Text: HF00514 Text: HF00516 Text: HF00500 - HF00599 Text: HF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. Section 543B.5, Code 1995, is amended to read 1 2 as follows: 1 3 543B.5 OTHER DEFINITIONS. 1 4 As used in this chapter, unless the context otherwise 1 5 requires: 1 6 1. "Agency" means a relationship in which a real estate 1 7 broker acts for or represents another by the other person's 1 8 express authority in a transaction. 1 9 2. "Agency agreement" means a written agreement between a 1 10 broker and a client which identifies the party the broker 1 11 represents in a transaction. 1 12 3. "Appointed agent" means that affiliated licensee who is 1 13 appointed by the designated broker of the affiliated 1 14 licensee's real estate brokerage agency to act solely for a 1 15 client of that brokerage agency to the exclusion of other 1 16 affiliated licensees of that brokerage agency. 1 171.4. "Broker associate" means a person who has a broker's 1 18 license but is employed by or otherwise associated with 1 19 another broker as a salesperson. 1 20 5. "Brokerage" means the business or occupation of a real 1 21 estate broker. 1 22 6. "Brokerage agreement" means a contract between a broker 1 23 and a client which establishes the relationship between the 1 24 parties as to the brokerage services to be performed. 1 25 7. "Brokerage services" means those activities identified 1 26 in sections 543B.3 and 543B.6. 1 27 8. "Client" means a party to a transaction who has an 1 28 agency agreement with a broker for brokerage services. 1 29 9. "Customer" means a consumer who is not being 1 30 represented by a licensee but for whom the licensee may 1 31 perform ministerial acts. 1 32 10. "Designated broker" means a licensee designated by a 1 33 real estate brokerage agency to act for the agency in 1 34 conducting real estate brokerage services. 1 352.11. "Inactive license" means either a broker or 2 1 salesperson license certificate that is on file with the real 2 2 estate commission in the commission office and during which 2 3 time the licensee is precluded from engaging in any of the 2 4 acts of this chapter. 2 5 12. "Licensee" means a broker or a salesperson licensed 2 6 pursuant to this chapter. 2 7 13. "Material adverse fact" means an adverse fact that a 2 8 party indicates is of such significance, or that is generally 2 9 recognized by a competent licensee as being of such 2 10 significance to a reasonable party, that it affects or would 2 11 affect the party's decision to enter into a contract or 2 12 agreement concerning a transaction, or affects or would affect 2 13 the party's decision about the terms of the contract or 2 14 agreement. 2 15 For purposes of this subsection, "adverse fact" means a 2 16 condition or occurrence that is generally recognized by a 2 17 competent licensee as resulting in any of the following: 2 18 a. Significantly and adversely affecting the value of the 2 19 property. 2 20 b. Significantly reducing the structural integrity of 2 21 improvement to real estate. 2 22 c. Presenting a significant health risk to occupants of 2 23 the property. 2 24 14. "Negotiate" means to act as an intermediary between 2 25 the parties to a transaction, and includes any of the 2 26 following acts: 2 27 a. Participating in the parties' discussion of the terms 2 28 of a contract or agreement concerning a transaction. 2 29 b. Completing, when requested by a party, appropriate 2 30 forms or other written record to document the party's proposal 2 31 in a manner consistent with the party's intent. 2 32 c. Presenting to a party the proposals of other parties to 2 33 the transaction and informing the party receiving a proposal 2 34 of the advantages and disadvantages of the proposal. 2 35 15. "Party" means a person seeking to sell, exchange, buy, 3 1 or rent an interest in real estate, a business, or a business 3 2 opportunity. "Party" includes a person who seeks to grant or 3 3 accept an option to buy, sell, or rent an interest in real 3 4 estate. 3 53.16. "Salesperson" means a person employed by or 3 6 otherwise associated with a real estate broker, as a selling, 3 7 renting, or listing agent or representative of the broker. 