resolution

        U.S. Department of Housing and Urban Development (HUD) and the
                   National Association of REALTORS® (NAR)
                     A Fair Housing Partnership Resolution

         WHEREAS: Fairness is a cornerstone of the foundation of the American way
of life and depicts the best of our traditional values.
         WHEREAS: Fair housing is a major element of public policy and it is in our
national interest to promote and further fair housing.
         WHEREAS: The Fair Housing Act and other laws guarantee a right to a
national housing market free from discrimination based on race, color, religion, sex,
handicap, familial status, and national origin.
         WHEREAS: The Code of Ethics of the National Association of REALTORS®
commits every REALTOR® to providing professional services without such
discrimination.
         WHEREAS: Section 809 of the Fair Housing Act requires the Secretary of
Department of Housing and Urban Development to work with the housing industry
and other interested parties to develop voluntary programs to achieve fair housing.
         WHEREAS: The National Association of REALTORS® and HUD pioneered a
cooperative voluntary approach to achieving our nation’s fair housing goals.
         NOW, THEREFORE, BE IT RESOLVED that the National Association of
REALTORS® and the U.S. Department of Housing and Urban Development reaffirm
their commitment and hereby formulate a partnership to promote fair housing in all
communities across our nation.
         BE IF FURTHER RESOLVED that such partnership is based on the following
principles:
All participants in our nation’s housing market share a responsibility for the
achievement of fair housing. HUD and NAR (the partnership) will, on an ongoing
basis, jointly identify fair housing issues and concerns which need be addressed.
         The partnership will develop measurable strategies and actions to address
identified issues and concerns.
         The partnership will evaluate the results of the actions taken to determine
future strategies and actions.
         The partnership is national in scope but will be implemented both on the local
community level and national level.
         REALTORS® are encouraged to adopt a fair housing declaration outlining
their commitment to fair housing.

Articles of Partnership
Article I
         Scope of the partnership: The partnership consists of the National Association
of REALTORS® and the U.S. Department of Housing and Urban Development (the
Partnership). The partnership will, on occasion, invite other organizations in the
housing community, which have an interest in fair housing to participate in the
activities of the partnership.
         The HUD Assistant Secretary for Fair Housing and the NAR President of his
or her designee will represent HUD and NAR, respectively. The partnership shall be
in effect for five years or until earlier dissolved by the partners. The previous
Agreement between the parties (the Voluntary Affirmative Marketing Agreement
executed in June, 1992) will expire upon execution of this Partnership.

Article II
        Identification of fair housing concerns: The partnership will meet periodically,
at least three times a year, to identify fair housing issues and concerns which can
and should be addressed by the partners. Each partner, as well as other invited
participants, will have an opportunity to present fair housing issues and concerns
important to its members of constituents at these meetings. The partners will
determine which issues and concerns will be addressed.

Article III
        Development of Strategies and actions to address fair housing issues and
concerns: The partnership will jointly identify and develop strategies and actions
designed to address specific fair housing issues and concerns selected by the
partners. The strategies and actions will be collaborative; designed to involve the
widest spectrum of the housing community; and intended to produce measurable
results. The partners shall endeavor to set timeframes for each strategy and action.
Partnership issues, strategies, and actions are set out as an appendix to this
Partnership resolution. The appendix will be revised and supplemented from time-
to-time to reflect future direction.

Article IV
        Review and Evaluation: The partnership will annually review and evaluate the
effectiveness of partnership strategies and actions. Each partner may present
information from its constituents and/or members and may incorporate local
partnership evaluations into the national review. The partnership will seek the input
of other organizations, which have participated in the partnership’s actions. The
partnership will prepare a written report summarizing its review and evaluation and
will use its review in the ongoing development of strategies and actions.
Article V
        Local and State Activities: The Partnership’s goals can best be implemented
at the local level. The Partnership will encourage the development of local
partnerships between HUD field offices and State or local Associations of
REALTORS® based on the national principles and articles set forth in this
Resolution. The national Partnership will identify and develop model local and state
partnerships, and model strategies and approaches for addressing specific fair
housing issues to guide these efforts. Local partnerships are encouraged to invite
local organizations in the housing community with an interest in fair housing into their
local partnership. Each local partnership shall determine how to formalize and make
public their local partnership efforts.

Article VI
         Termination of Partnership: Either partner may terminate its participation in
the partnership by written notification t the designated representative of the other
partner. At the request of either partner, the partners will meet to discuss the
pending termination. The partnership will terminate within 60 days of receipt of
notice of the pending termination unless the partners agree, within this time frame, to
continue the partnership. When the State or local Association of REALTORS® or a
HUD field office wishes to terminate its participation on a local partnership, it shall
notify its national organization as to the reasons for termination. The national
organization shall consult with the other national partner regarding the possible
termination to determine whether to take appropriate action to assist in preserving
the local partnership.

Article VII
        Fair Housing Declaration: The Partners have developed a fair housing
declaration for use by REALTORS®. The declaration is included in the appendix to
this resolution. The declaration outlines a series of affirmative fair housing principles
REALTORS® are encouraged to incorporate into the day-to-day business operations
of their firms. REALTORS® are encouraged to publicly display this commitment in
their marketing efforts.

Article VIII
        Fair Housing Practices: The partners will develop guidance for RELATORS®
concerning the development of appropriate Fair Housing Practices for their individual
firms, including a recommended list of Best Practices. REALTORS® are encouraged
to use this guidance to develop an appropriate set of fair housing practices for their
firms. Local partnerships will be encouraged to develop from this guidance
appropriate practices to address local fair housing concerns.
       The partners will develop model Affirmative Fair Housing Marketing Plans for
use by REALTORS® when needed to satisfy HUD’s Affirmative Fair Housing
Marketing regulations.

Adoption
        This Agreement is adopted by the National Association of REALTORS® and
the United States Department of Housing and Urban Development, acting through
their respective authorized representatives, on this 5th day of December 1996.

For the National Association of REALTORS®:
Russell K. Booth, President
Michele K. Smith, Chair, Equal Opportunity Committee

For the U.S. Department of Housing and Urban Development:
Henry G. Cisneros, Secretary
Elizabeth K. Julian, Assistant Secretary for Fair Housing and Equal Opportunity
Guidance for Use of the Model Affirmative
Fair Housing Marketing Plan

       The Model Affirmative Fair Housing Marketing Plan (Model Plan) may be
signed and used by REALTORS® to meet the Department of Housing and Urban
Development’s affirmative fair housing marketing plan requirements.

Purpose and Background
        Section 808(e)(5) of the Fair Housing Act requires the Department of Housing
and Urban Development (HUD) to administer the programs and activities relating to
housing and urban development in a manner to affirmatively further fair housing. It is
the policy of the Department to administer its housing programs affirmatively, as to
achieve a condition in which individuals of similar income levels in the same housing
market area having available to them a like range of choices in housing, regardless
of the individual’s race, color, religion, sex, handicap, familial status or national
origin. The Affirmative Fair Housing Marketing (AFHM) regulations (24 CFR Part
200, Subpart M) are one of the means used to satisfy the statutory mandate of
Section 808 (e)(5) of the Fair Housing Act and to achieve the Department’s housing
policy objectives. They are designed to ensure positive outreach and informational
efforts to those who are least likely to know about and apply for the housing in
question.
        The AFHM regulations require that each applicant for participation in any of
the Department’s subsidized or unsubsidized housing programs covered by the
regulations carry out an affirmative program to attract prospective buyers or tenants
of all minority and nonminority groups in the housing market area regardless of race,
color, religion, sex, handicap, familial status or national origin. These groups include
Whites (non-Hispanic), Blacks (non-Hispanic), American Indians/Alaska Natives,
Hispanics, and Asian/Pacific Islanders in the metropolitan or housing market area
who may be subject to housing discrimination on the basis of race, color, religion,
sex, handicap, familial status or national origin. The affirmative program should
ensure that any group/s of persons normally NOT likely to apply for the housing
without special outreach efforts (because of the existing neighborhood racial or
ethnic patterns, location of housing in the metropolitan area, price, or other factors)
know about the housing, feel welcome to apply and have the opportunity to buy or
rent.
        On December 5, 1996, HUD and the National Association of REALTORS®
(NAR) entered into a Fair Housing Partnership, replacing the Voluntary Affirmative
Marketing Agreement. Article VII of the HUD/NAR Fair Housing Partnership
Resolution provides that HUD and NAR develop a Model affirmative Fair Housing
Marketing Plan (Model Plan) for use by members of the National Association of
REALTORS® when needed to satisfy HUD’s AFHM regulations. REALTORS® who
sign and participate in the Model Plan will not be required to submit individual plans
as specified in the AFHM regulations. Rather, they will be allowed to use their
participation in the Model Plan to meet the regulatory requirement.
         Model Affirmative Fair Housing Marketing Plan
              National Association of REALTORS®
      U.S. Department of Housing and Urban Development
Firm Name: _________________________________________________________

Address: ____________________________________________________________

City/State/Zip: _______________________________________________________

Phone: _______________ Fax: ________________ Email: _________________

Broker/Owner: _______________________________________________________

Local REALTOR® Association where broker/owner holds primary REALTOR®
membership:
___________________________________ State: _________________________

Part I: REALTOR® Fair Housing Declaration
I agree to:
•       Provide equal professional service without regard to the race, color, religion,
        sex, handicap, familial status, or national origin of any prospective client,
        customer, or of the residents of any community.
•       Keep informed about fair housing law and practices, improving my clients’
        and customers’ opportunities and my business.
•       Develop advertising that indicates that everyone is welcome and no one is
        excluded; expanding my client’s and customer’s opportunities to see, buy, or
        lease property.
•       Inform my clients and customers about their rights and responsibilities under
        the fair housing laws by providing brochures and other information.
•       Document my efforts to provide professional service, which will assist me in
        becoming a more responsive and successful REALTOR®.
•       Refuse to tolerate non-compliance.
•       Learn about those who are different from me, and celebrate those
        differences.
•       Take a positive approach to fair housing practices and aspire to follow the
        spirit as well as the letter of the law.
•       Develop and implement fair housing practices for my firm to carry out the
        spirit of this declaration.
Part II:Affirmative Fair Housing Marketing Strategies
         Each signatory is responsible for the development and implementation of the
Affirmative Fair Housing Marketing Plan or affirmative marketing procedures. Each
signatory has the ultimate responsibility for marketing and sales/rental transactions.
The employment of a sales management agent does not relieve the signatory of
his/her responsibilities. Each signatory must assure that such agents will carry out
affirmative marketing and nondiscrimination practices. Each signatory agrees to
utilize the following strategies to implement the Fair Housing Declaration.

       A. Fair Housing Education and Training
           1. Each signatory shall explain and publicize the purposes and
              provisions of this agreement to all associates.
           2. Each signatory shall provide, either directly or through Board or
              Association sponsored programs, ongoing training and education to
              inform all associates of their responsibilities under this Agreement and
              under the fair housing laws, and urge associates to attend and
              participate in Board of Association training programs.
           3. Each signatory shall obtain and make available to all associates the
               NAR Fair Housing Handbook.

       B. Public Commitment to Fair Housing
           1. Each signatory shall display, in a prominent place in the signatory’s
              office, a fair housing poster as outlined in 24 CFR Part 110.
           2. Each signatory shall use advertising policies for the sale or rental of
              housing that indicate to the general public that the advertised housing
              is open to all persons and is designed to attract buyers and renters
              without regard to race, color, religion, sex, familial status, handicap, or
              national origin.
           3. Such advertising shall include an official Equal Housing Opportunity
              logotype as follows:
                      (a) In all display advertising, the Equal Housing Opportunity
                           logotype, when used, shall be at least ½” x ½” in size.
                      (b) In each “classified” advertisement of six (6) column inches
                           or larger in size, except where HUD “Publisher’s Notice”
                           appear on the lead page of the classified advertising
                           section of the newspaper or magazine.
                      (c) In a prominent place on all brochures, circulars, billboards,
                           and direct mail advertising.
           4. In order to promote awareness of the fair housing laws and the equal
       opportunity policy of the signatory, each signatory shall encourage all
       associates to distribute copies of the NAR flyer entitled “What
       Everyone Should Know about Equal Opportunity in Housing,” or its
       equivalent, provided a copy of the equivalent flyer is attached to this
       plan or otherwise provided to HUD prior to its use.

