June CPARealtor News

EALTOR NEWS VOL. 6 / ISSUE 6 JUNE 2015

EDUCATION ~ SERVICE ~ INTEGRITY In this Issue:

Are YOU the piece we’ve been missing?

CPAR Calendar

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Letter from your President

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CPAR-tee Social Mixer

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AE Corner, What’s Due Next?

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“Consent to Serve” Form

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New CPAR Members

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The CPAR Nominating

Hurricane Season Info

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NAR News

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Business Partner Spotlight

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Ind. Contractor FAQ

17-20

Advertise in CPAR News Business Partners

21 22-23

Join CPAR

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www.facebook.com/ CentralPascoRealtors @CPARealtors

Committee is in the process of selecting members to serve as Officers and Directors in 2016.

We are accepting “Consent to Serve” forms for President-Elect, Vice President, Treasurer, Secretary, and Directors. Members interested in being considered for nomination must submit a “Consent to Serve” form. The form can be found on page 6 of this newsletter, and the qualifications and form are also available on our website under the Leadership tab.

There are three director positions to be filled (two-year term).

CPAR Realtor® members will be instructed to vote for up to four directors from the slate submitted. The three receiving the highest votes will be elected, and the next highest will become an alternate for any vacancies during the term.

If you would like a position description, please send an email to Vanessa@cparfl.com. If you have any questions, please contact Nominating Committee Chair Toby Caroline at TobyParadise@aol.com.

The forms must be submitted by July 30, 2014. The election of officers and directors will take place in September (details to follow).

27642 Cashford Circle ~ Wesley Chapel, FL 33544 www.cparfl.com ~ Phone 813-406-6081 ~ Fax 813-712-2865 ~ info@cparfl.org 1

CPAR Board of Directors DIRECTOR Louise Richardson

PRESIDENT Lynn Mooney

TREASURER Vicki Derbes

PRESIDENT-ELECT Dwight McDonald

PAST PRESIDENT Toby Caroline

DIRECTOR Robert Kane

Sun ‘n Fun Realty TobyParadise@aol.com

Powers Real Estate Services RobKane76@gmail.com

DIRECTOR Patsy Peterman

DIRECTOR David Chen

SouthShore Homes & Properties Lynn@LynnMooney.com

Pro-Active Realty LouiseRichardson71@gmail.com

Berkshire Hathaway Home Services VDerbes@BHHSFloridaProperties.com

International Realty Plus-Tampa Bay EmailMyBroker@verizon.net

VICE PRESIDENT Dennis Derbes

djderbes@BHHSFloridaProperties.com

Seagrass Realty Patsy@SeagrassRealEstate.com

SECRETARY Gerald Collings

DIRECTOR Pete Rundel

Berkshire Hathaway Home Services

SouthShore Homes & Properties GeraldC0123@gmail.com

DChen4649@yahoo.com

BUSINESS PARTNER LIAISON

Ruth Peeples

First American Title Company RPeeples@firstam.com

WestBay Real Estate Pete@PetesRealty.com

June 2015 Sun

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CPAR‐tee Mixer 5:30 —7:30 p.m.

Primebar

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Closing Changes Classes 10:00 a.m. & 1:00 p.m.

Pebble Creek Golf Club

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RPR Training 9:00 a.m. & 11:00 a.m.

EPAR Office

Father’s Day

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Save the Date July 8: CPAR General Membership Meeting (“Tribute to America”) 11:30 a.m.—1:00 p.m., Pebble Creek Golf Club July 22: CPAR New Member Orientation 1—4 p.m., CPAR Office 2

From your President a word from the PREZ...

"When someone walks away from you, it's not the end of your story. It's the end of their character's role in your story." -- Author Unknown Have you started a new chapter in your story? ~ A very hard lesson learned... I had a very trusted IT person who has turned out to be extremely disappointing—my hard drive crashed (first time ever for me). No response to my repeated requests about scheduling an appointment for replacing the hard drive and restoring the information or referring me to another vendor. The software went away when the drive was replaced; the data is all backed up...

Lynn Mooney however: 354,259 files = 293.7 GB. I should be on the mend after tomorrow when I install my new Microsoft Office software.

