KCPA v. MREC - Appellant's Brief - Appendix

SC91125

IN THE SUPREME COURT OF MISSOURI

KANSAS CITY PREMIER APARTMENTS, INC.,

Plaintiff-Appellant,

v.

MISSOURI REAL ESTATE COMMISSION,

Defendant-Respondent.

APPEAL FROM THE CIRCUIT COURT OF PLATTE COUNTY

The Honorable Abe Shafer, Judge

APPELLANT’S BRIEF—APPENDIX

DAVID E. ROLAND, Mo. Bar #60548 Freedom Center of Missouri 5938 De Giverville Ave. St. Louis, Missouri 63112 Telephone: (314) 604-6621 Facsimile: (314) 720-0989 [email protected] Attorney for the Plaintiff/Appellant

TABLE OF CONTENTS TO APPENDIX

Judgment……………………………………………………………………………. A1

First Amendment to the U.S. Constitution………………………………………….. A7

Fourteenth Amendment to the U.S. Constitution…………………………………… A7

Article I, Section 2 of the Missouri Constitution…………………………………… A8

Article I, Section 8 of the Missouri Constitution…………………………………… A9

Article I, Section 10 of the Missouri Constitution………………………………….. A9

Article III, Section 40(30) of the Missouri Constitution……………………………. A9

Section 339.010, RSMo……………………………………………………………... A9

Section 339.170, RSMo……………………………………………………………... A14

Section 339.180, RSMo……………………………………………………………… A15

Section 558.011, RSMo……………………………………………………………… A15

20 CSR 2250-8.090…………………………………………………………………... A18

Plaintiff’s Trial Exhibit #6 (MREC Responses to Requested Stipulations)…………. A30

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IN THE CIRCUIT COURT OF PLATTE COUNTY, MISSOURI

SIXTH JUDICIAL CIRCUIT

KANSAS CITY PREMIER ) APARTMENTS, INC., ) 1I JUN 3 0 2010 (gI

) SANDRA L. OOWD Plaintiff, ) Clerk of the Circuit Court Platte County, Mo

) v. ) Case No. 07AE-CV01240

) Division 1 MISSOURI REAL ESTATE ) COMMISSION, )

) Defendant. )

JUDGMENT

On the 23 rd day of June, 2010, Plaintiff Kansas City Premier Apartments appeared

by corporate representative and by Counsel Dave Roland and Timothy J. Thonlpson.

Tiffany Le,vis and Ryan Gran appeared in person and by Counsel Dave Roland and

Timot11Y J. Thonlpson. The Missouri Real Estate Commission appeared by Counsel

Edwin Frownfelter.

The Court heard evidence and arguments of the parties.

Now on this 30th day of June, 2010, the Court lllakes the following findings and

enters judgment as follows,

1. The Court has jurisdiction over the parties and the subject mauer of this action.

2. Kansas City Premier Apartments (KCP A) filed on April 16, 2007, requesting a

declaratory judgment that § 339.010.1 does not encompass its business activities; that

Kepr'\ is exenlpt from the provisions of Chapter 339; that the Missouri Real Estate

Conlnlission (MREC) violated KCPA's right to due process as protected under the

Fourteenth Amendment and the Missouri Constitution; that the statute violates KCPA's

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freedon1 of speech as protected under the First Amendment and the Missouri

Constitution, and that the statute violates KCPA's right to equal protection of the law as

protected under the Fourteenth Amendment and the Missouri Constitution. The MREC

filed a motion to dismiss. In an order issued on November 26, 2007, Judge Hull

disrnissed KCPA's procedural due process claims, but allowed the rest ofKCPA's claims

to proceed. On June 4, 2009, the MREC filed a Petition for Preliminary Injunction and

Permanent Injunction, asking the court to prohibit KepA from continuing any of its

business activities that, in the estirnation of the court, would constitute perfonning real

estate activities \vithout a license. The requested injunction alleges violations of § §

339.101.1(3), (4), (7), (8), and (10).

3. The MREC is responsible for administering and enforcing the statutes and

regulations relating to the licensing and practice of real estate brokers and salespersons,

pO'wers delegated through Chapter 339, RSMo. Ms. Lewis does not hold and has never

held a real estate broker or salesperson license issued by the MREC.

4. KCPA is internet based with several components, including a database of real

estate advertisements; a search function that allows interested members of the public to

vie\v only those advertisements that match criteria that they select thetnselves; an online

roommate Inatching service, a collection of useful infomlation about the advantages of

living in the Kansas City area; a blog and other social media outlets that allow owners or

tnanagers of rental properties to notify prospective renters of the availability of specials

that might othenvise escape the renters' notice. KepA enters into written agreements

\vith owners and nlanagers of rental property under which KCPA agrees to post on its

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vvebsite advertisements prepared and submitted by the property owners, managers, or

brokers working on their behalf. KCP A does 110t alter these advertiselllents once they

have been provided by the properties. The MREC did not prove that any of the property

advertiseJllents on the KCPA website were false or 111isleading. If a renter notifies the

o\vner or manager of a rental property with whom KCPA has an agreement that they

discovered the property through KCPA, KCPA is paid a percentage of the first Inonths

rent. The MREC did not prove that KCPA's rental advisors have conveyed any false or

misleading infomlation about specific rental units.

5. KCPA's business activities do not include collecting rents or security deposits

for owners.KCPA does not accept money directly from renters or prospective renters

and does not handle tenant complaints for o\vners or managers of rental properties.

KCPA does not properties to prospective renters through actual in person

inspection. It does not advertise or hold itself out as a licensed real estate broker or

salesperson. KCPA does not charge or accept advance fees for advertisenlents appearing

on the KCPA website.

6. Before KCPA began Ms. Lewis contacted both the Kansas Real

Estate Commission and the MREC to find out if state laws \vould require her business

to have a license. The Kansas commission responded that no license would be

necessary. A representative of the MREC responded that her proposed activities

occupied a "grey area" of the law. Ms. Lewis thereafter conlmenced business

operations with KepA.

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7. In June of 2004, the MREC notified Ms. Lewis that her fornler elnployer had

filed a complaint alleging that KepA was unlawfully engaging in real estate

activities. On Decen1ber 26, 2006, the MREC announced its determination that

KCPA \vas violating the law. A letter signed by Janet Carder, the Executive Director

of the MREC, demanded that KCPA cease conducting real estate activity. On

January 25,2007. K,CPA's attorney, Timothy 1. Thompson, sent a well \vritten and

\vell reasoned letter to the MREC explaining why KCPA believed the law did not

apply to its business. On March 22, 2007, Kimberly Grinston, an attorney for the

MREC sent another letter stating that KCPA was violating § 339.010.1, which the

letter quoted. The letter specifically highlighted §§ 339.010.1(4), and (9), placing

these provisions in bold and italic font, but the letter did not specify any of KCPA's

business activities that it believed to violate these provisions. The letter specifically

advised KCPA that operating as a real estate broker or salesperson without a license

was a crirninal offense and it threatened to refer KepA's activities to the Missouri

Attorney General's Office and all applicable prosecuting authorities for official and

inlmediate legal action.