C. Fair Housing Procedures and Advertising Policies
    1. Each signatory shall adopt fair housing procedures, including
       procedures relating to office operations, and advertising policies to
       implement the goals and purposes of providing fair housing for all.
       The signatory either shall adopt the fair housing “best practice”
       recommended by NAR and HUD, or shall develop written fair housing
       procedures and advertising policies which, at a minimum, are
       consistent with the recommended “best practices.”
    2. Each signatory shall require all associates to follow the procedures
       and policies adopted by the signatory’s firm.
    3. The fair housing procedures, including those relating to office
       operations, shall address the provision of equal professional service
       without discrimination based on race, color, religion, sex, familial
       status, handicap, or national origin.
    4. The advertising policies shall incorporate the provisions of paragraph
        II B of this plan.

D. Equal Opportunity in the Real Estate Industry
        Each signatory shall affirmatively recruit persons of all racial
    and ethnic groups, of both sexes, with and without disabilities, and
    individuals otherwise protected from discrimination by the Fair Housing
    Act, as salaried employees and independent contractors.

E. Association and Community Efforts
    1. Each signatory shall encourage all associates to participate in
       community fair housing equal opportunity activities.
    2. Each signatory shall endeavor to participate in Association Fair
       Housing Partnership activities designed to identify and remove
       barriers to equal opportunity in housing in the community.

F. Specific Project Considerations
    1. Each signatory shall attach this REALTOR® Model Plan to its
       Affirmative Fair Housing Marketing Plan Application form for each
       project subject to the Affirmative Fair Housing Marketing Plan
              Regulations.
           2. Each signatory shall consider, for each project submitted for HUD
              approval, the following:
                     a. type of project
                     b. the area in which the project is to be located
                     c. the groups that are least likely to apply for or be aware of the
                        project
                     d. the most effective methods to be used in marketing to
                        group/s that are least likely to apply for or be aware of
                        housing in the project area and respective project
       Groups are defined as white (non-Hispanic), Hispanic, American Indian or
       Alaskan Native, Asian or Pacific Islander.
           3. Each applicant shall review its marketing efforts for each project to
              assess whether its marketing efforts have attracted a significant cross-
              section of the eligible population, especially significant numbers from
              those eligible among population groups least likely to apply for or be
              aware of housing in the project area and project.

Part III: Evaluating Performance Under This Plan
        A signatory’s performance under this plan shall be evaluated by reviewing the
        actions taken or not taken to carry out the provisions of this plan and related
        provisions of this plan and related provisions of fair housing laws, executive
        orders and regulations. The purpose of the evaluation is to assess the
        following:
             1. Whether the signatory carried out the elements of this Affirmative Fair
                Housing Marketing Plan.
             2. Whether the good faith efforts of the signatory have attracted a
                diversified cross-section of the eligible population, especially from
                those identified pursuant to Part II F of this plan as least likely to apply
                for the housing without special outreach activities.
             3. To assist in this evaluation, the signatory is encouraged to seek the
                input of a broad spectrum of organizations throughout the community
                that have substantial interest in fair housing.

Part IV: Acceptance of Signatory Status of Member in lieu of Individual
Affirmative Fair Housing Marketing Plan
           1. During the effectiveness of this Agreement, any signatory who
              hereafter applies for participation in any HUD/FHA program and would
              otherwise be subject to the requirement of the HUD Affirmative Fair
              Housing Marketing Regulations may submit this REALTOR® Model
              Plan in lieu of using the HUD 935.2 form.
           2. Each signatory shall attach this REALTOR® Model Plan to its
              REALTOR® Affirmative Fair Housing Marketing Plan Application form
              for each project subject to the Affirmative Fair Housing Marketing Plan
              Regulations.

Part V: Effective Date of Plan
       A. This Agreement shall be in effect for any signatory until:
           1. A signatory advises HUD in writing that he no longer wishes to be a
               signatory.
           2. The signatory is no longer a member of the National Association of
               REALTORS®.
           3. The expiration of the Fair Housing Partnership unless renewed by
               HUD and NAR.
           4. The signatory is suspended as a party to this REALTORS® Model
               Plan, under paragraph VI.

       B. During the time that the signatory is suspended as a party to this Plan, the
          signatory shall continue to be subject to the requirements of the HUD
          Affirmative Fair Housing Marketing Regulations, and shall be required to
          submit individual Affirmative Fair Housing Marketing Plans in connection
          with any new application for participation in any HUD/FHA assistance or
          insurance program. In addition, the suspended signatory shall have 30
          days from the date of suspension to submit to HUD an individual
          Affirmative Fair Housing Marketing plan for each of its current projects for
          which an individual plan had not previously been submitted.

Part VI: Suspension from the REALTOR® Model Plan
       Whenever HUD has reasonable cause to believe that a signatory has failed to
make good faith efforts to comply with his or her responsibilities under this
REALTOR® Model Affirmative Fair Housing Marketing Plan, HUD shall contact the
signatory and arrange for a meeting between HUD representatives and the signatory
and any other principal of the firm to identify and discuss the area/s of non-
compliance. Either HUD or the signatory may invite representatives of the
signatory’s local or state REALTOR® Association (where the signatory holds primary
membership) or the National Association of REALTORS® to participate in the
meeting.
       If the HUD representatives determine the corrective action by the signatory is
needed to achieve compliance, the HUD representative shall determine the
appropriate correction action needed, including a timetable for implementation. If the
signatory does not agree to take the needed corrective action, or fails to take such
action within the time specified, the HUD representative/s shall make a
recommendation to the Assistant Secretary for Fair Housing and Equal Opportunity
on whether or not the signatory should be suspended as a party to this REALTOR®
Model Plan. Written notice of this recommendation shall be given to the signatory
and to NAR. The signatory may, within 30 days of receipt of the notice of
recommendation, submit written arguments and/or other materials in support of
his/her position to the Assistant Secretary. The Assistant Secretary shall make the
final decision on the suspension of the signatory and shall notify the signatory and
NAR of the decision.
        The suspension of a signatory as a party to this REALTOR® Model Plan shall
remain in effect until the Assistant Secretary has determined that the signatory may
be reinstated.
Addenda
Fair Housing Changes

Enforcement by Private Persons
       The court, if it deems appropriate, may grant as relief court costs and
reasonable attorney fees to a prevailing defendant, consistent with Federal Civil
Rights statutes.
                      LREC Regulation Review
Deposits
Account Closing
Maintaining Accounts
Corporations & Partnerships
Transfer of Trust Funds on Sale or Acquisition of Agency
Commissions
Handling of Real Estate Trust Funds
Disbursement of Escrow Deposits
Escrow Disbursement Order
Addenda
      LREC Law Changes
           Post-Licensing
           Inactive Licensees
Deposits
       The Louisiana Real Estate Commission may censure, suspend or revoke a
license, registration or certification if a licensee, registrant or certificate holder is
performing or has performed or has attempted to perform any of the following acts:
•      Failure to account for any money coming into his/her possession belonging to
       others
•      Failure to properly disburse money which belongs to others upon its coming
       into his/her possession
•      Commingling the money or other property of his/her principals with his/her
       own
•      Accepting, giving, or charging any undisclosed commission, rebate, or direct
       profit on expenditures made for a principal
•      Failure of an associate broker or salesperson to place, as soon after receipt
       as practical in the custody of his/her licensed broker any deposit money or
       other money or funds entrusted to him by any person dealing with him as the
       representative of his licensed broker or in connection with any transaction
       involving sale, lease or management or real property.

       Any money received as a deposit in a transaction involving the sale of real
estate shall be deposited into the sales escrow checking account of the listing broker
unless all parties having an interest in the funds have agreed otherwise in writing.

Account Closing
        No sales escrow checking account, rental trust checking account, or security
deposit account may be closed until such time as all deposits therein have been
properly disbursed according to the law. Every broker shall notify the commission in
writing of the closing of any sales escrow account, rental trust account or security
deposit account within ten (10) days following the date the account is closed.

Maintaining Accounts
      Upon revocation, suspension or lapse of his license for any reason, or upon
bankruptcy, a broker shall continue and maintain this sales escrow checking
accounts and rental trust checking accounts until such time as all deposits therein
have been properly disbursed according to the law.

Corporations and Partnerships
        Every licensed corporation or partnership shall open and maintain sales
escrow accounts, rental trust accounts and rental security deposit accounts as
specified for resident and non-resident brokers. All funds received in any real estate
transaction conducted by the corporation or partnership as a licensee shall be
deposited into these accounts.

Transfer of Trust Funds on Sale or Acquisition of Agency
         When a licensed agency is sold or otherwise acquired by another licensed
agency, the sponsoring broker or qualified broker of the acquiring agency will advise
the commission in writing of the name of the agency acquired and the anticipated
date of the transfer of trust funds. The letter notifying the commission of the
acquisition will specify the account numbers of the sales escrow accounts, rental
trust accounts, or rental deposit accounts from which the funds will be transferred
and the account numbers of the accounts into which the funds will be deposited. A
letter jointly signed by the sponsoring or qualifying brokers of the agency being
acquired and the acquiring agency requesting that approval be granted for the
transfer of funds will accompany the notification to the commission. The transfer of
funds shall not be accomplished until written approval has been granted by the
commission.

Commissions
        No payment of a commission or compensation shall be made by any licensee
or registrant to any person who has not first secured his/her license or registration.
Associate brokers, salespersons, and timeshare interest salespersons shall not pay
or offer to pay any commission or valuable consideration for the performance of any
act herein specified. No payment of a commission or other compensation shall be
made by any broker to any licensee or registrant when the paying broker has
knowledge that the receiving licensee or registrant has agreed to pay or intends to
pay or otherwise deliver a portion of the commission or compensation to an
unlicensed person or entity. A payment of commission or compensation may be
made to and accepted by former licensees and registrants for transactions
negotiated by them while duly licensed or registered by the commission. Current
licensees who transfer their licenses from one broker to another broker may accept
compensation from their broker, so long as the compensation is transmitted through
their current sponsoring brokers. Associate brokers and salespersons shall not
accept commission or other valuable consideration for the performance of any act
herein specified or for performing any act relating thereto, from any person, except
their sponsoring or qualifying broker. Associate brokers and salespersons may
assign or direct their commissions or other compensation earned in connection with
a real estate transaction be paid by their licensed sponsoring broker to an unlicensed
corporation of which the associate broker or salesperson is the sole officer, director,
or shareholder.
Handling of Real Estate Trust Funds
         Each resident broker who accepts any deposit on behalf of a client in
connection with the sale of real estate shall open and maintain a sales escrow
checking account in a financial institution in the state of Louisiana. All sales escrow
accounts shall be title in the identical wording as stated on the broker license and the
wording “Sales Escrow Account” shall be imprinted on all checks and bank
statements issued in connection with this account. Except as otherwise provided in
this chapter, all deposits received by a broker in connection with the sale of real
estate shall be deposited in this account.
         Upon the opening of any sales escrow checking account, rental trust checking
account, or security deposit trust account, a broker shall execute and submit to the
commission an affidavit attesting to the existence, location, type and account number
of such account, and authorizing and empowering the commission or its
representatives to examine, inspect and/or copy the records of the account. All such
affidavits shall be submitted to and received by the commission within ten (10) days
following the opening of any such accounts.
         Each non-resident broker shall open and maintain such sales escrow
accounts, rental trust accounts and rental deposit accounts as specified for
residential brokers. The accounts may be opened and maintained at a financial
institution in the state of Louisiana or in a financial institution in the state in which
they reside.
         If a broker opens a branch office in a parish other than the parish in which
his/her main office is located, the broker may open an additional sales escrow
account, rental trust account, or rental deposit account in the parish in which the
branch office is located.
         Where the interest of the principal parties to a particular transaction or series
of transactions would be served thereby, and with the prior written consent of the
principals parties, a broker may open an additional sales escrow checking account or
rental trust checking account in any parish and deposit therein all monies received in
trust on behalf of those parties pursuant to that particular transaction or series of
transactions.
         Every sales escrow checking account, rental trust checking account or
security deposit trust checking account shall be opened as a non-interest bearing
checking account unless all parties having an interest in the funds to be deposited
therein have agreed otherwise in writing. A broker may deposit and keep a sum not
to exceed $500.00 in each sales escrow account, rental trust account, and security
deposit trust account from his/her personal funds, which sum shall be specifically
identified and deposited to cover bank service charges relating to the accounts. A
broker may, in connection with property management activities, deposit personal
funds in excess of $500.00 into a rental trust account for the temporary, limited and
specific purpose of enabling the broker the satisfy financial obligations for or on
behalf of clients. Within five working days following the transfer of funds a letter
jointly signed by the sponsoring or qualifying brokers of the agency being acquired
and the acquiring agency will be forwarded to the commission certifying that all trust
funds have been transferred. The letter will include the following:
•        A certification that all escrow account and rental trust account funds have
         been transferred to and received by the acquiring agency
•        A certification that supporting documents for all trust funds have been
         delivered to and received by the acquiring agency
•        A listing of all escrow or rental trust accounts from which a transfer was made
         and the amount of funds transferred from each account
•        A listing of all escrow or rental trust accounts into which funds were deposited
         and the amount of funds deposited into each account

        The sponsoring or qualifying broker of the agency being acquired will close
the escrow accounts and rental trust accounts from which the funds were transferred
within ten (10) days following the transfer of funds and advise the commission in
writing when such action has been completed.

