Real Estate and Professional Licensing

Spring 2004

N E W S L E T T E R

Bob TaftGOVERNOR

Lt. Gov. Jennette BradleyDIRECTOR

Anne Moorhead PetitSUPERINTENDENT

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Division of

New Purchase Agreement Unveiled - Modified Earnest Money Language�

The Columbus Board of Realtors® rolled out a new purchase agreement the week of March 1, 2004. The agreementwas the result of a 14-month taskforce review, chaired by Bill Clifford, Chairperson of the Residential Standard FormsCommittee. The taskforce collaborated with the Division, the Ohio Banker’s Association and the Columbus Bar Association’sReal Property Law Committee. The revisions mark the first total overhaul to the contract in 20 years.

On March 1-2, 2004, the Division participated in Broker/Manager courses offered by the Columbus Board on thenew agreement, with a focus on describing changes in the earnest money provisions within the agreement. The Division hasconsistently advised licensees that contractual provisions regarding earnest money must clearly set forth procedures fordisbursal of the deposit. The new earnest money provisions in this purchase agreement represent one of several lawfulmethods brokers may utilize in handling earnest money.

In 2002, the Alaska SuperiorCourt handed down a very importantdecision regarding undisclosed dualagency. You may wonder why the viewsof an Alaska court on undisclosed dualagency would have any bearing on yourpractice. The answer is quite simple:while Ohio courts would not be requiredto follow the precedent of another state’scourts on such issues, those findings couldprovide persuasive authority to Ohiocourts on how to handle similar issues inthis state. In the case of Columbus v.Mehner, the Alaska Court held that thesales associate, Bonnie Mehner(hereinafter “Mehner”), had engaged inundisclosed dual agency and had violatedher fiduciary duties to her client.

The facts which led to thisdecision are similar to situations you arelikely to run into in your day-to-daybusiness dealings. The prospective buyer,Joseph Columbus (“Columbus”), wantedto see one of Mehner’s listings, but thebuyer’s agent with whom he was workingwas out of town at the time. So,Columbus called Mehner, and she methim at the property. He gave her the cardof his buyer’s agent and indicated thathe was working with this agent. Afternoting that she usually does not showproperties to other people’s clients,Mehner agreed to show Columbus thislisting. He was not interested in theproperty. Mehner then offered to showhim some of her other listings.

The next day, Columbus viewedthe same property again, as well asseveral other properties. He found onehe liked and wanted to make an offeron it. Because his own buyer’s agentwas still out of town, Columbus askedanother agent in the buyer’s agent’scompany to draft up an offer andpresent it to Mehner. Mehner indicatedthat the offer “would not fly” and alsoexpressed that she was angry that thebuyer was still working with this otheragent’s firm instead of through her. Sheindicated that Columbus became herclient when he called her the secondtime.

Mehner contacted Columbus,berated him and told him that sheexpected to receive both sides of thecommission on this sale. She toldColumbus the offer price would haveto be close to full price in order forColumbus to secure the property. Shealso told Columbus that the seller didnot have to negotiate on the pricebecause his employer would make upany difference between the sales priceand the listing price. This statement wasfalse.

Believing that he had to workthrough Mehner to purchase thisproperty, Columbus had Mehner draftup a full price offer. For the first time,Mehner brought up the issue of dualagency. She presented Columbus withan agency disclosure form, and he

signed it. Columbus then made a full-price offer on the property, and the selleraccepted Columbus’ offer.

Columbus and his buyer’s agenteventually filed suit against Mehner,alleging that she had breached herfiduciary duties to Columbus and hadintentionally interfered with thecontractual relationship betweenColumbus and his agent. The court ruledin favor of Columbus and the buyer’sagent and awarded damages to bothparties. The buyer received thedifference between the price he actuallypaid for the property and the price hewould have paid had Mehner acted inaccordance with the law. The buyer’sagent received half of the commission.

The court held that Mehner hadviolated Alaska’s dual agency disclosurelaws by waiting until Columbus hadalready seen several of her listings andmade an offer on one to even broachthe subject of dual agency. In addition,the court found that Mehner had violatedher fiduciary duty to the buyer by failingto disclose her dual agency status, since,as a dual agent, her role was limited.