8. The commission did not direct Ms. Grinston to highlight the particular

provisions enlphasized in the cease-and-desist letter that bore her signature.

IT IS THEREFORE ORDERED, ADJUDGED, AND DECREED that:

1. KCPA is nol exempt from the restrictions and requirenlents of Chapter 339.

2. Sections 339.010.1(3), (4), (7), (8), (9) and (10) are not unconstitutional under the

Missouri or U"nites States Constitution.

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3. The application of Sections 339.010.1(3), (4), (7), (8), (9), and (10) are not

facially unconstitutional under the Missouri or United States Constitution.

4. Sections 339.010.1(3), (4), (7), (8), (9)) and (10), are not unconstitutionally

overbroad.

5. Sections 339.010.1(3). (4), (7), (8), (9), and (10) are not unconstitutionally vague.

6. Section 339.010.6 is not unconstitutional.

7. KCPA is not excepted from the definition in Section 339.010.1 by any of the

exceptions in Section 339.010.6.

8. The Court finds that the application of Chapter 339 RSMo to the activities of

KCPA does not violate any section of the United States or Missouri Constitutions.

With regard to the request for Injunctive Relief by MREA the Court finds and

Orders as follows:

1. MREC has shown that KCPA has performed acts which require licensure

under Chapter 339, and KepA does not hold a Missouri real estate

license under Chapter 339, RSMo.

2. MREC has shown that there are grounds for an injunction restraining KCPA

fronl certain actions under the provisions of Section 339.180.1 (I), RSMo.

WHEREFORE IT IS ORDERED, ADJUDGED AND DECREED:

1. That until KCPA complies with the requirements of Chapt.er 339 applicable to

KCPA operations, KCPA is restrained and enjoined from:

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A. Contracting with property owners to receive cOlnpensation in return for

referring prospective tenants who rent from property which is

not an enforceable contract under the terms of Section 339.160, RSMo;

B. Any act requiring real estate licensure pursuant to the terms of Cja[ter

339 RSMo.

IT IS FURTHER ORDERED, ADJUDGED AND DECRED:

That KCPA is restrained and enjoined from paying a reward or incentive to

tenants \.vho notifY property owners that they were directed to the property through

KCPA's services, which \vould violate Section 339.100.2(13) ifperfonned by a licensed

real estate broker.

All requests for relief not granted herein are denied. Costs are assessed

against KCP A.

Dated:

Judge I ;:, ({;,/30/;Z

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First Amendment to the U.S. Constitution

“Congress shall make no law respecting an establishment of religion, or prohibiting the

free exercise thereof; or abridging the freedom of speech, or of the press; or the right of

the people peaceably to assemble, and to petition the Government for a redress of

grievances.”

Fourteenth Amendment to the U.S. Constitution

Section 1. All persons born or naturalized in the United States, and subject to the

jurisdiction thereof, are citizens of the United States and of the State wherein they reside.

No State shall make or enforce any law which shall abridge the privileges or immunities

of citizens of the United States; nor shall any State deprive any person of life, liberty, or

property, without due process of law; nor deny to any person within its jurisdiction the

equal protection of the laws.

Section 2. Representatives shall be apportioned among the several States according to

their respective numbers, counting the whole number of persons in each State, excluding

Indians not taxed. But when the right to vote at any election for the choice of electors for

President and Vice President of the United States, Representatives in Congress, the

Executive and Judicial officers of a State, or the members of the Legislature thereof, is

denied to any of the male inhabitants of such State, being twenty-one years of age, and

citizens of the United States, or in any way abridged, except for participation in rebellion,

or other crime, the basis of representation therein shall be reduced in the proportion

which the number of such male citizens shall bear to the whole number of male citizens

twenty-one years of age in such State.

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Section 3. No person shall be a Senator or Representative in Congress, or elector of

President and Vice President, or hold any office, civil or military, under the United

States, or under any State, who, having previously taken an oath, as a member of

Congress, or as an officer of the United States, or as a member of any State legislature, or

as an executive or judicial officer of any State, to support the Constitution of the United

States, shall have engaged in insurrection or rebellion against the same, or given aid or

comfort to the enemies thereof. But Congress may, by a vote of two-thirds of each House,

remove such disability.

Section 4. The validity of the public debt of the United States, authorized by law,

including debts incurred for payment of pensions and bounties for services in suppressing

insurrection or rebellion, shall not be questioned. But neither the United States nor any

State shall assume or pay any debt or obligation incurred in aid of insurrection or

rebellion against the United States, or any claim for the loss or emancipation of any slave;

but all such debts, obligations and claims shall be held illegal and void.

Section 5. The Congress shall have power to enforce, by appropriate legislation, the

provisions of this article.

Article I, Section 2 of the Missouri Constitution

“That all constitutional government is intended to promote the general welfare of the

people; that all persons have a natural right to life, liberty, the pursuit of happiness and

the enjoyment of the gains of their own industry; that all persons are created equal and

are entitled to equal rights and opportunity under the law; that to give security to these

things is the principal office of government, and that when government does not confer

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this security, it fails in its chief design.”


“That no law shall be passed impairing the freedom of speech, no matter by what means

communicated: that every person shall be free to say, write or publish, or otherwise

communicate whatever he will on any subject, being responsible for all abuses of that

liberty; and that in all suits and prosecutions for libel or slander the truth thereof may be

given in evidence; and in suits and prosecutions for libel the jury, under the direction of

the court, shall determine the law and the facts.”


“That no person shall be deprived of life, liberty or property without due process of law.”

Article III, Section 40(30) of the Missouri Constitution

“The general assembly shall not pass any local or special law… where a general law can

be made applicable, and whether a general law could have been made applicable is a

judicial question to be judicially determined without regard to any legislative assertion on

that subject.”

Section 339.010, RSMo

§ 339.010. Definitions -- applicability of chapter

1. A "real estate broker" is any person, partnership, association, or corporation, foreign

or domestic who, for another, and for a compensation or valuable consideration, does, or

attempts to do, any or all of the following:

(1) Sells, exchanges, purchases, rents, or leases real estate;

(2) Offers to sell, exchange, purchase, rent or lease real estate;

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(3) Negotiates or offers or agrees to negotiate the sale, exchange, purchase, rental or

leasing of real estate;

(4) Lists or offers or agrees to list real estate for sale, lease, rental or exchange;

(5) Buys, sells, offers to buy or sell or otherwise deals in options on real estate or

improvements thereon;

(6) Advertises or holds himself or herself out as a licensed real estate broker while

engaged in the business of buying, selling, exchanging, renting, or leasing real estate;

(7) Assists or directs in the procuring of prospects, calculated to result in the sale,

exchange, leasing or rental of real estate;

(8) Assists or directs in the negotiation of any transaction calculated or intended to

result in the sale, exchange, leasing or rental of real estate;

(9) Engages in the business of charging to an unlicensed person an advance fee in

connection with any contract whereby the real estate broker undertakes to promote the

sale of that person's real estate through its listing in a publication issued for such purpose

intended to be circulated to the general public;

(10) Performs any of the foregoing acts on behalf of the owner of real estate, or interest

therein, or improvements affixed thereon, for compensation.