Disbursement of Escrow Deposits
        When a broker determines or has knowledge that a dispute exists as to the
ownership or entitlement of a deposit or funds held in a sales escrow account, as a
result of a real estate sales transaction, it shall be the obligation of the broker to
immediately notify in writing all of the parties involved of the dispute, and within
ninety (90) days of the determination or knowledge that such a dispute exists, it shall
be the obligation of the broker to immediately notify in writing all of the parties
involved of the dispute exists, it shall be the obligation of the broker holding the funds
to one of the following:
        Release the deposit funds upon the written and mutual consent of all of the
parties involved,
        Through a concursus proceeding, deposit the funds into the registry of any
court of competent jurisdiction and proper value.
        Deposit the funds including original promissory notes, with the Louisiana Real
Estate Commission along with a request for an escrow disbursement order, which
request shall include the names and last known addresses of the principals to the
agreement, a copy of the purchase agreement, and copies of any other documents
which may have some bearing on the dispute.
Escrow Disbursement Order
       The Louisiana Real Estate Commission upon receipt of the request for an
escrow disbursement order:
       Shall immediately cause the funds accompanying said request to be
deposited in an interest bearing escrow account pending final disposition,
•      May commence an investigation by its staff of the dispute
•      May, upon completion of an investigation, consider the investigative findings
       and at a regular or special meeting issue an escrow disbursement order
       providing for the disposition and allocation of funds which are being held in
       escrow and are in dispute
•      May call an adjudicatory hearing before issuing an escrow disbursement
       order
•      May deposit the disputed funds into a concursus proceeding in any court or
       competent jurisdiction and proper venue.
Addenda
LREC Law Changes

Education Law Changes

Post-Licensing Education Requirement Changes
        Beginning January 1, 2000, each person obtaining a real estate broker’s
license shall complete thirty additional hours within the first full calendar year of
licensure, which shall satisfy the required continuing education requirements for that
year. Such hours shall be in subjects required by the commission including but not
limited to laws, rules and regulation changes, finance and handling of funds.
        Each person obtaining a salesperson’s license shall complete thirty additional
hours within the first full calendar year of licensure, which shall satisfy the required
continuing education requirements for that year. Such hours shall be in subjects
required by the commission including but not limited to laws, rules and regulation
changes, finance and the handling of funds.
        Beginning January 1, 2001, four or the required annual continuing education
hours shall be in subjects specified by the commission.

Inactive Licensees
       An inactive licensee will not be required to fulfill the continuing education
requirement established for active licensees on a yearly basis.
       Upon application to return to active license status the licensee must have
completed the continuing education specified in the following paragraphs:
•      One to three years of inactive status: twenty hours of continuing education
•      Three to five years of inactive status: forty hours of continuing education
•      Five or more years: eighty hours of continuing education

        Licensees remaining on inactive status for longer than a five-year period will
be required to complete a maximum of eighty hours of approved continuing
education, within the five-year period immediately preceding the request to return to
active license status. Such continuing education shall include a four-hour Louisiana
real estate license law and commission rules and regulations course, which must be
completed within one year prior to the date of the transfer of the license to the active
status.
                      Property Condition Issues
Lead Based Paint
      Background
      Recommendations
      Addenda
          FAQ about Regulations
          HUD/EPA Disclosure Regulations
                Properties to which the Requirements Apply
                Effective Date
                Obligation of Sellers, Lessors and Real Estate Agents
                Who is an Agent?
                The Ten Day Testing Period
                State and Local Requirements
                Penalties
                Record Keeping Requirements
          Supplement to Lead Based Paint: A Guide to Compliance
                Resolved Issues
                Unresolved Issues
Wood Destroying Insect Report (WDIR)
      LPCA Issues New Guidelines
      General Information & Conditions Governing the WDIR
      Terms & Definitions
      Species Which May Infest Wood
      The New WDIR Form
Addenda
      New Home Warranty Act Changes
      Louisiana Home Inspectors Licensing Law
      Formosan Termite Initiative
Lead Based Paint Background

         Lead is a highly toxic metal, when present in the human body attacking the
central nervous system. Children and fetuses are particularly susceptible since their
bodies are still developing. Anemia, hyperactivity, kidney dysfunction, lower
intelligence, stunted growth, mental retardation, and even death have been linked to
lead. Sources of lead in the environment include water (lead pipes), soil and dust
(gasoline consumption), and air (industry emissions), as well as lead-based paint.
         Lead-based paint was used almost universally until the 1950’s, when
caseworkers in a few large cities sought out lead-poisoned children and identified
lead-based paint as a health hazard. In the 1960’s in Chicago, New York, and
several other large cities began initiating the first mass screening programs. The
Lead-Based Paint Poisoning Act, passed in 1971, initiated a national effort to identify
children with lead poisoning and abate the lead source. When the Act was passed,
the direct legislation of lead paint chip was regarded as the primary health hazard
from lead-based paint. By 1978, lead-based paint was completely banned for use in
all homes and most other buildings (it can be used for some exterior industrial
properties).
         According to the U.S. Housing and Urban Development, more than one-half
of the U.S. housing stock – and more than three quarters of units built before 1978 –
contains some lead-based paint.
         In 1992, the U.S. Congress passed the Residential Lead-Based Paint Hazard
Reduction Act, which requires seller disclosure of lead-based paint and lead-based
paint hazards in connection with the sale or lease of pre-1978 dwellings. The law
directed the U.S. Environmental Protection Agency and HUD to issue regulations to
implement those requirements.
         New federal regulations requiring sellers or lessors of pre-1978 residential
dwellings to disclose the presence of known lead-based paint in the property went
into effect, September 6, 1996, for the owners of more than four residential
dwellings, and December 6, 1996, for owners of one to four residential dwellings.
Lead-Based Paint Recommendations
        Under the new regulations, homebuyers and renters must receive known
information on lead-based paint hazards during sales and rentals of housing built
before 1978. Buyers and renters will receive specific information on lead-based
paint in the housing as well as a Federal pamphlet with practical, low-cost tips on
identifying and controlling lead-based paint hazards. Sellers, landlords and their
agents will be responsible for providing this information to the buyer or renter before
the sale or lease of the property.
        Before the ratification of a contract for housing sale or lease:

•      Sellers and landlords must disclose known lead-based paint and lead-based
       paint hazards and provide available property evaluations to buyers or renters.
•      Sellers and landlords must give buyers and renters the pamphlet developed
       by EPA, HUD, and the Consumer Product Safety Commission entitled,
       “Protect Your Family from Lead in Your Home.”
•      Homebuyers will get a ten (10) day period to conduct a lead-based paint
       inspection or risk assessment at their own expense. The rule gives the two
       parties flexibility to negotiate key terms of the evaluation.
•      Sales contracts and lease agreements must include certain notification and
       disclosure language.
•      Sellers, lessors, and real estate agents share responsibility for ensuring
       compliance with these regulations.

         This rule does not require any testing or removal of lead-based paint by
sellers or landlords. This rule does not invalidate lease or sales contracts. For
owners of a total of more than (4) four dwelling units, the regulations became
effective on December 6, 1996.
         The new rules will help inform about nine million renters and three million
homebuyers each year. The estimated cost associated with learning about the
requirements, obtaining the pamphlet and other materials and conducting disclosure
activities is about $6 per transaction. This data was prepared by the EPA and HUD
and can be purchased by calling 1-800-424-LEAD.
Lead Based Paint Addenda
Frequently Asked Questions about the Regulations

1.) What do the new regulations require of sellers, lessors and real estate
professionals?
      Before ratification of a contract for sale or lease:
•     Sellers and landlords must disclose known lead-based paint and lead-based
      paint hazards and provide available reports to buyers and tenants.
•     Sellers and landlords must give buyers and renters a federal pamphlet titled
      Protect Your Family from Lead in Your Home.
•     Homebuyers will get a 10-day period to conduct a lead-based inspection or
      risk assessment at their own expense if desired. The number of days can be
      changed by mutual consent.
•     Sellers and lessors must include certain language in sales contracts and
      leasing agreements to ensure that disclosure and notification actually take
      place. Sellers, lessors and real estate professionals share responsibility for
      ensuring compliance.

2.) What are the specific responsibilities of real estate salespeople?
      Real estate salespeople must ensure that:
•     Sellers and landlords are aware of their obligations.
•     Sellers and landlords disclose the proper information to buyers and tenants.
•     Sellers give buyer the 10-day opportunity (or another mutually agreed-on
      period) to conduct an inspection.
•     Lease and sales contracts include proper disclosure language and
      acknowledgments that all the required information was provided.

3.) What type of housing is covered?
       Most private housing, public housing, federally owned housing, and housing
receiving federal assistance.

4.) What housing is not covered?
      The following types of housing are not covered:
•     Housing built after 1977
•     Zero-bedroom units, such as efficiencies, lofts or dormitories
•     Housing with leases for less than 100 days, such as vacation houses or short-
      term rentals
•     Housing exclusively for the elderly (unless there are children living there)
•     Housing for the handicapped (unless there are children living there)
•      Rental housing that has been inspected by a certified inspector and found to
       be free of lead-based paint
•      Houses being sold because of foreclosure

5.) Is the seller required to correct any lead hazards that are found?
        No, nothing in the law requires an owner to remove lead paint or correct
hazards. The law also does not prevent the two parties from negotiating hazard
reduction as a contingency. That will be handled the same as any other defect.

6.) Will the salesperson be held liable if the sellers or lessors fail to disclose
information known to them about the presence of lead-based paint?
        As long as the salesperson has informed the sellers or lessors of their
obligations to disclose, the salesperson will not be held liable for the failure to
disclose to a purchaser or lessee the presence of lead-based paint or lead-based
paint hazards known by sellers or lessors but not disclosed to the salesperson, says
NAR.

7.) To whom does the disclosure have to be made?
        The disclosure must be made to the purchaser or the lessee. The regulations
define a “purchaser” as any entity that enters into an agreement to purchase, and
“lessee” is defined as any entity that enters into an agreement to lease, rent or
sublease. The regulations make it clear that the rule does not require mass
disclosure to all prospective purchasers or lessees, regardless of their degree of
interest. Only the actual purchaser or lessee must receive the information, subject to
the timing requirements set forth below, says NAR.

8.) When should the disclosure occur and the pamphlet be distributed?
       For sales transactions, the disclosure must occur prior to the seller’s
acceptance of the purchaser’s written offer to purchase. If the potential purchaser
makes an offer before the requisite disclosures are provided, the seller may not
accept that offer until the disclosure activities are completed and the potential
purchaser has had an opportunity to review the information and consider whether to
amend the offer prior to becoming obligated under the contract, says NAR.
       For lease transactions, the lessor must provide the information and complete
the disclosure portions of the lease before accepting the lessee’s offer and must also
provide the lessee an opportunity to review the disclosed information and amend the
lease offer, says NAR.

9.) How will the testing period work?
        The regulations do not prescribe any particular method of satisfying this
requirement, but they allow the potential purchaser and seller to include in the sales
contract home inspection contingency language similar to that already in common
use. The only specific requirement is that the purchaser must be given up to 10
days to have the testing done. The purchaser can demand on opportunity to test
even if the seller has already had the property tested. The parties can agree, in
writing, to a longer or shorter time frame, says NAR.
        The contingency language may provide the purchaser with the right to cancel
the contract if test results show unacceptable amounts of lead in the home. The
contingency language may also provide the seller the right to remove the lead and
correct the problem, thus binding the purchaser to the contract, says NAR.
        The purchaser can also simply waive the right to test, as long as it is in
writing. Although there is no mandatory federal contingency language, the
regulations include a suggested format. The parties are free to create other
contingencies concerning such matters as the starting and ending time for testing,
each party’s responsibilities if lead is found, and the disposition of earnest money,
says NAR.

