2012 Legislative Preview

Again in 2012, estimates place the upcoming budget deficit between $600 million and $800 million, or roughly 10 percent of the state’s general revenue. That estimate, coupled with the newly drawn redistricting lines and the upcoming election in November 2012, will make it very difficult to move legislation forward this session. Depending on your perspective, that’s not always a bad thing.

The Kansas City Regional Association of REALTORS® is committed to the following public policy priorities for the 2012 Legislative Session in Missouri:

Home inspector licensing. Recognizing that the home inspector has become an integral part of the residential real estate transaction, the Association will continue efforts to ensure that all home inspectors meet minimum standards of competency through a licensing/regulation/registration system managed by a board of home inspectors.

Certificate of value. The Association will continue to oppose the certificate of value or any form of sales price disclosure and support legislation that limits the ability of the state or subordinate political subdivisions to use certificate of value.

Fair tax. The “Fair Tax” proposes to eliminate the Missouri income tax and replace it with a statewide sales tax. Although real estate sales taxes are proposed to be eliminated in the most recent versions of the Fair Tax initiative, according to independent analysis the resulting tax structure would cause such severe limitations on state revenue that a responsible General Assembly would be forced to remove those exemptions in subsequent years. Because of the uncertainty created by these proposals, the Association opposes replacing the current tax system with this untried and risky proposal.

Recording fees. The Association will continue to oppose increases in property recording fees that are unrelated to services provided to the transaction.

Real estate license law/MREC. The Association will continue to monitor changes in the real estate license law in other jurisdictions so as to ensure that the current statute provides appropriate protections for both consumers and real estate professionals. The Association will support changes throughout state government that will allow the MREC to implement online license renewal and transfer, as well as process credit card transactions online and at its office. The Association will seek to reduce the liability of the real estate licensee for acts by other parties who are charged with closing the transaction.

Incentives for homeownership and real estate development. The Association will continue to monitor legislation on and provide support for the continuation of the Historic Preservation Tax Credit and the Low Income Housing Tax Credit, as well as other programs aimed at increasing homeownership and real estate development in Missouri.

Lending Issues. The current economy, new federal regulations significantly limiting credit available to the residential real estate market, historically high unemployment rates and the resulting increase in the rate of foreclosures in Missouri have created significant pressures on the financial services industry. These factors have also created significant proposed legislative “fixes” to the problem. While KCRAR and MAR will continue to monitor each of these proposals, the Association believes that the correct approach to all of these problems is to follow the National Association of REALTORS® in their efforts to support fair and reasonable federal laws and regulations dealing with lending and believes that for Missouri to attempt to impose their own solution to this problem would lead to a flight of capital from Missouri. Therefore, we oppose legislation that would impose new burdens solely on Missouri lenders.

Landlord/Tenant Legislation. The ability of a property owner to receive a fair return on his investment and to be assured of recovering his property after the term of a rental agreement or lease, or in the event a tenant defaults on their obligation, are key elements in a strong real estate investment market. Accordingly, the Association supports legislation that assists owners in their efforts to recover access to their property and opposes legislation that forces additional duties on property owners without additional protection for their investment.

Municipal Inspections of Real Property. A number of cities are requiring property owners to have their property inspected by municipal employees as a condition of listing their property for sale. The additional fees and time to schedule the inspection can have a chilling effect on the sale of the property and in the current economic climate any impediment to a timely sale in unacceptable. The Association opposes a requirement by a city that owners apply for an occupancy inspection as a condition of listing a property for sale or keeping a property on the market.

Questions? Contact Derek Ramsay at 913-266-5910 or derekr@kcrar.com.