2. A "real estate salesperson" is any person who for a compensation or valuable

consideration becomes associated, either as an independent contractor or employee, either

directly or indirectly, with a real estate broker to do any of the things above mentioned.

The provisions of sections 339.010 to 339.180 and sections 339.710 to 339.860* shall not

be construed to deny a real estate salesperson who is compensated solely by commission

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the right to be associated with a broker as an independent contractor.

3. The term "commission" as used in sections 339.010 to 339.180 and sections 339.710 to

339.860* means the Missouri real estate commission.

4. "Real estate" for the purposes of sections 339.010 to 339.180 and sections 339.710 to

339.860* shall mean, and include, leaseholds, as well as any other interest or estate in

land, whether corporeal, incorporeal, freehold or nonfreehold, and the real estate is

situated in this state.

5. "Advertising" shall mean any communication, whether oral or written, between a

licensee or other entity acting on behalf of one or more licensees and the public, and shall

include, but not be limited to, business cards, signs, insignias, letterheads, radio,

television, newspaper and magazine ads, Internet advertising, web sites, display or group

ads in telephone directories, and billboards.

6. The provisions of sections 339.010 to 339.180 and sections 339.710 to 339.860* shall

not apply to:

(1) Any person, partnership, association, or corporation who as owner, lessor, or lessee

shall perform any of the acts described in subsection 1 of this section with reference to

property owned or leased by them, or to the regular employees thereof;

(2) Any licensed attorney-at-law;

(3) An auctioneer employed by the owner of the property;

(4) Any person acting as receiver, trustee in bankruptcy, administrator, executor, or

guardian or while acting under a court order or under the authority of a will, trust

instrument or deed of trust or as a witness in any judicial proceeding or other proceeding

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conducted by the state or any governmental subdivision or agency;

(5) Any person employed or retained to manage real property by, for, or on behalf of

the agent or the owner of any real estate shall be exempt from holding a license, if the

person is limited to one or more of the following activities:

(a) Delivery of a lease application, a lease, or any amendment thereof, to any person;

(b) Receiving a lease application, lease, or amendment thereof, a security deposit,

rental payment, or any related payment, for delivery to, and made payable to, a broker or

owner;

(c) Showing a rental unit to any person, as long as the employee is acting under the

direct instructions of the broker or owner, including the execution of leases or rental

agreements;

(d) Conveying information prepared by a broker or owner about a rental unit, a lease,

an application for lease, or the status of a security deposit, or the payment of rent, by any

person;

(e) Assisting in the performance of brokers' or owners' functions, administrative,

clerical or maintenance tasks;

(f) If the person described in this section is employed or retained by, for, or on behalf

of a real estate broker, the real estate broker shall be subject to discipline under this

chapter for any conduct of the person that violates this chapter or the regulations

promulgated thereunder;

(6) Any officer or employee of a federal agency or the state government or any political

subdivision thereof performing official duties;

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(7) Railroads and other public utilities regulated by the state of Missouri, or their

subsidiaries or affiliated corporations, or to the officers or regular employees thereof,

unless performance of any of the acts described in subsection 1 of this section is in

connection with the sale, purchase, lease or other disposition of real estate or investment

therein unrelated to the principal business activity of such railroad or other public utility

or affiliated or subsidiary corporation thereof;

(8) Any bank, trust company, savings and loan association, credit union, insurance

company, mortgage banker, or farm loan association organized under the laws of this

state or of the United States when engaged in the transaction of business on its own

behalf and not for others;

(9) Any newspaper, magazine, periodical, Internet site, Internet communications, or any

form of communications regulated or licensed by the Federal Communications

Commission or any successor agency or commission whereby the advertising of real

estate is incidental to its operation;

(10) Any developer selling Missouri land owned by the developer;

(11) Any employee acting on behalf of a nonprofit community, or regional economic

development association, agency or corporation which has as its principal purpose the

general promotion and economic advancement of the community at large, provided that

such entity:

(a) Does not offer such property for sale, lease, rental or exchange on behalf of

another person or entity;

(b) Does not list or offer or agree to list such property for sale, lease, rental or

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exchange; or

(c) Receives no fee, commission or compensation, either monetary or in kind, that is

directly related to sale or disposal of such properties. An economic developer's normal

annual compensation shall be excluded from consideration as commission or

compensation related to sale or disposal of such properties; or

(12) Any neighborhood association, as that term is defined in section 441.500, RSMo,

that without compensation, either monetary or in kind, provides to prospective purchasers

or lessors of property the asking price, location, and contact information regarding

properties in and near the association's neighborhood, including any publication of such

information in a newsletter, Internet site, or other medium.


§ 339.170. Penalty for violation

Any person or corporation knowingly violating any provision of sections 339.010 to

339.180 and sections 339.710 to 339.860 shall be guilty of a class B misdemeanor. Any

officer or agent of a corporation, or member or agent of a partnership or association, who

shall knowingly and personally participate in or be an accessory to any violation of

sections 339.010 to 339.180 and sections 339.710 to 339.860, shall be guilty of a class B

misdemeanor. This section shall not be construed to release any person from civil liability

or criminal prosecution under any other law of this state. The commission may cause

complaint to be filed for violation of section 339.020 in any court of competent

jurisdiction, and perform such other acts as may be necessary to enforce the provisions

hereof.

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1. It shall be unlawful for any person or entity not licensed under this chapter to perform

any act for which a real estate license is required. Upon application by the commission,

and the necessary burden having been met, a court of general jurisdiction may grant an

injunction, restraining order or other order as may be appropriate to enjoin a person or

entity from:

(1) Offering to engage or engaging in the performance of any acts or practices for which

a permit or license is required by this chapter upon a showing that such acts or practices

were performed or offered to be performed without a permit or license; or

(2) Engaging in any practice or business authorized by a permit or license issued pursuant

to this chapter upon a showing that the holder presents a substantial probability of serious

danger to the health, safety or welfare of any person with, or who is considering

obtaining, a legal interest in real property in this state.

2. Any such action shall be commenced either in the county in which such conduct

occurred or in the county in which the defendant resides.

3. Any action brought under this section shall be in addition to and not in lieu of any

penalty provided by this chapter and may be brought concurrently with other actions to

enforce this chapter.


