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									Kentucky                                            Real                       Estate

N E W S                               A Publication of the Kentucky Real Estate Commission

Governor Fletcher Appoints Ken
Perry to the Commission
                                       and Northern Kentucky                      CONTENTS
                                       University. In the early 1990’s, he
                                       served as a City Councilman in          Comments from the
                                       Alexandria.                             Chair

                                       Mr. Perry first received his sales      Comments from the
                                       associate license on August 14,         Director
                                       1989. He worked for several real
                                                                               Disciplinary Actions
                                       estate companies before starting
                                       his own company, Ken Perry Real         Renewal Reminder
                                       Estate, in 2002. There are fifteen
                                       licensees with his firm, which is       Online Renewal
                                       located in Cold Spring, Kentucky.       Instructions
The Commission is pleased to wel-                                              Errors and Omissions
                                       When asked about his new role,
come Mr. Delbert “Ken” Perry,                                                  Update
                                       Mr. Perry said, “I look forward to
the newest member appointed by
                                       serving the public and the real
Governor Ernie Fletcher on                                                     Fair
                                       estate industry for the next four
October 31, 2005. Mr. Perry is                                                 Housing/Advertising
                                       years. I appreciate the opportunity
serving a four-year term and he
                                       to give back to the industry that       Thanks to Former
replaces former Commissioner,
                                       has given so much to me.”
Sue Teegarden, whose term had                                                  Commissioner Sue
expired.                                                                       Teegarden
                                       Mr. Perry resides in Alexandria,
                                       Kentucky with his wife, Mary
Mr. Perry was born and raised in
                                       Beth, and he has a nineteen year-
Campbell County, Kentucky. He
                                       old daughter, Jessica.
graduated from the Naval Nuclear
Power Program in 1984 and was
                                       The Commissioners and staff wel-
in charge of the Nuclear Reactor
                                       come Mr. Perry, and we all look
for the U.S.S. Dwight D.
                                       forward to working together to
Eisenhower. He is also six-year
                                       continue to serve the real estate
veteran of the military. He attend-                                           Printed with State Funds
                                       industry in Kentucky.
ed State University of New York
                                                                             Issue No. 202, Winter 2006
Kentucky Real                Comments from
Estate Commission            the Chair
10200 Linn Station Road,
Suite 201                    by: Ron Smith,
Louisville, KY 40223
Phone: 502-429-7250          Chair
Toll Free: 1-888-373-3300
Fax: 502-429-7246
Web Site:

                             Commission’s Policy Regarding Applicants Who Are
Ron Smith, Chair             On Probation, Parole or Other State Supervision
                             This article is mainly geared toward     they later reapplied and were
Arvel J. McMahan             principal brokers, managing brokers,     approved by the Commission.
PeWee Valley                 educators and anyone who recruits
                             new applicants. As you know, appli-      The Commission has sent notices to
Lois Ann Disponett           cants who have been convicted of a       schools advising them of their duty
Lawrenceburg                                                          to inform students of this policy, as
                             felony in their lifetimes or a misde-
                             meanor in the last five (5) years        the Commission does not want
Michael Plummer              must appear before the Commission        applicants to spend time and money
Covington                    for a hearing. Some of these appli-      toward obtaining a license only to be
                             cants are still under some type of       denied. I am also urging others in
Ken Perry                                                             the industry to do the same when
Cold Spring                  probation, parole or state supervi-
                             sion. Under 201 KAR 11:430,              approached by someone who might
                             Section 2 (6)(d), the application of     fall into this category. We recom-
Commission Staff             an applicant who is, at the time of      mend that individuals who have
                             filing for a license either under pro-   anything on their criminal back-
Norman Brown                                                          ground report wait to get approval
Executive Director           bation or parole may be denied by
                             the Commission, at its discretion. It    from the Commission prior to
Education and Licensing      has been the Commission’s policy to      spending money on classes or the
                             deny applicants who are either           real estate exam.
Linda Poliskie               under probation or parole and direct
Education Director                                                    Broker applicants are also subjected
                             the applicant to reapply when their      to a criminal background check,
Sarah West                   probation or parole has expired.         and, if a sales associate has had a
Sarah Chandler                                                        felony at any time or a misde-
                             I want to get this message out to the
Michelle Gary                                                         meanor in the last five (5) years,
                             industry, because many of these
                             individuals pay for classes and even     they, too, will have to be reviewed
                             take the exam prior to appearing         by the Commission prior to becom-
Lee B. Harris                before the Commission, only to be        ing licensed as a broker.
General Counsel              denied because of the Commission’s       In the last five years, the
                             policy. Obviously, we cannot stop        Commission has reviewed an aver-
Mary Stevenson
Dianna Rogers                people from going ahead and taking       age of five to seven applicants each
Denise Wade                  classes or even taking the exam.         month. I am happy to report that,
                             However, keep in mind that the           out of those applicants approved for
Administrative               exam results are only good for sixty     licensure, none has received any dis-
                             (60) days and a background check is      ciplinary action.
Shelly Saffran               good for only six (6) months. So, if
Director of Administration   an individual took the exam only to      As always, don’t ever hesitate to
Kim Brewer                   be denied because he/she is on pro-      contact the Commission if you have
Louis Carter                 bation or parole, he/she would most      any questions.
Melissa Kime                 likely have to retake the exam if
From the                                                                              Practicing Good Faith
Director’s Desk                                                                        Makes Perfect Sense
by: Norman E. Brown,                                                                  When buyers and sellers enter into a
                                                                                      contract, they are agreeing to uphold the
Executive Director                                                                    provisions of the contract in good faith.
                                                                                      In some contracts, there are contingen-
                                                                                      cies for financing, inspections and the
                                                                                      like. Once a buyer and a seller have
                                                                                      entered into the contract, neither party
                                                                                      should try to use a contingency to get out
                                           ple, there may be numerous hot
The Dangers of Meth Labs                   plates, glass cooking dishes, coffee
                                                                                      of that agreement in bad faith.