The Florida Realtors® Tech Helpline (407-587-1450 on Monday—Friday from 9 a.m.—8 p.m. and on Saturday and Sunday from 9 a.m. - 5 p.m) has been wonderful. I highly recommend that you contact them if you have the least concern about your computer or just need some information or clarification. They are there to help you. Working off a tablet is definitely tedious. Lesson learned - do NOT put all your eggs in the same basket. ~ Windows 10 Arrives on July 29. Free for Windows 7 and Windows 8.1. The initial OS release will be limited to PCs and tablets. ~ I am very fascinated by drones—check out this video of the Cheval Country Club: Florida Aerial Drone Video of Cheval Golf Course at www.fastaerial.com. ~ We will be offering the required COE class with 3 hours credit - watch your inbox for details. ~ In July, we will be having a Military Tribute. Do you have any artifacts from the wars that you would be willing to share? Contact Vanessa Frost or Lynn Mooney. ~ Suggestion - we have now entered Hurricane Season. Be prepared just in case you have to evacuate. Put some essentials in a duffel bag that is sitting around—towels, cloths, liquid soap, Purell, plastic cups and flatware, paper towels, travel size toothpaste and toothbrush and other things that are extras that you would need. Then, all you have to do is grab your medications and bottled water and you are ready to evacuate at a moment's notice to find higher ground.

Until next month,

Lynn

Thank you to our 2015 Sponsors Elite

My Florida Regional ~ Merri Jo Cowen

Platinum

Embrace Home Loans ~ Tyler Cain and Scott Slone First American Title ~ Ruth Peeples

Gold

IERNA’s Heating & Cooling ~ Julie Rinaldi National Property Inspections ~ Lynne Tonte Sandon Mortgage ~ Rick Sandon Security National Mortgage ~ Ray Williams WCR Tampa Chapter ~ April Gayle Gausman

Silver Eagle Mortgage ~ Karen Calhoun Herbert H Landy Insurance ~ Joe Flynn Hillsborough Title ~ Joellyn Robles Market Prime Mortgage ~ John Farris Mason Title ~ Mary Turner Peeples Maintenance Repairs ~ Ron Peeples Prime Protection ~ Joed Hassani Rainbow International Restoration ~ Steve Dumas Tampa Home Inspection ~ Bobb Courtman Two Men and a Truck ~ Eugenia Parlow 3

Time for a Summer CPAR-tee!

Realtor® and Business Prime Bar Partner Mixer Shops at Wiregrass Wednesday, June 3 5:30—7:30 p.m.

2001 Piazza Ave., Wesley Chapel

Sponsors: First American Title—Ruth Peeples Hallmark Title Agency—Rebecca Walker Hengesbach & Hengesbach, P.A.—Seton Hengesbach Home Inspector Professor—Paul Phillips Homeowners Mortgage—George Cooper IPA Family—Daniel Borrero Mason Title—Mary Turner National Property Inspections—Lynne Tonte Operation Raven Funding—Bill Doyle Sun ‘n Fun Realty—Toby Caroline Tampa Home Inspection—Bobb Courtman Thurow Financial Services—Christopher Thurow

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A Note from My Florida Regional MLS:

AE Corner

Don’t miss this year’s Florida Realtors® Convention & Trade Expo!

Louise Richardson Vanessa Frost

The theme is Celebration, and Florida Realtors® has a lot of fun things planned.

This year’s convention is August 19-23 at the Rosen Shingle Creek Hotel in Orlando. The Trade Expo will be open on August 20-21.

This year’s Expo is Free! Just pre-

register online here.

Check out all the reasons you should sign up for the full convention by visiting http://convention.floridarealtors.org/, where you can view the schedule, speakers, Expo exhibitors, events, and more. You can also click on the video to the right to hear it directly from Florida Realtors® President Andrew Barbar (video will open in a new window).

If you need to contact your AE, email me at Vanessa@cparfl.com or call me at 813-4066081. General Office Hours are Monday— Friday from 10 a.m.—2 p.m.

What’s Due Next?