However, that is far from theend of the story. The buyer was alsoeligible to receive punitive damagesbecause the court found that Mehner’sactions were so egregious as to meritsuch additional damages. A hearing wasset to determine the amount of punitive

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Alaska Case on Undisclosed Dual Agency Could Affect Ohio Licensees

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The Division of Real Estate andProfessional Licensing Newsletter is

published quarterly by The OhioDepartment of Commerce, Division

of Real Estate and ProfessionalLicensing.

77 South High Street20th Floor

Columbus, Ohio 43215-6133

Columbus OfficeVoice (614) 466-4100FAX (614) 644-0584

Cleveland OfficeVoice (216) 787-3100FAX (216) 787-4449

Commission MembersOwen V. Hall, President

Cheryl A. ChurchillDale W. Marks

George M. SarapLois L. Yeager

Appraiser Board MembersMargaret A. Hambleton, Chairperson

Richard H. HoffmanLawrence A. KellRobert J. WeilerCheryl H. Love

damages, but the parties settled thematter for $200,000.00 prior to thecourt’s ruling on the issue. There areso many issues in this case and somany lessons to be learned from it. Firstand foremost, it is important to becognizant of agency and disclosurelaws at all times. ORC. 4735.57,4735.58, 4735.71 and 4735.73 governwhen and how agency and dual agencydisclosure must be performed. Perhapsthe most important aspect of this lawis that dual agency requires theknowledge and consent of both parties.You cannot ever assume that you area dual agent until both the buyer andthe seller have consented, withknowledge, to that agency relationship.In addition, undisclosed dual agency isunlawful and can lead to disastrousresults, as Mehner found out.

The second lesson is related tothe first. When you list a property fora seller, your primary duty is to sell that

Alaska Case On Undisclosed Dual Agency Continued...home. If a buyer comes along and thebuyer and seller both consent to dualagency, then it is perfectly legal for youto represent that buyer as well.However, it is not your right to be adual agent or to obtain both sides of thecommission. A buyer has the right tobe represented by whomever he or shechooses at any time in the transaction.It could be a serious breach of yourfiduciary duty to put your potentialcommission above the interests of yourseller-client.

The best way to avoid potentialconflicts or breaches of contractualrelationships between a buyer andanother agent is to handle the situationproperly from the outset. Ask the buyerif he or she has an agent, even if youare afraid what the answer might be.If the buyer is working with anotheragent, allow that buyer and his agentfull access to the property as you wouldyour own buyer-client. Do not attempt

to “take” that buyer away from hisagent. Do not ever refuse an offer ortell a buyer he or she has to work withyou. Consider how much liability wouldbe created if you were to steer thebuyer away from using his or her ownagent and then a problem arose in thetransaction.

Finally, it is always importantto consider your relationship to theindustry and to the other professionalsin your industry. The old adage is true:what goes around comes around. If youtry to encourage buyers to work withyou over their chosen real estate agent,what is to stop the other licensees inyour profession from trying to coaxyour client away from you? Our adviceis to follow the Golden Rule, andeveryone will benefit.

(Amended and reprinted with permission ofLee B. Harris, General Counsel, KentuckyReal Estate Commission)

Over the past few months the Division has received numerous telephonecalls from real estate licensees regarding the new National Association ofREALTORS® requirement to complete a two and a half (2.5) hour Code of Ethicsclass. This requirement applies only to those individuals who are members of theNAR and must be completed by December 31, 2004.

The Division has a requirement to complete a three (3) hour class thatspecifically covers the Canons of Ethics. This requirement is by Ohio AdministrativeCode 1301:5-7-02(D)(3) and must be completed every continuing education reportingperiod. This requirement must be met by all individuals who are licensed real estateprofessionals in the state of Ohio, irrespective of membership in a professionalorganization.

If you are a REALTOR® then you should contact your local board to obtaininformation on scheduling and completing the Code of Ethics class. Your local boardor the Ohio Association of REALTORS® can help you in this matter. Rememberthe Ohio Division of Real Estate & Professional Licensing has not changed therequirement to complete the Canons of Ethics course every reporting period. Alsoremember the Division and the National Association of REALTORS® are twocompletely different and distinct organizations.

Code of Ethics vs. Canons of EthicsEthics Education Requirements

Division compliance audits indicate many brokerages are failing to use correct fairhousing language in their agency agreements. The Division reminds all Ohio realestate licensees that the correct fair housing language must be used in all agencyagreements, including listing contracts, buyer or tenant representation agreements;property management agreements and auction agreements. The term “agencyagreement” is defined in Ohio Revised Code 4735.51 (B). The correct fair housinglanguage is found in Ohio Revised Code 4735.55 and on the Division website athttp://www.com.state.oh.us/odoc/real/. Failure to use the correct fair housinglanguage may result in disciplinary action.