10.) Will buyer’s brokers be required to comply with the regulations?
        The regulations define agent as “any party who enters into a contract with a
seller or lessor, including any party who enters into a contract with a representative
of the seller or lessor for the purpose of selling or leasing target housing.” This
means that listing salespeople, selling salespeople, and buyer’s brokers (if paid by
the seller through a cooperative brokerage agreement with the listing salesperson)
are “agents” and are responsible for ensuring compliance under the rule.
        Buyer’s brokers who are compensated solely by the buyer are exempt from
the regulations, says NAR.

11.) How will the federal regulations affect the need to comply with state or
local lead disclosure law?
        Although the federal government can’t delegate the enforcement of the
federal lead-based paint law to the states, the EPA and HUD have tried to avoid
duplication and to allow for the incorporation of the federal requirements into existing
state laws, says NAR.
        If state law already requires use of a lead disclosure pamphlet, the state may
apply to the EPA for approval to have that document used in lieu of the federal
pamphlet. However, compliance with the federal law does not eliminate any
obligations of sellers, lessors, or salespeople to comply with state or local lead-
based paint disclosure, testing or remediation requirements, according to NAR.
12.) Will the failure to comply give the purchaser or lessee the right to void the
sales or lease transaction?
       No, says NAR. Bother the federal law and regulations expressly provide that
noncompliance cannot be used to void or nullify the contract after ratification and
cannot void any transfer of real estate.

13.) Where can I get copies of the regulation and the information pamphlet
that must be given to buyers and renters of pre-1978 dwellings?
      Call the National Lead Information Center at 800-424-LEAD. You may also
FAX orders to 202-659-1192.

14.) Whom can I contact for technical advice on complying with the
regulations?
      Call HUD or the EPA. For addresses and phone numbers call Today’s
REALTOR Interactive, 312-329-8400, and press 7.
HUD/EPA Lead Based Paint Disclosure Regulations
        The Residential Lead-Based Paint Hazard Reduction Act of 1992 (Title X of
Public Law 102-550) directed the U.S. Environmental Protection Agency and the
Department of Housing and Urban Development to jointly issue regulations requiring
disclosure of certain information about lead-based paint and lead-based hazards in
residential real estate transactions. After considerable delay, those regulations
(which appear at 24 C.F.R. Part 35 and 40 C.F.R. Part 745) were issued in final form
on March 6, 1996.
        NAR has developed a publication describing the requirements of the
Regulations and how to comply with them entitled, Lead-Based Paint – A Guide to
Complying with the New Federal EPA/HUD Disclosure Regulations. This publication
is available for $5.00 per copy (with discounts also available on larger orders), and
can be ordered by calling NAR Customer Service at 800-874-6500. Overnight or
next day delivery is also available.

Properties to which the Requirements Apply
        The Regulations apply to sale or lease transactions of “target housing”, that
is, residential property completed before 1978, with certain exceptions:
•       Sales at foreclosure
•       Leases of property which has been inspected and found to be lead-based
        paint free by an inspector certified by a Federal or Federally accredited State
        or tribal certification program
•       Short term leases of 100 days or less where no lease renewal or extension
        can occur
•       Renewal of existing leases, so long as no new information about lead-based
        paint on the premises has come into the possession of the owner, and the
        required information was disclosed when the lease was originally created. (In
        the case of leases which automatically convert to “month to month” after a
        expiration of a fixed term, disclosure must be made when the lease first
        converts (if not made at the time the lease was created, but not each month
        thereafter)
•       O-bedroom dwellings
•       Housing designed for the elderly or disabled, but only if no children under the
        age of 6 reside or are expected to reside in such housing

      Housing completed before 1978 has been interpreted to mean not only that
which was completed and/or occupied before January 1, 1978, but also that for
which a building permit was issued before that date, or if no permit was required,
where construction began before that date.

Effective Date
        The effective date of the Regulations is September 6, 1996, for owners of 5
residential dwellings (apartment or condominium units, as well as townhouses or
single-family homes) and December 6, 1996, for owners for fewer than 5 dwellings.
        HUD has announced in Mortgagee Letter 96-29 that the form presently
required to be signed in the case of properties financed by FHA-insured mortgage
loans will not be required after December 6, 1996.

Obligation of Sellers, Lessors and Real Estate Agents
        Sellers and Lessors of housing to which the regulations apply must provide
the information and perform the other duties described below to purchasers/lessees.
Any agent hired by a seller or lessor to market the property must insure the
seller or lessor’s compliance with the requirements of the Regulations.
        The agent must specifically inform the seller/lessor of his disclosure
obligations, described below. The purchaser or lessee must be provided the
following:
•       All information the seller or lessor may have regarding known lead-based
        paint or lead-based paint hazards on the property
•       Copies of any prior reports of testing for lead-based paint or lead-based paint
        hazard evaluation of the property
•       A copy of the EPA publication Protect Your Family from Lead in Your Home,
        or a federally-approved equivalent publication
•       Sales contracts and leases must include specific lead-based paint warning
        language, which is specifically prescribed in the Regulations.
•       A Disclosure and Acknowledgement statement confirming that the disclosures
        have been made, signed by bother parties to the transaction and the broker/s
        involved, must be included as a part of the contract for sale or lease
•       Property purchasers (but not renters) must be provided an opportunity to
        have the property tested for lead-based paint or lead-based paint hazards
        during a ten day period prior to the time when the purchaser becomes
        obligated under the contract, although that period may be modified by
        agreement between the seller and purchaser, or waived by the purchaser
        entirely
•       If the purchaser or lessee makes and offer to buy or lease prior to receiving
        the required disclosures, the seller or lessor may not accept the offer until the
        information is provided and the purchaser or lessee has the opportunity to
        review it and, if desired, to change the terms of the offer
•      Sellers, lessors and their agents have no duty to conduct testing of the
       property for lead-based paint of lead-based paint hazards. Their only
       obligation is to provide known information, as described above, regarding
       lead-based paint or lead-based paint hazards on the premises
•      Copies of EPA’s publication Protect Your Family from Lead in Your Home
       may be purchased by calling 800-424-LEAD. The publication is also
       available on NAR’s Website at REALTOR.com, on both the EPA and HUD
       websites (EPA.gov and HUD.gov), as well as that of the National Safety
       Council (nsc.org.nsc/ehc/ehc.html). A copy was also published in the July
       1996 issue of Today’s REALTOR® magazine. It is not copyrighted and may
       be photocopied freely.

Who is an Agent?
        The regulations define an agent as any party who enters into a contract with a
seller or lessor, including any part who enters into a contract with a representative of
the seller or lessor, for the purpose of selling or leasing a property…to which the
regulations apply. The duty of an agent to insure the seller’s or lessor’s compliance
with these disclosure requirements is imposed on any agent hired by the seller or
lessor to market the property, including both listing agents and selling agents
(whether they are buyer’s agents, subagents, or it would appear, facilitators or
transaction brokers), and excludes only agents retained and compensated
exclusively by the buyer.

The Ten Day Testing Period
        Although the Regulations do not explicitly so provide, EPA and HUD have
indicated that they intend that they intend that the 10-day testing period be
conducted much like home inspection contingencies operate. That is, pursuant to
language incorporated in the sales contract, the purchaser is permitted conduct such
lead-based paint testing or risk assessment as he deems appropriate and, if the
results are unacceptable, can seek the seller’s correction of the problem, void the
contract or exercise such other rights as are provided in the contract. The length or
other terms and conditions of the testing hazards are identified, are matters for
negotiation and agreement by the parties. In particular, they may agree to a longer
or shorter period for testing or no testing period at all. EPA is in the process of
establishing a lead-based paint contractor training and certification program, also as
required by Title X, to train and certify those who perform lead-based paint
inspection, risk assessment and abatement activities. Until that process is in
operation, however, lead-based paint activities need not be performed by certified
contractors unless required by state or local law.
State & Local Requirements
        Compliance with these Regulations does not eliminate the need to satisfy
any other applicable requirements of state or local law relating to lead-based paint.
It is important to recognize that this may include common law duties to disclose
known material facts, though compliance with the Regulations will probably result in
the disclosure of all such facts relating to lead-based paint.

Penalties
        Substantial penalties may be imposed on sellers, lessors and their agents for
non-compliance: fines of up to $10,000 and civil liability of three times the damages
suffered by an injured purchaser/lessee. EPA has announced, however, that in the
first year following the effective dates their enforcement focus will be on compliance
assistance, and they will pursue civil penalty actions only in response to egregious
violations which put the public at risk.

Record Keeping Requirements
        The seller or lessor, and any agent employed to market the property, must
retain a copy of the disclosure and acknowledgment statement included as a part of
the contract for three years from the date of completion of the sale or
commencement of the lease.
Supplement to Lead-Based Paint: A Guide to Compliance
       Guidance documents issued by HUD and EPA on August 20, and December
5, 1996, concerning the Title X Regulations, as well s a letter issued to NAR directly,
address and resolve a number of issues raised by the Regulations. Certain other
issues remain uncertain. The following information supplements that in the NAR
publication entitled Lead-Based Paint: A Guide to Complying with the New Federal
EPA/HUD Disclosure Regulations.

Resolved Issues
Seller’s Right to Refuse to Have Testing/Risk Assessment Performed
        HUD/EPA have now addressed, in a letter to NAR, the important question of
whether a seller may reject an offer to purchase in which the purchaser seeks to
pursue the 10-day opportunity to perform lead-based paint inspection or risk
assessment, as provided in the Regulations. The letter advises that “the seller is
required to provide a potential purchaser becomes obligated under a contract to
purchase target housing,” and may not “offer or advertise property as being available
only if purchasers will not take advantage of the opportunity to conduct an inspection
or risk assessment.
        The EPA/HUD goes on to point out, however, that that purchaser is “entitled”
to a period of 10 days to perform such testing but may agree to a different period or
may agree to waive that testing opportunity completely. The seller is not required to
pay for testing or risk assessment.
        The letter also addresses an important related issue: whether a seller must
also agree to a “contingency” that permits a purchaser to cancel the sales contract if
the results of lead-based paint testing or risk assessment are unacceptable. On that
issue, HUD and EPA have advised that “the regulation provided broad flexibility for
buyers and sellers to develop mechanisms for providing the opportunity for
inspection or risk assessment…” The letter goes on to indicate explicitly that where
a “seller wishes to require a buyer to honor the other terms of the contract regardless
of the outcome of a lead-based paint inspection or risk assessment, such a clause
must be included in the contract language, and such a procedure is acceptable to
HUD and EPA because the rule only covers the opportunity to obtain an inspection
or risk assessment.”
        In short, while the seller and purchaser may negotiate regarding the lead-
based paint testing or risk assessment provisions in the contract, the seller may not
refuse the purchaser opportunity to test. The protocol preferred by HUD and EPA is
that sales contract provide the purchaser the right to cancel the contract if the test
results are unfavorable, but the seller may insist that the purchaser not retain that
right and may decline to agree to give the purchaser that right.
Date of Construction
        Housing constructed before 1978 means not only that which was completed
and/or occupied before January 1, 1978, but also that for which a building permit
was issued before that date, or if no permit was required, where construction began
before that date. The Guidance issued by HUD/EPA does not directly address the
question of the agent’s obligation to seek out information establishing the
construction date of the premises, or the extent to which the agent may rely on the
seller’s representation of that date. The provision of the Regulations that holds an
agent not liable for failing to disclose information about lead-based paint or hazards
known to but not provided by the seller or lessor suggestions, by analogy, that the
seller or lessor regarding the construction date of the property.

Mobile/Manufactured Housing & Timeshares
        The Regulations apply to mobile homes and manufactured housing even if it
is known or believed not to contained any paint (lead-based or otherwise)
whatsoever. The Regulations also apply to the sale or lease of timeshare units that
are “target housing” unless an exception (such as the exception for non-renewable
leases of 100 days or less) applies.

Disclosure by Seller of Lessor Representatives
       A seller or lessor may authorize an agent, such as a property management
agent, to fulfill the seller’s or lessor’s disclosure responsibilities under the
Regulations. This includes providing any information known to the seller, lessor or
agent about lead-based paint or lead-based paint hazards on the premises, an
execution of the disclosure acknowledgement form. Such action by an authorized
agent binds the lessor and the lessor is responsible for any failure of the agent to
provide all required information.