November 30, 2015

September 2015 Supra Active Key Renewals Active Key Dues

2015 dues were $173.40; 2016 dues TBA

Realtor® Membership Dues Primary

Optional Insurance $25

Secondary

CPAR

$100

Florida Realtors®

$126

National Assoc. of Realtors®

$155

CPAR

$100

CPAR Business Partner Dues Primary

$125

Secondary

$35

Central Pasco Association of REALTORS® Officers and Directors Consent to Serve

President-Elect  Vice President  Secretary  Treasurer  Director

Name:

No. of Years Licensed:

Firm Name:

Ph:

Business Address: Home Address:

Ph:

Website Address:

E Mail:

 Residential

 Commercial

 Property Management

 Business

Biographical Data___________________________________ Date of Birth: Month Day Educational/Designations: =========================================================================== Local Board Involvement: State Association Involvement: National Association Involvement: =========================================================================== Briefly describe your other activities with other trade associations, professional organizations, civic, community and other accomplishments.

Are you aware of the responsibilities and time required to serve as an officer or director?

Are you willing to complete annual Professional Standards certification?

Are you willing to make this commitment?

Do you contribute to RPAC? Are you willing to attend FR and NAR meetings to represent the Board?

Are you willing to pay your own way to these functions if funds are not available?

If you are elected to serve, what are your goals for the Association?

Yes Yes  Yes  Yes  Yes  Yes

 No No  No  No  No  No

I agree that any and all of the above information may be released in the Association’s publications or to the local media.

Signed: To expand on any information above, plus attach additional pages.

Date:

Free Classes for CPAR & EPAR members!

Thursday, June 25 9:00 am - 10:30 am: RPR Advanced 11:00 am - 12:00 pm: RPR Mobile East Pasco Association of REALTORS® Office 5026 7th Street, Zephyrhills, FL 33542 Phone: (813) 783-3794 9:00 AM to 10:30 AM - RPR Advanced: Hit the Bull's-eye on Perfect Pricing with RPR You’ve got the basics – now dig deep and learn the tips and tricks to leverage RPR®’s powerful analysis tools for your clients. Take the AVM or RVM® for a property and apply your local market intelligence to refine this starting point with corrections to the facts, addition and projection of improvement values, and comparison refinement tools. Create quick and easy CMA or an in-depth Sales Comparison Analysis, and lead clients through the intricacies of market realities with easy-to-understand facts and graphics. And we’ll use RPR’s Investment Analysis Tool to create an analysis for any type of client, whether they are buying their first home to live in, an investor looking to ‘flip’ the property, or someone looking for a rental investment.

11:00 AM to 12:00 PM - RPR Mobile - Big Data, Powerful Reports: Anytime, Anywhere RPR Mobile delivers RPR’s vast repository of property information and tools anytime, anyplace, to any iPhone or Android phone. Use your phone’s location to instantly view any property nearby, or search for properties to find listing, sales, valuation, assessment, deed, foreclosure, school, photos, maps, and market trend information…create, customize, view, save, and send RPR reports with your added photos, audio, and text notes. Download today at the App Store or Google Play, and join us for this comprehensive review of all the powerful features of this great REALTOR-only tool!

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Welcome New CPAR Members (April 2015)

Realtors® Berkshire Hathaway ~ Wesley Chapel Lois Armour Joyce Luloff

HomeLife Tropical Realty Lars Kier, Broker

Keller Williams ~ New Tampa Ronald Burris Gregory Dodson

Monte Real Estate Linda Martin

NewHomePrograms.com Juliette Leeseman

Powers Real Estate Todd Powers, Broker

Business Partners

North American Title Company Kimberly Martin

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GET IN THE KNOW

TIL A /RESPA INTEGR ATED DISCLOSURES

Are You Ready for August 1, 2015?

Our industry is facing significant changes this summer. Will you be ready?

Class Information

June 17th at 10 a.m. or 1 p.m. (class is about 45 minutes) DAT E , T I M E & LO C AT I O N

Attend this class for important information about:

June 17th / times are 10:00 and 1:00 ( class is about 45 minutes long with two times to pick from )

- Changes to the Loan and Settlement Disclosure forms and processes

Pebble Creek - Mulligans 10550 Regents Park Drive Tampa, Fl.

- Why these changes are happening - Who will issue the new disclosure forms - Potential penalties

I NS T RUC TO R

- Impact on real estate professionals

Robins Simmons VP of Sales with First American Title

We will also discuss the new forms (Loan Estimate and Closing Disclosure) and important timelines that will affect your transactions.