3 8 17. "Transaction" means the sale, exchange, purchase or 3 9 rental of, or the granting or acceptance of an option to sell, 3 10 exchange, purchase, or rent an interest in real estate. 3 11 Sec. 2. NEW SECTION. 543B.56 DUTIES OF LICENSEES. 3 12 1. DUTIES TO ALL PARTIES IN A TRANSACTION. In providing 3 13 brokerage services to all parties to a transaction, a licensee 3 14 shall do all of the following: 3 15 a. Provide brokerage services to all parties to the 3 16 transaction honestly and in good faith. 3 17 b. Diligently exercise reasonable skill and care in 3 18 providing brokerage services to all parties. 3 19 c. Disclose to each party all material adverse facts that 3 20 the licensee knows except for the following: 3 21 (1) Material adverse facts known by the party. 3 22 (2) Material adverse facts the party could discover 3 23 through a reasonably diligent inspection, and which would be 3 24 discovered by a reasonably prudent person under like or 3 25 similar circumstances. 3 26 (3) Material adverse facts the disclosure of which is 3 27 prohibited by law. 3 28 (4) Material adverse facts that are known to a person who 3 29 conducts an inspection on behalf of the party. 3 30 d. Account for all property coming into the possession of 3 31 a licensee that belongs to any party within a reasonable time 3 32 of receiving the property. 3 33 2. DUTIES TO A CLIENT. In addition to the licensee's 3 34 duties under subsection 1, a licensee providing brokerage 3 35 services to a client shall do all of the following: 4 1 a. Place the client's interests ahead of the interests of 4 2 any other party, unless loyalty to a client violates the 4 3 licensee's duties under subsection 1, section 543B.58, or 4 4 under other applicable law. 4 5 b. Disclose to the client all information known by the 4 6 licensee that is material to the transaction and that is not 4 7 known by the client or could not be discovered by the client 4 8 through a reasonably diligent inspection. 4 9 c. Fulfill any obligation that is within the scope of the 4 10 agency agreement, except those obligations that are 4 11 inconsistent with other duties that the licensee has under 4 12 this chapter or any other law. 4 13 d. Disclose to a client any financial interests the 4 14 licensee or the brokerage has in any business entity to which 4 15 the licensee or brokerage refers a client for any service or 4 16 product related to the transaction. 4 17 3. PROHIBITED CONDUCT. In providing brokerage services, a 4 18 licensee shall not do either of the following: 4 19 a. Accept a fee or compensation related to a transaction 4 20 from a person other than the licensee's client, unless the 4 21 licensee has provided written notice to all parties to the 4 22 transaction that a fee or compensation will be accepted by the 4 23 licensee from such person. 4 24 b. Act in a transaction on the licensee's own behalf, on 4 25 behalf of the licensee's immediate family or brokerage, or on 4 26 behalf of an organization or business entity in which the 4 27 licensee has an interest, unless the licensee has the written 4 28 consent of all parties to the transaction. 4 29 Sec. 3. NEW SECTION. 543B.57 CONFIRMATION AND DISCLOSURE 4 30 OF RELATIONSHIP. 4 31 1. A licensee shall not represent any party or parties to 4 32 a transaction or otherwise as a licensee unless that licensee 4 33 makes an affirmative written disclosure to all parties to the 4 34 transaction identifying which party that person represents in 4 35 the transaction. The disclosure shall be acknowledged by 5 1 separate signatures of all parties to the transaction. 5 2 2. a. The disclosure required in subsection 1 shall be 5 3 made by the licensee at the time the licensee provides 5 4 specific assistance to the client, or prior to any offer being 5 5 made or accepted by any party to a transaction, whichever is 5 6 sooner. A change in a licensee's representation that makes 5 7 the initial disclosure incomplete, misleading, or inaccurate 5 8 requires that a new disclosure be made immediately. 5 9 b. For purposes of this section, "specific assistance" 5 10 means eliciting or accepting confidential information about a 5 11 party's real estate needs, motivation, or financial 5 12 qualifications. "Specific assistance" does not mean an open 5 13 house showing, preliminary conversations concerning price 5 14 range, location, and property styles, or responding to general 5 15 factual questions concerning properties which have been 5 16 advertised for sale or lease. 