March 19, 2018 10:46:14 AM
On Feb. 28, Realtors in the state were in a mood to celebrate.
The Mississippi Senate had passed House Bill 1471, which changed the licensing process for real estate brokers in the state. The bill was sponsored by Mississippi Realtors, which represents more than 6,000 real estate professionals in 21 districts in the state.
"The Mississippi House and Senate demonstrated overwhelming bipartisan support of the proposed change," said Kris Davis, who with her husband, Mike, own RE/MAX Partners in Columbus and Starkville.
The bill, which sailed through the House by an 81-34 vote and the Senate by a 49-2 margin, needed only the formality of Gov. Phil Bryant's signature to be enacted.
But on March 9, Gov. Bryant vetoed the bill, sending shockwaves through the real estate community statewide.
"To say we were surprised is such an understatement," said Karen Glass, Mississippi Realtors president. "We were totally shocked. (The governor's office) was the last place I thought we would find resistance."
Under the proposed legislation, someone seeking a broker's license in the state would be required to have three years experience as an agent. Under the current law, an agent can become a broker after one year's experience. The bill also eliminated a loophole that allowed someone with no experience as an agent to become a broker after 150 hours of real estate-related coursework.
Glass said the suggested change came after a year-long series of meetings and surveys with brokers throughout the state as well as information from the Mississippi Real Estate Commission on a steady increase in consumer complaints.
"Really, it's all about broker education," Glass said. "In our business, a person can be an agent for six months to a year and never complete a transaction. Under the current law, that person could still become a broker."
Brokers can conduct all real state transactions, whereas agents cannot conduct transactions without the supervision of a broker. All agents must report to a broker, and the state real estate commission holds brokers accountable for the work of the agents.
"What we found from the commission is that consumer complaints have been increasing steadily," she said. "For a lot of people, buying a home is the biggest investment they will make, and the commission was getting lots of reports from people who felt like they weren't getting good advice or that their Realtors didn't know the things they should know. We spent a lot of time in the Legislature making sure they understood the situation and why the law needed to be changed."
In his veto statement, Bryant wrote:
"It is my policy, and the state's policy, to increase economic opportunities by promoting competition and to use the least restrictive means necessary to protect consumers. This bill does not increase economic opportunities but rather serves as an over-burdensome law and a barrier to market entry for potential brokers. Further, this bill does not represent the least restrictive means necessary. Requiring two more years of experience will not necessarily guarantee that a real estate salesperson will be better prepared to become a broker. I believe there are mechanisms out there that can be more narrowly tailored to address the specific issue of better preparing future real estate brokers, if there is a present need to do so."
Glass said the new law should not be viewed as a deterrent to those seeking to become brokers but a means of making sure brokers are prepared to do the work the consumer demands.
"There is no shortage of brokers in the state," Glass said. "We currently have 3,200 brokers. What we want, what our members and consumers want, is better education for brokers. There's no better education than experience."
Glass said Mississippi is one of just two states that only require one year's experience as an agent before becoming a broker.
"In some states, it's a much as five years," she said. "We were trying to present a reasonable change, so to see the Governor veto this, it's very disappointing."
Davis said she shared that frustration.
"This bill would have added additional protection for the consumer," Davis said. "By requiring additional experience in the trenches for a broker's license, we would be raising the level of professionalism delivered to consumers."
Slim Smith is a columnist and feature writer for The Dispatch. His email address is [email protected]
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