§ 558.011. Sentence of imprisonment, terms--conditional release

1. The authorized terms of imprisonment, including both prison and conditional release

terms, are:

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(1) For a class A felony, a term of years not less than ten years and not to exceed thirty

years, or life imprisonment;

(2) For a class B felony, a term of years not less than five years and not to exceed fifteen

years;

(3) For a class C felony, a term of years not to exceed seven years;

(4) For a class D felony, a term of years not to exceed four years;

(5) For a class A misdemeanor, a term not to exceed one year;

(6) For a class B misdemeanor, a term not to exceed six months;

(7) For a class C misdemeanor, a term not to exceed fifteen days.

2. In cases of class C and D felonies, the court shall have discretion to imprison for a

special term not to exceed one year in the county jail or other authorized penal institution,

and the place of confinement shall be fixed by the court. If the court imposes a sentence

of imprisonment for a term longer than one year upon a person convicted of a class C or

D felony, it shall commit the person to the custody of the department of corrections for a

term of years not less than two years and not exceeding the maximum authorized terms

provided in subdivisions (3) and (4) of subsection 1 of this section.

3. (1) When a regular sentence of imprisonment for a felony is imposed, the court shall

commit the person to the custody of the department of corrections for the term imposed

under section 557.036, RSMo, or until released under procedures established elsewhere

by law.

(2) A sentence of imprisonment for a misdemeanor shall be for a definite term and the

court shall commit the person to the county jail or other authorized penal institution for

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the term of his or her sentence or until released under procedure established elsewhere by

law.

4. (1) A sentence of imprisonment for a term of years for felonies other than dangerous

felonies as defined in section 556.061, RSMo, and other than sentences of imprisonment

which involve the individual's fourth or subsequent remand to the department of

corrections shall consist of a prison term and a conditional release term. The conditional

release term of any term imposed under section 557.036, RSMo, shall be:

(a) One-third for terms of nine years or less;

(b) Three years for terms between nine and fifteen years;

(c) Five years for terms more than fifteen years; and the prison term shall be the

remainder of such term. The prison term may be extended by the board of probation and

parole pursuant to subsection 5 of this section.

(2) “Conditional release” means the conditional discharge of an offender by the board

of probation and parole, subject to conditions of release that the board deems reasonable

to assist the offender to lead a law-abiding life, and subject to the supervision under the

state board of probation and parole. The conditions of release shall include avoidance by

the offender of any other crime, federal or state, and other conditions that the board in its

discretion deems reasonably necessary to assist the releasee in avoiding further violation

of the law.

5. The date of conditional release from the prison term may be extended up to a

maximum of the entire sentence of imprisonment by the board of probation and parole.

The director of any division of the department of corrections except the board of

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probation and parole may file with the board of probation and parole a petition to extend

the conditional release date when an offender fails to follow the rules and regulations of

the division or commits an act in violation of such rules. Within ten working days of

receipt of the petition to extend the conditional release date, the board of probation and

parole shall convene a hearing on the petition. The offender shall be present and may call

witnesses in his or her behalf and cross-examine witnesses appearing against the

offender. The hearing shall be conducted as provided in section 217.670, RSMo. If the

violation occurs in close proximity to the conditional release date, the conditional release

may be held for a maximum of fifteen working days to permit necessary time for the

division director to file a petition for an extension with the board and for the board to

conduct a hearing, provided some affirmative manifestation of an intent to extend the

conditional release has occurred prior to the conditional release date. If at the end of a

fifteen-working-day period a board decision has not been reached, the offender shall be

released conditionally. The decision of the board shall be final.

20 CSR 2250-8.090

20 CSR 2250-8.090 Brokerage Service Agreements

PURPOSE: This rule requires that a listing agreement be in writing and that a copy of

the agreement be delivered to the owner before a broker may advertise or place a sign on

the property. The agreement must contain all terms, conditions, a definite expiration

date, and signatures of all parties. All information contained on the agreement shall be

carefully investigated for accuracy by the listing agent. In a cooperative listing, the

selling broker shall be presumed to be a subagent of the listing broker.

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(1) A licensee shall not advertise or place a sign upon any property offering it for sale or

lease to prospective customers without the written consent of the owner or his or her duly

authorized agent.

(2) A licensee shall not show residential property unless a broker holds a currently

effective written seller’s/lessor’s agency agreement, seller’s/lessor’s transaction

brokerage agreement, or other written authorization to show.

(3) In a commercial real estate transaction, a brokerage service agreement prepared by

legal counsel for the client/customer to be represented or assisted shall not be subject to

the provisions of 20 CSR 2250-8.090(4)-(7).

(4) Seller’s/Lessor’s Agency (Sale/Lease Listing) Agreement.

(A) Every written listing agreement or other written agreement for brokerage services

shall contain all of the following:

1. The price;

2. The commission to be paid (including any and all bonuses);

3. A definite beginning date;

4. An expiration date;

5. The licensee’s duties and responsibilities;

6. A statement which permits or prohibits the designated broker from offering subagency;

7. A statement which permits or prohibits the designated broker and/or affiliated licensee

from acting as a disclosed dual agent and if permitted, the duties and responsibilities of a

dual agent;


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from acting as a transaction broker and if permitted, the duties and responsibilities of a

transaction broker;

9. Specification of whether or not the designated broker is authorized to cooperate with

and compensate other designated brokers acting pursuant to any other brokerage

relationship as defined by 339.710 to 339.860, RSMo, including but not limited to

buyer’s agents and/or transaction brokers;

10. A statement which confirms that the seller/lessor received the Broker Disclosure

Form prescribed by the commission: a) on or before the signing of the seller’s agency

agreement, or b) upon the licensee obtaining any personal or financial information,

whichever occurs first;

11. The signatures of all owners and the listing broker or listing agent as authorized by

the broker;

12. The type of listing;

13. The legal description or the complete street address of the property, which includes

the city where the property is located; or, in the absence of a legal description or address,

a clear description which unmistakably identifies the property; and

14. All other terms and conditions under which the property is to be sold, leased, or

exchanged.

(B) The agreement shall contain no provision requiring an owner to notify the broker of

intent to cancel the listing after the expiration date.

(C) Any addendums, riders, endorsements, attachments, or changes to the listing

agreement or other written agreement for brokerage services must contain the initials of

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all parties.

(D) The licensee shall give a legible copy of every written listing agreement or other

written agreement for brokerage services to the owner of the property at the time the

signature of the owner is obtained.

(E) A licensee shall not negotiate or enter into a brokerage service agreement with an

owner if the licensee knows, or has reason to know, that the owner has a written

unexpired exclusive brokerage service agreement as to the property with another broker,

unless the owner initiates the discussion and provided the licensee has not directly or

indirectly solicited the discussion, in which case the licensee may negotiate and enter into

an agreement which will take effect after the expiration of the current agreement.

(F) No licensee shall make or enter into a net listing agreement for the sale or lease of

real property or any interest in real property; this agreement is defined as one that

stipulates a net price to be received by the owner with the excess over that price to be

received by the broker as commission.