Fair Housing Language In Agency Agreements

ATTENTION BROKERS! Ohio Rules and Regulations updates are available at www.state.oh.us/ohio/ohiolaws.htm

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Welcome to the Fiscal section. This section is the foundation of the Division. All mail received in the office (anaverage of 500 pieces per day) is opened and sorted by Alvin Cogan (recently promoted to another division) and JenniferAnderson. All checks are then logged into our licensing system, which assists the customer service staff in verifyingreceipt of checks. This function is extremely useful when licensees call for the status of their recently submitted applications.

After checks are logged, the three account clerks post the applicationpayment information to individual licensee accounts. File numbers are assigned atthis time to any new/prospective licensees for the real estate and appraiserindustries and files are created for all security guard registrants.

In addition to the accounts receivable duties, the fiscal section processesall invoices for payment, orders all printing products, creates any needed purchaseorders and obtains all supplies. Any refunds required and our normal “bad check”collections are also done by this section.

The fiscal section also has the responsibility of compiling andmaintaining all budget information for our four operating and three specialfunds, monitoring and submitting the employee bi-weekly payroll, andpreparing student loan information/reports for the Ohio Real EstateCommission and processing all Education & Research Fund grant awards.

During calendar year 2003, over 174,000 entries were made tothe cash receipts journal from the 72,124 checks received, with another11,655 entries made through our on-line renewal system.

Meet the Staff: Fiscal Section

The Division is often asked to provide legal advice tolicensees and members of the public. This is not a service theDivision can provide. Questions concerning legal issues outsideof the chapters of the Ohio Revised Code enforced by theDivision are beyond the scope of assistance we are permittedto provide because they are outside our review jurisdiction.Such inquiries are more appropriately addressed by privatelegal counsel. However, the Division’s legal staff will providegeneral guidance on enforcement of the licensing law.

Any opinion provided by the Division is based on thestatement of facts provided by the person making the inquiry.Any modification to the fact pattern may alter this response.Therefore, it is ill advised to rely on guidance provided to anotherperson.

If you have a question you believe we can help youwith, please submit that question to our office in writing. Theuse of email for such inquires will speed the response time.Questions may be submitted to REPL@com.state.oh.us or tothe Division’s mailing address found elsewhere in thisnewsletter.

Limitations of Division Advice

In order to assist in educating the real estateindustry, the Division has developed an on-line indexentitled, “New Broker/Agent Index” which is nowavailable on the Division website. The index shouldbe useful to all new brokers/sales agents and thosere-activating and features the most relevant andupdated enforcement and licensing materials. Theindex includes compliance audit information, agencydisclosure statements, fair housing pamphlets, OhioRevised Code and Ohio Administrative Code cites,the Home Buyers Guide and other importantdocuments. This information can be obtained byentering the following address in your web browser:http://www.com.state.oh.us/odoc/real or by clickingon the New Broker/Agent index icon located on thefront page of the Division’s website.

Keep in mind this is an ‘on-line’ resource toolcomprised of various real estate documents and webpage links. It is not an actual guide or booklet.

Check it out today. It is FREE!

New Broker/Agent Real Estate

Index

From left to right: Amy Mar, Dee Jones (FiscalSupervisor), Beth Frabott, and Seleda Cockrell

Alvin Cogan (l) andJennifer Anderson (r)with the daily mail.

ATTENTION BROKERS! Forms are available for download from the Division’s Web site at www.state.oh.us/real

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Appraiser Disciplinary Actions�

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Audrey B. Browning, License No.380381, a State-licensed residentialreal estate appraiser from Cincinnati,Ohio, was found to have violated OhioRevised Code Section 4763.11 (G)(5)as it incorporates the UniformStandards of Professional AppraisalPractice, Standards Rule 1-1(C). Forthese violations Audrey B. Browningis issued a written reprimand.Further, Audrey B. Browning isordered by the Appraiser Board tocomplete a fifteen (15) classroom hourcourse in Uniform Standards ofProfessional Appraisal Practice andsuccessfully pass the courseexamination. This course must betaken within ninety (90) days of thedate of this order. The additionalappraisal education taken can not beused for credit toward the fourteen(14) hours of annually requiredappraiser continuing education. Ms.Browning indicated that each of theComparable Sales in the Appraisalwas located in Hamilton, Ohio, whenin fact; the comparable sales werelocated in Fairfield, Ohio.Janice H. Buchele, License No.405516, a State-licensed residentialreal estate appraiser from Toledo,Ohio was found to have violated OhioRevised Code Section 4763.11 (G)(5)as its incorporates the UniformStandards of Professional AppraisalPractice, Standards Rule 1-1 (b), 1-1(c), 1-4(a), and 1-5(c). For theseviolations Janice H. Buchele is issueda written reprimand and admonishedto follow the requirements stressedin the Uniform Standards ofProfessional Appraisal Practice touse appropriate sales for comparison.Further, Janice H. Buchele is orderedby the Appraiser Board to completea fifteen (15) classroom hour coursein Uniform Standards of ProfessionalAppraisal Practice, and a fifteen (15)classroom hour course in SalesComparison Approach to Value andsuccessfully pass each of the courseexaminations. Courses are to betaken within one hundred twenty

(120) days of the date of the order. Theadditional appraisal education taken cannot be used for credit toward thefourteen (14) hours of annually requiredappraiser continuing education. JaniceH. Buchele did the following withrespect to an appraisal report; she usedlisting agreements in the SalesComparison Analysis portion of theAppraisal Report, rather than closedsales contracts as comparisons.James William Moore Jr., LicenseNo. 383721, a State-licensed residentialreal estate appraiser was found to haveviolated as to count one, Ohio RevisedCode Section 4763.11 (G)(5), as itincorporates the Uniform Standards ofProfessional Appraisal Practice,Standards Rule 1-1(c). As to count two,was found to have violated OhioRevised Code Section 4763.11 (G)(5),as it incorporates the UniformStandards of Professional AppraisalPractice, Standards Rule 2-1(a), andOhio Revised Code Section 4763.11(G)(6). For these violations JamesWilliam Moore Jr., is issued a writtenreprimand. Further, James WilliamMoore Jr. as to count one, is orderedby the Appraiser Board to complete afifteen (15) classroom hour course inUniform Standards of ProfessionalAppraisal Practice and successfullypass the course examination. As tocount two, Mr. Moore is ordered by theAppraiser Board to complete a fifteenclassroom hour course in SalesComparison Approach to Value andsuccessfully pass the courseexamination. The courses must betaken within one hundred twenty (120)days of the date of the order. Theadditional appraisal education taken cannot be used for credit toward thefourteen (14) hours of annually requiredappraiser continuing education. JamesWilliam Moore Jr., did the following withrespect to an appraisal report;incorrectly indicating that the SubjectProperty had a completely fenced-inbackyard; contradictorily indicated boththe existence and non-existence of alaundry or mud room; and the existence

of a fourth bedroom on Level 1. Mr.Moore Jr. also failed to state thecorrect square footage of the subjectproperty, and for indicating in theappraisal report that he had inspectedthe interior of the Subject Property,when an interior inspection had notbeen done.Jerry M. Connor, License No.397990, a State-licensed residentialreal estate appraiser from Columbus,Ohio as to count one, was found tohave violated Ohio Revised Code,Section 4763.11 (G)(5), as itincorporates Uniform Standards ofProfessional Appraisal Practice,Standards Rule 2-2 and Ohio RevisedCode Section 4763.11(G)(6). As tocount two, Mr. Connor was found tohave violated Section 4763.11(G)(5),as it incorporates the UniformStandards of Professional AppraisalPractice, Standards Rule 1-5(a). Forthese violations as to count one, JerryM. Connor is ordered by the OhioReal Estate Appraisal Board that hisresidential real estate appraiser’slicense is suspended for three hundredsixty-five (365) days and is issued awritten reprimand. Further, as to counttwo, Mr. Connor is ordered to completea fifteen (15) classroom hour coursein the Uniform Standards ofProfessional Appraisal Practice, afifteen (15) classroom hour course inSales Comparison Approach to Valueand successfully pass each of thecourse examinations. Courses are tobe taken within one hundred twenty(120) days of the date of this order.The additional appraisal educationtaken can not be used for credit towardthe fourteen (14) hours of annuallyrequired appraiser continuingeducation. Mr. Connor did thefollowing with respect to an appraisalreport; he did not recite the reportingoption he had utilized in the preparationof the appraisal report. Further, Mr.Connor failed to consider and analyzethe listing of and the sales agreementsfor the subject property.

