Mon, Jul 06, 2009

Business

Gripes vs. realty agents escalate

Only most serious probed; no investigators in Tucson
By Joseph Barrios
ARIZONA DAILY STAR
Tucson, Arizona | Published: 04.09.2006
As Arizonans have flocked to the real-estate profession in the last two years, the number of complaints against agents has shot up.
That means only the most serious schemes will get up-close-and-personal attention from Arizona Department of Real Estate's investigators.
None of the department's nine investigators is based in Tucson, and for now they come down only to pursue the most significant allegations of fraud, said senior investigator Henry Soza.
Soza specializes in cases in which someone was financially harmed, and he's also the only Spanish-speaking investigator. Between those two specialties, he has dozens of cases to worry about.
"That's why I tell people, 'You've got me, so your case is going to be open for a while,' " he said. "I've got a few that I've got to get down there (to Tucson) and work."
In the first eight months of this fiscal year, the number of complaints statewide is at 1,241, well ahead of last fiscal year's total, 1,101.
Relatively few complaints result in disciplinary action, but that number is going up, too. In fiscal 2005, 207 complaints resulted in "administrative action." But in the first eight months of this fiscal year that number is up to 243.
The vast majority of complaints filed are against real-estate agents, but the department also lumps together complaints against offices, brokers, developers and unlicensed salespeople.
New agents strain regulators
An influx of new agents has taxed the state office charged with regulating them, Arizona Real Estate Commissioner Elaine Richardson said at a recent seminar at the Westin La Paloma.
As real-estate sales rose to frenzied levels in 2005, the number of real-estate licensees rose to 70,771 on June 30, 2005, up 30.5 percent from 54,215 on the same date in 2000.
Today, the department is responsible for supervising more than 80,000 licensees across Arizona with just nine investigators responsible for handling all complaints throughout the state. The majority of complaints are addressed through letters, phone calls and e-mails, not shoe-leather investigation, Soza said. The same is true even for cases filed in Phoenix.
Speaking to hundreds of real-estate professionals, Richardson said the increase in complaints could be because the "people who are getting into the field are not as professional as we would like to see them."
Investigators were drawn to Tucson last year while investigating a complaint against Gilbert resident William Pickron, whose real-estate license was revoked based on his involvement in the purchase of a Tucson home from Tucson resident Ramona Randolph.
To avoid foreclosure, Randolph transferred title to Pickron's company and signed a lease/buyback agreement that would let her buy it back over time, according to a Real Estate Department summary of its investigation. When Randolph asked to make use of a short grace period in the agreement, Pickron's company evicted Randolph.
She filed a complaint against Pickron's company, Home Investment and Acquisitions, saying she was not properly informed of all aspects of the agreement. The Real Estate Department revoked Pickron's sales license and fined him $2,000, finding that he violated a state law prohibiting agents from making "false promises."
Pickron is appealing. Randolph again owns the home near South Pantano and East Escalante roads and has it listed for sale at $235,000.
Other areas of concern
While investigators review complaints from the public and fellow agents, the department also deals with administrative problems or licensing issues, which are sometimes brought forward by the agents involved.
More commonly, the department deals with licensing issues and other complaints in which nobody is alleged to have lost money. Among recent examples from Southern Arizona:
● Ellen Clark, designated broker at Pioneer Properties, 4625 E. Broadway, was fined $2,000 after operating for about three months without a broker's license. Her application to renew that license was later granted, according to a department summary. Clark did not return phone calls from the Arizona Daily Star.
● Three Tucson residents were denied real-estate licenses based on their criminal records. Two other Tucsonans appealed and were granted provisional licenses.
● Gary Brasher, chairman of the department's own advisory board, paid a $375 fine after his Tubac-based business, Brasher Real Estate Inc., allowed an employee to continue work as a salesman after his license had expired. Separately, the business had to pay a $500 fine. The company discovered the error through an internal audit and notified the department.
While the majority of real-estate agents and Realtors are professional and competent, the overall quality of service is a concern within the profession, said Gary Best, a top-selling commercial broker at Realty Executives of Southern Arizona and president of the Tucson Association of Realtors.
"We do hear it on the street," Best said. " The seasoned Realtors do express concern."
Few state investigators
While the association is ramping up ethics training, the number of state investigators remains low.
An investigator was assigned to work in Tucson years ago, said Mary Utley, a department spokeswoman. That position was moved to Phoenix in an effort to be more efficient. One new investigator and one administrative employee were added this fiscal year, and the department is asking for two new investigators for the next fiscal year, Utley said.
"I don't think we've been neglectful of Southern Arizona. I think we've responded well," she said. "Obviously it (a complaint) has to be brought to our attention. If it needs immediate attention, we're not going to say, 'Take a number and we'll get to you when we can.' "
Utley said the department has made changes to deal with increased demand. Among them is a new "traffic ticket" program in which agents accused of certain minor infractions can simply acknowledge the complaint, pay a fine and be done.
In the first month, the program generated $123,000 in fines.
● Contact reporter Joseph Barrios at 573-4237 or jbarrios@azstarnet.com.