Friday, February 22, 2008

Is real estate disclosure in Idaho?s future?

Idaho Senate committee approves bill requiring price disclosure

Express Staff Writer

Under legislation an Idaho Senate committee approved on Wednesday, all residential real estate sales price data would have to be reported to the county assessor within 30 days. The bill?S.B. 1400?now goes to the full Senate for consideration.

Idaho's days as a state that does not require real estate sales price disclosure may be numbered.

After hearing testimony on Wednesday about a disclosure bill now proceeding through the Idaho Senate—S.B. 1400—the Senate's Local Government and Taxation Committee voted 5-3 in favor of sending the legislation on to the full Senate floor.

House Minority Leader Wendy Jaquet, D-Ketchum, is sponsoring a companion bill in the Idaho House. The bill's Senate sponsor is Sen. Shawn Keough, R-Sandpoint.

The legislation would help assessors more accurately tax homes and land in Idaho's up-and-down real estate market.

During an interview Thursday, Jaquet said she was told by a member of the Local Government and Taxation Committee that a similar bill has been considered and rejected by the committee in 17 of the last 21 years.

"It's the first time it got out of the committee," Jaquet said.

Under the draft legislation, property buyers would have to tell county assessors what they paid for residential real estate. The bill would not require disclosure of commercial real estate sales price data. The legislation considers apartment complexes with more than four units to be commercial property not subject to the disclosure requirement.

Jaquet said the next step will be for the Senate bill to be rewritten to include several minor amendments.

"Then it will be considered on the floor of the Senate," she said.

Jaquet said that could happen as early as next week.

If approved there, the legislation will be considered in the House Revenue and Taxation Committee, of which Jaquet is one of 18 members.

Though obviously elated at the success of the legislation so far, Jaquet sounded a somewhat cautious tone about its prospects for full passage.

"I don't think you can ever feel confident," she said.

A four-member delegation from Blaine County spoke in support of the legislation before the Senate committee on Wednesday. The group included Blaine County Commissioner Tom Bowman, county Assessor Valdi Pace, local appraiser Bill McCann and real estate agent and former Sawtooth Board of Realtors President Jed Gray. Real estate agents from other parts of Idaho testified in opposition to the bill.

The bill would require property buyers to disclose sales prices to assessors within 30 days. Violators could be found guilty of a misdemeanor and assessed a civil penalty.

Assessor Pace said that in Blaine County, the percentage of people who report real estate sales data to her varies from year to year, though it's always been quite low. She said that in 1999, the year she took office, 42 percent of real estate transactions were reported. Since then, she said, that number has dipped significantly. In 2005, just 13.5 percent of real estate sales in the county were reported, Pace said. In 2006 it was 15 percent, and last year it rose to 23 percent.

Pace said the rise and fall coincides with how the market is doing. She said in years when the real estate market is active—such as in 2005—people tend to not report property values out of concern that their property taxes will increase.

"Nobody wants assessors to know that," she said.

But when the real estate market takes a downturn and property values dip, people tend to want to report sales data, Pace said.

The Legislature's work on price disclosure comes as several Idaho counties, including Blaine, are considering their own ordinances.

On Thursday, Blaine County Commissioner Tom Bowman said the county will continue considering the ordinance regardless of how the state proceeds on S.B. 1400, as well as another sales price disclosure bill the Senate is considering, S.B. 1401. That legislation would require that real estate sales price data be given to real estate agents and not county assessors.

Jaquet said the bill she's co-sponsoring is a more comprehensive bill than S.B. 1401.

"It gives more information to the assessor," she said.

Jaquet said the state should take the lead on requiring price disclosure so counties don't have to.

"Is it appropriate to have 44 ordinances across the state?" she asked.

During a meeting of the Blaine County Commission last month, the commissioners got their first look at a draft ordinance requiring disclosure of sales data for all transfers of residential property in the county. Under the draft ordinance, all property transfer certificates would have to be delivered to the county assessor no later than 10 days after the closing of a transaction. The ordinance will likely be subject to a number of revisions.

During the January meeting, Blaine County Deputy Prosecutor Tim Graves addressed one of the commissioners' biggest concerns--whether the county has the legal authority under Idaho code to enact such a law.

"I think there's sufficient authority to go forward at this time," Graves said.

He said one major issue that must be addressed in any sales disclosure ordinance passed by the county is how to treat property owners' right to confidentiality. He said disclosure of sales data should not be required of businesses.

Real estate agent Jed Gray spoke at the meeting in support of passage of some kind of disclosure ordinance.

"We'll get an equitable taxation," he said.

Gray advised the commissioners to consider borrowing some of the language from Jaquet's bill when drafting their ordinance. Still, Gray said, the local board of Realtors would prefer to see Idaho legislators take the lead on the issue.

"We would like to see it universal across the state," he said.

Pace said the county's intention is to pass an ordinance by the end of April.

"We're going to have it in place and ready to go if the Legislature fails to act," she said.

Pace said the ordinance would not affect this year's property values.

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