In Kentucky and across the nation,         filters, bottles and jugs, rubber tub-     For example, if the contract is contin-
methamphetamine laboratories (also         ing, funnels and strainers and             gent upon the buyer using his or her best
referred to as "meth labs") are            propane cylinders in a property used       efforts to obtain financing on certain
becoming a source of consternation         as a meth lab. There may also be           agreeable terms, the buyer should not
for many sellers, buyers and real          lots of cold tablets, nail polish          then take steps to cause the bank to deny
estate licensees. The products neces-      remover, rubbing alcohol, engine           that financing in order to get out of the
sary to make meth can create residue       starter, drain cleaners, batteries, fer-   contract.
which can cause serious health prob-       tilizer, paint thinner, camp stove fuel,   In addition, certain form contracts give
lems. The residue can be so perva-         Epsom salts and matches in or              the buyer a specified amount of time in
sive that it can seep into duct work,      around the premises.                       which to inspect the property and then
carpeting and drywall. Anyone who                                                     walk away for any reason, if the buyer
breathes in the residue can suffer         If you see signs of a meth lab, you
                                           should immediately leave the proper-       does not like the results of that inspec-
from severe respiratory conditions                                                    tion. In some areas, buyers are using
and other serious health problems.         ty and report the matter to the prop-
                                           er law enforcement agency. If you          this clause to hold a property and then
In addition, it is very difficult to       find out that a property you are           placing offers or contracts on other prop-
effectively clean up a meth lab to         going to list was formerly a meth lab,     erties. They then use the inspection
ensure that the residue is completely      you may consider not taking the list-      clause as a means to be released from the
gone. Therefore, if an individual          ing at all. If you do choose to con-       original agreement and to proceed with
buys the property, even if it has been     tinue with the listing, then you need      a subsequent contract.
cleaned to some degree, there may          to ensure that the property has            Sellers can also engage in bad faith nego-
be health and financial repercussions      already been sufficiently cleaned or       tiations. For example, a seller should
for the buyer.                             assist the seller in ensuring that the     never counter multiple offers on his or
In many cases, the seller may not be       property is properly cleaned. There        her property. That could result in selling
willing to admit - or may not know -       are now entities that will clean up a      the property to more than one buyer. A
that the property has been used as an      meth lab.                                  seller should choose the offer that he or
illegal meth lab. In addition, the list-   If you find out that the property has      she likes best and counter only that offer.
ing agent may be unaware that there        been a meth lab, you must disclose         None of the above scenarios would con-
has been a meth lab in the property.       this fact. If the seller of the property   stitute acting in good faith. Licensees
A buyer or an agent may walk into          refuses to admit that there was a          should explain each term of the contract
the property unaware and immedi-           meth lab or does not want to dis-          to their respective clients and also
ately suffer the health consequences       close such information, walk away          explain that, by signing, the buyers and
of the residue left by the meth lab.       from the listing. If the seller agrees     sellers are agreeing to
The Commission has developed a             to disclose, then alert buyers and         uphold those provi-
presentation, through the generosity       their agents of the dangers that may       sions. In addi-
of the South Dakota Real Estate            await them at the property.                tion, licensees
Commission, to educate licensees on        This is a complex issue that cannot        should not be
the signs and effects of meth labs. If     be solved overnight. If you have           parties to the
you would like me to do a presenta-        ideas about legislation that could         bad      faith
tion, just give me a call at the           assist in uncovering and disclosing        actions     by
Commission.                                the existence of meth labs in              assisting buy-
                                           Kentucky, please contact the               ers or sellers
When viewing or showing property,                                                     in any of these
you can look for clues that the prop-      Commission or your legislator.
erty may be a meth lab. For exam-
Commissioners’       Group E & O Rate and Provider Remain the Same
   Corner            The Commission is pleased to offer licensees group errors and omissions insurance this
                     year for the same premium of $140.00 plus applicable taxes. The insurance carrier for
                     the program is still Continental Casualty Company and the administrator of the program
                     is Rice Insurance Services Company, LLC (RISC).
                     All active licensees are required to carry errors and omissions insurance. This is a guar-
                     anteed issue program which means that all licensees can participate regardless of claim
                     history. This insurance covers licensees for claims arising from a negligent act, error or
                     omission relating to the rendering of or failure to render professional services as a real
                     estate licensee.
                     Licensees have the option of selecting the group plan through the Commission, or they
    Ron Smith        may shop for errors and omissions insurance on their own. If a licensee chooses to go
                     outside the group plan, they must have their insurance company complete a Private
                     Carrier Certification of Coverage form. The company must have a B+ or better rating by
                     A.M. Best Insurance Rating and must meet the Commission’s minimum requirements.
                     The company must also be licensed in Kentucky by the Department of Insurance if the
                     principal broker resides in Kentucky. If the principal broker chooses to carry outside
                     insurance, he or she should let all company associates know the name and phone number
                     of the carrier. Also, the broker should inform his or her associates that this coverage, in
                     most instances, will not transfer with the licensee if they go to another firm. The form
                     required to carry outside coverage will be included in the renewal package and can be
 Arvel J. McMahan    found on our website ( under our Catalog of Documents.
                     Licensees may also contact RISC if they are interested in purchasing higher limits of cov-
                     erage. Higher limits are available on an underwritten basis for real estate firms domiciled
                     in Kentucky. All licensees associated with the firm must be insured under the group poli-
                     cy in order to participate. The higher limits must be purchased directly from RISC.
                     Insured real estate licensees who also hold a Kentucky appraiser license will again be able
                     to purchase an endorsement to cover their services performed as a licensed real estate
                     appraiser. The endorsement cost is $200.00 and can be obtained directly through RISC at
                     the telephone number below.
                     Under the group plan, licensees have the option of purchasing additional coverages as
 Michael Plummer     separate endorsements to the policy. Each principal broker will receive a form with the
                     renewal mailing that should be filled out and sent in directly to RISC if he or she chooses
                     to purchase additional endorsements. Kentucky law requires the addition of municipal
                     taxes and a Kentucky surcharge to the insurance premium for group policies and any
                     endorsements. The following are the different endorsements: Regulatory Complaints;
                     Environmental; and Fair Housing Act and Conformity. Keep in mind that under the
                     basic policy, licensees are not covered for regulatory complaints, environmental issues or
                     fair housing violations.
                     RISC is also offering, as an enhancement to the program, higher limits of $250,000 per
                     claim per insured licensee. Licensees whose real estate activity is at least 75% residential
                     sales and who have had no claims in the past five years may pay an additional premium
Lois Ann Disponett   of $45 per year to increase limits to $250,000. Licensees whose real estate activity is less
                     than 75% residential sales and/or who have had claims in the past five years may pay an
                     additional premium of $60 per year to increase limits to $250,000.
                     A brochure and the Endorsement Enrollment/Excess Coverage Forms will be included in
                     the renewal package mailed to each principal broker. If you have additional questions,
                     please contact RISC directly.

