This legislative summary is brought to you by the PAR Department of Government Affairs. The Briefs give an abstract of the actions occurring in the General Assembly that impact REALTORS® and the real estate industry. The Capitol Briefs is available for viewing on the PAR website.

This edition of the Capitol Briefs includes:

If you cannot enter the page as provided, go to http://www.parealtor.org/ - click on Legislative & Regulatory, then Current Legislative Initiatives, and then Capitol Briefs.

On June 21, the Pennsylvania House of Representatives passed legislation that amends the Real Estate Licensing and Registration Act (RELRA) to clarify the procedure for releasing escrow. House Bill 2630, sponsored by Representative Tom Gannon (R-Delaware), addresses the long-standing problem of releasing escrow funds in a failed real estate transaction. The PAR Board of Directors categorized this as Priority Level I legislation, and have been aggressively lobbying for its passage.

The legislation sets conditions under which a real estate broker may release money held in escrow. Specifically, it allows the money to be released when:

The deal formally goes through.

• The transaction is formally terminated. This could occur when a deal falls through but all parties have formally acknowledged the deal's termination through a separate writing.
• One party walks away from the transaction without formal termination, i.e., without signing a separate writing.
• The broker receives instructions from all of the parties to the transaction regarding the proper disposition of the funds.
• There is a final order from a court directing disposition of the funds.

Legislators from the Lehigh Valley delegation were supportive of the legislation. Representative Craig Dally (R-138) cosponsored the bill and worked with his colleagues on the Professional Licensure Committee, including Representative Julie Harhart (R-183), to bring the bill to the floor for a vote. Representative Paul Semmel (R-187) also cosponsored the bill. All of the Representatives from the Lehigh Valley voted in favor of the bill, which passed the House by a vote of 194-3.

One June 27, the House passed another PAR priority bill that amends RELRA to make the Consumer Notice applicable only to 1 – 4 residential properties. House Bill 2631 would make the law consistent with current Seller Disclosure requirements in effect since 1996.

In the commercial market, where transactions occur nationally and internationally, buyers are typically more sophisticated and are cognizant of who the licensee is working for. For example, if a company in Japan wants to open an office in Philadelphia, they contact a commercial real estate office in the Philadelphia area. The company knows that the Philadelphia agent will work on their behalf as a buyer’s agent. In a typical commercial sale or lease negotiation, even small business owners are represented by counsel and have obtained commercial financing.

Requiring that the Consumer Notice be presented imposes an additional layer in the transaction that is unnecessary and may lead Pennsylvania to be perceived as anti-business.

Legislators from the Lehigh Valley delegation were supportive of this bill also. Only Representative Robert Freeman(D-136) voted against the bill.

Lobbying for passage of this legislation will continue as both proposals now head to the Senate for consideration.

Last month, a delegation of LVAR members headed down to Washington, DC for the NAR Mid-Year Legislative Meetings. During the week, members had a chance to meet with Congressman Charlie Dent, U.S. Senators Rick Santorum and Arlen Specter, to lobby for Small Business Health Plan Legislation and a number of other NAR legislative priorities.

The meetings were productive and gave members a chance to encourage Congress and the Senate to pass critically needed Small Business Health Plan legislation (H.R. 525 and S.1955) so REALTORS® can obtain affordable health care. The legislation passed Congress last summer, with Congressman Dent voting in the affirmative. The Senate has yet to act, but are closer than they have been in years to getting a vote on the bill.

LVAR members also lobbied to keep banks out of real estate and to defend the mortgage interest deduction from efforts reforming the tax system.

More information on NAR legislative priorities can be found by clicking here.

This legislative summary is brought to you by the PAR Department of Government Affairs. The Briefs give an abstract of the actions occurring in the General Assembly that impact REALTORS® and the real estate industry. The Capitol Briefs is available for viewing on the PAR website.

This edition of the Capitol Briefs includes:

• House Sends Property Tax "Reform" Legislation to Governor
• House to Move on with Budget
• RELRA Legislation May See Movement Soon
• Appraiser Act Amendment Moves from Appropriations
• Real Estate Commission to Meet in Philadelphia

If you cannot enter the page as provided, go to http://www.parealtor.org/ - click on Legislative & Regulatory, then Current Legislative Initiatives, and then Capitol Briefs.

A number of REALTORS^® who are doing business in the Borough of Bangor have informed LVAR that the Borough has been withholding Certificates of Occupancy (CO) until purported code violations are corrected, thereby delaying property settlements. LVAR Government Affairs Director, Ryan Conrad, researched the issue further and found that state law prohibits municipalities from preventing the sale or transfer of ownership if code violations are not corrected prior to settlement.

The Pennsylvania Municipal Code and Ordinance Compliance Act (P.L. 724-99) specifically states that a municipality “shall not refuse to issue a use and occupancy certificate . . . or require the correction of a substantial violation as a condition to issuing a use and occupancy certificate . . .” In fact, the buyer has 18 months from the date of purchase to bring the property into compliance with code.

On March 3, President Pete Ramos sent a letter to Bangor Borough Code Office advising him of our concerns (click here to view the letter). Subsequently, on May 5 LVAR leadership met with the Bangor Borough Manager, Bernie Rodgers, to discuss the issue to work with the Borough to address our members concerns.

The meeting was productive, and presented an opportunity for LVAR to build a working relationship with the Borough. Mr. Rodgers understood our concerns and how their practice of withholding CO’s was not in compliance with State Law. Mr. Rodgers was glad that we presented P.L. 724-99 to him, as he was not aware of its existence.

Mr. Rodgers ensured our leadership that the State Law will be followed and that he will send a directive to his Code Officer to makes sure he is not enforcing requirements that are contrary to the State Law.

He advised that REALTORS^® give him a call directly at 610-588-2216 if they are running into problems with code requirements or with the Code Officer. He will do his best to address any concerns. Similarly, our leadership advised him that he can reach out to us if he needs an avenue of communication with REALTORS^®.

LVAR has recently learned of other municipalities that are engaging in the practice of withholding CO’s until code violations are corrected. Staff is contacting the municipalities to address the issues. LVAR members are encouraged to contact the Government Affairs Director if they are aware of other municipalities who may be withholding CO’s.