RSVP Vanessa Frost by email at vanessa@cparfl.com

This is one class you will not want to miss, hope to see everyone there and we have some great handouts to keep as a reference

RUTH PEEPLES ACCOUNT EXECUTIVE 13901 Carrollwood Village Run Tampa, FL 33618 MOBILE 813.240.4277 rpeeples@firstam.com www.firstam.com/fl

ALL - 02/2015

Ready or not, hurricane season arrives June 1 TALLAHASSEE, Fla. – May 29, 2015 – Florida is due for a hurricane. Overdue, in fact.

The last storm to hit Florida, Hurricane Wilma, came ashore Oct. 24, 2005, and Floridians with homeowners' insurance policies are still paying, at least for one more month.

Florida officials believe they are as ready as possible, in terms of storm preparation and the financial strength of the insurance industry, for the next hurricane that crashes into any part of the Sunshine State's shoreline.

Forecast tracking has improved, and even the use of social media – the state directs people to its "Get a Plan!" website – has given the state another means to communicate with the public pre- and post-storm.

But with the 2015 hurricane season starting Monday, officials say the question remains how well-prepared individual Floridians will be when a storm packing sustained winds of 74 mph or greater finds Florida.

"I think we're ready. We do a lot of work March through May to get ready for June 1," said Florida Division of Emergency Management Director Bryan Koon after joining President Barack Obama in a pre-storm season briefing Thursday at the National Hurricane Center in Miami.

The state agency recently ran a pair of drills, testing officials and public and private agencies to assess how they would respond if different parts of the state were hit by storms. In the most-recent scenario, officials portrayed the Panhandle getting hit by a hurricane and a week later a second storm crossing South Florida, following the path of the killer 1928 hurricane that crossed Lake Okeechobee.

"Those emergency managers, I think they are (ready)," Koon said. "And businesses and non-governmental charitable organizations, I'm confident in all of them. Now it's a matter of making sure that people understand Florida is a great place to live, but they have to take the appropriate precautions so they can take care of themselves so we can take care of those less fortunate."

How well Floridians heed Koon won't be known until a storm makes landfall.

Nine hurricane seasons have come and gone for Florida since Wilma. There have also been some tropical storms and heavy rain events.

But otherwise, Florida's population has grown the past decade by more than 2 million, with a sizable chunk of the increase coming in coastal areas.

On Wednesday, the National Oceanic and Atmospheric Administration (NOAA) predicted a below-normal Atlantic hurricane season, with between six to 11 tropical storms and three to six growing into hurricanes.

The Weather Channel's Professional Division has forecast nine named storms, with five reaching hurricane strength.

NOAA Administrator Kathryn Sullivan, in a release from the White House on Thursday, referred to the 1992 hurricane season that was punctuated by the monstrous Hurricane Andrew, which swept across South Florida.

"A below-normal season doesn't mean we're off the hook," Sullivan said in the release. "As we've seen before, below-normal seasons can still produce catastrophic impacts to communities."

Sam Miller, executive vice president of the Florida Insurance Council, said he has a "bad feeling" about this year.

"We've had some luck," Miller said. "We had luck with (Hurricane) Katrina, which brushed the Keys. But people who look at this say this just can't continue."

Still, Miller is in the camp viewing Florida, which skirted through the recession with relatively little money behind the state's Hurricane Catastrophe Fund, as being financially prepared to respond to a massive storm.

The "Cat Fund," created after Hurricane Andrew to provide backup coverage to property insurers if major storms hit the state, has about $17 billion available.

Cont. on page 12 11

Cont. from page 11

Miller said he is less concerned about insurance companies that have been created since Wilma, but he does have some worries about the sharpness of adjusters and others who for years haven't had to respond to a disaster.

"I think there is a concern maybe about rust in the system," Miller said. "Hopefully we're ready to handle whatever we face. There is a nightmare hurricane out there that will hit Miami, and we'll do the best we can."

Also count Jay Neal, director of the advocacy group Florida Association for Insurance Reform, among those expressing more concern about the response of Floridians than the private insurance industry.

"This is one area where the regulatory structure and ratings agency have done an excellent job," Neal said.