                      Rice Insurance Services Company, LLC, P.O. Box 6709, Lou., KY 40206-0709
                         Phone numbers: 800-637-7319 and (502)-897-1876 Fax: (502) 897-7174.

    Ken Perry
It’s That Time of Year Again!                                   RENEWING ONLINE
 RENEW RENEW RENEW                                              Principal brokers again have the option to renew
                                                                online. Just think, renewal is now only a click away. No
It is hard to believe it is 2006 and even harder to             more wasted postage or worrying about whether your
believe that renewal time is here again. The deadline           renewal was received. Just get out your credit card, fol-
to renew your license is March 31, 2006. This
                            Marc                                low the prompts and receive e-mail confirmation.
applies to active licensees as well as escrowed
licensees. Active licensees renew through their princi-         You can only renew online from March 1 through
pal brokers. Escrowed licensees renew individually.             March 20. After March 20, 2006, all renewals must be
The fee to renew your license is $55.00 for brokers and         mailed or delivered to the Commission.
$50.00 for sales associates. Active licensees are also
required to carry group errors and omissions insurance          Basic Requirements:
or to show proof of coverage by a private carrier.              * Internet access on your computer,
                                                                * Adobe reader (version 5.0),
Principal brokers have a lot of responsibility during           [If you do not have this version of Adobe reader, you
renewal. A renewal form is mailed to all principal bro-         will be given an opportunity to download the reader.]
kers with a list of the licensees affiliated under their        * Internet explorer (version 6.0), and
companies. Principal brokers need to review the                 * Computer resolution of 800 x 600 or better.
renewal form carefully and if changes need to be
made, follow the instructions that will accompany the           Why Should You Renew Online?
form. Principal brokers are required to collect the             * It is simpler and faster,
renewal fees from each licensee and submit only one             * You will receive an e-mail confirmation when your
check to the Commission for the entire company.                 renewal has been processed,
However, principal brokers who have a branch office             * Credit card payments are accepted and calculations are
or a multiple office should send separate checks for            done for you,
each branch or multiple office.                                 * KREC uses a secure website and does not share informa-
                                                                tion with any other entity (even the KREC does not have
Principal brokers may also choose to renew online.              access to payment accounts).
The online renewal option is available from March 1 -
20. After the close of business on March 20th, you              We Suggest That You NOT Renew Online if:
must either deliver or mail your renewal form and pay-          * You are changing the firm name and have a branch
ment. Please see the column at the right for more               office, and one branch has already been renewed, or
details regarding online renewal.                               * You do not want to put credit card/bank information on
                                                                the Internet, for security reasons.
Unfortunately, escrowed licensees will not be able to
renew online this year. Renewal forms are mailed to             Instructions To Renew Online:
their home addresses. Simply return the form to the             Have the following items available when you are ready
Commission along with your check. Since online                  to start:
renewal is still fairly new, licensees in escrow will not       * Escrow account number, bank name and address,
be able to renew online this year.                              * Charge card information OR account and routing num-
                                                                bers from checking or savings account for ACH (electronic
Make sure your renewal form is post-marked by
                                                                fund transfer),
March 31, 2006. Any renewals received after the
Marc         2006
                                                                * Registration code assigned by the KREC which is found
deadline will be assessed a $100.00, which increase to
                                                                in the top right corner of your renewal form, and
$200.00 after May 15, 2006. This is in addition to the
                                                                * Completed certificate of coverage and alpha list of
renewal fees. Failure to receive a renewal form in the
                                                                insureds from private insurance carrier, if applicable.
mail is not an acceptable excuse for not renewing on
time.                                                           Now that your paperwork is in front of you, log on to
                                                       using the registration code found in the
For information regarding 2006/2007 E & O insur-
                                                                top right corner of your paper renewal form. It is just
ance, please reference page 4 of this newsletter.
                                                                that easy!!!
Again, the deadline to renew is March 31, 2006.
                                 Marc        2006
                                                                Please refer to the "Help Text" on the screens to answer
Renewals must be postmarked or hand delivered by
                                                                any questions BEFORE calling the Commission.
that date in order to be accepted without a penalty.
We appreciate all of your help and patience during
                            Disciplinary Actions
John McDermott (Louisville) Case           Complaint; therefore, he is in default,     He agreed that he will not attempt to
Nos. 05-0090 & 05-0079                     and all of the allegations are deemed       become a broker during his probation-
Violation: Mr. McDermott did not           to be true. He is in violation of KRS       ary period.
respond to the Commission’s Sworn          324.160(4)(v) for conduct which consti-
                                                                                       George M. Williamson (Prospect)
Complaint; therefore, he is in default,    tutes improper, fraudulent or dishonest
                                                                                       Case No. 04-0194
and all of the allegations are deemed      dealing.
                                                                                       Violation: Mr. Williamson stipulated
to be true. He is in violation of          Disposition: Mr. Greenwell’s license
                                                                                       to a violation of KRS 324.160(4)(u) for
324.160(4)(s),(v) and (h) for failing to   was revoked.
                                                                                       violating 201 KAR 11:245 and 201
respond to the Commission’s com-
                                           J. Christopher Janes (Bowling               KAR 11:121, by engaging in property
plaint, for conduct which constitutes
                                           Green) Case No. 02-0131                     management activities pursuant to a
improper, fraudulent or dishonest deal-
                                           Violation: Mr. Janes did not respond        verbal property management agree-
ings and for failing to account for or
                                           to the Commission’s Sworn                   ment, after the expiration of his client's
remit, within a reasonable time, any
                                           Complaint; therefore, he is in default      and his written property management
monies belonging to others.
                                           and all of the allegations in the com-      agreement; by failing to timely deposit
Disposition: Mr. McDermott’s license
                                           plaint are deemed to be true. Mr.           funds into his escrow account; and by
was revoked in both cases.
                                           Janes is in violation of KRS                failing to act reasonably and diligently
Frank Spoonamore (Mount Sterling)          324.160(4)(s) and (v) for failing to        to prevent his client's overpayments,
Case No. 05-0027                           respond to the Commission’s com-            late payments, and payments for ser-
