08-20023-03

Purpose of the Report

In accordance with the intent of Titles 24 and 44 of the Alaska Statutes, we have
reviewed the activities of the Real Estate Commission (REC) to determine if the
termination date for the commission should be extended. As required by
AS 44.66.050(a), the legislative committee of reference shall consider this report as
part of the oversight process in determining if REC should be reestablished.
Currently, AS 08.03.010(c)(19) specifies that REC will terminate on June 30, 2004,
and will have one year from that date to conclude its administrative operations.

Report Conclusions

In our opinion, the termination date for REC should be extended. The commission
serves a public purpose and has demonstrated an ability to operate in a satisfactory
manner. The regulation and licensing of real estate professionals provides necessary
public protection in the buying and selling of residential and commercial properties.

The commission carries out its responsibilities to educate both the public and REC
licensees in a professional, competent, and efficient manner. Additionally, active
investigation of complaints and licensure actions, when appropriate, provides
assurance that licensed professionals are competent and ethical. We recommend that
legislation be enacted to extend the commission’s termination date to June 30, 2008.

Findings and Recommendations

1. The legislature should amend the statutes related to the Real Estate Surety Fund
(RESF) to provide more complete, effective, and efficient consumer protection to
claimants.
RESF provides consumers reimbursement for financial losses they may have suffered
from a real estate transaction attributable to “fraud, misrepresentation, deceit, or the
conversion of trust funds…” on the part of an REC licensee. Claims for
reimbursement are subject to a hearing process administered in accordance with the
state’s administrative procedures act. In order to make the RESF operate in a manner
consistent with the fund’s evident purpose, we recommend the legislature amend state
laws related to the fund in order to:

• Increase the limits on reimbursement of claims to $20,000 per transaction and
  the associated maximum payment per licensee to $100,000.
• Only require the Division of Occupational Licensing (OccLic) to make
  reasonable efforts to provide right-of-appeal notification.
• Specify that mobile home transactions are subject to RESF claims.