5 17 3. The written agency disclosure form shall contain all of 5 18 the following: 5 19 a. A statement of which party is the licensee's client or, 5 20 if the licensee is providing brokerage services to more than 5 21 one client as provided under section 543B.60, a statement of 5 22 all persons who are the licensee's clients. 5 23 b. A statement of the licensee's duties to the licensee's 5 24 client under section 543B.56, subsections 1 and 2. 5 25 c. Any additional information that the licensee determines 5 26 is necessary to clarify the licensee's relationship to the 5 27 licensee's client or customer. 5 28 4. This section does not prohibit a person from 5 29 representing oneself. 5 30 5. The seller, in the listing agreement, may authorize the 5 31 seller's licensee to disburse part of the licensee's 5 32 compensation to other licensees, including a buyer's licensee 5 33 solely representing the buyer. A licensee representing a 5 34 buyer shall inform the listing licensee, if there is a listing 5 35 licensee, either verbally or in writing, of the agency 6 1 relationship before any negotiations are initiated. The 6 2 obligation of either the seller or the buyer to pay 6 3 compensation to a licensee is not determinative of the agency 6 4 relationship. 6 5 Sec. 4. NEW SECTION. 543B.58 LICENSEES REPRESENTING MORE 6 6 THAN ONE CLIENT IN A TRANSACTION. 6 7 1. A licensee shall not be the agent for both a buyer and 6 8 a seller to a transaction without obtaining the written 6 9 consent of both the buyer and the seller. The written consent 6 10 shall state that the licensee has made a full disclosure of 6 11 the type of representation the licensee will provide. The 6 12 consent to multiple representation shall contain a statement 6 13 of the licensee's duties under section 543B.56, subsection 1, 6 14 a statement of the licensee's duties to the client under 6 15 section 543B.56, subsection 2, paragraphs "b" and "c", and a 6 16 statement that the clients understand the licensee's duties 6 17 and consent to the licensee's providing brokerage services to 6 18 more than one client. 6 19 2. A consent to multiple representation may contain 6 20 additional disclosures by the licensee or additional 6 21 agreements between the licensee and the clients that do not 6 22 violate any duty of a licensee under this chapter. 6 23 Sec. 5. NEW SECTION. 543B.59 APPOINTED AGENTS WITHIN A 6 24 FIRM. 6 25 1. APPOINTED AGENTS. A real estate brokerage agency 6 26 entering into a brokerage agreement, through a designated 6 27 broker, may notify a client in writing of those affiliated 6 28 licensees within the real estate brokerage agency who will be 6 29 acting as appointed agents of that client to the exclusion of 6 30 all other affiliated licensees within the real estate 6 31 brokerage agency. 6 32 2. DUAL AGENT. A real estate brokerage agency and a 6 33 designated broker are not considered to be dual agents solely 6 34 because of an appointment under the provisions of this 6 35 section. However, an affiliated licensee who personally 7 1 represents both the seller and the buyer in a particular 7 2 transaction is considered to be a disclosed dual agent and is 7 3 required to comply with the provisions of this subchapter 7 4 governing disclosed dual agents. 7 5 3. ACTUAL KNOWLEDGE &endash; INFORMATION. A client, a real 7 6 estate brokerage agency, and its appointed agents are deemed 7 7 to possess only actual knowledge and information at the time 7 8 the appointed agents are appointed. Knowledge or information 7 9 is not imparted by operation of law among the clients, the 7 10 real estate brokerage agency, and its appointed agents. 7 11 4. APPOINTMENTS &endash; ROLES. The commission shall define by 7 12 rule the methods of appointment and the role of the real 7 13 estate brokerage agency and the designated broker. The rules 7 14 must include a requirement that clients be informed as to the 7 15 real estate brokerage agency's appointed agent policy and be 7 16 given written notice of that policy in advance of entering 7 17 into a brokerage agreement. 7 18 Sec. 6. NEW SECTION. 