Photocopies of Disclosure Acknowledgement Form
       It is permissible to provide purchasers or lessees with a photocopy of the
disclosure form executed by lessor or seller. It is not necessary to provide to a
purchaser or lessee a form bearing the original signature or the seller or lessor.

Oral and Month-to-Month Leases
        The Regulations apply to oral as well as written leases. The Regulations
apply to the creation of a month-to-month tenancy which automatically follows the
expiration of a stated lease term. The Regulations need not be fulfilled if any terms
and conditions of the lease are changed or if new information about lead-based paint
or lead-based paint or lead-based paint hazards comes into the possession of the
owner of the property.
Common Areas
        Sellers/lessors in multi-unit buildings must disclose what they know about
lead-based paint in common areas (hallways, lobbies, etc.). This includes providing
test reports in the possession of the owner describing the results of an examination
of common areas, as well as test results of building-wide evaluations even if the
report does not include a specific evaluation of the unit being leased.
        The disclosure responsibilities of the Regulations are placed on the
seller/lessor of individual units of condominiums or cooperatives, rather than on the
condominium association or co-op corporation. That duty applies both with respect
to information about lead-based paint or lead-based paint hazards in the individual
unit being offered for sale or lease as well such information about the common
areas. Thus, unit owners should obtain from the association or corporation and
disclose any available information about known lead-based paint or lead-based paint
hazards in common areas. Of course, in the case where a unit being sold or leased
is in fact owned by the association or corporation, the disclosure responsibilities rest
with the owner – the association or corporation.

Inspection Contractors
       A listing of lead testing, risk assessment and mitigation contractors is or will
soon be available at: www.leadlising.org (703-312-7837). HUD also has information
about certified inspectors available on its website at www.hud.gov/lea/leahome.html.
Such information may also be available through the National Lead Information
Clearinghouse (800-424-LEAD).

Rehabilitated Properties
       HUD/EPA have indicated that they will consider amending the Regulation to
exempt residential properties from the requirements if all interior and exterior
surfaces painted prior to December 31, 1977, have been removed and replaced after
that date. Unless and until such an amendment is issued, however, no such
exemption applies.

Lessee Refusing to Sign Disclosure Form
       The Guidance issued by HUD/EPA indicates that where a lessee refuses to
accept the disclosure materials (EPA pamphlet and information about known lead-
based paint or hazards), or sign the disclosure acknowledgment form, the lessor
may deliver these materials by certified mail, return receipt requested. The lessor
may also certify in writing that a signed and dated disclosure acknowledgment form
could not be obtained due to the lessee’s refusal. The receipt and written
certification should be retained with the lessor’s executed disclosure
acknowledgment form.

Lead-Based Paint
       It is vitally important to distinguish between the mere presence of lead-based
paint and lead-based hazards. The former may not present a current danger to
occupants and thus not require remedial or other action except monitoring the
condition of the lead-based paint. The latter is, by definition, hazardous and requires
corrective action of some kind, depending on the nature and extent of the problem.
Similarly, there is an important distinction between lead based paint inspection and
lead-based paint risk assessment. The former is an examination for the presence of
lead-based paint, while the latter often involves not only a determination of whether
lead-based paint is present but also an evaluation of the extent of the hazard, if any,
presented by such paint. The degree of hazard often depends on the particular
location/s of the lead-based paint and its condition.

Sales Contracts in Place on December 6, 1996
        An issue of diminishing importance is the validity of sales contracts entered
into prior to December 6, 1996, even though the closing will or did occur on or after
that date. Contrary to the interpretation EPA had previously rendered, the
Regulations DO NOT apply to such contracts, whether or not there are any
outstanding contingencies to the contract.

Unresolved Issues
Seller’s Acceptance of Offer Contingent on Purchaser’s Receipt of Required
Documents
        The Regulations provide that where a seller or lessor makes the required
disclosures after the purchaser or lessor makes the required disclosures after the
purchaser of lessee has made an offer to purchase or lease, the seller or lessor may
not accept that offer until all disclosures are completed and the purchaser or lessee
has an opportunity to review the information provided and amend the offer, if
desired. HUD/EPA has been asked to confirm in writing that a seller or lessor who
receives an offer before the disclosures are completed may accept the offer
contingent on (1) the purchaser or lessee receiving the information which must be
disclosed, and (2) the purchaser or lessee retaining the right to modify or revoke the
offer based on information revealed in the disclosure materials.

Auctions
        HUD/EPA has provided minimal guidance on the handling to target housing
sold at auction. That advice indicates only that where a “due diligence” period
precedes the auction a seller “may give potential buyers any information on lead-
based paint, allow lead-based paint inspections, and otherwise comply with this
rule.” NAR has requested specific clarification of the seller’s mandatory obligations
under the Regulations.
        Based on the advice provided NAR regarding the “purchaser’s right to test”
issue, it would appear that properties may be sold at auction subject to the
purchaser’s right to have an inspection or risk assessment performed without the
purchaser also having the right to void the transaction if the inspection or
assessment results are unacceptable. That result would appear to allow auctions to
be conducted effectively notwithstanding the purchaser’s right to test the property for
lead-based paint or hazards.

Transaction Brokers/Facilitators
         While the Regulations do not expressly address whether the Regulations
apply to listing or cooperating brokers action and “transaction brokers” or
“facilitators,” that is, brokers who do not have a common law or statutory agency
relationship, it would appear that such licensees are covered. EPA has been asked
to provide further specific advice on the issue as well.
Wood Destroying Insect Background
         At their October 9, 1996, hearing, the Structural Pest Control Commission
approved the newly revised Wood Destroying Insect Report (WDIR) and guidelines
for its completion. The WDIR and guidelines, a three-year project of a special
Louisiana Pest Control Association (LPCA) Committee, was presented to the
Structural Pest Control Commission by Aubrey Billiot, LPCA President, Ed Martin,
Committee Chairman, and Allen Fugler, LPCA Executive Director. In their
presentation, they reported to the Commission the results of an October series of
informational meetings held in six cities during which those attending overwhelmingly
supported the WDIR form, guidelines, and draft regulations.
         The LPCA Board believes that the new form and regulations will improve not
only the quality of inspections, but will improve the relationship the pest control
industry shares with the mortgage banking and real estate industries. Both the
Louisiana Mortgage Bankers Association (LMBA) and the Louisiana REALTORS®
(LR) were consulted and attended meetings on the form as it was developed.
Concessions were made to the groups that will be affected by the new form to make
it agreeable to all parties. Continuing education, support for which has been offered
by the LPCA to the LR and the LMBA. A copy of the new form is included in this
section.

Information & Conditions
A.) This report is based on observations and opinions of a Pest Control Operator
    (PCO) inspector. It must be noted that all buildings have structural members that
    are not visible or accessible for inspection. It is not always possible to determine
    the presence of infestation and/or damage without dismantling parts of the
    structure being inspected.
B.) All inspections are made for wood destroying insects only and not leaks, rot or
    any other structural problems.
C.) In the event the inspector reports no evidence of termites or other wood
    destroying insects in any portion of the building inspected, the inspector does not
    assume any responsibility for a condition that may exist or may be starting and
    was not visible to the representative at the time of this inspection. This
    disclaimer is necessary due to the fact that the inspections have been made only
    on accessible areas of the building and the possibility of infestation and/or
    damage exists in areas that are inaccessible for inspection. Due to the biology
    and habits of termites and other wood destroying insects, it is possible that
    infestation and/or damage may become visible at any time subsequent to this
    inspection.
D.) All inspections and reports will be made on the basis of what is visible and the
    PCO will not render opinions covering areas that are enclosed or inaccessible
    areas of finished rooms, areas concealed by wall coverings, floor coverings,
    furniture, equipment, stored articles in attics or any portion of the structure in
    which inspection would necessitate tearing out or marring of finished work. The
    PCO does not move furniture, appliances, equipment, carpet tile, interior or wall
    coverings.
E.) If any visible damage has been reported, the PCO does not intend for this
    inspection to determine whether or not this damage should be replaced. A
    qualified individual should be called to ascertain the soundness of these
    damaged members and the building.
F.) If there is evidence of active infestation or past infestation of termites and/or other
    wood destroying insects, it must be assumed that there is some damage to the
    building caused by this infestation, even if the damage is not visible to the
    inspector as of the date of the inspection.
G.) This instrument shall carry a guarantee that the property inspected will be treated
    without charge should an infestation of wood destroying insects covered by this
    report be found within 90 days of the date of issuance as required by Title 7, Part
    XXV, Chapter 141, Section 14116 (B) of the Structural Pest Control regulations.
H.) No cause for action or claim for damages shall be filed in a court of law until an
    inspection of the property has been made by an inspector of the Louisiana
    Structural Pest Control Commission to verify the fact that an infestation of wood
    destroying insects specified in this report has been confirmed.
I.) A copy of the guidelines for completion of this report may be obtained by written
    request to the structural Pest Control Commission, P.O. Box 3596, Baton Rouge,
    LA 70821-3596

Terms & Definitions
A.) “Qualified Inspector” is a licensed pest control operator (PCO) or registered
    employee working under his supervision who has had training in wood destroying
    insect inspection procedures (being a Qualified Inspector does not indicate not
    include the ability to determine damage beyond that which is visible to the human
    eye).
B.) “Accessible Area” is one that an individual can physically enter and examine.
C.) “Hidden Damage” is damage that cannot be seen without defacing a surface to
    reveal such damage.
D.) “Non-Accessible Area” is one that cannot be reached physically with hands nor
    see with the human eye. Examples of non-accessible areas are ceiling joists,
    studs and other timbers between walls, areas behind solid structures such as
    planter boxes, masonry steps, porches, and chimneys and floors under attached
    floor coverings and immovable furniture.
E.) “Visual Inspection” applies to an area that an individual can physically see.
F.) “Defacing” is the removal of any surface to determine a condition that is not
    visible on the surface to the naked eye. (Since the termite inspector is not an
    owner of the structure he/she is inspecting, no defacing will be done except with
    the written instruction from the proper authority.
G.) “Evidence” is defined as present and plainly visible signs of active or inactive
    infestation.
H.) “Arial Infestation” is the presence of a colony of subterranean termites
    (retuculiterme, heteroterms and coptotermes) which remain active free of visible
    soil contact.
I.) “Sounding” is the act of tapping a substance with a solid instrument such as a
    hammer, mallet, etc., in an effort to determine whether or not the substance is
    solid/sound (sounding will not divulge the presence of active termites and is not
    applicable in determining hidden damage).

Species Which May Infest Wood
A.) Native Subterranean Termites
    A colony of subterranean termites is composed of queen, king, solider, workers
    and reproducers, which may swarm each year. This colony may consist of up to
    60,000 insects or more. They build mud tunnels from soil to wood. They feed on
    the sapwood, taking mud with them to control temperature and moisture. They
    are soft, white-bodied insects and must have moisture to live. Although
    subterranean in nature, these termites may remain active when free of soil
    contact as long as enough moisture is present to support an infestation. If
    ground contact is broken they may get moisture from leaks in roof or plumbing
    pipes. These insects cause heavy damage to wood. When inspecting for
    subterranean termites, your inspector will look for the mud tunnels these termites
    build into a building. However, they can build their tunnels inside walls or piers
    where they cannot always be found.
B.) Formosan Subterranean Termites
    The Formosan termite is more aggressive and can live on very little moisture. A
    colony may exceed 250,000 insects and can damage wood much faster than our
    native subterranean termites. This colony is also composed of a king and queen
    with the workers and soldiers also present. The habits of the Formosan termites
    are very similar to those of our native subterranean termites. They will damage a
    structure faster than any other termite. These insects aggressively take
    advantage of structural defects such as faulty plumbing, leaks, and dampness
    from drains, condensation or leaks from the roof, etc.
C.) Drywood Termites
    A colony of drywood termites is made up of a queen, king, soldier, nymphs and
    reproductives, which may swarm each year. They live in dry solid wood without
    moisture and no ground contact. They cavities where they feed are cleaned and
    polished and contain the drippings which are tiny pellets (frass). Their exit holes
    are hard to locate. Therefore, it is very difficult for an inspector to find an
    infestation of drywood termites, because there will be no visible evidence of their
    presence.
D.) Powder Post Beetles
    There are several species of small beetles. The female lay eggs on the surface
    of the wood or in cracks or crevices. The larva feed on wood and grow for one
    year or more before emerging as adults. They make small exit holes from 1/32”
    to 1/8” in diameter. An active infestation can be determined when powder
    droppings (frass) appear as adults emerge. It is impossible to determine if any
    infestation exists until powder appears and adult beetles are visible. It should be
    noted that an absence of physical frass does not always indicate an absence of
    active infestation.
E. Old House Borer
    This beetle attacks such wood as pine and fir. The female lays eggs on the
    surface of the wood in cracks and crevices. The larvae continue to feed and
    grow for 5 to 12 years before emerging as adults. The emergence of holes are
    oval and about ¼” in diameter. Infestations of these beetles are very difficult to
    locate since visible evidence may not be present until 5 to 10 years later.
F. Carpenter Ants
    These insects do not fee on wood. They usually cut out cavities in rotting wood
    for nesting purposes. They can cause damage and may move into sound wood
    as the colony matures.
Addenda
Home Warranty Act Changes

        Changes to the Home Warranty Act specifically that all warranties apply
whether or not building code regulations are in effect or violated. The Home
Warranty Act defines “builder” as a person, corporation, partnership, limited liability
company and joint venture.
        The builder must warrant for one year, following the warranty commencement
date, that the home is free from any defect due to noncompliance with the building
standards. The builder must also warrant for defects in materials or workmanship
not regulated by building standards for the one-year warranty period.
        The builder must warrant for two years that the plumbing, electrical, heating,
cooling and ventilation systems are free from major structural defects due to
noncompliance with building standards. The builder must also warrant for defects in
materials or workmanship not regulated by building standards for the two-year
warranty period.
        The builder must warrant for 10 years that the home is free from major
structural defects. The builder must also warrant for defects in materials or
workmanship not regulated by building standards for the ten-year warranty period.
        Unless the parties agree in writing, the builder’s warranty, after the first year,
excludes the concrete basement and floor of the attached garage that is separate
from a foundation wall or other structural element of the home. In addition, the
warranty excludes an “unattached garage” that is separate from a foundation wall or
other structural element of the home.

