House File 541 H-1225 Amend House File 541 as follows: 1 1. By striking everything after the enacting clause and 2 inserting: 3 < DIVISION I 4 REAL ESTATE LICENSEES 5 Section 1. Section 543B.15, subsection 3, Code 2017, is 6 amended to read as follows: 7 3. a. An applicant for a real estate broker’s or 8 salesperson’s license who has been convicted of an offense 9 specified in this subsection shall not be considered for 10 licensure until the following time periods have elapsed 11 following completion of any applicable period of incarceration, 12 or payment of a fine or fulfillment of any other type of 13 sentence: 14 (1) For an offense which is classified as a felony, two 15 an offense including or involving forgery, embezzlement, 16 obtaining money under false pretenses, theft, arson, extortion, 17 conspiracy to defraud, or other similar offense, or any other 18 offense involving a criminal breach of fiduciary duty, five 19 years. 20 (2) Notwithstanding subparagraph (1), for offenses 21 including or involving forgery, embezzlement, obtaining money 22 under false pretenses, theft, arson, extortion, conspiracy to 23 defraud, or other similar offense, any offense involving moral 24 turpitude, or other offense involving a criminal breach of 25 fiduciary duty, five years. For any offense not described in 26 subparagraph (1) involving moral turpitude, one year. 27 b. After expiration of the time periods specified in 28 paragraph “a” , an application shall be considered by the 29 commission pursuant to subsection 6 and may be denied on the 30 grounds of the conviction. An applicant may request a hearing 31 pursuant to section 543B.19 in the event of a denial. 32 c. For purposes of this section , “convicted” or “conviction” 33 means a conviction for an indictable offense and includes a 34 court’s acceptance of a guilty plea, deferred judgment from 35 -1- HF541.1620 (1) 87 gh/rn 1/ 10 #1.

the time of entry of the deferred judgment until the time the 1 defendant is discharged by the court without entry of judgment, 2 or other finding of guilt by a court of competent jurisdiction 3 in this state, or in any other state, territory, or district 4 of the United States, or in any foreign jurisdiction. A copy 5 of the record of conviction is conclusive evidence of such 6 conviction. 7 Sec. 2. Section 543B.16, Code 2017, is amended to read as 8 follows: 9 543B.16 Application forms. 10 1. Every applicant for a real estate broker’s license shall 11 apply in writing upon blanks prepared or furnished by the 12 real estate commission. The real estate commission shall not 13 require that a recent photograph of the applicant be attached 14 to the application. The real estate commission shall only 15 require an applicant to disclose on the application criminal 16 convictions for crimes classified as indictable offenses. 17 2. Every applicant for a license shall furnish information 18 setting forth the applicant’s present mailing address , both of 19 business and residence, a complete list of all former places 20 where the applicant may have been engaged in business for a 21 period of sixty days or more, during the last five years, 22 accounting for such entire period and electronic mail address . 23 3. The commission shall prepare and furnish written 24 application blanks for the salesperson’s license requesting 25 information as the commission may require. The commission 26 shall not require that a recent photograph of the applicant be 27 attached to the application. The application Every applicant 28 for the a salesperson’s license shall be accompanied by furnish 29 a written statement by the designated broker whose service the 30 applicant is about to enter recommending that the license be 31 granted to the applicant. 32 Sec. 3. Section 543B.29, subsection 4, Code 2017, is amended 33 to read as follows: 34 4. A real estate broker’s or salesperson’s license shall be 35 -2- HF541.1620 (1) 87 gh/rn 2/ 10

revoked following three violations of this section or section 1 543B.34 within a five-year three-year period. 2 Sec. 4. Section 543B.31, Code 2017, is amended to read as 3 follows: 4 543B.31 Place of business —— branch license . 5 Every real estate broker, except as provided in section 6 543B.22 , shall maintain a place of business in this state. A 7 real estate broker may maintain more than one place of business 8 within the state and a broker may be the designated broker of 9 more than one branch office within the state. If the real 10 estate broker maintains more than one place of business within 11 the state, a duplicate license shall be issued to such broker 12 for each branch office maintained. Provided, that if such 13 broker be a partnership, association, corporation, professional 14 corporation, or professional limited liability company a 15 duplicate shall be issued to the members or officers thereof, 16 and a A fee determined by the real estate commission in each 17 case shall be paid for each duplicate license. 18 Sec. 5. Section 543B.32, Code 2017, is amended to read as 19 follows: 20 543B.32 Change of location. 21 Notice in writing , electronic or otherwise, shall be given 22 to the real estate commission by each licensee of any change 23 of principal business location, whereupon the commission shall 24 issue a new license for the unexpired period upon the payment 25 of a fee established by rule to cover the cost of issuing the 26 license. 27 Sec. 6. Section 543B.33, Code 2017, is amended to read as 28 follows: 29 543B.33 Salespersons —— change of employment or association . 30 When any real estate salesperson is discharged or terminates 31 employment or association with the real estate broker by 32 whom the salesperson is employed, the real estate broker 33 shall immediately deliver , or mail , or electronically submit 34 to the real estate commission a copy of the real estate 35 -3- HF541.1620 (1) 87 gh/rn 3/ 10