(G) A listing agreement or other written agreement for brokerage services may not be

assigned, sold, or otherwise transferred to another broker without the express written

consent of all parties to the original agreement.

(5) Buyer’s/Tenant’s Agency Agreement.

(A) Every written buyer or tenant authorization shall contain all of the following:

1. A description of the type of property sought by the buyer or tenant;

2. The commission or fee to be paid (including any and all bonuses);


A22



6. A statement which permits or prohibits the designated broker from offering subagency;


from acting as a disclosed dual agent and if permitted, the duties and responsibilities of a

dual agent;


from acting as a transaction broker and if permitted, the duties and responsibilities of a

transaction broker;




seller’s agents and/or transaction brokers;

10. A statement which confirms that the buyer received the Broker Disclosure Form

prescribed by the commission: a) on or before the signing of the buyer’s agency


whichever occurs first;

11. The signatures of the buyers or tenants and the broker or agent as authorized by the

broker;

12. The type of agreement; and

13. All other terms and conditions prescribed by the buyers or tenants.

(B) The agreement shall contain no provision requiring a buyer or tenant to notify the

A23

broker of intent to cancel the agreement after the expiration date.

(C) Any addendums, riders, endorsements, attachments, or changes to the agreement or

other written authorization must contain the initials of all parties.

(D) The licensee shall give a legible copy of every written agreement or other

authorization to the buyer or tenant at the time the signatures are obtained and a copy of

the written authorization shall be retained in the broker’s office.

(E) A licensee shall not negotiate or enter into a brokerage service agreement with a

buyer or tenant if the licensee knows, or has reason to know, that the buyer or tenant has

a written unexpired exclusive agreement with another broker, unless the buyer or tenant

initiates the discussion and provided the licensee has not directly or indirectly solicited

the discussion, in which case the licensee may negotiate and enter into an agreement

which will take effect after the expiration of the current agreement.

(F) A buyer or tenant agency agreement may not be assigned, sold, or otherwise

transferred to another broker without the express written consent of all parties to the

original buyer or tenant agency agreement.

(6) Transaction Brokerage Agreement Between Broker and Seller/Lessor.

(A) Every written seller’s or lessor’s transaction brokerage agreement shall contain all of

the following:

1. The price;

2. The commission to be paid (including any and all bonuses);



A24


6. The signatures of all owners and the broker or affiliated licensee as authorized by the

broker;

7. The type of agreement;

8. The legal description or the complete street address of the property, which includes the

city where the property is located; or, in the absence of a legal description or address, a

clear description which unmistakably identifies the property;

9. All other terms and conditions under which the property is to be sold, leased, or

exchanged;




buyer’s agents and/or other transaction brokers; and

11. A statement which confirms that the seller/lessor received the Broker Disclosure

Form prescribed by the commission: a) on or before the signing of the transaction

brokerage agreement, or b) upon the licensee obtaining any personal or financial

information, whichever occurs first.

(B) The agreement shall contain no provision requiring an owner to notify the broker of

intent to cancel the agreement after the expiration date.

(C) Any addendums, riders, endorsements, attachments, or changes to the agreement

must contain the initials of all parties.

(D) The licensee shall give a legible copy of every written agreement to the owner of the

A25

property at the time the signature of the owner(s) is obtained.

(E) A licensee shall not negotiate or enter into a brokerage service agreement with an

owner if the licensee knows, or has reason to know, that the owner has a written

unexpired exclusive brokerage service agreement as to the property with another broker,

unless the owner initiates the discussion and provided the licensee has not directly or

indirectly solicited the discussion, in which case the licensee may negotiate and enter into

an agreement which will take effect after the expiration of the current agreement.

(F) No licensee shall make or enter into a net agreement for the sale or lease of real

property or any interest in real property; this agreement is defined as one that stipulates a

net price to be received by the owner with the excess over that price to be received by the

broker as commission.

(G) Transaction brokerage agreements may not be assigned, sold, or otherwise

transferred to another broker without the express written consent of all parties to the

original transaction brokerage agreement.

(7) Transaction Brokerage Agreement Between Broker and Buyer/Tenant.

(A) Every written buyer’s or tenant’s transaction brokerage agreement shall contain all of

the following:

1. A description of the type of property sought by the buyer or tenant;

2. The commission or fee to be paid (including any and all bonuses);




A26

6. The signatures of the buyers or tenants and the broker or affiliated licensee as

authorized by the broker;

7. The type of agreement;

8. All other terms and conditions prescribed by the buyers or tenants;




seller’s agents and/or other transaction brokers; and

10. A statement which confirms that the buyer received the Broker Disclosure Form

prescribed by the commission: a) on or before the signing of the transaction brokerage


whichever occurs first.

(B) The agreement shall contain no provision requiring a buyer or tenant to notify the

broker of intent to cancel the agreement after the expiration date.

(C) Any addendums, riders, endorsements, attachments, or changes to the agreement

must contain the initials of all parties.

(D) The licensee shall give a legible copy of every written agreement or other

authorization to the buyer or tenant at the time the signatures are obtained and a copy of

the agreement shall be retained in the broker’s office.

(E) A licensee shall not negotiate or enter into a brokerage service agreement with a

buyer or tenant if the licensee knows, or has reason to know, that the buyer or tenant has

a written unexpired exclusive agreement with another broker, unless the buyer or tenant

A27

initiates the discussion and provided the licensee has not directly or indirectly solicited

the discussion, in which case the licensee may negotiate and enter into an agreement

which will take effect after the expiration of the current agreement.

(F) Transaction brokerage agreements may not be assigned, sold, or otherwise transferred

to another broker without the express written consent of all parties to the original

transaction brokerage agreement.

(8) Other Written Authorization. Written authorization to show residential property

without an agency agreement or transaction brokerage agreement with the owner/landlord

must contain all of the following:

(A) A definite beginning date;

(B) An expiration date;

(C) The signatures of all owners or landlords and the broker or licensee as authorized by

the broker;

(D) The legal description or the complete street address of the property, which includes

the city where the property is located; or, in the absence of a legal description or address,

a clear description which unmistakably identifies the property;

(E) Permission to enter and show the property;

(F) The commission or fee to be paid (including any and all bonuses);

(G) All other terms and conditions prescribed by the owners or landlords;

(H) Any addendums, riders, endorsements, attachments, or changes to the written

authorization must contain the initials of all parties; and

(I) A statement which confirms that the owner or landlord received the Broker Disclosure

A28

Form prescribed by the commission: a) on or before the signing of the other written

authorization, or b) upon the licensee obtaining any personal or financial information,

whichever occurs first.