Louisiana Home Inspectors Licensing Law
       Creates the Louisiana State Board of Home Inspectors within the Department
of Economic Development.
       Beginning January 1, 2001, may person engaging in, conducting, advertising,
or holding himself out, as a licensed home inspector must be licensed, unless
exempt by the Chapter. However, on January 1, 200, any person who has actively
engaged in the business of conducting home inspections for at least one year will not
have to meet the examination or instruction requirements when applying for initial
licensure.
       It requires members to be U.S. citizens, residents of the state and actively
engaged in the home inspection business for one year. It also requires members
thereafter to be licensed home inspectors. The minimum qualifications for licensing
are as follows:
•      At least 18 years of age
•      Successfully completed high school or its equivalent
•      Passed the required exam
•      Paid the appropriate fees and submitted an application, as required by the
       board

       Beginning July 1, 2001, all applicants must show evidence of successful
completion of at least 120 hours of instruction. At least 30, but no more than 40,
must be in coursework containing actual practical home inspections. The remaining
hours are class work approved by the board.

        Requires home inspectors to provide a written report of the home inspection
to each person for whom the inspector performs a home inspection for
compensation.
        Prohibits an inspector from, at the time or a reasonable time after, from
advertising or soliciting repair services on the home upon which the inspection was
performed.
        Requires licenses to be issued for a year. Allows delinquent renewals up to
six months, but after the delinquent period has expired, it requires the application as
an initial applicant. A condition of renewal includes satisfactory evidence of the
completion of twenty continuing education hours.
        Requires the appearance of the term “licensed home inspector” and the
license number of the inspector on all advertising, correspondence and documents
of a home inspection.
        Requires the board to carry a group insurance program. All active licensees
must carry Errors and Omissions insurance, as well as general liability insurance.
The Errors and Omissions insurance may be obtained independently of the group
program, but a certificate of coverage is required.

Formosan Termite Initiative
        The Commissioner of the Department of Agriculture and Forestry will
administer and enforce programs to suppress and control the Formosan termite in
the state. The commissioner may enter cooperative endeavor agreements, which
may include cost sharing and division of duties and responsibilities.
        The commissioner may declare and enforce quarantines of any infested
structure, premise or regulated article in any parish when necessary, to prevent the
spread of termites. The declaration must contain a statement of the facts,
geographical area, the date it is to being and objectives of the quarantine. It requires
that the quarantine be published within five working days in the state journal and in
the next available Louisiana Register. If the quarantine is not published, the
quarantine will expire in 21 days. The commissioner may life the quarantine, by
publishing in the same manner as required for declaration.
        The commissioner is allowed to designate areas as Formosan termite
suppression zones. The commissioner must define the geographic limits of the
zone, establish the effective date and state the nature of the treatment, control or
suppression program. It requires that the quarantine be published within five
working days in the state journal and in the next available Louisiana Register. If the
quarantine is not published, the quarantine will expire in 21 days. The commissioner
may lift the quarantine, by publishing in the same manner as required for declaration.
        The commissioner is allowed to enter any dwelling, building, structure,
premises or other property in the state with reasonable notice, during reasonable
hours and with the consent of the owner. If denied entry, the commissioner may
apply to the proper court for an order authorizing entry.
        The commissioner may impose civil penalties for violations. The fines may
not exceed $5,000. They may be imposed only based on adjudication, following an
adjudicatory hearing held in accordance with the APA.
Property Taxes

Property Taxes
      FAQ
      Important Dates
Addenda
      Building Restrictions
Frequently Asked Questions
1.     What does the assessor do?
       The Louisiana Constitution requires the assessor to list a place of value on all
property that is subject to ad valorem taxes. Ad valorem means “according to value”.
The value that the assessor determines is called “assessed value” and is a
percentage of fair market value or use value as prescribed by law.

2.      What is fair market price?
        Fair market value is defined by Louisiana Revised Statute47:2321 as “the
price for property which would be agreed upon between a willing and informed buyer
and a willing and informed seller under usual and ordinary circumstances; it shall be
the highest price estimated in terms of money which property will bring if exposed for
sale on the open market” for a reasonable time.

3.      How is your assessment determined?
        First, the assessor arrives at a fair market value by using one of three
nationally recognized appraisal methods: cost, income, or market. To do this, he
must constantly gather information on sales and other data, which affected property
value. He must know what “willing sellers” and “willing buyers” are doing in the
marketplace and what the current cost of construction is in the parish. He must also
be aware of any changes in zoning , financing and economic conditions that may
affect property values. All the data he collects is then correlated into a final value
estimate by the appraiser. Next, the assessed value is calculated as a percentage of
the market value as provided by law.

Property is assessed as follows:
      Land                       10% of “fair market value”
      Residential Improvement 10% of “fair market value”
      Commercial                 15% of “fair market value”
      *(includes personal)
NOTE: Commercial land is assessed at 10% of “fair market value” and the Louisiana
Tax Commission assesses all public service properties.

4.       How are taxes calculated?
         Taxes are calculated by multiplying the assessed value by the tax rate set by
various millages, bond rates, and fees voted on by registered voters in the different
districts established by the legislature or constitution. If the property is your home,
you may deduct a maximum of $7500.00 from the total assessed value under the
Homestead Exemption before finding the taxable assessed value.
       For example, if your home is valued at $100,000 and assessed at 10% or
       $10,000, and you are eligible and have signed for homestead exemption, you
       would calculate your taxes as follows:

       10,000 (Assessed value)
       -7,500 (Homestead Exemption)
        2,500 (Taxable assessed value)
         .180    x (Assumed Tax Rate)
       $450.00 (Total Parish Tax Rate)

       NOTE: The example is for parish taxes only.
       Homestead Exemption does not apply to city taxes or “extra” fees.

5.      What is the Homestead Exemption?
        The homestead exemption is a tax exemption on the first $75,000 of the value
of a person’s home. The value of your home is exempt up to $75,000 from state and
parish property taxes. The exemption applies to all homeowners. If your home is
worth $70,000, you are fully exempt from the payment of property taxes. If it is worth
$90,000, you are exempt on your first $75,000 of value; and you pay taxes only on
the remaining $15,000 of value. If your home is worth $200,000, you are exempt on
the first $75,000 of value; and you pay taxes on the remaining $125,000 of value.

6.       When and how do I file for my Homestead Exemption?
         After you got to your Act of Sale, your attorney or notary will file your act in
the Conveyance Office of the Clerk of Court in the accurate parish. A short time later
you will receive a recorded copy of your title along with the recordation numbers, the
Conveyance Office Book and page number (known as the C.O.B. and Folio) and the
instrument number. After you receive the recorded copy of your sale, bring it to the
C.O.B and Folio number to the Assessor’s Office and file for your homestead
exemption. You must own and occupy the property to qualify for the homestead
exemption. The property owner must come into the Assessor’s office personally to
file for the exemption.

7.      Must I file for the Homestead Exemption every year?
        Initially you must file for the Homestead Exemption in person. Each year
there after, you will receive a renewal card in the mail. As long as you still own and
occupy that same property as your residence, simply return the card to this office,
and your homestead exemption will automatically be renewed for the following year.
If you sell that property and move to another location, you must again appear in
person at the Assessor’s office to file a new homestead exemption for your new
home.

8.      Where do I pay my property tax bill?
        The Assessor’s office values real estate and personal property in your parish
for property tax purposes. This office does not collect property taxes. The Sheriff
and Tax Collector send your property tax bill to you at the end of each year. Any
inquiries concerning your property tax bill should be made to the office of the Sheriff
and Tax Collector. If you have a question regarding your property assessment, you
should contact the local parish Assessor’s Office.
Important Dates for Property Owners
January 1 – June 30                         Property is assessed as to
                                            ownership during this time.
                                            Homestead exemptions to be filed.
                                            Self-reporting forms for business
                                            and personal property are to be
                                            filed.

August 15                                   Assessment books cannot be
                                            opened for taxpayers before this
                                            date.

September 15                                Deadline for open inspection for
                                            correctness of assessment by
                                            taxpayers.

November 15                                 Tax roll must be filled by this date;
                                            tax notice usually mailed shortly
                                            thereafter.

December 31                                 Property taxes are due and
                                            payable by this date and become
                                            delinquent thereafter.

*Dates and procedures slightly vary on a parish by parish basis. It is
recommended that you contact your parish assessor’s office to get more
accurate information.
Addenda
Building Restriction Changes

         The Louisiana Legislature in legislatively overruling the case of Briar Lake,
Inc. vs. Jones, 710 So.2nd 1054 (La. App. 1998) enacted a statute regarding
amendment of existing building restrictions and establishment of building restriction.
         Louisiana Civil Code Articles 776, 780 and 783 now provide that building
restrictions once established may be amended or terminated as provided in this title
as follows:
•        If the building restrictions provide a provision for amendment, then the
         building restriction may be amended or terminated pursuant to that provision
•        If the building restriction does not provide for its amendment or termination,
         then the building restrictions may be amended by agreement of owners
         representing more than one-half of the land area affected by the restrictions
         (excluding streets and rights of way) if the restrictions have been in effect for
         more than ten years
•        The building restrictions can be amended by an agreement of both owners
         representing two-thirds of the land title affected and two-thirds of the owners
         of the land affected by restriction (excluding streets and rights of way) if the
         restrictions have been in effect for more than ten years.

        The Louisiana Homeowners Association Act contained in R.S. 9:1141 et seq.
further sets our how an amendment is to be made to building restrictions. A copy of
the new statute is attached.
Wetlands
Background
     Wetland Functions
     What is a Wetland?
     Why is it Necessary to Consider Wetlands?

Recommendations
     Determining the Presence of Wetlands
     Section 404 Permits for Wetland Development
     Permitting Process Overview
         Permit Procedure in Louisiana
         Penalties
         How to Permit is Processed
     Louisiana Coastal Use Certification
         Limitations

Addenda
     Wetlands Disclosure
     Addendum to Agreement to Purchase
     Sample Wetlands Determination Request Letter
Background on Wetlands
        Approximately 54% of the country’s original wetlands no longer exist.
Wetlands have been lost to rising sea levels, erosion, sediment deposition changes,
and biotic factors such as over grazing. Many more have been lost to land
reclamation for housing and commerce, landfills and waste disposal, navigation
channels and reservoir construction, oil and gas canals, pipelines, and strip and peat
mining. Agriculture accounts for the majority of wetland destruction, being
responsible for 87% of those from the mid-1950’s to the mid 1970’s. Today it is
estimated that wetlands are disappearing across the United States at a rate of
300,000 to 500,000 acres yearly.
        The valuable functions of wetland ecosystems have, however, been
increasingly recognized and studied in recent years. With a growing realization of
the strategic value of these resources, wide arrays of groups have lobbied with some
success to halt wetland destruction. In the last two decades much protective
legislation restricting wetlands development and use has been issued on federal,
state and local levels. The major piece of wetland legislation enacted in 1972 is
Section 404 of the Federal Clean Water Act (33 USC 1251 et seq.), under which a
permit must be obtained from the US Army Corps of Engineers (Corps) by those
interested in altering wetlands through dredging or filling. This includes most
ditching, land clearing, and land leveling activities, and levee, dike, dam and most
road construction.
        Failure to determine the presence of wetland on a subject site and whether
proposed activities will require a Section 404 permit, as well as compliance with any
state and local regulations, can be disastrous. In some very rare instance,
government agencies have required existing structures to be removed and the land
to be returned to its natural state.