Violation: Mr. Spoonamore did not          plaint and for conduct which consti-        vices his client did not receive.
respond to the Commission’s Sworn          tutes improper, fraudulent or dishonest     Disposition: He agreed to have his
Complaint; therefore, he is in default     dealings.                                   license placed on probation for a peri-
and all of the allegations in the com-     Disposition: Mr. Janes’ license was         od of twelve (12) months. Mr.
plaint are deemed to be true. Mr.          revoked.                                    Williamson also agreed to pay a fine in
Spoonamore is in violation of KRS                                                      the amount of one thousand dollars
                                           Joseph J. Ballard (Radcliff) Case Nos.
324.160(4)(s) and (v) for failing to                                                   ($1,000.00) and to attend and success-
                                           04-0032 & 03-0026
respond to the Commission’s com-                                                       fully complete twelve (12) hours of
                                           Violation: Mr. Ballard was found in
plaint and for conduct which consti-                                                   continuing education, in addition to
                                           violation of KRS 324.160(4)(b),(s),(u)
tutes improper, fraudulent or dishonest                                                any hours already required by law. He
                                           and (v) for making substantial misrep-
dealings.                                                                              also accepted a formal reprimand.
                                           resentations, for failing to respond to a
Disposition: Mr. Spoonamore’s
                                           Commission complaint, for violating         Joseph C. Janes (Bowling Green)
license was revoked.
                                           KRS 324.330 for not changing his            Case No. 02-0131
Larri Brown (Williamstown) Case            address and for conduct that consti-        Violation: Mr. Janes stipulated to a
No. 05-0031                                tutes improper, fraudulent or dishonest     violation of KRS 324.160(4)(v) for
Violation: Ms. Brown stipulated to a       dealing.                                    conduct which constitutes improper
violation of KRS 324.160(4)(j) for         Disposition: Mr. Ballard’s license was      dealing for pleading guilty to mispri-
being convicted of a felony while hold-    revoked in both cases.                      sion of a felony in the federal district
ing a real estate license issued by the                                                court.
                                           Joel Gibbons (Nicholasville) Case No.
Commission.                                                                            Disposition: He agreed to have his
Disposition: Ms. Brown's license will                                                  license placed on probation for the
                                           Violation: Mr. Gibbons stipulated to a
be placed on probation for twelve (12)                                                 duration of his federal probationary
                                           violation of KRS 324.160(4)(j) for
months, and she shall pay a fine in the                                                period and to accept a formal repri-
                                           being convicted of a felony while hold-
amount of two hundred dollars                                                          mand from the Commission.
                                           ing a Kentucky real estate license.
($200.00). She also agreed to success-
                                           Disposition: Mr. Gibbons agreed to          Robert J. Stamps (Bowling Green)
fully complete six (6) hours of continu-
                                           have his license placed on probation        Case No. 02-0131
ing education, in addition to any hours
                                           for a period of five (5) years, beginning   Violation: Mr. Stamps stipulates to a
already required by Kentucky law and
                                           on December 8, 2003. Mr. Gibbons            violation of KRS 324.160(4)(v) for
to accept a formal reprimand.
                                           agreed to accept a formal reprimand         conduct which constitutes improper,
Robert E. Greenwell (Louisville)           from the Commission and to pay a fine       fraudulent or dishonest dealing for
Former broker of Greenwell                 in the amount of one thousand dollars       pleading guilty to misprision of a
Company) Case No. 05-0093                  ($1,000.00). He also agreed to disclose     felony in the federal district court.
Violation: Mr. Greenwell did not           his criminal conviction to any principal    Disposition: He agreed to have his
respond to the Commission’s Sworn          broker who agrees to hold his license.
                                                                                                      Continued on Page 7
                                             made after-closing transfers to Ms.        untarily surrender his license.
    Disciplinary Actions                     Hall. Ms. Hall knew that these after-
         Continued from Page 6                                                          Jack L. Adams (Richmond) Case No.
                                             closing transfers were not reflected on
                                             the closing statements.
                                                                                        Violation: Mr. Adams stipulated to a
license placed on probation for the          Disposition: Ms. Hall agreed to pay a
                                                                                        violation of KRS 324.160(4)(u) for vio-
duration of his federal probationary         fine in the amount of seven hundred
                                                                                        lating KRS 324.117 and KRS
period and to accept a formal repri-         fifty dollars ($750.00) and to success-
                                                                                        324.160(4)(e) for using misleading
mand from the Commission.                    fully complete six (6) hours of continu-
                                                                                        advertising and failing to disclose his
                                             ing education in a Commission-
Julie Pogue (Louisville) Case No. 04-                                                   status as a licensee and a principal in a
                                             approved law course.
0192                                                                                    purchase contract. He failed to dis-
Violation: Ms. Pogue unintentionally         Connie Blackwell (Lawrenceburg)            close that he was the seller of the prop-
violated KRS 324.160(4)(p) when she          Case No. 04-0253                           erty and also held a real estate license
failed to check a multiple listing service   Violation: Ms. Blackwell stipulated to     issued by the Commission.
to verify a seller’s statement that the      an unintentional violation of KRS          Disposition: Mr. Adams agreed to
seller had been released from an active      324.160(4)(u) for unintentionally vio-     attend six (6) hours of continuing edu-
listing contract with another real estate    lating KRS 324.117 and 201 KAR             cation, in addition to any hours
company, resulting in Ms. Pogue              11:105 by publishing, in The Anderson      already required by law. Mr. Adams
acquiring the listing after she uninten-     News, a misleading advertisement for       also agreed to pay a fine in the amount
tionally negotiated the sale of the real     three (3) properties, which included the   of five hundred dollars ($500.00).
property in question with the seller.        names of three (3) individuals who are
                                                                                        Nancy Hamann (Loveland, Ohio)
The seller at that time had a written        not affiliated with Ms. Blackwell's real
                                                                                        Case No. 05-0128
outstanding contract granting exclusive      estate company, Anderson Realty.
                                                                                        Violation: Ms. Hamann stipulated to
agency with another real estate broker.      Disposition: Ms. Blackwell agreed to
                                                                                        a violation of KRS 324.010(2) for
Disposition: Ms. Pogue agreed to pay         pay a fine in the amount of two hun-
