Commercial real estate brokers and state regulators got some time to think carefully about how they want brokers who sell businesses to be regulated.
The Nevada Real Estate Commission a few days ago approved emergency regulations to help stem a rising tide of confusion surrounding a new state law regulating brokers who sell businesses.
When the regulations took effect at the start of this year, brokers worried that the sale of investment property a small apartment complex, for instance might require a business brokerage permit.
The emergency regulations approved by the commission, however, specifically exempt sales of property such as apartments, hotels and storage units from the rules.
The emergency regulations also resolve what brokers called an even more troubling requirement.
As the rules initially were written, real estate brokers would have been required to predict whether the purchaser would file an "asset acquisition statement" with the Internal Revenue Service. If the statement would be required, the broker would be required to have a permit to sell businesses.
In the emergency regulations, brokers need only to take a look backward, to see if the owner filed an IRS form showing income or loss from a business during the previous year.
The emergency regulations signed by Gov. Jim Gibbons are in effect for 120 days. In the meantime, commercial brokers and state officials will think about the shape of permanent regulations.
"This is a good stopgap measure," said Brad Bankowski, a Carson City broker who was among the brokers who raised the alarm about the regulations.
The 120 days that now are available, he said, give regulators and brokers alike time to think carefully about the implications of new regulations.
Bankowski noted that the real estate industry moved quickly once brokers saw the problems with the new regulations, and the Nevada Real Estate Commission worked quickly to adopt the emergency regulations.
"We got this done in a hurry," Bankowski said.
The regulations are needed to establish the details of a state law approved by the Legislature in 2005 that requires a special permit for brokers who sell a business.
Gail Anderson, the administrator of the state division of real estate, said the emergency regulations will be followed by a set of temporary rules. Permanent regulations can't take effect until after July 1, she said.
The business brokerage permit will require 24 hours of training, fingerprinting, a background check, and three hours of continuing education each year before the permit is renewed.