(9) Every written property management agreement or other written authorization between

a broker and the owners of the real estate shall:

(A) Identify the property to be managed;

(B) State the amount of fee or commission to be paid and when the fee or commission

will be paid;

(C) Specify whether security deposits and prepaid rents will be held by the broker or the

owner;

(D) Contain the beginning date of the agreement;

(E) Provide the terms and conditions for termination of the property management

agreement by the broker or the owner of the property;

(F) Include the licensee’s duties and responsibilities;

(G) Contain a statement which permits or prohibits the designated broker from offering

subagency (not applicable for transaction broker agreements);

(H) Contain a statement which permits or prohibits the designated broker and/or affiliated

licensee from acting as a disclosed dual agent and if permitted, the duties and

responsibilities of a dual agent;

(I) Contain a statement which permits or prohibits the designated broker and/or affiliated

licensee from acting as a transaction broker and if permitted, the duties and

responsibilities of a transaction broker;

A29

(J) Include specification of whether or not the designated broker is authorized to

cooperate with and compensate other designated brokers acting pursuant to any other

brokerage relationship as defined by sections 339.710 to 339.860, RSMo, including but

not limited to tenant’s agents and/or transaction brokers;

(K) Contain a statement which confirms that the landlord received the Broker Disclosure

Form prescribed by the commission:

1. On or before the signing of the brokerage relationship agreement; or

2. Upon the licensee obtaining any personal or financial information, whichever occurs

first;

(L) Contain the signatures of all the owners and the broker or affiliated licensee as

authorized by the broker; and

(M) Any addendums, riders, endorsements, or attachments to the property management

agreement or other written authorization between a broker and the owners of the real

estate shall contain the signatures of all the owners and the broker or affiliated licensee as

authorized by the broker.

(10) The licensee shall give to the owner or the owner’s authorized agent a legible copy

of every written property management agreement or other written authorization at the

time the signature of the owner is obtained. The licensee’s broker shall retain a copy of

the written property management agreement or other written authorization and a signed

copy of any addendums, riders, endorsements, or attachments to the written property

management agreement or other written authorization.

A30

Plaintiff’s Trial Exhibit #6 (MREC Responses to Requested Stipulations)

While the Exhibit Index of the Trial Transcript shows that Plaintiff’s Exhibit #6

was “not offered,” it clearly was approved by Defendant’s counsel, Tr. at 8-10, and

admitted into evidence. Tr. at 297.

Stipulations to be Requested of MREC

1. When assuming their position on the Missouri Real Estate Commission (MREC),

every member took an oath “to support the Constitution of the United States and of this

State.”

The circumstances under which Commissioners take office are within the control of

the Governor’s office. Such an oath is required of all state officers by Article VII,

Section 11 of the Missouri Constitution.

2. Under § 339.170, “Any person or corporation knowingly violating any provision

of sections 339.010 to 339.180 and sections 339.710 to 339.860 shall be guilty of a class

B misdemeanor.”

Agreed.

3. Under § 558.011.1(6), a class B misdemeanor is punishable by imprisonment for

“a term not to exceed six months.”

Agreed.

A31

4. The injunction requested by the MREC seeks to prevent KCPA from engaging in

specified future communications or publications the MREC believes to be prohibited by

Chapter 39, but not to punish any past violations of Chapter 339.

Agreed.

5. The decision by the MREC to seek an injunction does not prevent it from seeking

to impose against KCPA and its rental advisors any criminal penalties authorized by §

339.170.

Agreed, although it has not been the practice of the MREC to file complaints

in Circuit Courts under this section and the MREC has not done so in at least

twenty years, if ever, as far as is known.

6. The injunction requested by the MREC seeks not to terminate all business

operations in which KCPA is currently involved, but to prohibit those aspects of its

business that, in the opinion of the MREC, violate Chapter 339.

Agreed, except that the injunction would apply to those aspects of the

business which violated Chapter 339 in the determination of the Court, not

the opinion of the MREC.

7. The injunction requested by the MREC seeks to prevent KCPA and its rental

advisors from publishing or otherwise communicating certain information related to the

availability of real estate for rent.

A32

Agreed, provided that the communications in question violate the provisions

of Chapter 339, RSMo.


advisors from publishing or otherwise communicating information about specific rental

properties even if the information itself was produced by an authorized person, such as

one holding a license from the MREC or one exempted from the restrictions of Chapter

339.

Only agreed in part. The communications may be permitted if done in

accordance with Chapter 339 and MREC regulations under the supervision

of a licensed real estate broker. The fact that the communications might have

been written or produced by a licensed broker is not necessarily

determinative, if the communications are published by KCPA mixed with

those produced by owners, outside the supervision and approval of a licensed

broker.


advisors from offering to members of the public information or opinions about specific

rental properties that KCPA or its rental advisors believe might fit the interests of those

members of the public, regardless of the truth or accuracy of that information or the

sincerity of those opinions.

Agreed.

A33


advisors from engaging in “interactive communication with prospective tenants, whether

in person or through media including telephone, email, or written communications,

intended to communicate to that prospective tenant possible rental/leasing units,

providing advice to prospective tenants as to available rental/leasing units, or otherwise

assisting, directing, or negotiating the rental or leasing of real estate.”

Agreed.


advisors from communicating with the owners or managers of real property “in person or

through any media… to [offer or] provide services in procuring, identifying, negotiating,

or assisting in the rental or leasing of real estate units.”

Agreed.

12. It is the position of the MREC that KCPA’s business activities would comply with

the provisions of Chapter 339 if the corporation and its principals obtained the proper

licensure.

Agreed as to most of the aspects of KCPA’s business. One central feature of

KCPA’s business model – the delivery of “Visa Cards” to tenants who lease

apartments and provide KCPA’s name to landlords – appears to constitute

“prizes, money, gifts or other valuable consideration as inducement to secure

A34

customers or clients to . . . lease . . . property when the awarding of such

prizes, money, gifts or other valuable consideration is conditioned upon the . .

. lease,” which licensed real estate professionals are prohibited from doing

under Section 339.100.2(13), RSMo.

13. The MREC does not allege that any specific information contained in the rental

property advertisements posted on the KCPA website was prepared by anyone other than

a broker or owner of the rental property advertised.

Agreed.

14. The MREC has no evidence that any specific information contained in the rental

property advertisements posted on the KCPA website was prepared by anyone other than

a broker or owner of the rental property advertised.

Agreed.

15. The MREC does not allege that any specific information contained in the rental

property advertisements posted on the KCPA website is false or misleading.

Agreed as to content of listings themselves. Some of the statements of KCPA

itself, as itemized in the MREC’s response to Interrogatory No. 10 of KCPA’s

second First Set of Interrogatories (served March 26, 2010), which is

incorporated herein by reference, constitute claims as to its authority and

competence which the MREC believes are false or misleading. However,

A35

MREC does not have information indicating that any of the property

advertisements on the website are false or misleading.

16. The MREC has no evidence that any of the information about specific rental units

advertised on the KCPA website is false or misleading.

See response to Stipulation No. 15.

17. The MREC does not allege that any specific information provided by one of

KCPA’s rental advisors to a member of the public was false or misleading.