                                                                                        engaging in unlicensed brokerage by
a fine in the amount of five hundred         dred fifty dollars ($250.00) and to suc-
                                                                                        seeking and obtaining a fee for proper-
($500.00) and to complete six (6) hours      cessfully complete six (6) hours of con-
                                                                                        ty management activity while her
of continuing education in a law or          tinuing education in a Commission-
                                                                                        license was in escrow. She also stipu-
ethics course.                               approved law course, in addition to the
                                                                                        lated to a violation of 201 KAR
                                             hours already required by Kentucky
Julie Pogue (Louisville) Case No. 04-                                                   11:121, Section 1(9) for aiding and
0195                                                                                    abetting her husband in unlicensed bro-
Violation: Ms. Pogue stipulated to a         Thad Johnson (Georgetown) Case             kerage activity.
violation of KRS 324.160(4)(p) and           No. 04-0255                                Disposition: She agreed to pay a fine
KRS 324.160(4)(u); specifically, 201         Violation: Mr. Johnson stipulated to a     in the amount of five hundred dollars
KAR 11:121, for negotiating with a           violation of KRS 324.160(4)(v) for         ($500.00) and to accept a formal repri-
consumer who had an active listing           improper conduct for engaging in real      mand from the Commission. She also
contract with another agent and for          estate brokerage before he was licensed    agreed that, if she is going to represent
breaching the fiduciary duty owed to         by the Commission. Mr. Johnson's           others in property management for a
said consumer/client by failing to act       violation was inadvertent and uninten-     fee, she will first activate her license
reasonably and diligently.                   tional, as it was based upon erroneous     and place it with a Kentucky-licensed
Disposition: Ms. Pogue shall pay a           legal advice.                              broker. She also agreed that she will
fine in the amount of one thousand           Disposition: Mr. Johnson agreed to         not allow her husband to engage in any
dollars ($1,000.00) and she shall com-       pay a fine in the amount of two hun-       property management with her, should
plete six (6) hours of continuing educa-     dred fifty dollars ($250.00) and to        she become actively licensed.
tion in a Commission-approved law or         attend six (6) hours of continuing edu-
                                                                                        Dottie S. Watson (Falls of Rough)
ethics course, in addition to any hours      cation, in addition to any hours
                                                                                        Case No. 05-0037
already required by Kentucky law.            required by law.
                                                                                        Violation: Ms. Watson stipulated to a
Melanie Hall (Mount Sterling) Case           Reavis D. Gibb (Richmond) Case No.         violation of KRS 324.160(4)(u) for vio-
No. 04-0059                                  04-0239                                    lating KRS 324.117 for false, mislead-
Violation: Ms. Hall stipulated to a          Violation: Mr. Reavis D. Gibb stipu-       ing or deceptive advertising, resulting
violation of KRS 324.160(4)(v) by            lated to a violation of KRS                from her advertisements containing her
engaging in conduct that constitutes         324.160(4)(u) for violating KRS            e-mail address instead of either her
improper dealings in two (2) real estate     324.117 and KRS 324.160(4)(e) for          principal broker's name or the real
transactions in which she, while acting      using misleading advertising and fail-     estate company's name. She also stipu-
in the capacity of an agent/buyer,           ing to disclose his status as a licensee   lated to a violation of KRS
agreed to purchase newly-constructed         and a principal in a purchase contract.    324.160(4)(v) for conduct which consti-
properties from her seller/client, who       Disposition: Mr. Gibb agreed to vol-
                                                                                                     Continued on Page 10
Fair Housing Issues: Including the Names of
Churches and Schools in Real Estate Advertisements
The following article was submitted by the                       national origin, or to attract or make unattractive a
Kentucky Commission on Human Rights                              particular property for a buyer because he or she is in
                                                                 some other protected class, then you may be engaged
When it comes to placing your real estate advertise-
                                                                 in a discriminatory act. (According the the U.S.
ment, staying in compliance with the Kentucky Fair
                                                                 Department of Housing and Urban Development, if
Housing Act is, of course, a priority for you, your
                                                                 licensees choose to use the legal name of an entity,
clients, and the publisher of the advertisement. Some
                                                                 they must include a disclaimer such as “This home
of the clearest cut cases of illegal discrimination at the
                                                                 does not discriminate on the basis of race, color, reli-
Kentucky Commission on Human Rights come from
                                                                 gion, national origin, sex, handicap or familial sta-
ads found on-line and in newspapers. Here are some
tips to help you prevent illegal discrimination in
your advertising.                                                            Ads that said “No Children Allowed” or
                                                                               “Mature Adults Only” or “Retired
Basic guideline: Include all, exclude
                                                                                Couple Preferred” are common exam-
none. Ensure that the property is
                                                                                ples of advertisements that were placed
described in a way that every buyer
                                                                                in newspapers or on websites in 2004-
would read the ad and think, “Gee, I’d
                                                                               2005. These are illegal discrimination
like to live there.”
                                                                             based on familial status.
Subliminal messages like, “X school district” or
“Y Church nearby” may, in fact, be designed to dis-              This rule of thumb might help you, says KCHR
courage certain buyers from looking in that market.              Housing Supervisor Cyndi Thornburg Schnell: It’s best
Although not expressly prohibited by the Kentucky                to describe the property, not the person you imagine
Civil Rights Act, the practice of listing such items in          living there.
newspapers and on-line ads could potentially result in
                                                                 Practicing fair housing is good for everyone. It helps
a complaint being filed under KRS Chapter 344 if
                                                                 promote Kentucky as a viable state, strong with equali-
licensees do not include a disclaimer.
                                                                 ty and opportunity, and rich in diversity with all the
Linda Strite Murnane, KCHR Executive Director,                   resources and creativity that diversity brings.
advises: Ask yourself – ‘Why am I including this infor-
                                                                 If you would like more information, please call the
mation in the ad?’ If the answer is to attract a buyer
                                                                 Kentucky Commission on Human Rights at 502-595-
who is of a particular race, gender, or familial status,
                                                                 4024 or 1-800-292-5566. We can also conduct a free
or to include or exclude someone who is of a specific
                                                                 Fair Housing workshop for your organization.