Neal noted that every Florida company rated by Ohio-based Demotech, Inc., which provides financialstrength ratings for insurance companies, has a reinsurance program in place to handle a 1-in-100-year storm, a second storm deemed a 1-in-50-year event, coverage for a third storm and the ability to buy additional coverage for a fourth storm.

"These standards have been significantly increased since 2010 and cover a series of catastrophic events so devastating that they have never before occurred in recorded history," Neal said.

A 1-in-100-year storm is an event that has 1 percent chance of occurring in any given year. A 1-in-50-year storm has a 2 percent change of happening.

As the six-month hurricane season starts, the state-backed Citizens Property Insurance Corp. has a $7.5 billion surplus, the highest in its history, and $3.9 billion in reinsurance coverage, which is insurance for insurers.

"We expect to be in the financial position to handle a 1-in-100 year storm without having to levy any assessments on Florida policies," said Citizens spokesman Michael Peltier. "That's a pretty big change from the $11.6 billion in assessments Florida policyholders faced just four years ago."

The last assessment imposed, a 1 percent surcharge on most homeowners' policies that ends July 1, was enacted to recoup $887 million of the roughly $1.7 billion deficit created by Hurricane Wilma.

The lack of storms has been a key factor in the improved financial status of Citizens, along with a massive depopulation effort that since 2012 has driven nearly 1 million policies into the private market. As of April 30, Citizens had 591,883 policies.

Source: News Service of Florida, Jim Turner

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Broker Liable for Slander of Title Read the full decision: Anton v. Mr. C’s Lake Orion, L.L.C. A Michigan court has held that a commercial real estate broker (“Broker”) may be held liable for slander of title for violations of the state’s Commercial Real Estate Broker’s Lien Act (“CREBLA”).

Broker entered into an exclusive listing agreement with the owner (“Owner”) of a commercial property. Pursuant to the agreement, Broker was to receive a commission from the sale or any lease price, depending on various factors. Broker introduced a potential buyer (“Buyer”) to Owner. After Broker made the introduction, Buyer made a purchase offer to Owner, and Buyer and Owner secretly negotiated to shut the Broker out of the deal in order to avoid paying the agreed-upon commission. Prior to completing the sale, however, Owner defaulted on its mortgage, and its lender secured the appointment of a receiver (“Receiver”) to continue the sale of the property to Buyer. Although Receiver offered to settle the commission dispute, the parties were unable to come to a resolution, and Broker recorded a broker’s lien on the property in the amount of $60,000.

Michigan’s CREBLA permits commercial brokers to record liens against properties if the broker is entitled to a commission under a written agreement. CREBLA also provides that a broker must release the lien if “the parties to the transaction” create an escrow account, and that the party or parties owing the commission fund the account with an amount sufficient to satisfy the lien.

After Broker recorded the lien, Receiver and Buyer created an escrow account and funded it with $75,000 to satisfy Broker’s claim – an amount $15,000 greater than the recorded broker’s lien. At some point thereafter, Broker, apparently unaware of the creation of the escrow account, filed suit against Buyer and Buyer’s mortgage lender. After being served with the lawsuit, Buyer notified Broker of the escrow account, and requested removal of the lien and dismissal of the lawsuit. Broker refused both requests, claiming that neither Receiver nor Buyer had notified Broker of the escrow account until after the lawsuit had been filed, and that Buyer had not been forthcoming about the ultimate purchase price of the property. Among other rationales for refusing to remove the lien, Broker maintained that it was “a party to the transaction” and therefore should have been included in the establishment of the escrow account.

Buyer countersued, alleging slander of title on the purchased property and requesting attorney’s fees. The circuit court ruled in favor of Buyer on the countersuit, and also summarily dismissed Broker’s claims against Buyer and its lender. In so ruling, the court held that after Buyer had deposited funds in the escrow account sufficient to cover the commission dispute, Broker’s refusal to release the loan was a violation of CREBLA. The court found Buyer’s arguments to the contrary unpersuasive, and held that Broker was not “a party” to the sale of the property, and therefore had no say in the establishment of the escrow account or the amount deposited thereunder. The court also found that Broker had committed “slander of title” – defined under Michigan law as the “malicious publication of false statements that disparage a plaintiff’s right in property.” The court held that Broker’s refusal to release the lien after being told of the escrow account demonstrated sufficient malice to qualify as slander of title.

