Maryland real estate regulators and the state association of Realtors are optimistic that Gov. Robert L. Ehrlich Jr. (R) will sign a bill passed by the General Assembly that changes how licensing and regulation staffing is funded. The bill aims to address a backlog of paperwork and complaints that have piled up as the real estate market boomed and state funds dwindled.
And a spokesman for the national organization of real estate licensing officials said he hopes Maryland will become a model for the region in having its licensing agency self-funded through fees. That runs counter to a national trend in which the fees that real estate agents pay the state are funneled to more-general budgets.
Craig A. Cheatham, chief executive of the Association of Real Estate License Law Officials, said state licensing bodies that do not have direct use of fees "have to beg to get the money back to do their jobs."
"The investigations that should be done, the training for those appointed to sit in judgment of their peers, the enforcement that is needed, the services the professionals need all suffer if there is no self-funding mechanism. And consumer education is always lopped off when you don't have your own funding," he said.
Cheatham said about 20 states have a pure self-funding system and another 15 work with appropriations from general funds, the way Maryland has done for years. The rest are somewhere in between.
While the number of licensees in Maryland has grown to 45,282 last year from 28,856 in fiscal 2001 and the number of complaints has jumped to almost 500 from 328, the number of state Department of Labor, Licensing and Regulation employees who serve as the Maryland Real Estate Commission staff has fallen to 13 authorized positions from 17, said Steven VanGrack, commission chairman.
It can take five months or more for a complaint to be assigned to an investigator and weeks for minor paperwork to go through because of the shortage of people and resources, according to state regulators.
The bill just passed by the General Assembly would cause a sea change in how the system works, bill backers said. The proposal, by Dels. Brian J. Feldman (D-Montgomery) and Susan W. Krebs (R-Carroll), would channel license fees directly to the commission rather than sending fees to the state treasury and requiring the commission to seek appropriations.
Although a last-minute amendment delays the bill from taking effect until Oct. 1, 2006, supporters say it's still a victory because it promises relief soon.
"We've been working on this for years and years, ever since I came to the commission in 1999, and I'm thrilled," VanGrack said.
He has anticipated further problems. "Conservative estimates project that there will be more than 47,000 licensees by the end of the present fiscal year," he said.
The gap in funding and staffing didn't happen just in the past year, said Mary C. Antoun, chief executive of the Maryland Association of Realtors. "I've been here 11 1/2 years, and in that time it's never been fully funded."
But because the number of licensees and real estate transactions have mushroomed with the boom of recent years, the bill is "critically important," Antoun said.
While about 90 percent of the complaints are found to be without merit and are dismissed, they need to be looked at, Antoun said. "But it takes a long time to get through the process."
Antoun said she has heard of cases that have taken five years to process.
Ehrlich hasn't taken a position on the bill, which cleared both chambers by almost unanimous votes during the hectic last moments of the session. But an Ehrlich aide said this week that the proposal is not among bills that have been flagged because of concerns. And James D. Fielder Jr., secretary of the Maryland Department of Labor, Licensing and Regulation, said Wednesday that he expects the bill to be signed.
The governor's next bill signing is set for April 26.
"We've worked for two years with the legislature and the governor to get this through," Fielder said. He said he has held staffing at 13 positions despite hiring freezes since he was appointed in January 2004 because of "a concern about delivery of services to the citizens and professionals."
He said he intends to hire four investigators and three other staffers with the new funding, raising the total to 20. "When you have a 60 percent increase in the number of licenses, you better be ramping up staff."
Said Antoun, "They are so understaffed that the vast majority of the time when you call the staff on the phone, you can't get through."