  The Commission has formed an                                     When a licensee has listed a foreclosed
  Agency Disclosure Task Force,                                     property, the Seller’s Disclosure Form
   which met for the first time in                                   (“SDF”) is required. The exemption
January. The Task Force is working                                  found in 201 KAR 11:350 is only for a
                                                                   court-supervised sale, not for the subse-
  on a new and improved Agency
                                                                      quent listing of the property. If the
 Disclosure Form, which will hope-                                  seller does not have knowledge of the
fully be easier to understand for not                               property, a representative of the seller
 only licensees, but consumers also.                                may sign the waiver on the back of the
  We will keep you updated on the                                     SDF, indicating his or her refusal to
     progress of the Task Force.                                      complete the itemized list of repairs
                                                                              and possible defects.

Commission Holds 7th Annual
Half-Century Awards Reception
Once again, the Commission had the pleasure of
honoring licensees who have been licensed for 50
years. The event took place on October 18, 2005
at the Louisville Marriott East.
We kicked off the event with a complimentary
breakfast. Then honorees were congratulated by
Secretary of State Trey Grayson, who was the
guest speaker for the event. After the awards
were presented, the honorees were treated to a          Picture left to right, front row: Donald K. Meador,
special musical presentation by the Absolute            David L. Waterman, Leon C. Figa, Raymond M.
Magic Quartet. They sang a variety of period and        Levy; back row: Gerald M. Whalen, Secretary of
patriotic songs and their performance was really        State Trey Grayson, Fred Pfannenschmidt, Jr.,
enjoyed by all.                                         Francis D. Kindred and John L. Day.
The Commission again thanks and congratulates           Licensees honored but not present were: William P.
the honorees for their dedication and service to        Brown, Sam Dexter, Everett Gevedon, Jr., Aubrey
the real estate industry. The Commissioners and         Harvey, Ellis McElroy, Eleanor Meyer, Laurance
staff really enjoyed meeting all of the honorees.       Moon, James L. Morris, Robert Noll, Wallace Soard,
What a wonderful achievement!                           and Leon Tarter

KREC Thanks Former                                       the Core Course was developed and the Commis-
                                                         sion’s website and e-mail capabilities were intro-
Commissioner Sue Teegarden                               duced.

for Her Many Years of Service                            Ms. Teegarden was actively involved with several
                                                         organizations. She is a member of the Northern
The Commission would like to acknowledge with            Kentucky Association of REALTORS®, the
grateful appreciation all of the many accomplish-        Kentucky Association of REALTORS® and the
ments made by Sue Teegarden. Ms. Teegarden’s             National Association of REALTORS®. She was
term as Commissioner expired on October 30,              also a thirteen-year member of the Association of
2005. Ms. Teegarden was first appointed to the           Real Estate License Law Officials (ARELLO) and
Commission on October 15, 1992 by former                 served on numerous ARELLO committees.
Governor Brereton C. Jones.
                                                         Ms. Teegarden exhibited such professionalism and
During her thirteen years as a Commissioner, she         was a pleasant person to work with. She made a
was committed and dedicated to protecting con-           special point of getting to know each one of the
sumers as well as regulating and educating               staff members and personally took the time to
licensees. She served as Chair of the Commission         visit them at their work station before each
during three of her thirteen years. Her concern for      monthly Commission meeting. She will not only
the industry was apparent by the many hours she          be missed by all of us at KREC, but by the indus-
spent dedicated to the mission of the Commission.        try members as well. The Commission wishes her
During her tenure at the Commission, the Seller’s        well with all of her future endeavors, and we
Disclosure of Property Condition Form and the            thank her so much for her contributions to the
Agency Disclosure Form were both implemented,            Commission and to the industry as a whole.