salesperson’s license on the reverse side of which the 1 employing designated broker shall set out the date and cause 2 of termination of employment . The real estate designated 3 broker at the time of mailing submitting a copy of the real 4 estate salesperson’s license to the commission shall address 5 a communication to the last known residence address of the 6 real estate salesperson stating that a copy of the license 7 has been delivered , or mailed , or electronically submitted 8 to the commission. A copy of the communication to the real 9 estate salesperson shall accompany the copy of the license 10 when mailed or delivered submitted to the commission. It is 11 unlawful for any real estate salesperson to perform any of the 12 acts contemplated by this chapter either directly or indirectly 13 under authority of a license from and after the date of receipt 14 of a copy of the license by the commission. The commission 15 shall, upon presentation of evidence by the salesperson that 16 the salesperson has been employed by or is associated with 17 another broker, issue another license for the balance of the 18 current license period showing each change of employment or 19 association . A fee as determined by the commission shall be 20 charged for the issuance of the license. Not more than one 21 license shall be issued to any real estate salesperson for the 22 same period of time. 23 Sec. 7. Section 543B.34, subsection 1, unnumbered paragraph 24 1, Code 2017, is amended to read as follows: 25 The real estate commission may upon its own motion and 26 shall upon the verified complaint in writing of any person, 27 if the complaint together with evidence, documentary or 28 otherwise, presented in connection with the complaint makes 29 out a prima facie case, request commission staff or any other 30 duly authorized representative or designee to investigate the 31 actions of any real estate broker, real estate salesperson, or 32 other person who assumes to act in either such capacity within 33 this state . The commission may assess civil penalties against 34 any person or entity , and may suspend or revoke a license 35 -4- HF541.1620 (1) 87 gh/rn 4/ 10

issued under this chapter at any time if the licensee has by 1 false or fraudulent representation obtained a license, or if 2 the licensee or other person assuming to act in the capacity 3 of a real estate broker or real estate salesperson, except for 4 those actions exempt pursuant to section 543B.7 , is found to be 5 guilty of any of the following: 6 Sec. 8. Section 543B.34, subsection 1, paragraph i, 7 subparagraph (1), subparagraph division (b), Code 2017, is 8 amended to read as follows: 9 (b) A citizen of another country acting as a referral 10 agent if that country does not license real estate brokers or 11 salespersons and if the Iowa licensee paying the commission or 12 consideration obtains and maintains reasonable written evidence 13 that the payee is a citizen of the other country, is not a 14 resident of this country, and is in the business of brokering 15 real estate in that other country. 16 Sec. 9. Section 543B.34, subsection 1, paragraph i, 17 subparagraph (2), subparagraph division (b), Code 2017, is 18 amended to read as follows: 19 (b) The employing broker is not relieved of any obligation 20 to supervise the employed licensee or any other requirement of 21 this chapter or the rules adopted pursuant to this chapter . 22 Sec. 10. Section 543B.46, Code 2017, is amended to read as 23 follows: 24 543B.46 Trust accounts. 25 1. Each real estate broker who is in the practice of 26 depositing funds in a trust account shall maintain a common 27 trust account in a bank, savings association, or credit union 28 federally insured depository institution for the deposit of 29 all down payments, earnest money deposits, or other trust 30 funds received by the broker or the broker’s salespersons on 31 behalf of the broker’s principal, except that a broker acting 32 as a salesperson shall deposit these funds in the common trust 33 account of the broker for whom the broker acts as salesperson. 34 The account shall be an interest-bearing account. The interest 35 -5- HF541.1620 (1) 87 gh/rn 5/ 10

on the account shall be transferred quarterly to the treasurer 1 of state and transferred to the Iowa finance authority for 2 deposit in the housing trust fund established in section 3 16.181 unless there is a written agreement between the buyer 4 and seller to the contrary. The broker shall not benefit 5 from interest received on funds of others in the broker’s 6 possession. A broker who is not in the practice of depositing 7 funds in a trust account shall not be required to maintain a 8 common trust account pursuant to this section. 9 2. Each broker required to maintain a trust account pursuant 10 to this section shall notify the real estate commission of 11 the name of each bank, savings association, or credit union 12 the federally insured depository institution in which a trust 13 account is maintained and also the name of the account on forms 14 provided therefor. 15 3. Each broker required to maintain a trust account 16 pursuant to this section shall authorize the real estate 17 commission to examine each trust account and shall obtain the 18 certification of the bank, savings association, or credit 19 union federally insured depository institution attesting to 20 each trust account and consenting to the examination and audit 21 of each account by a duly authorized representative of the 22 commission. The certification and consent shall be furnished 23 on forms prescribed by the commission. This subsection does 24 not apply to an individual farm account maintained in the 25 name of the owner or owners for the purpose of conducting 26 ongoing farm business whether it is conducted by the farm owner 27 or by an agent or farm manager when the account is part of 28 a farm management agreement between the owner and agent or 29 manager. This subsection also does not apply to an individual 30 property management account maintained in the name of the 31 owner or owners for the purpose of conducting ongoing property 32 management whether it is conducted by the property owner or 33 by an agent or manager when the account is part of a property 34 management agreement between the owner and agent or manager. 35 -6- HF541.1620 (1) 87 gh/rn 6/ 10

