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2d Session

Part 2

TO DEFINE, REGULATE, AND LICENSE REAL-ESTATE BROKERS AND REAL-ESTATE SALESMEN; TO CREATE A REAL-ESTATE COMMISSION IN THE DISTRICT OF COLUMBIA; AND TO PROTECT THE PUBLIC AGAINST FRAUD IN REAL-ESTATE TRANSACTIONS

MARCH 24, 1930.-Ordered to be printed

Mr. PATMAN, from the Committee on the District of Columbia, submitted the following

MINORITY REPORT

To accompany H. R. 10476)

It is claimed that this bill is for the purpose of preventing fraudulent transactions by real-estate dealers. I do not agree with the majority that it is for the benefit of the people of the District of Columbia. It is my opinion that it will benefit the real-estate dealers and no one else.

Under the present law, real-estate brokers are required to pay an annual occupational tax of $50. This brings to the District of Columbia treasury more than $20,000 each year. If this real estate bill is passed, real-estate brokers will only pay $15 a year, and that money will be used to administer the act and none of it used for public purposes. Not only will the District be deprived of more than $20,000 a year in occupational taxes, but the administration of this law is calculated to cost $75,000 to $100,000 a year in addition to the fees paid by real-estate brokers. This amount will have to be paid by the people of the District of Columbia. A better title for this bill would be "A bill to raise taxes in the District of Columbia for the benefit of real-estate brokers."

The real-estate commission under this bill will be permitted to hire such assistants as the commission may deem necessary to discharge the duties imposed by provisions of the act, and the commission shall likewise prescribe their duties and fix their compensation.

Over a period of 10 years I estimate that the administration of this act will cost the taxpayers of the District of Columbia more than a million dollars.

No one on the committee would oppose legislation that has for its purpose the preventing of fraudulent transactions by real-estate

dealers. The way to take care of an evil like that would be to amend the criminal statutes, if amendments are necessary, making such wrongful and fraudulent acts as are complained of, violations of the criminal code and providing for a sufficient penalty in the event of violations. The penalty could not be made too high or too severe to suit me, if within the bounds of reason.

The effect of this law will be to require everybody to pay a commission on the sale of their property and will be required to pay a certain amount. The bill does not stop there. The effect will be to not only require the payment of a fee on each real-estate transaction and a certain amount, but it will also require this amount to be paid to one of a few people.

If some one owning property in the District of Columbia desires to get a close relative or friend to sell his property for him, he can not do it, if this bill becomes a law, unless this relative or friend happens to be a real-estate broker. Although the relative or friend might be more interested in this person's welfare than anyone else and might be willing to handle the transaction without charge, he would not be permitted to do so under the terms of this law. This bill is backed by the real estate board. It is an old question of a majority of the members of an industry or business asking to be regulated to protect the public from them. There is no public demand for the legislation. The demand comes only from real-estate dealers.

The Better Business Bureau claims that it had filed before it 214 complaints against real-estate dealers. Sixty-one of these complaints were about the so-called free-lot scheme. In only eight of these cases did the Better Business Bureau ask for criminal action.

There is too much legislation among the States and the Federal Government creating boards and commissions. It is a difficult matter to repeal a law when it is once created. These commissions soon become top-heavy with expense and there is no way to relieve the people of them.

There is also too much of a tendency to get legislation enacted for the purpose of "keeping the other fellow out." This particular bill provides that the real-estate board will have a right to determine the competency of one seeking a broker's license. The commission will have the right to hold an examination and require that each applicant shall have a knowledge of the law and certain other requirements before being eligible to a license. The bill even states that the commission shall require proof that the applicant for a broker's license has a fair understanding of the general purposes and general legal effect of deeds, mortgages, land contracts of sale, and leases, a fair understanding of the law between principals and agents, etc. In other words, this commission has the power to make requirements that will cause licenses to be refused to any person to whom they do not desire any license be issued.

This bill was before the committee to-day, March 19, 1930. Mr. Lampert made a motion to report the bill favorably. I made a substitute motion or offered an amendment that the bill be reported back with everything stricken from it except section 14, which was the fraud section and section 16, the penalty section. My amendment was defeated. I then offered a motion to postpone further consideration of this bill for two weeks or until the Commissioners of the

District of Columbia had made their report on the bill. The chairman refused to entertain my motion and held it out of order. I think he was in error and really believe that the motion would have carried if the committee had been given an opportunity to pass on it. I believe this committee should adopt the policy of not passing on any legislation of this character without first getting an opinion from the Commissioners of the District or until the expiration of a reasonable time after the commissioners have been requested to give their opinion. It is my understanding that the Commissioners of the District of Columbia were not asked to give an opinion on this bill until just a few days ago. Therefore, the committee in all fairness, to my mind, should have waited until that report was received before acting on the bill.

The subcommittee of the District of Columbia Committee that considered this bill and held hearings on it, a number of witnesses being heard, made an unfavorable report back to the whole committee.

On the vote to favorably report the bill 9 voted for a favorable report and 5 voted against the favorable report. Had the whole committee gone into the matter as thoroughly as the subcommittee went into it, I feel sure that the bill would have been unanimously rejected.

Respectfully submitted.

WRIGHT PATMAN.

AUTHORIZING THE SECRETARY OF THE INTERIOR TO DELIVER WATER DURING THE IRRIGATION SEASON OF 1930 ON THE UNCOMPAHGRE PROJECT, COLORADO

MARCH 21, 1930.-Committed to the Committee of the Whole House on the state of the Union and ordered to be printed

Mr. SMITH of Idaho, from the Committee on Irrigation and Reclamation, submitted the following

REPORT

[To accompany S. J. Res. 151]

The Committee on Irrigation and Reclamation, to whom was referred the joint resolution (S. J. Res. 151) to authorize the Secretary of the Interior to deliver water during the irrigation season of 1930 on the Uncompahgre project, Colorado, having considered the same, report thereon with a recommendation that it do pass.

This legislation is made necessary because of the inability of the settlers on the Uncompahgre project in Colorado to meet all of their delinquent payments at this time, as provided by a contract entered into with the Uncompahgre irrigation district by the Secretary of the Interior, that water shall not be furnished if delinquent payments are not made within five years, as provided in section 45, August 20,

1926.

The economic condition of the settlers on the Uncompahgre project was considered at a conference held at Denver on February 25 and 26, which was attended by the Commissioner of Reclamation, which resulted in the creation of a committee composed of State authorities, representatives of the agricultural college, the Reclamation Bureau and the water users, to make a study of conditions and determine what should be done toward readjusting the amount owed by the settlers to the Government.

The representatives at the conference concluded that if one year's charges, including both construction and operation and maintenance, should be paid to the Government that time would be given to make arrangements regarding the adjusting of the delinquent payments.

In view of the act above referred to, water can not be furnished during the present season without congressional authority, which this

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