Agreed that no false or misleading information was alleged, because MREC

did not have access to any information provided by KCPA Rental Advisors to

members of the public until such information was provided late in the

discovery process.

18. The MREC has no evidence that any information about specific rental units

conveyed by one of KCPA’s rental advisors to a member of the public was false or

misleading.

Agreed that no false or misleading information about specific rental units has

been identified in the information made available to MREC. Some

statements of KCPA Rental Advisory may be false or misleading as to their

legal authority to perform services they stated they could do.

A36

19. The MREC does not allege that it expects Missouri citizens to suffer any specific,

quantifiable harm if KCPA or similar organizations are permitted to continue offering

truthful, non-misleading information about real estate available for rent.

Not agreed. To the extent services performed by KCPA violate the law

requiring licensure to perform real estate brokerage services, harm to the

public, to potential clients and consumers, and to licensed professionals may

result. MREC does not intend to plead or prove any specific harm, but will

not stipulate that such conduct is not inherently harmful or that specific,

quantifiable harm is not expected.

20. The MREC has no evidence tending to suggest that Missouri citizens are likely to

suffer any specific, quantifiable harm if KCPA and its rental advisors are permitted to

continue offering truthful, non-misleading information about real estate available for rent.

See response to No. 19, above.

21. The MREC does not allege that, separate from the communications and

publications it seeks to enjoin, any particular owner or manager whose properties are

advertised on the KCPA website would be legally prohibited from entering into rental

agreements with members of the public.

MREC does not allege and does not intend to offer proof that any legally

prohibited practices have taken place, but cannot stipulate that such conduct

A37

did not occur.

22. The MREC has no evidence that, separate from the communications and

publications it seeks to enjoin, any particular owner or manager whose properties are

advertised on the KCPA website has violated any law by entering into rental agreements

with members of the public.

MREC does not allege and does not intend to offer proof that any legally

prohibited practices have taken place, but cannot stipulate that such conduct

did not occur.

23. For the purposes of this case, it is the position of the MREC that Chapter 339’s

restrictions on the communication and publication of real estate information are

necessary to protect the state’s interest in guaranteeing that such information is only

distributed by persons or entities that have demonstrated that they are of “good moral

character; bear a good reputation for honesty, integrity, and fair dealing; and are

competent to transact the business of a broker or salesperson in such a manner as to

safeguard the interest of the public”; and to ensure that those entrusted with the

communication and publication of such real estate commission may be disciplined for

various forms of misconduct.

Agreed.

24. For the purposes of this case, it is the position of the MREC that § 339.010.1(4):

A38

a. forbids unauthorized persons from making any list of real estate for sale,

lease, rental or exchange, regardless of whether it is published or otherwise

communicated for the consideration of any other person.

The term “unauthorized persons” supports an inference that the activity is

inherently illegal. A better term would be “unlicensed.” To the extent

that this stipulation is applies to unlicensed persons, such practices are

illegal only if done for another and for compensation or valuable

consideration.

b. permits unauthorized persons to make a list of real estate for sale, lease,

rental or exchange, so long as it is not published or otherwise

communicated for the consideration of any other person.



that this stipulation is applies to unlicensed persons, agreed.

c. prohibits unauthorized persons from publishing or communicating any

notice that a particular piece of real estate is available for sale, lease, rental

or exchange, even if the information communicated was prepared by a third

party.


A39




consideration.

25. The MREC has not published any formal definition of what it means to “list” real

estate for sale, lease, rental or exchange, as that word is used in § 339.010.1(4).

Agreed.

26. No representative of the MREC has the authority to advise a citizen whether a

particular communication or publication about real estate has violated or would risk

violating § 339.010.1(4) without the MREC first taking a vote on the communication or

publication in question.

MREC representatives and staff may not give legal advice, nor make

statements binding on the MREC. MREC staff do provide a certain amount

of information to the public, such as advising inquirers of the existence of

statutes and regulations addressing their questions and directing them to the

language of those laws, providing information from MREC directives and

public policy statements, and directing inquirers to resources from which

their questions may be answered.


A40

a. forbids any unauthorized person from communicating to another the

availability of real estate for sale, exchange, leasing or rental, regardless of

any agreement between the unauthorized person and the owner or manager

of the real estate in question.





consideration.

b. forbids unauthorized persons from communicating to another the

availability of real estate for sale exchange, leasing or rental, only if the

communication is made as the result of an agreement between the

unauthorized person and the owner or manager of the real estate in

question.

MREC is unable to respond to this request due to uncertainty about what

the “only if” language of the proposed stipulation is intended to mean.

c. forbids unauthorized persons from taking any steps to draw the attention of

the general public to information communicating the availability of real

estate for sale exchange, leasing or rental, even if that information is

A41

passively presented (as in a newsprint advertising flyer that might be placed

at the entrance to an area business).





consideration. In addition, the presentation of advertising is permissible if

the advertising is “incidental” to the presenter’s operations. See Section

339.010.6(9).

28. The MREC has not published any official definition of what it means to “procure a

prospect calculated to result in the sale, exchange, leasing or rental of real estate” as that

phrase is used in § 339.010.1(7).

Agreed.


particular communication or publication has violated or would risk violating §

339.010.1(7) without the MREC first taking a vote on the communication or publication

in question.



A42






30. The MREC has not published any official definition of what it means to negotiate

“any transaction calculated or intended to result in the sale, exchange, leasing or rental of

real estate” as that phrase is used in § 339.010.1(8).

Agreed.


particular communication or publication has violated or risks violating § 339.010.1(8)

without the MREC first taking a vote on the communication or publication in question.








A43


a. forbids unauthorized persons from serving as a conduit of information

between prospective renters or purchasers of real estate and the owners or

managers of that real estate, if and only if the unauthorized person attempts

to influence the terms under which the parties might reach an agreement as

to the terms of a real estate transaction.

b. forbids unauthorized persons from serving as a conduit of information


managers of that real estate if the purpose of communicating that

information is to reach mutually agreeable terms for a transaction,

regardless of whether the unauthorized person is attempting to influence the

position taken by either party regarding the potential terms of such a real

estate transaction.

c. forbids unauthorized persons from serving as a conduit of information


managers of that real estate if the communication of that information might

lead to the “sale, exchange, leasing or rental of real estate.”

These proposed stipulations are drawn with such complex, ambiguous, and

confusing language that MREC declines to stipulate to them. The MREC has

not adopted a detailed definition of what is involved in the process of

“negotiation,” and applies that definition on a case by case basis. It has not

A44

made the kind of detailed findings which this stipulation seems to be seeking.

As an unlicensed entity, KCPA cannot “assist or direct in the negotiation of

any transaction calculated or intended to result in the . . . leasing or rental of

real estate,” in the ordinary meanings of those words.

33. For the purposes of this case, it is the position of the MREC that it will not vote on

whether any particular communication or publication would violate any particular

provision of Chapter 339 unless in response to a complaint filed about that

communication or publication, or a complaint about the person or organization that

issued the communication or publication.