ATTENTION BROKERS! Ohio Rules and Regulations updates are available at www.state.oh.us/ohio/ohiolaws.htm

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Appraiser Disciplinary Actions�Patricia A. Slaughter, License No.394086, a State-certified residentialreal estate appraiser from Toledo,Ohio, was found to have violated asto count one Ohio Revised CodeSection 4763.11 (G)(5), as itincorporates the Uniform Standards ofProfessional Appraisal Practice,Standards Rule 2-3. As to count two,Patricia Slaughter is found to haveviolated Ohio Revised Code 4763.11(G)(5), as it incorporates the UniformStandards of Professional AppraisalPractice, Standards Rule 1-1(b). Asto count one for this violation, PatriciaSlaughter is ordered by the AppraiserBoard to complete a fifteen (15)classroom hour course in UniformStandards of Professional AppraisalPractice and successfully pass thecourse examination. As to count twofor this violation, Patricia Slaughter isordered by the Appraiser Board tocomplete a fifteen (15) classroom hourcourse in Sales Comparison Approachto Value and successfully pass thecourse examination. These coursesmust be taken within one hundredtwenty (120) days of the date of thisorder. The additional appraisaleducation can not be used for credittoward the fourteen (14) hours ofannually required appraiser continuingeducation. Further, Patricia Slaughteris issued a written reprimand andadmonished to use greater care inmeasuring the subject property.Patricia Slaughter did the followingwith respect to an appraisal report; shefailed to disclose the participation ofan assistant in the development of anappraisal, and failed to report thecorrect gross living area of the subjectproperty.Harvey Norton, Jr., License N0.426429, a State-certified residentialreal estate appraiser from Columbus,Ohio was found to have violated OhioRevised Code Section 4763.11 (G)(5)as it incorporates the UniformStandards of Professional AppraisalPractice Standards Rule 2-2 (ix) as setforth in the Notice of Opportunity for

Hearing. For these violations HarveyNorton, Jr. was issued a writtenreprimand and admonished to usegreater care in explaining the reasonsfor the unavailability of salesinformation and the steps taken to verifydata collected. Further, Harvey NortonJr., is ordered to complete a course ofno less than thirty (30) hours coveringat least in part the Sales ComparisonApproach to Value. The additionalappraisal education taken can not beused for credit toward the fourteen (14)hours of annually required appraisercontinuing education. The course mustbe taken within one hundred twenty(120) days of the date of this order.Harvey Norton, Jr., failed to report thesale of subject property in his appraisalreport and failed to explain how hearrived at the conclusion that the salesdate and sales price were “not known,”when in fact the County Recordsshowed the sale.Richard J. Costanzo, License No.379183, a State-licensed residentialreal estate appraiser from Lyndhurst,Ohio, was found to have violated as tocount one Ohio Revised Code Section4763.11 (G)(5), as it incorporates theUniform Standards of ProfessionalAppraisal Practice, Standards Rules 1-1(a), 1-1(b), 1-1(c), and Ohio RevisedCode Section 4763.11(G)(6), as tocount two, was found to have violatedOhio Revised Code Section 4763.11(G)(5) as it incorporates UniformStandards of Professional AppraisalPractice Standards Rule 2-1(a) as setforth in the Notice of Opportunity forHearing. For these violations Mr.Costanzo is suspended for nine (9)months. Additionally, Richard J.Costanzo is further ordered to completea fifteen (15) classroom hour course inBusiness Practice and AppraisalProcedure. The additional appraisaleducation taken cannot be used forcredit toward the fourteen (14) hoursof annually required appraisercontinuing education. Mr. Costanzo’sappraisal report contained multipleinaccuracies and the data was not