The appellate court affirmed on all counts, and awarded Buyer attorney’s fees as permitted by the state slander of title law.

Anton v. Mr. C’s, Nos. 317935, 321827, 2015 WL 1085029 (Mich. Ct. App. March 12, 2015). [This is a citation to a Westlaw document. Westlaw is a subscription, online legal research service. If an official reporter citation should become available for this case, the citation will be updated to reflect this information].

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CPAR Business Partner Spotlight

Bill Doyle - 813-830-3965

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2810 Land O’ Lakes Blvd.

Land O’ Lakes, FL 34639 (813) 909-2722 Office (813) 909-0827 Fax

www.CentralPascoChamber.com https://www.facebook.com/pages/The-Central-Pasco-Chamber-of-Commerce/169655723123770?fref=ts

Upcoming Events June 1st, 2015 Tuesday June 2nd 4pm

How to Craft Your Irresistible Introduction The most important part of networking is your introduction!

RIBBON CUTTING

Teleseminar at 4pm - register at www.lorrainelane.com/events

Wednesday June 3rd 1pm - 3:30pm Lutz Guv’na FUN-Raiser GFWC Lutz-Land O’ Lakes Woman’s Club will host a Bing Blast at Land O’ Lakes Winery, 3901 Land O’ Lakes Blvd (just North of RaceTrac) $10 donation.

More info call Sharon at (813) 996-4909

Wednesday June 3rd 5pm - 7pm

Ribbon Cutting Sliding Door Roller Replacement 19121 US Hwy 41 North, Lutz, FL 33549 More info call (813) 802 6111 www.FixMySlidingDoors.com

Wednesday June 3rd 5-7pm Ribbon Cutting 5:30 or 6:30pm FREE! Food beverages and fun!

Come support a New Member 19121 U.S. Hwy 41 North Lutz, FL 33549

SAVE THE DATE & REGISTER TODAY! Tuesday June 9th

Membership Meeting Networking 11:30 AM - Meeting 12:00 - 1:30 PM Cost $25 After 6/5/15 - Register at: http://centralpascochamber.chambermaster.com/events/ details/2015-membership-meeting-lunch-june-1920

Wednesday June 10th 5:30 - 7:30 PM

MIXER with Hispanic Business Leaders Wesley Chapel Nissan 28519 SR 54, Wesley Chapel, FL 33544

Tuesday June 16th 6:30pm - 8pm RSVP by 6/12/15

Women & Money, a Free Workshop Jackie Bennett & DMG Financial LLC The Vine Restaurant & Wine Bar, 17667 Dale Mabry Hwy, Lutz, 33548 RSVP Today! (813) 996 6100 Jackiebennett@dmgfinancialllc.com

Membership Meeting REGISTER TODAY! Tuesday June 9th Networking 11:30 AM - Meeting 12:00 - 1:30 PM Cost $25 After 6/5/15 Register at: http://centralpascochamber.chambermaster.com/events/ details/2015-membership-meeting-lunch-june-1920

Tuesday June 23rd 8am - 2:30pm RSVP By 6/12/15 United Way Summit - ALICE Report PHSC Porter Campus Conference Center 2727 Mansfield Blvd, Wesley Chapel, 33543 https://www.surveymonkey.com/r/ALICErsvp or call for more info (727) 845-3030

Office@CentralPascoChamber.com

INDEPENDENT CONTRACTOR STATUS FREQUENTLY ASKED QUESTIONS LEGAL AFFAIRS DEPARTMENT 1. What is the difference between an independent contractor and an employee?

Employers have a significant degree of control over their employees, and are able to direct when, how, and where employees accomplish their tasks and responsibilities.

Employers also often provide the necessary “tools of the trade” to their employees. In contrast, an independent contractor generally can determine when, how and where to perform their work, and is responsible for any necessary tools or equipment necessary to provide the services.

For legal purposes, the key distinction between an employee and an independent contractor is often determined by the amount of control a business exerts over the worker. The more control a business exerts over the worker, the greater the likelihood the worker will be deemed an employee.

2. Are brokers required to classify their salespeople as independent contractors?

No. Brokers can classify their real estate salespeople as either employees or as independent contractors.