Wetland Functions

       Wetlands, having little to do with elevation, can be found in practically every
county or parish in the nation according to the EPA. Regional differences produce
many forms of wetland conditions that are difficult to categorize.
       Wetlands are fragile ecosystems that perform invaluable functions such as:
•      Water Quality Enhancement – Wetlands remove pollution from waters that
       flow through them, in effect, function as biological sewage treatment plants.
•      Physical Protection – Wetlands protect shorelines from wave or storm erosion
       and protect downstream areas from damaging effects of floods by slowing
       and temporarily storing floodwaters.
•      Climatic Influences – Wetlands participate in the global cycles of nitrogen,
       sulfur, methane and carbon dioxide and may help to control atmospheric
       pollution by removing excess nitrogen and carbon produced by human
       activities.
•      Water Supply – Some wetlands act as groundwater recharge zones for area
       aquifers. Many store water during wet parts of the year and release it at
       relatively constant rates, helping to maintain regular stream flows.
•      Wildlife Habitat – Many species of fish and wildlife, including a large
       proportion of federally listed threatened or endangered animals (45%) and
       plants (26%), depend directly or indirectly on wetlands to provide critical
       breeding, nesting, rearing, and wintering habitat.
•      Food-Chain Support – Coastal and riverine wetlands produce large quantities
       of food materials that are exported to estuaries and other coastal areas where
       they support marine food webs, many of which are critical to commercial
       fisheries.
•      Commercial Products – Wetlands serve as important sources of fish and
       shellfish, timber, forage, wild rice, cranberries, blueberries, furberries and
       other useful materials.
•      Recreation and Aesthetics - Wetlands provide places for hunting, fishing,
       nature study, boating and outdoor education and are valuable simply for their
       natural beauty.

What is a Wetland?

        The US Army Corps of Engineers and the US Environmental Protection
Agency (EPA) jointly define wetlands as follows:
        Those areas that are inundated or saturated by surface or ground water at a
frequency and duration sufficient to support, and that under normal circumstances do
support a prevalence of vegetation typically adapted for life in saturated soil
conditions. Wetlands generally include swamps, marshes, bogs, and similar areas.
        Wetlands are areas covered by water or that have waterlogged soils for long
periods during the growing season. Plants growing in wetlands are capable of living
in soils lacking oxygen for at least part of the growing season. Wetlands, such as
swamps and marshes, are often obvious, but some wetlands are not easily
recognized, often because they are dry during part of the year or “they just don’t look
very wet” from the roadside. Some of these wetland types include, but are not
limited to, many bottomland forests, swamps, pocosins, pine savannas, bogs,
marshes, wet meadows, potholes, and wet tundra. The information presented here
usually will enable you to determine whether you might have a wetland. If you intend
to place dredged or fill material in wetland or in an area that might be a wetland,
contact the local Corps of Engineers District Office for assistance in determining if a
permit is required.

Why is it Necessary to Consider Wetlands?

       Section 404 of the Clean Water Act requires that anyone interested in
depositing dredged or fill material into “waters of the United States, including
wetlands,” must apply for and receive a permit for such activities. The Corps of
Engineers has been assigned responsibility for administering the Section 404
permitting process. Activities in wetlands for which permits may be required include,
but are not limited to:
•      Placement of fill material
•      Ditching activities when the excavated material is sidecast
•      Levee and dike construction
•      Landclearing involving relocation of soil material
•      Landleveling
•      Most road construction
•      Dam construction

        The final determination or whether an area is a wetland and whether the
activity requires a permit must be made by the appropriate Corps District Office.
Recommendations
Determining the Presence of Wetlands

      The Corps of Engineers cites the following situations as strong evidence of
wetland occurrence and recommends that their local office be contacted for a
wetland determination if:
•     An area lies in a floodplain or contains low spots in which water stands at or
      above the soil surface for more than seven consecutive days during the
      growing season
•     Plant communities are present that normally occur in areas having standing
      water for part of the growing season (for example, cypress-gum swamps,
      cordgrass marshes, cattail marshes, bulrush or bulltongue marshes,
      sphagnum bogs or pitcher plant, flatwoods)
•     An area has soils known as peats, mucks or heavy clays
•     An area is periodically flooded by tides, including strong, wind-driven, or
      spring tides

        Visual inspections and maps will aid in identifying many of the nation’s
wetlands, but numerous wetland areas are not easily recognizable as such,
particularly during warm dry weather. There is a fascinating variety in the
appearance and location of wetlands, which can be highly troublesome for those
involved in real estate transactions and development. Wetland occurrence on a
property may at times be impossible for an untrained individual to detect.
Prospective buyers and developers are advised to have property checked by a
trained expert for the three wetland indicators, which, if present, may be signs that
the property is subject to permitting and development restrictions. Wetland
Vegetation, Hydric Soils, and Wetland Hydrology are the indicator categories
considered during any wetland determination. At least one indicator from each
category must normally be present for a site to be declared wet, however, under
abnormal circumstances, or disturbed sites, the determination may be made on the
basis of two or rarely only one of the three criteria.
        Those are close to 5,000 plant species that serve as wetland indicators which
can live in oxygen-lacking soil for at least a portion of the growing season. These
specially adapted plants, whose growth is encouraged by the presence of water, are
termed ‘hydrophytes’ or plants ‘growing in water or soil too waterlogged to survive’.
Some examples are cattails, bulrushes, cordgrass, sphagnum moss, bald cypress,
willows, mangroves, sedges, rushes, arrowhead, and water plantations. Wetland
vegetation varies from region to region, so a list of plant types in a subject area
should be obtained from the local area US Fish and Wildlife Service Office.
        There are nearly 2,000 hydric, or wetland, soil types in the United States.
Hydric soil is often acidic and may be quite rich in peat, which is a primarily
undecomposed or only slightly decomposed plant material. Other characteristics of
hydric soil that maybe observable are a surface layer of eight or more inches of
decomposing plant material, gray or bluish grey color to approximately one foot
below the surface or a brownish black or black dull color at that level, an odor of
rotten eggs, and a sandy content with a layer of decomposing plant material near the
soil surface. The US Department of Agriculture maintains a hydric soils list,
obtainable from the local county or parish Soil Conservation Service Office.
        Wetland hydrology is defined as ‘the presence of water either at or above the
soil surface or a sufficient period of the year to significantly influence the plant types
and soils in the area’. Examples of hydrology indicators include standing or flowing
water for seven or more consecutive days during the growing season, waterlogged
soil, water-marked trees, drift lines, debris lodged in trees, and sediment deposits on
leaves and other objects. Hydrolic indicators, and hence the periodic presence of
flooding and soil saturation, can be detected by field inspection.
        There are two types of federal permits for the dredge-and-fill of wetlands:
The general permit, which is issued to the public at large on a regional and national
basis for standards activities that involve minor work; and the standard permit
required for larger projects, which involves public notice and a case-by-case
evaluation of proposed activity according to regulatory guidelines.
        Under Section 404(f), the following activities are exempt from permitting
regulations:
•       Normal farming, silviculture, and ranching practices (as part of established
        operations)
•       Maintenance, including emergency reconstruction of recently damaged parts,
        or currently serviceable structures such as dikes, dams, levees, and similar
        specified structures
•       Construction or maintenance of farm or stock ponds or irrigation ditches or
        drainage ditch maintenance
•       Construction of temporary sedimentation basins on a construction site that
        does not include placement of fill material into waters of the United States
•       Construction of maintenance of farm or forest roads or temporary roads for
        moving farming or mining equipment if best management practices are
        followed

       These exemptions do not apply if the discharge is part of an activity whose
purpose is to convert an area of the water of the Untied States into a use to which it
was not previously subject. For activities that require the standard permit, a ‘pre-
application consultation’ can give the applicant an idea of the requirements that must
be fulfilled. A standard permit application usually takes two to four months to
process. Once the application is received, a public notice will be issued, usually
within 15 days. Then a 20-30 day comment period follows, after which the
application is reviewed by the Corps. Fees for permits are usually $10.00 for
noncommercial activity and $100.00 for commercial or industrial activity. No fee is
charge for a general permit.
         In reviewing applications, the Corps may rely on the Fish and Wildlife Service
for habitat evaluation and other biological and the EPA for recommendations on
water quality and general environmental issues. But beyond environmental
consultation, the EPA has an important three-part role in the Section 404 regulatory
process; determining Clean Water Act jurisdiction; promulgating and policing
implementation of the Section 404(b)(1) Guidelines; and enforcing Section 404. In
addition, Section 404(c) gives the EPA authority to veto permits when beds, and
fishery areas (including spawning and breeding areas), wildlife, or recreational areas.
         Developed by the EPA, the section 404(b)(1) Guidelines (published at 40
CFR Part 230) call for the Corps to conduct a ‘practical alternatives’ analysis when
determining if a permit will be granted. They analysis hinges on the availability and
feasibility of an alternative nonwetland site for the project. Alternative siting is vastly
preferred to any level of mitigation. There is a presumption that activities that are not
water-dependent do not require development in wetlands. The guidelines state that
‘No discharge of dredged or fill material shall be permitted if there is a practicable
alternative to the proposed discharge which would have less adverse impact on the
aquatic ecosystem, so long as the alternative does not have other significant
adverse environmental impacts.’ In a recent federal court decision (Bersani v. EPA,
26 ERC 1678 (DC NNY 1987), site availability, for purposes of selecting an
alternative, was defined at the time the applicant enters the market-not after a final
decision has been made on the permit application.
         If it is necessary to develop on the wetland site, the major consideration in
permit review is whether sufficient mitigation is proposed to offset the adverse
environmental effect of the project. There are three ways to mitigate: 1.) acquire,
enhance and preserve wetlands, 2.) restore damaged wetlands, or 3.) create new
ones. Usually mitigation involves a combination of all three and replaced at least
acre for acre and type for type. It is advisable to consult with the EPA and the Fish
and Wildlife Service about acceptable mitigation efforts before submitting a permit
application in order to avoid lengthy delays and complications. Much time and
expense can be saved by addressing such issues prior to any development
commitments. While onsite, in-kind mitigation is normally preferred, off-site, out-of-
kind mitigation can, at times, be quite acceptable and beneficial.
         The Corps receives up to 12,000 individual permit applications per year.
Recently, only 5% of the applications have been denied. Reportedly, this small
group is composed primarily of applicants who refuse to change the design, timing,
or location of proposed activities. Obviously, applicants must be prepared to be
flexible and work closely with the Corps and EPA to arrive at a development and
mitigation plan that meets the needs of all parties.
Additional Wetland Regulation
        Wetland regulation occurs under a variety of federal laws in addition to the
Clean Water Act, including the Costal Zone Management Act (16 USC 1451-1464);
Estuarine Areas (16 USC 1301-1311); Rural Environmental Conservation Program
(16 USC 1501-1510); Migratory Bird Wildlife Coordination Action (16 USC 661-668);
and Watershed Protection and Flood Prevention Act (16 USC 1001-1009). Also,
there are Executive Orders on Wetlands Protection and Floodplain Management. It
is of particular note that permits are subject to the provisions of the National
Environmental Policy Act (NEPA), which may require environmental assessments
and environmental impact studies.

Contacts for more information or assistance:
Dr. Thom Davidson or Dr. John Bruza
U.S. Army Corps of Engineers
P.O. Box 60267
New Orleans, LA 70160
Phone: 504-862-2270
Permitting Process Overview
1972 SEC 404 Clean Water Act
        Permitting program administered by the Army Corps of Engineers “to regulate
the discharge of dredging or filling materials into navigable waters of the U.S.
including adjacent wetland resource.”
        In a 1988 State of the Union address by President Bush, he pledged there
would be “no net loss” or wetlands while he was president. The interpretation of this
statement is not clear. The definition of the word wetland is the crucial issue.