verified as set forth in the comparativemarket analysis. As a consequencethe value assigned to the subjectproperty was not reliable.Zilber Ronald Plair, lll License No.416175, a State-licensed residentialreal estate appraiser from Cincinnati,Ohio was found to have violated OhioRevised Code Section 4763.11 (G)(5),as it incorporates the UniformStandards of Professional AppraisalPractice, Standards Rule 2-1(a) and1-1(c) as set forth in the Notice ofOpportunity for Hearing. For theseviolations the Appraisal Board issueda written reprimand and admonishedto follow the requirements of theUniform Standards of ProfessionalAppraisal Practice and to useappropriate Sales Comparisonmethods and techniques. Zilber RonaldPlair, lll’s Appraisal report containeddeficiencies and inconsistencies inregard to the description of theproperty type, and the construction ofthe exterior walls. Mr. Plair, llldescribed the subject property as botha one-story and two-level property.He also inconsistently indicated in thereport that the exterior walls of thesubject property were vinyl/aluminumbut in another section indicated theywere brick. He also failed to make anappropriate adjustment for the factthat the subject property had a crawlspace area whereas the comparableto which the subject was beingcompared did not have a crawl spacearea, but was constructed on aconcrete slab.Darrell E. Wolfe, License No.391870, a State-certified residentialreal estate appraiser, from Columbus,Ohio was found to have violated, asto count one, Ohio Revised CodeSection 4763.11(G)(5), as itincorporates Uniform Standards ofProfessional Appraisal Practice,Standards Rule 2-2, as to count two,was found to have violated OhioRevised Code Section 4763.11(G)(5),as it incorporates Uniform Standards

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ATTENTION BROKERS! Forms are available for download from the Division’s Web site at www.state.oh.us/real

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Real Estate Disciplinary ActionsREVOCATIONSWILLIAM E. JONES, broker,Shaker Heights, Ohio, as the result ofan investigation of a formal complaint,had his license revoked for violatingOhio Revised Code 4735.18(A)(5),4735.18(A)(25) and 4735.18(A)(9) asthat section incorporates Ohio RevisedCode 4735.73(F) and 4735.58(B)(1),when he failed to return to the buyer,earnest money within a reasonable time,when he failed to provide the buyerwith copies of all necessary documentsand when he failed to disclose a materialrelationship with the seller. In anothercase, as the result of an investigationof a formal complaint, his license wasrevoked for violating Ohio RevisedCode 4735.18(A)(6) as that sectionincorporates Administrative Rule1301:5-1-13 and for violating OhioRevised Code 4735.18(A)(6) as thatsection incorporates Ohio RevisedCode 4735.18(A)(5), when he failed toobey a subpoena issued by the Divisionand when he failed to return to the buyer,earnest money within a reasonabletime.SUSPENSIONS, FINES,EDUCATIONBRENT D. CRAWFORD, broker,Columbus, Ohio, was fined $1,000.00for violating Ohio Revised Code4735.18(A)(6), as that sectionincorporates Article 3 of the Canons ofEthics for the Real Estate Industry,when he failed to cooperate with theDivision by not submitting requireddocuments to correct deficienciesidentified during a compliance audit.MARCIA L. McGEE, salesperson,Englewood, Ohio, as the result of aninvestigation of a formal complaint, wasfound to have violated Ohio RevisedCode 4735.18(A)(6), but no penalty wasimposed, when she prematurelyreleased earnest money withoutfollowing the earnest money releaseprocedure provided for in the salescontract.ISAAC HAGGINS, SR., broker,South Euclid, Ohio, as the result of aninvestigation of a formal complaint, hada five (5) day suspension of his license,which commenced on January 30, 2004,

was fined $500.00, and was requiredto complete and to submit proof ofcompletion of three hours of continuingeducation in agency law, for violatingOhio Revised Code 4735.18(A)(6) asthat section incorporates Ohio RevisedCode 4735.58(A), when he failed totimely provide the seller with an agencydisclosure form. In addition, he wasfined $100.00 for violating OhioRevised Code 4735.18(A)(24), whenhe failed to maintain his businessrecords for a period of three years.DONNA S. BURNHAM, broker,Columbus, Ohio, was fined $1,000.00for violating Ohio Revised Code4735.18(A)(6), as that sectionincorporates Article 3 of the Canons ofEthics for the Real Estate Industry,when she failed to cooperate with theDivision by not submitting requireddocuments to correct deficienciesidentified during a compliance audit. Inaddition, she was fined $500.00, forviolating Ohio Revised Code4735.18(A)(9) as that sectionincorporates Ohio Revised Code4735.54 and Administrative Rule1301:5-6-03, when during a complianceaudit, it was found that she maintaineda non-compliant company policy.JUDY C. BURTON, salesperson,Proctorville, Ohio, as the result of aninvestigation of a formal complaint, wasfined $1,000.00 and was required tocomplete and to submit proof ofcompletion of the ten (10) hour salespost-licensure course, for violating OhioRevised Code 4735.18(A)(6), whenshe directly contacted the seller, whowas exclusively represented by anotherbrokerage and knowing that the selleronly permitted their listing agent to showthe property.JAMES J. WEILER, broker,Proctorville, Ohio, as the result of aninvestigation of a formal complaint, wasfined $1,000.00 and was required tocomplete and to submit proof ofcompletion of the ten (10) hourbrokerage post-licensure course, forviolating Ohio Revised Code4735.18(A)(6) as that sectionincorporates Ohio Revised Code4735.18(B), when he permitted a