                                            324.160(6), resulting from her mistaken    is a party be dismissed, with prejudice,
    Disciplinary Actions                    belief that the agency disclosure form     and with no license repercussion to
         Continued from Page 7              that her licensed affiliate completed,     Mr. Hockensmith. The Settlement
                                            which she reviewed for him, was in full    Agreement was a compromise and was
                                            compliance with the requirements of        not an admission of liability on the
tutes improper dealing.
                                            201 KAR 11:400.                            part of the complainants or Mr.
Disposition: Ms. Watson agreed to
                                            Disposition: Ms. Bascom agreed to          Hockensmith.
pay a fine in the amount of five hun-
                                            pay a fine in the amount of two hun-       Disposition: Mr. Hockensmith and
dred dollars ($500.00) and to accept a
                                            dred dollars ($200.00). In addition,       another licensee agreed to pay the
formal reprimand. Ms. Watson agreed
                                            Ms. Bascom shall engage her attorney,      complainants in this matter the sum of
to cease using the term "Realtor" and
                                            Virginia L. Lawson, to conduct an in-      twenty thousand dollars ($20,000.00)
shall not use that term unless or until
                                            house training on the proper comple-       as restitution.
she becomes a member of an
                                            tion of the Agency Disclosure Form.
Association of Realtors®. She also                                                     Mary L. Foley (Georgetown) Case
shall not advertise that she will cooper-   Doug Rapp (Louisville) Case No. 04-        No. 02-0162
ate with other agents, unless she           0294                                       Violation: Ms. Foley did not stipulate
intends to cooperate fully with all other   Violation: Mr. Rapp stipulated to a        to a violation. The complainants
agents.                                     violation of KRS 324.160(4)(u) for vio-    agreed to recommend to the Kentucky
                                            lating 201 KAR 11:245 and KRS              Real Estate Commission that the
Fred Swarts (Lexington) Case No. 05-
                                            324.020(4) by failing to have required     Administrative Action to which she is
                                            terms in a property management agree-      a party be dismissed, with prejudice,
Violation: Mr. Swarts stipulated to a
                                            ment and by splitting property manage-     and with no license repercussion to
violation of KRS 324.111 for failing to
                                            ment fees with the unlicensed owner of     Ms. Foley. The Settlement Agreement
place two earnest money deposits into
                                            the real estate company.                   was a compromise and was not an
his escrow account within the requisite
                                            Disposition: Mr. Rapp agreed to            admission of liability on the part of
three-day time frame outlined by regu-
                                            attend nine (9) hours of continuing        the complainants or Ms. Foley.
lation and for receiving interest on his
                                            education in law, in addition to any       Disposition: Ms. Foley and another
escrow account without disclosing to
                                            hours already required by law and to       licensee agreed to pay the com-
whom the interest would accrue.
                                            accept a formal reprimand.                 plainants in this matter the sum of
Disposition: Mr. Swarts agreed to
                                                                                       twenty thousand dollars ($20,000.00)
attend six (6) hours of continuing edu-
                                                                                       as restitution.
cation in law and to accept a formal
reprimand from the Commission. He                                                      Deborah L. Richardson (Louisville)
also agreed to have his counsel, Ms.                                                   Case No. 04-0237
Elizabeth Conley, review his escrow         Kimberly L. Patton (Lexington) Case        Violation: Ms. Richardson failed to
account procedures to ensure compli-        No. 04-0223                                pay her original fine as agreed upon in
ance with license law.                      Violation: Ms. Patton stipulated to a      a Settlement Agreement.
                                            violation of KRS 324.160(4)(u) for vio-    Disposition: The Commission fined
Donald M. Gesin (Mount Sterling)
                                            lating 201 KAR 11:121, resulting from      Ms. Richardson two hundred fifty dol-
Case No. 04-0083
                                            Ms. Patton inadvertently and uninten-      lar ($250.00) in addition to her original
Violation: Mr. Gesin stipulated to an
                                            tionally mentioning to her prospective     fine.
unintentional violation of KRS
324.160(4)(u), specifically, 201 KAR        buyer-client that her seller-client and    Donna J. Korte (Park Hills) Case No.
11:400, for completing an agency dis-       the prospective buyer share similarities   04-0273
closure form in a manner that he,           that include the fact that they were       Violation: Ms. Korte stipulated to an
while acting in the capacity of a dual      both getting a divorce, thereby breach-    unintentional violation of KRS
agent who had properly obtained the         ing the fiduciary duty of confidentiali-   324.160(4)(u), specifically, 201 KAR
informed consent of his clients to act      ty that Ms. Patton owed to her seller-     11:400 and 201 KAR 11:121, resulting
as such, mistakenly believed fully com-     client.                                    from a chain of events that began
plied with the requirements of the reg-     Disposition: Ms. Patton agreed to pay      when she and another licensee were
ulation.                                    a fine of five hundred dollars ($500.00)   both acting in the capacity of dual
Disposition: Mr. Gesin agreed to pay        and to accept a formal reprimand.          agents representing a seller and two
a fine in the amount of two hundred         Michael S. Hockensmith                     prospective buyers of the seller's prop-
and fifty dollars ($250.00) and to          (Georgetown) Case No. 02-0162              erty, in a multiple-offer situation, with-
attend an in-house training program.        Violation: Mr. Hockensmith did not         out obtaining the informed consent of
                                            stipulate to a violation. The com-         the seller and both of the prospective
Carol René Bascom (Mount Sterling)
                                            plainants agreed to recommend to the       buyers, whose interests in that rare sit-
Case No. 04-0083
                                            Kentucky Real Estate Commission that       uation were not properly protected.
Violation: Ms. Bascom stipulated to
                                            the Administrative Action to which he      Disposition: Ms. Korte agreed to pay
an unintentional violation of KRS
                                                                                                     Continued on Page 11
                                             nate one of her listing agreements.