3. What laws and regulations apply to a brokerage’s classification of its salespeople?

Worker classification laws at the federal and state levels as well as state real estate license laws will apply to a brokerage’s classification of its salespeople. At the federal level, the Internal Revenue Service has carved out a special statutory non-employee status for real estate professionals, qualifying them as independent contractors when all of the following requirements are met: a. b. c.

The individual must be a licensed real estate professional; Substantially all of their payments must be directly related to sales or other output, rather than the number of hours worked; and Their services must be performed under a written contract providing that they will not be treated as employees for federal tax purposes.

State statutes for worker classification and real estate licenses vary in regards to determining proper classification of real estate licensees. Some states explicitly recognize real estate licensees as independent contractors when certain conditions are met, and other states are silent as to real estate licensees so the courts must apply the applicable test for determining proper classification. This is why it is vital for real estate professionals to know the laws that pertain to worker classification in their states.

INDEPENDENT CONTRACTOR STATUS FREQUENTLY ASKED QUESTIONS LEGAL AFFAIRS DEPARTMENT 4. Is an independent contractor written agreement sufficient to classify workers as independent contractors?

Having an independent contractor agreement is a very important element of establishing an independent contractor relationship with a real estate salesperson, but the existence of an agreement is not enough to avoid misclassification. Courts and regulatory agencies will look to the reality of the relationship, how the parties interacted, and how much control a broker exerts over the real estate salesperson in order to determine the true nature of the relationship between the parties.

5. What types of activities should brokers avoid in order to properly classify salespeople as independent contractors?

Under many state, and federal, laws, making certain acts “mandatory” may be considered an indication of employer-like control over the worker. One of the hallmarks of an independent contractor relationship is that the independent contractor has the ability to direct and control where, when and how they perform their work.

In order to establish an independent contractor relationship, the following is a list of the types of activities that should be avoided: • • • • •

Requiring the worker perform the services during set work hours.

Requiring the worker perform the services at a specific location.

Making attendance at staff meetings mandatory.

Providing training to the worker.

Supplying tools and materials to the worker.

6. Since worker classification is often dependent on the level of control an employer exerts over a worker, does this mean that brokers should not supervise their independent contractor salespeople?

No. In fact, according to real estate licensing laws brokers must maintain a certain amount of supervision over their salespeople. Brokers must therefore make sure that they are balancing their state real estate license laws’ supervision requirements with the applicable requirements in state and federal worker classification laws.

7. Do federal income taxes have to be withheld from a real estate professional’s earnings?

No, if the independent contractor meets the three elements of the IRS’s carve out. The IRS recognizes the unique nature of the real estate industry and created a statutory

INDEPENDENT CONTRACTOR STATUS FREQUENTLY ASKED QUESTIONS LEGAL AFFAIRS DEPARTMENT non-employee status for real estate professionals, provided three elements are met: 1) the individual is a licensed real estate professional; 2) substantially all of their payments be directly related to sales or other output, rather than number of hours worked; and 3) their services are performed under a written contract providing that they will not be treated as employees for federal tax purposes. If these three elements are met, no federal income taxes need to be withheld from the real estate professional's earnings.

8. Does qualifying as a statutory independent contractor under IRS rules also mean that state income taxes do not have to be withheld from a real estate professional's earnings?

No, qualifying as a statutory independent contractor under IRS rules applies only to federal income taxes. The question of whether state income taxes must be withheld from a real estate professional's earnings is a question of state law. Brokers should check the applicable state law where they operate.

9. Can a broker provide its independent contractors with benefits such as health insurance and 401K participation?

The provision of employee-type benefits, such as health insurance, vacation pay and 401k participation, can be factors pointing to an employer-employee relationship, rather than that of an independent contractor. The provision of these types of benefits may compromise the argument that the relationship with the worker is that of an independent contractor.

10. What happens if a broker misclassifies an employee as an independent contractor?

Improper classification of workers can cause businesses a number of tax and other legal problems. At the federal level, the IRS may levy unpaid payroll taxes against a business it believes is misclassifying its workers, as well as interest and other penalties. In addition, the United States Department of Labor, the National Labor Relations Board, and the Equal Employment Opportunity Agency have an interest in a business’s classification of its workers, and may pursue penalties and legal action against businesses believed to be engaging in worker misclassification.