salesperson to directly contact a seller,who was exclusively represented byanother brokerage and knowing that theseller only permitted their listing agentto show the property.WILLIAM A. CARTER, sales-person, Columbus, Ohio, as the resultof an investigation of a formal com-plaint, was fined $500.00 and wasrequired to complete and to submitproof of completion of a three hourethics course, for violating Ohio RevisedCode 4735.18(A)(10), when hedemanded, without reasonable cause,commission(s) to which he was notentitled, namely a fee for thepreparation of a 1099 tax form. Inaddition, he was fined $500.00, and wasrequired to complete and to submitproof of completion of a three hour civilrights course, for violating Ohio RevisedCode 4735.18(A)(6) as that sectionincorporates Ohio Revised Code4735.55(A)(2), when he used outdatedHUD language in his propertymanagement agreement.EDWARD R. SCHERER, broker,Coshocton, Ohio, was fined $1,000.00and was required to complete and tosubmit proof of completion of a threehour ethics course, for violating OhioRevised Code 4735.18(A)(6), as thatsection incorporates Article 3 of theCanons of Ethics for the Real EstateIndustry, when he failed to cooperatewith the Division by not submittingrequired documents to correctdeficiencies identified during acompliance audit. In addition, he wasfined $1,000.00 and was required tocomplete and to submit proof ofcompletion of the ten (10) hourbrokerage post-licensure course, forviolating Ohio Revised Code4735.18(A)(9) as that sectionincorporates Ohio Revised Code4735.54 and Administrative Rule1301:5-6-03, when during a complianceaudit, it was found that he maintained anon-compliant company policy.

ATTENTION BROKERS! Ohio Rules and Regulations updates are available at www.state.oh.us/ohio/ohiolaws.htm

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of Professional Appraisal Practice,Standards Rule 2-3, as to count three,was found to have violated OhioRevised Code Section 4763.11 (G)(5),as it incorporates Uniform Standardsof Professional Appraisal Practice,Standards Rule 2-1(b), as to count four,was found to have violated OhioRevised Code Section 4763.11 (G)(6)as set forth in the Notice ofOpportunity for Hearing. For theseviolations the Appraisal Board issued,as to counts one, two and three, awritten reprimand and admonishedDarrell E. Wolfe to comply withUniform Standards of ProfessionalAppraisal Practice whencommunicating and developingappraisal reports. As to count four,Darrell E. Wolfe is ordered by theAppraiser Board to complete a fifteen(15) hour classroom course in UniformStandards of Professional AppraisalPractice and a course of no less thanthirty (30) hours covering in part theSales Comparison Approach to Value.The courses must be taken within onehundred twenty (120) days of the dateof the order. The additional appraisaleducation taken cannot be used forcredit toward the fourteen (14) hoursof annually required appraisercontinuing education. Darrell E. Wolfefailed to state the reporting option he

had utilized in each of the three appraisalreports and failed to exercise reasonablediligence in developing the threeappraisal reports for the subjectproperties. Mr. Wolfe failed to giveadequate attention to the identificationand verification of prior sales in hisappraisal reports of each of the threesubject properties. Further he also didnot properly explain the commondriveway easement in the appraisalreport.Edward Dale Featheringham,License No. 398404, a State-certifiedgeneral real estate appraiser fromWintersville, Ohio, was found to haveviolated, as to count one, Ohio RevisedCode Section 4763.11(G)(5) as itincorporates the Uniform Standards ofProfessional Appraisal PracticeStandards Rules 1-1(a), 1-1(b) and 1-1(c), Ohio Revised Code Section4763.11(G)(6), as to count two, wasfound to have violated Ohio RevisedCode Section 4763.11 (G)(5) as itincorporates the Uniform Standards ofProfessional Appraisal PracticeStandards Rules 1-1(a), 1-1(b), and 1-1(c) and Ohio Revised Code Section4763.11 (G)(6), as to count three, wasfound to have violated 4763.11 (G)(5)as it incorporates the Uniform Standardsof Professional Appraisal PracticeStandards Rules 1-1(a), 1-1(b), and 1-

Q. Do I need the words “trust” or “special account” on all deposit tickets and checks drawn on the brokerage trustaccount.A. Yes. Ohio Administrative Code 1301:5-5-08(B) requires both deposit tickets and checks to bear the words “trust” or“special account”.