Not agreed. The MREC acts on information from a variety of sources, not all

of which comes directly from complaints. However, MREC must also make

decisions about how finite resources for investigation and enforcement will be

employed, and rejects any claim that the fact that a particular situation has

not been addressed represents a determination that there has been

compliance with the law in that situation or that the conduct in that situation

could not be addressed in the future. There can be a variety of reasons why a

situation involving potentially illegal conduct has not been addressed,

including but not limited to that the situation has not been brought to the

MREC’s attention; that there are evidentiary or practical reasons why

enforcement would not be effective; and that the conduct has not been

pursued as a matter of priority decisions.

A45

34. The MREC has no evidence that KCPA or its rental advisors have attempted to

influence the terms under which owners or managers of rental property and prospective

renters might enter into an agreement to rent or lease the property.

Not agreed. In email messages turned over in discovery, one rental advisor

makes statements which appear to encourage the prospective renter to

negotiate a “very good deal.”

35. The MREC has no evidence that KCPA is “engaging in the business of charging

an advance fee in connection with any contract whereby it undertakes to promote the sale

of that person’s real estate through its listing in a publication issued for such purpose

intended to be circulated to the general public” as that phrase is used in § 339.010.1(9).

Agreed.

36. The MREC has not published any official definition of what it means for a person

not licensed by the MREC to be “retained to manage real property by, for, or on behalf of

the agent or the owner of any real estate” as that phrase is used in § 339.010.6(5).

Agreed.

37. No representative of the MREC has the authority to advise a citizen whether they

meet the exemption established in § 339.010.6(5) without the MREC first taking a vote

on that question.

A46








38. The MREC has not published any official definition of what it means for the

advertising of real estate to be “incidental” to the operation of a “newspaper, magazine,

periodical, Internet site, Internet communications, or any form of communications

regulated or licensed by the Federal Communications Commission” as that phrase is used

in § 339.010.6(9).

Agreed.

39. No representative of the MREC has the authority to advise a citizen whether they

meet the exemption established in § 339.010.6(9) without the MREC first taking a vote

on that question.





A47




40. For the purposes of this case, it is the position of the MREC that the advertising of

real estate is “incidental” to the operation of a “newspaper, magazine, periodical, Internet

site, Internet communications, or any form of communications regulated or licensed by

the Federal Communications Commission” when:

a. The advertising of real estate accounts for XX% of the revenue generated

by the business.

b. The advertising of real estate accounts for XX% of the time spent by

employees or contractors of the business.

c. The advertising of real estate is part of the job description of XX% of the

employees or contractors of the business.

d. The advertising of real estate makes up XX% of the information conveyed

by the media produced by the business.

The MREC has never adopted a definition of “incidental” which incorporates

factors such as these.

41. For the purposes of this case, it is the position of the MREC that it will not vote on

whether any person or organization meets one of the exemptions provided by Chapter

339 unless in response to a complaint filed about that person or organization.

A48

As noted in the response to Stipulation No. 33, above, which is incorporated

in this answer, the MREC acts on information from a variety of sources and

is not limited to information coming from complaints. Decisions as to

whether any particular exception applies is one of many factors which the

MREC must consider in its determinations as to any particular situation

which comes before it, and such determinations are made on a case-by-case

basis depending on the facts of the situation before it.

42. It is possible that rental advisors hired by KCPA might provide prospective tenants

a range of information about the Kansas City area that would not fall within the

prohibitions of set out in Chapter 339.

Some of the activities offered by KCPA can be performed by unlicensed

persons. Some specific examples are identified in the response to

Interrogatory No. 5 of KCPA’s second First Set of Interrogatories (served

March 26, 2010), which is incorporated herein by reference.

43. While the MREC believes that part of the information offered by KCPA’s rental

advisors falls within the prohibitions set out in Chapter 339, none of the chapter’s

provisions specifically prohibits the practice of making rental advisors available to the

public.

Not agreed. While the statute does not employ the term “rental advisors,” the

fact that unlicensed persons may be “advising” prospective tenants and

A49

members of the public as to potential rental or lease transactions is clearly

within the scope of the statute.

44. For the purposes of this case, it is the position of the MREC that none of the

statutes cited in the MREC’s request for an injunction prohibits KCPA from giving

renters a $100 reward card if the renters tell the owners or managers of their rental

property that they discovered the property after visiting the KCPA website.

Not agreed. If a similar approach were employed by a licensed real estate

professional or association, there would be cause for discipline under Section

339.100.2(13), RSMo. for offering “prizes, money, gifts or other valuable

consideration as inducement to secure customers or clients to . . . lease . . .

property when the awarding of such prizes, money, gifts or other valuable

consideration is conditioned upon the . . . lease.” If a person performing a

certain service legally is prohibited from doing certain things in connection

with that service, it stands to reason that a person performing the same

service illegally is equally prohibited from doing so.

45. The MREC has no evidence that any property owner has been required to pay for

advertising on the KCPA website unless a qualified resident rented an advertised property

and notified the landlord that they learned of the availability through KCPA.

Agreed, as far as MREC knows.

A50

46. For the purposes of this case, it is the position of the MREC that, so long as they

avoided making any false or misleading statement, nothing in Chapter 339 would prevent

“any licensed attorney-at-law” from communicating to the general public precisely the

same information that the requested injunction would prohibit KCPA or its rental

advisors from providing.

There is an exception for attorneys-at-law under Section 339.010.6(2), but the

MREC has not been presented with and determined this precise issue.

47. For the purposes of this case, it is the position of the MREC that, so long as they

avoided making any false or misleading statement, nothing in Chapter 339 would prevent

“any licensed attorney-at-law” from offering information about real estate in the Kansas

City area, even if the attorney in question had never been to the Kansas City area and had

no special knowledge about the real estate in question.

There is an exception for attorneys-at-law under Section 339.010.6(2), but the

MREC has not been presented with and determined this precise issue.

48. It is the position of the MREC that only those who hold licenses from the MREC

or are otherwise exempt from the provisions of Chapter 339 may hold themselves out to

the public as “experts on Kansas City” or “veterans within the apartment community.”

Not agreed. The issue is not with the claims that were made, but the use that

was made of them – i.e., to encourage members of the public to employ

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KCPA’s services in arranging transactions for the rental of real estate, for

another and for compensation or valuable consideration. The proposed

stipulation would apply to a much broader range of situations.

49. None of the positions that the MREC has taken for the purpose of this case

regarding the interpretation or application of specific provisions of Chapter 339 is

binding on the MREC in regard to any other set of facts.

It is true, as a general rule, that no action the MREC takes in one case is

“binding” on the MREC in any other situation involving similar but not

identical facts. The MREC strives for consistency in its determinations, but

there are often subtle differences between apparently similar situations, and

different facts may lead to a different result.

Documents

KCPA v. MREC - Appellant's Brief - Appendix