NAR Praised for Managing Oil Spill Fund
The Deepwater Horizon drilling rig explosion and subsequent oil spill was indeed a tragedy that affected many real estate practitioners. But the relationship that was established between the Gulf Coast state REALTOR® associations and Kenneth Feinberg, appointed administrator of the $20 billion BP escrow fund, could serve as a future model for management of emergency compensation.

Feinberg spoke with praise at the 2010 REALTORS® Conference & Expo in New Orleans Sunday, touching on the successful demonstration of reimbursement need among real estate practitioners in the Gulf, and NAR’s competence in fair and equitable distribution of funds.

“The REALTORS® came to me and said, ‘We have a truly unique problem in the Gulf,’” Feinberg said. Over several weeks in the summer, he met with real estate practitioners, association leaders, NAR CEO Dale Stinton, and others. They asked him to meet REALTORS® who suffered loss of income from cancelled transactions when the oil was gushing. By August, Feinberg was convinced that the real estate practitioners’ losses were caused by the oil spill.

Feinberg decided to set aside $60 million specifically for real estate professionals’ claims. In a creative move, he turned the management of the funds over to the Louisiana, Mississippi, Alabama, Florida, and Texas REALTOR® associations and NCA, an independent claims adjustment firm.

“I took a pot of money out of the $20 billion escrow fund and walked out on a limb,” said Feinberg, who pointed out that no one else has better knowledge and credibility when it comes to the real estate industry than NAR.

“You’ve got people on the ground and in the field examining these claims,” Feinberg said of the state associations and NCA. The program’s effectiveness and efficiency has been proven over the past three months, Feinberg said, as he reviewed the real estate-related payments. More of the $20 billion BP escrow fund will be turned over to the state associations as the claims process continues and the $60 million is depleted.

“[NAR] has a reputation in doing what it says it will do,” Feinberg said. “This is an example of an organization that steps up for its members.”

—Erica Christoffer, REALTOR® Magazine