Q. May the broker maintain personal funds in the trust account?A. Yes, provided that those funds are clearly identified as the broker’s funds and only for the purpose of either maintain-ing a minimum balance as required by the financial institution or for the payment of a service charge assessed by thefinancial institution.

Q. Are there specific records the broker is required to keep regarding the trust account?A. Yes. Ohio Administrative Code 1301:5-5-09 requires brokers to keep a record of all trust funds received in a fiduciarycapacity, including the date the funds are received, the party from whom the funds are received, the amount received,the date the funds are deposited in the trust account, the check number and date the funds are disbursed, the party towhom funds are disbursed and purpose of disbursement and any other information necessary to verify and explain theaccount balance. For these purposes, the Division has created a columnar ledger for brokerage use, which is available onthe Division’s website.

1(c) and Ohio Revised Code Section4763.11 (G)(6), as to count four wasfound to have violated Ohio RevisedCode Section 4763.11 (G) (7) as setforth in the Notice of Opportunity forHearing. For these violations theAppraisal Board ordered, as to countone, the State-certified general realestate appraiser certificate of EdwardDale Featheringham suspended forthree (3) months and further orderedto complete a course of no less thanthirty (30) hours covering at least in partthe Sales Comparison Approach toValue. The education must becompleted within one hundred twenty(120) days of the date of the Boardorder. As to count two, was orderedsuspended for two (2) months, as tocount three, was ordered suspended forone (1) month, as to count four, wasordered suspended for three (3)months. All suspensions ordered areto run consecutively, for a total of nine(9) months of license suspension.Edward Dale Featheringham, did thefollowing with respect to an appraisalreport; failed to report a prior transferof the subject property; failed toaccurately report the square footagecontained in the Comparables; andfailed to report a prior transfer of acomparable.

Note: The appraisal education taken tosatisfy these orders can not be used for

credit for the 14 hours of approvedcontinuing education required annually.

Appraiser Disciplinary Actions continued...

Q&A – Trust or Special Accounts

ATTENTION BROKERS! Forms are available for download from the Division’s Web site at www.state.oh.us/real

State of OhioDepartment of CommerceDivision of Real Estate and Professional Licensing77 South High Street, 20th FloorColumbus, OH 43215-6133

PRESORTED STANDARDU.S. POSTAGE

PAIDColumbus, OH

PERMIT NO. 5455

THE OHIO DEPARTMENT OF COMMERCE IS AN EQUAL OPPORTUNITYEMPLOYER AND SERVICE PROVIDER.

Workshops are now available for consumer groups in Ohio. If you would liketo coordinate a time and location for your group or organization to attend aFREE, IN DEPTH EDUCATION ON ONE OF THE FOLLOWINGTOPICS, call the Consumer Outreach Section at 466-6297.

WORKSHOP #1. The AppraisalWhat is it? What is its value to the consumer? What if something iswrong? What is a consumer’s recourse?WORKSHOP #2. The Property Condition Disclosure FormBrand new areas of concern for the seller and buyer.WORKSHOP #3. The Agency Disclosure FormWhat type of agency relationship are you establishing in buying orselling a home? The roles of agents in each type of relationship.WORKSHOP #4. The Complaint ProcessWhere to Find Information on a Licensed Appraiser or Real EstateAgent. How to Find Remedies for Real Estate and Appraisal Problems.

Our Outreach Program staff will travel to your location, present thefactual topic chosen, allow time for questions and answers, and supplyconsumer educational materials pertinent to the selected workshop.

BUY SMARTBecome an Informed Consumer Before You Buy.

Division Consumer Outreach Offers ConsumerEducation Classroom Style Advantages of Renewing

Your Real Estate License

On-Line

� It updates your file immediatelywithout the delays involved withmailing your renewal fee and waitingfor it to be processed;

� It allows you to renew at yourconvenience anytime day or night;

� It insures that your transaction issecure by accessing your account usingyour own Personal IdentificationNumber (PIN);

� It provides you with an immediate,printable confirmation of your renewal;and

� You’ll receive your pocket cardmore quickly.