    Disciplinary Actions                     Disposition: Ms. Brown agreed to pay         Unlicensed Brokerage
        Continued from Page 10               a fine in the amount of two hundred         Mike Elliott (Danville) Case #05-
                                             fifty dollars ($250.00) and to success-     0060
a fine in the amount of five hundred         fully complete three (3) hours of con-      Violation: Mr. Elliott, who is not a
dollars ($500.00) and to attend and          tinuing education in agency, in addi-       licensed real estate agent, accepted
successfully complete six (6) hours of       tion to any hours already required by       the Commission’s settlement agree-
continuing education in law, in addi-        law.                                        ment, which stated that the
tion to any hours already required by        Cindy A. Simmons (Perryville) Case          Commission alleged that he and The
law. Ms. Korte also accepted a formal        No. 04-0152                                 Advocate Messenger violated KRS
reprimand.                                   Violation: Ms. Simmons stipulated to        324.010(2) and (4) and engaged in
Ms. Patricia L. Coslett (Park Hills)         a violation of KRS 324.160(4)(u) for        unlicensed real estate brokerage by,
                                             violating 201 KAR 11:420 for improp-        without a real estate license, solicit-
Case No. 04-0273
                                             er Internet advertising.                    ing and obtaining a percentage of
Violation: Ms. Coslett stipulated to an
                                             Disposition: She agreed to pay a fine       licensees' real estate sales rather than
unintentional violation of KRS
                                             in the amount of two hundred dollars        an up-front fee for advertising. Mr.
324.160(4)(u), specifically, 201 KAR
                                             ($200.00) and to attend six (6) hours of    Elliott and The Advocate Messenger
11:400 and 201 KAR 11:121, resulting
                                             continuing education in law, in addi-       ceased and desisted the alleged viola-
from a chain of events that began
                                             tion to any hours already required by       tion in April 2005 by amending all
when she and another licensee were
                                             law. She also agreed to amend and           real estate advertising programs to
both acting in the capacity of dual
                                             correct all non-compliant advertising       ensure that real estate licensees were
agents representing a seller and two
                                             on all of her company and personal          charged only an up-front fee.
prospective buyers of the seller's prop-
                                             websites and agreed that all future         Disposition: Mr. Elliott and The
erty, in a multiple-offer situation, with-
                                             advertising is in compliance with the       Advocate Messenger agreed not to
out obtaining the informed consent of
                                             Internet advertising regulations.           resume the alleged violation and to
the seller and both of the prospective
                                                                                         pay the sum of five hundred dollars
buyers, whose interests in that rare sit-    Rita Nevins (Pendleton) Case No. 04-        ($500.00). However, nothing in this
uation were not properly protected.          0235                                        Settlement Agreement shall be con-
Disposition: Ms. Costlett agreed to          Violation: Ms. Rita Nevins stipulated       strued as an admission of liability or
pay a fine in the amount of five hun-        to a violation of KRS 324.160(6) for        violation of law by the Respondents.
dred dollars ($500.00) and to attend         failing to adequately supervise her sales
and successfully complete six (6) hours      associate, Susan Daily, by allowing her
of continuing education in law, in           to run a property management compa-
addition to any hours already required       ny outside Ms. Nevins' real estate com-
by law. She also agreed to accept a for-     pany.
mal reprimand.                               Disposition: Ms. Nevins agreed to           RESTRICTED
Sol F. Anthony (Hardinsburg) Case            pay a fine in the amount of two hun-
No. 05-0037                                  dred dollars ($200.00) and to success-        FORMS&
Violation: Mr. Anthony stipulated to         fully complete six (6) hours of continu-
a violation of KRS 324.160(6) for fail-      ing education in law, in addition to any    CONTRACTS
ing to adequately supervise one of his       hours already required by law.
sales associates.
                                                                                           Below are the User Name and
                                             Susan Daily (Louisville) Case No. 04-
Disposition: Mr. Anthony agreed to                                                         Password you need in order to
pay a fine in the amount of two hun-         Violation: Ms. Daily stipulated to a               access forms on the
dred fifty dollars ($250.00) and to suc-     violation of KRS 324.160(4)(h) for fail-          Commission’s website
cessfully complete six (6) hours of con-     ing to account for, or remit money
tinuing education, in addition to any
                                                                                          ( The link is
                                             belonging to others. She also stipulat-
hours already required by law.               ed to a violation of KRS 324.160(4)(u)
                                                                                            under General Information.
Debbie L. Brown (Franklin) Case              for violating 201 KAR 11:245 by fail-
                                             ing to comply with property manage-           User Name: get (lower case)
No. 05-0132
Violation: Ms. Brown stipulated and          ment guidelines.
agreed that she unintentionally and          Disposition: Ms. Daily agreed to pay         Password: forms (lower case)
inadvertently violated KRS                   a fine in the amount of two hundred
324.160(4)(v) when she mistakenly            fifty dollars ($250.00) and to success-     Be sure and check the box that
believed that it was proper to initiate a    fully complete six (6) hours of continu-    says “remember my password.”
process to withdraw a listing from a         ing education in law, in addition to any
multiple listing service, rather than        hours already required by law.
seek a mutual written release, to termi-
                KREC Commissioners and Staff

  Left to right, front row: Michael Plummer, Melissa Kime, Jerry McMahan, Lois Ann Disponett, Ron
 Smith, Louis Carter, Ken Perry; back row: Shelly Saffran, Mary Stevenson, Michelle Gary, Kim Brewer,
 Denise Wade, Norman Brown, Sarah West, Dianna Rogers, Sarah Chandler, Linda Poliskie, Lee Harris.

Kentucky Real Estate Commission                                            PRESORTED STANDARD
10200 Linn Station Road, Suite 201                                           U.S. POSTAGE PAID
Louisville, KY 40223                                                          LOUISVILLE, KY
Phone: (502) 429-7250 Fax: (502) 429-7246                                      PERMIT NO. 73
Toll Free: 1-888-373-3300
Web Address:

  T he K entuc k y R eal
  Esta te Commission
  will be c losed f or a
      half da y on:
     A pril 14, 2006
     (Good F rida y)
   and a full da y on
      Ma y 29, 2006
    (Memorial Da y)

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