543B.60 LICENSEES PROVIDING 7 19 SERVICES IN MORE THAN ONE TRANSACTION. 7 20 A licensee may provide brokerage services simultaneously to 7 21 more than one party in different transactions unless the 7 22 licensee agrees with a client that the licensee is to provide 7 23 brokerage services only to that client. If the licensee and a 7 24 client agree that the licensee is to provide brokerage 7 25 services only to that client, the agency agreement disclosure 7 26 required under section 543B.57, subsection 1, shall contain a 7 27 statement of that agreement. 7 28 Sec. 7. NEW SECTION. 543B.61 VIOLATIONS &endash; REAL ESTATE 7 29 COMMISSION JURISDICTION. 7 30 1. Failure of a licensee to comply with sections 543B.57 7 31 through 543B.60 is prima facie evidence of a violation under 7 32 section 543B.34, subsection 4. 7 33 2. Failure of a licensee to act in accordance with the 7 34 disclosures made pursuant to sections 543B.56 through 543B.58 7 35 is prima facie evidence of a violation under section 543B.34, 8 1 subsection 4. 8 2 3. Nothing in this subchapter shall affect the validity of 8 3 title to real property transferred based solely on the reason 8 4 that a licensee failed to conform to the provisions of this 8 5 subchapter. 8 6 Sec. 8. NEW SECTION. 543B.62 CHANGES IN COMMON LAW 8 7 DUTIES AND LIABILITIES OF LICENSEES AND PARTIES. 8 8 1. Except as provided in subsection 2, the duties of a 8 9 licensee specified in this chapter or in rules adopted 8 10 pursuant to this chapter supersede any fiduciary duties of a 8 11 licensee to a party to a transaction based on common law 8 12 principles of agency to the extent that those common law 8 13 fiduciary duties are inconsistent with the duties specified in 8 14 this chapter or rules adopted pursuant to this chapter. 8 15 2. This section shall not be construed to modify a 8 16 licensee's duty under common law as to negligent or fraudulent 8 17 misrepresentation of material information. 8 18 3. a. A licensee who is providing brokerage services to a 8 19 client and who retains another licensee to provide brokerage 8 20 services to that client is not liable for misrepresentation 8 21 made by the other licensee, unless the retaining licensee knew 8 22 or should have known of the other licensee's misrepresentation 8 23 or the other licensee is repeating a misrepresentation made to 8 24 the other licensee by the retaining licensee. 8 25 b. A broker is responsible for supervising a salesperson 8 26 or broker associate employed by or otherwise associated with 8 27 the broker as a representative of the broker. The existence 8 28 of an independent contractor relationship or any other special 8 29 compensation arrangement between the broker and the 8 30 salesperson or broker associate does not relieve the broker, 8 31 salesperson, or broker associate of the duties and 8 32 responsibilities established by this chapter. A salesperson 8 33 or broker associate shall keep the employing broker fully 8 34 informed of all activities being conducted on behalf of the 8 35 broker and any other activities that might impact on the 9 1 broker's responsibilities. However, the failure of the 9 2 salesperson or broker associate to keep the employing broker 9 3 fully informed does not relieve the broker of the duties and 9 4 responsibilities established by this chapter. 9 5 Sec. 9. NEW SECTION. 543B.63 LICENSEE NOT CONSIDERED 9 6 SUBAGENT. 9 7 A licensee is not considered to be a subagent of a client 9 8 of another licensee solely by reason of membership or other 9 9 affiliation by the licensee in a multiple listing service or 9 10 other similar information source, and an offer of subagency 9 11 shall not be made through a multiple listing service or other 9 12 similar information source. 9 13 Sec. 10. NEW SECTION. 543B.64 CHAPTER IS NOT LIMITING. 9 14 The duties imposed upon persons under this chapter or 9 15 pursuant to rules adopted by the real estate commission shall 9 16 not limit or abridge any duty or responsibility to disclose 9 17 created by other applicable law, or under a contract between 9 18 parties. 9 19 LSB 1788HV 76 9 20 mj/sc/14
Text: HF00514 Text: HF00516 Text: HF00500 - HF00599 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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