2% complaint against FCRA boss is dismissed

The Arkansas Real Estate Commission has dismissed a complaint against the Fort Chaffee Redevelopment Authority (FCRA) and its executive director related to a 2% payment to the executive director with certain property sales.

In September 2023, the Arkansas Real Estate Commission notified Daniel Mann, FCRA executive director, and the FCRA that a complaint had been filed by Steve Beam, president of Steve Beam Construction, stating that Mann and FCRA may have violated state real estate licensing law.

Dalton Person, FCRA attorney, said the complaint stated there was a violation in regards to Arkansas State Real Estate Law and The Real Estate Settlement Procedures Act (RESPA).

RESPA was signed into law in 1974 and has had a number of changes since it became effective in June 1975, “all with the intent of informing consumers of their settlement costs and prohibiting kickbacks that can increase the cost of obtaining a mortgage,” according to the National Board of Realtors website. The act was created to provide consumers with improved disclosures of settlement costs and to reduce the costs of closing by the elimination of referral fees and kickbacks.

The complaint contended that a stipulation in Mann’s contract that FCRA agrees to pay Mann a “merit compensation” of 2% of the sale price of all real property transactions in which FCRA is the seller of the property as long as he is the CEO.

Beam alleged in the complaint that the 2% commission led to questionable real estate dealings.

In a letter dated July 24, Andrea Alford, executive director the Arkansas Real Estate Commission, told Beam that the investigation of the complaint had been completed.

“(T)he investigation did not produce sufficient evidence which could be used to establish the fact that the real estate licensees named above violated the Arkansas Real Estate License Law or Rules issued by this Commission. Therefore, since the authority of the Commission is limited by this law and rules, it is necessary to dismiss your complaint,” Alford said in the letter.

The merit pay stipulation was not in Mann’s original contract when he was hired by the FCRA board of trustees in 2019, Person said. It was added with the contract dated Dec. 16, 2021, Mann said previously.

In October 2022, FCRA decided to end its use of real estate brokers, meaning the duties of selling the property now fall primarily to Mann. Mann has said this had led to a significant reduction in expenses for the authority.

“Of course, I disagree and am disappointed, but it’s the AREC decision, and I respect it,” Beam told Talk Business & Politics.