At the state level, businesses may face fines and penalties for violations of state workers’ compensation laws, tax laws, and state unemployment compensation laws. Improper classification can also expose businesses to private causes of action and costly litigation.

11. May a broker require independent contractor real estate salespeople to maintain membership with a local association of REALTORS®?

A broker may require salespeople to be members of the REALTORS® association, as it indicates to the broker the sales agents’ commitment to the real estate profession and to

INDEPENDENT CONTRACTOR STATUS FREQUENTLY ASKED QUESTIONS LEGAL AFFAIRS DEPARTMENT high ethical standards of practice. REALTOR® membership is a criterion that a broker may voluntarily choose to require of independent contractors. The payment of any dues to belong to the REALTOR® association is simply a cost of obtaining the “credentials” necessary to become associated with a broker who deems this criterion important.

12. What resources are available to help further guide real estate professionals on this topic?

A number of resources on this topic are available on www.REALTOR.org’s Independent Contractor resources page: http://www.realtor.org/topics/independent-contractor. These resources include: • • • •

“Ten Ways to Successfully Manage Your Independent Contractor Relationships” Legal Affairs video on recent worker classification litigation Chart detailing various state labor laws approach to classifying real estate professionals Key Provisions for Independent Contractor Agreements

Outside resources include: • •

• •

The IRS website’s guide to worker classification U.S. Department of Labor – Wage and Hour Division guidance on worker classification Your state’s Department of Labor website Your state’s real estate licensing authority’s website.

YOUR AD HERE Advertise in the monthly CPARealtor® News. Open to CPAR Realtor® and Business Partner members.

Contact Vanessa at 813-406-6081 or Vanessa@cparfl.com to get started.

Artwork can be changed monthly and must be submitted by the 15th of each month.

Rates:

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6 issues

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12 issues

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Business Partners Thank you for your support!

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Business Partners Thank you for your support!

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Did you know?

NAR allows Local Board of Choice…

Regardless of office location, Realtors® may join any local real estate association they choose.

READY FOR A CHANGE? Contact Dwight McDonald, CPAR President-Elect, for answers to all your CPAR and membership-related questions.

813-629-6954 ~ emailmybroker@verizon.net CPAR offers the same benefits as other local real estate associations: ~ My Florida Regional MLS membership

~ New Member Orientation

~ Supra Active Keys, eKeys, and Lockboxes

~ Social events for fun and networking

~ Professional Development Education and CE credits

~ Public Advocacy

~ Office convenient to North Tampa, New Tampa, Wesley Chapel, and Land O’Lakes

~ Community Service opportunities

Compare and Save!

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for more information and applications on our website

CPAR 1

Membership Dues & Fees Local Dues (Primary Membership)

~ Fast start for new agents ~ Lower startup costs ~ Orientation for new agents ~ Low primary and secondary dues for transferring brokers

EPAR 3

PRO 4

WPBOR 5

$75.00

$120.00

$115.00

$168.00

$170.00

Florida Realtors® Dues & Issues Advocacy

$126.00

$126.00

$126.00

$126.00

$126.00

NAR Dues & Public Awareness Campaign Assessment

$155.00

$155.00

$155.00

$155.00

$155.00

$356.00

$401.00

$396.00

$449.00

$451.00

Application Fee (Local)

$75.00

$195.00

$110.00

$150.00

$250.00

Application Fee (Florida Realtors®)

$30.00

$30.00

$30.00

$30.00

$30.00

Business Partner/Affiliate Dues (Primary Membership)

$90.00

$195.00

$150.00

$250.00

$250.00

Total Annual Dues

Attention Brokers!

GTAR 2

1

4

2

5

Information obtained from CPAR 10/1/14 Information obtained from GTAR 10/14/14 3 Information obtained from EPAR 10/28/14

Information obtained from PRO 10/14/14 Information obtained from WPBOR 10/14/14

Central Pasco Association of Realtors® 27642 Cashford Circle, Ste. 110 ~ Wesley Chapel, FL 33544 www.cparfl.com ~ Phone 813-406-6081 ~ Fax 813-712-2865 ~ info@cparfl.org 24