Permit Procedure in Louisiana
      A. Application
      B. Drawings
            1. Prepared by engineering/land surveying firm indicating average low
            and high water shorelines and referenced to mean sea level on plan and
            cross section drawings.
            2. Letter size sheets, 8.5” x 11”
            3. Inaccurate, freehand sketches are not acceptable
      C. In a coastal zone, which includes from the state line of Texas and
      Louisiana preceding easterly through Calcasieu and Cameron south through
      Vermilion, Iberia, St. Mary, St. Martin, Terrebonne and Lafourche. North to
      include St. Charles, St. John the Baptist, St. James and east through
      Livingston, Tangipahoa and St. Tammany. Also includes Orleans, Jefferson,
      St. Bernard and Plaquemines. You must also:
            1. Send application and drawings to :
                  Coastal Management Division
                  Louisiana Department of Natural Resources
                  P.O. Box 44487
                  Baton Rouge, LA 70804-4487
                  Along with a $20 check made payable to Coastal Management
                  Division
            2. You will be assessed a permit processing fee involving more than 125
            cubic yards of dredged or fill material at 4 cents/cubic yard with a
            maximum charge being $2,000 for any permit issued.
      D. You must decide if you need a Water Quality Certification (WQC). If you
      plan only to build a structure, dredge or place fill on any land (not wetland
      area), you will not need a WQC. If you are filling wetland or in waterway, you
      will need WQC.
            1. Send permit and drawings to:
                  Office of Water Resources
                 Louisiana Department of Environmental Quality
                 P.O. Box 82115
                 Baton Rouge, LA 70884
                 Phone: 225-295-8981
           2. Along with a $25 application fee for non-commercial and a $265 for
           commercial activities.
           3. You will also be required to publish the project in the Baton Rouge
           Advocate bearing cost of advertising.
       E. Other Approvals:
           1. Louisiana Department of Transportation and Development reviews
           and comments on navigation and flood control.
           2. Louisiana Department of Wildlife and Fisheries considers impacts to
           the environment, state lease areas and refuge areas.
           3. Louisiana Department of Health and Hospitals is interested in effect
           on public health (225-568-5111). Contact them about your waste
           disposal system.
           4. May need approval from state or local agencies in addition to the
           Corps of Engineers Permit.
       F. Once permit is obtained, you must notify that you “will start work under
       permit number _________ on ________ date.”

Penalties
       A. If field inspections of the work authorized by your permit show conditions
       significantly different than is shown on your drawings, it could cause legal
       action to be taken and/or your permit to be revoked.
       B. Performing work prior to obtaining or without proper authorization may
       subject you to civil and/or criminal action for violation of Sect. 10 of the River
       and Harbor Set of 1899 and/or Act. 301 of the Clean Water Act. Legal Action
       under these statutes can result in a substantial fine and/or court order to
       restore the site to pre-project conditions.
       C. Permit is good for only 3 years. If work cannot be completed in that time,
       you may need to go through the process again with any possible changes in
       regulations since permit was issued.

How the Permit is Processed

       The Corps District either receives permit applications directly from the
applicant or from applicants through the Coastal Management Division (CMD) of the
Louisiana Department of Natural Resources. The Corps assigns the application a
number and reviews the application and drawings to verify all needed information
has been submitted. If the drawings are not acceptable or additional information is
needed, processing of the application stops until the applicant supplies the needed
information.
         Next, a public notice is drafted, typed, reproduced, and mailed to the
individuals on the public notice mailing list. If the work is in the Louisiana Coastal
Zone, CMD normally handles typing, reproduction, and mailing of joint Corps-CMD
public notices. The public notice gives the name and address of the applicant,
indicated the location of the work, and describes the project. The public notice
includes the drawings you submit. The work is advertised on public notice from
about 2 to 4 weeks depending on the type of work and is mailed to many Federal,
state and local agencies and to the general public, corporations, environmental
groups, navigation organizations, etc. They can write us and object to the project or
suggest modifications. If we receive objections, you will be given an opportunity to
comment, resolve or rebut the letters if you wish to do so. Besides allowing
comments from outside the Corps, we perform in-house reviews of your project. Our
environmental staff will review the project for environmental and socioeconomic
impacts. You could be requested to modify your project to lessen environmental
impacts. If the project is environmentally sensitive, you may be required to submit
information needed to prepare an environmental assessment or environmental
impact statement. If your project is on or close to a federally maintained waterway or
flood control project, our Engineering Division will review the project to determine if
navigation of flood control will be impacted.
         After the public notice comment period has expired, the application file is
reviewed. If the work is in the Louisiana Coastal Zone, we must have a coastal use
permit, a consistency statement, or waiver from CMD in order to issue a permit.
Similarly, if the project includes filling or placing dredged material in a waterway or
wetland, we cannot issue a permit without a water quality certification from the Office
of Water Resources. Next the Corps reviews all information, objections, comments,
in-house recommendations, etc., and makes a determination whether or not a permit
should be issued or denied. If the permit is denied, you will be sent a letter and will
be told why your project was denied. If we determine you should be issued a permit,
you will receive two typed copies of your permit by mail. You then are given the
opportunity to review the permit. If you are willing to accept the permit with all the
conditions of the approval, you sign and date both copies and return them to this
office with a processing fee. Any work of a commercial nature such as commercial
sand dredging, shrimp boat dock, marina, etc., will be assessed a fee of $100. Any
noncommercial project such as a pleasure boat slip, private wharf, etc., will be
assessed a fee of $10.
         After you return both signed copies of your permit and the processing fee, an
official of this office will sign both permit copies. One copy will be mailed to you and
one copy will be retained as our file copy. You may not begin your project until you
receive a copy of the permit signed by an official of this office nor before you obtain
any required state or local permits or approvals.
        After you receive your permit, you have 3 years from the date of issuance to
complete your project. Should you not be able to finish your work in the time allowed
by the permit, you can request a permit time extension. Depending on the type of
work, how much is complete, and possible changes in regulations since the permit
was issued, you may be granted an extension without the necessity of entirely
reprocessing your application. Otherwise your time extension will be processed with
a new public notice, need for a new water quality and coastal use certifications and a
new evaluation of your project. It is possible that, as a result of the new evaluation,
your request for additional time to complete your project could be denied. If you are
granted a time extension without fully reprocessing and additional time extension
requests will be fully reprocessed to include a new public notice and reevaluation.
        If your permit authorization includes maintenance dredging, dredging to
maintain a water bottom evaluation is authorized for 10 years from the date of permit
issuance.
        When you begin your project, you are required to notify the Regulatory
Functions Branch of this office by letter of the date you will start work. This can be in
the form of a simple statement such as “This is to notify you that I will start work
under permit LMNOD-SP (Bayou Blue) 14 on January 13, 1984.” You are also
required to notify us when you have completed your project so that your file may be
closed.
        You are advised that performing work prior to obtaining or without proper
authorization may subject your to civil and/or criminal action for violation of Section
10 of the River and Harbor Act of 1899 and/or Section 301 of the Clean Water Act.
Legal action under these statutes can result in a substantial fine and/or a court order
to restore the site to pre-project conditions.
Louisiana Coastal Use Certification
        Applicants for Department of the Army permits will be required to obtained
certification from the Coastal Management Division of the Louisiana Department of
Natural Resources (CMD/DNR), for work in the State’s coastal zone program that the
proposed activity will comply with the State’s coastal zone program. Applicants,
therefore, should send their permit applications for work in the coastal zone to
CMD/DNR with the $20 application fee.
        No COE permit will be issued unless CMD/DNR certification that the
proposed activity complies with the Louisiana coastal zone management program
has been provided. Department of Army regulation 33 CFR 325.2 states that
applicants for a COE permit in a State’s coastal zone shall submit a statement to the
COE that the proposed project is consistent with the approved state coastal zone
management program. This statement should accompany or be included on the
permit application.
        A sample of such a statement would be “I hereby certify that the proposed
activity described in this permit application complies with and will be conducted in a
manner that is consistent with the Coastal Resources Program of the State of
Louisiana.
        Individuals needing CMD/DNR certification or assistance should contact:
             Louisiana Department of Natural Resources
             Coastal Management Division
             P.O. Box 44487
             Baton Rouge, LA 70804-4487
             Phone: 225-342-7591

       The coastal zone boundary for Louisiana begins at the state line of Texas and
Louisiana proceeds easterly through the parishes of Calcasieu and Cameron then
south through Vermillion, Iberia, St. Mary, St. Martin, Terrebonne, and Lafourche.
The boundary then turns to the north to include the parishes of St. Charles, St. John
the Baptist, St. James and east through Livingston, Tangipahoa and St. Tammany
parishes. The parishes of Orleans, Jefferson, St. Bernard, and Plaquemines are
also with the boundary. The seaward boundary of the coastal areas is the outer limit
of the United States Territorial area.
       Processing of an applicant’s COE permit and CMD/DNR certification will be
performed concurrently. Issuance of a CMD/DNR certification does not replace or
guarantee approval of a COE permit.

Limitations
        It must be recognized that regardless of the thoroughness and the amount of
sampling done, an environmental site assessment can never prove that no
hazardous materials exist on the site or that no environmental risks exist. As a
matter of illustration, given unlimited amounts of time and money, it may be possible
to find a needle in a haystack. However, short of completely destroying the
haystack, it is virtually impossible to prove that the needle does not exist in the
haystack. It should be recognized that the purpose of an environmental site
assessment is not to prove that there are no environmental risks on the property, but
rather to provide proof that the purchaser made “all appropriate inquiry” and thus
avail himself of the innocent land owner defense.
        It should also be recognized that the more thorough the report, the less the
possibility that some item may not be have been found. For instance, after
examining the names in the chain of title for the last 50 years and reviewing the
available aerial photographs, it may be possible to say that buildings were
constructed on a site that is now vacant. However, a more detailed investigation
might include the research of each street address involved through city directories
for each of the last 50 years to see if any occupants of the buildings were dry
cleaners, filling stations, or other uses that may have had a negative effect upon the
environmental condition of the site. Additionally, interviews of people that have been
associated with the site over the past years might provide additional information.
However, this detailed research takes time, creativity, and additional expense.
Competitively bidding for this type of research may not be in the best interest of a
client.
Addenda
Wetlands Disclosure

RE: ________________________________________________________________
                              (Address)

The U.S. Army Corps of Engineers has recently commenced active enforcement of
Section 404 of the Clean Water Act. Under this federal law, designed to project the
wetlands of the United States, certain permit requirements must be met for altering
or building upon property that is determined to be wetlands as defined by the Corps.

A fee may be charged by the Corps for making the determination.

I hereby acknowledge receipt of the above.

______________________________________ ____________________________
Purchaser                              Date

______________________________________ ____________________________
Purchaser                              Date
Addendum to Agreement to Purchase

          Property Address:                 _______________________________
                                            _______________________________
                                            _______________________________

Wetlands Disclosure:

This property may be subject to Federal Corp. of Engineers Wetlands jurisdiction
inspection and permitting prior to development. A fee for this inspection and
determination may be required by the U.S. Army Corps of Engineers and such fee
may be paid by either buyer of seller prior to inspection. Inspection must be in
accordance with the Corps of Engineers Wetlands permit requirements as set forth
in Section 404.

Purchasers:                              Sellers:
_________________________                _________________________
_________________________                _________________________

Date:                                    Date:
_________________________                _________________________
Sample Wetlands Determination Request Letter

Mr. Thom Davidson                    or             Mr. Larry Marcey
U.S. Army Corps of Engineers                        U.S. Army Corps of Engineers
New Orleans District                                P.O. Box 60
P.O. Box 60267                                      Vicksburg, MS 39180-0060
New Orleans, LA 70160

Dear _________________________:

This letter will serve as our request for a Wetlands Determination letter on the
following property:
___________________________________________________________________

I have attached the information that I believe will be helpful to you in making this
determination.

If you should need any further information, please do not hesitate to call.

Sincerely,

_________________________                   _________________________
Owner                                       Agent/Company

_________________________                   _________________________
_________________________                   _________________________
Address                                     Address

_________________________                   _________________________
Telephone                                   Telephone

Attachments:      Map of Parish showing location
                  Subdivision plot and restrictions
                  Copy of appraisal with statistical information and/or any other
                  information that would be useful to the Corps.
                  Anything you can provide will help speed this along
For a Complete Up-To-Date Copy
      of the LREC Rules &
       Regulations, Go To:

    www.lrec.state.la.us

								
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