4. Each broker required to maintain a trust account pursuant 1 to this section shall only deposit trust funds received on 2 real estate or business opportunity transactions as directed 3 by the principal of a transaction constituting dealing in real 4 estate as defined in section 543B.6 in the common trust account 5 and shall not commingle the broker’s personal funds or other 6 funds in the trust account with the exception that a broker may 7 deposit and keep a sum not to exceed five hundred one thousand 8 dollars in the account from the broker’s personal funds, which 9 sum shall be specifically identified and deposited to cover 10 bank service charges relating to the trust account. 11 5. A broker may maintain more than one trust account 12 provided the commission is advised of said account as specified 13 in subsections 2 and 3 above. 14 6. The commission shall verify on a test basis, a 15 random sampling of the brokers, corporations, professional 16 corporations, professional limited liability companies, 17 and partnerships for their trust account compliance. The 18 commission may upon reasonable cause, or as a part of or after 19 an investigation, request or order a special report. 20 7. The examination of a trust account shall be conducted by 21 the commission or the commission’s authorized representative. 22 8. The commission shall adopt rules to ensure 23 implementation of this section . 24 Sec. 11. Section 543B.53, Code 2017, is amended to read as 25 follows: 26 543B.53 Application of chapter. 27 The provisions of this chapter which require successful 28 completion of a real estate education course before being 29 licensed as a real estate salesperson shall not apply to 30 persons who hold real estate salesperson’s licenses on July 1, 31 1976 or to the issuance of new licenses to these persons under 32 the provisions of pursuant to section 543B.28 . 33 Sec. 12. Section 543B.57, Code 2017, is amended to read as 34 follows: 35 -7- HF541.1620 (1) 87 gh/rn 7/ 10

543B.57 Confirmation and disclosure of relationship. 1 1. A licensee shall not represent any party or parties 2 to a transaction or otherwise as a licensee unless that 3 licensee makes a disclosure to all parties to the transaction 4 identifying which party that person represents in the 5 transaction an agency disclosure to the party or parties 6 represented by the licensee . 7 2. a. The disclosure required in subsection 1 shall 8 be made by the licensee at the time the licensee provides 9 specific assistance to the client. A change in a licensee’s 10 representation that makes the initial disclosure incomplete, 11 misleading, or inaccurate requires that a new disclosure be 12 made immediately. 13 b. A written disclosure is required to be made to the client 14 prior to an offer being made or accepted by any party to a 15 transaction . The written disclosure shall be acknowledged by 16 separate signatures of all parties to the transaction the party 17 or parties represented by the licensee prior to any offer being 18 made or accepted by any party to a transaction. 19 c. For purposes of this section , “specific assistance” means 20 eliciting or accepting confidential information about a party’s 21 real estate needs, motivation, or financial qualifications, 22 or eliciting or accepting information involving a proposed 23 or preliminary offer associated with specific real estate. 24 “Specific assistance” does not mean an open house showing, 25 preliminary conversations concerning price range, location, and 26 property styles, or responding to general factual questions 27 concerning properties which have been advertised for sale or 28 lease. 29 3. The written agency disclosure form shall contain all of 30 the following: 31 a. A statement of which party is the licensee’s client or, 32 if the licensee is providing brokerage services to more than 33 one client as provided under section 543B.60 , a statement of 34 all persons who are the licensee’s clients. 35 -8- HF541.1620 (1) 87 gh/rn 8/ 10

b. A statement of the licensee’s duties to the licensee’s 1 client under section 543B.56, subsections 1 and 2 . 2 c. Any additional information that the licensee determines 3 is necessary to clarify the licensee’s relationship to the 4 licensee’s client or customer. 5 4. This section does not prohibit a person from representing 6 oneself. 7 5. The seller, in the listing agreement, may authorize 8 the seller’s licensee to disburse part of the licensee’s 9 compensation to other licensees, including a buyer’s licensee 10 solely representing the buyer. A licensee representing 11 a buyer shall inform the listing licensee, if there is a 12 listing licensee, either verbally or in writing, of the 13 agency relationship before any negotiations are initiated. 14 The obligation of either the seller or the buyer to pay 15 compensation to a licensee is not determinative of the agency 16 relationship. 17 Sec. 13. REPEAL. Section 543B.25, Code 2017, is repealed. 18 DIVISION II 19 REAL ESTATE DISCLOSURES 20 Sec. 14. Section 558A.1, Code 2017, is amended by adding the 21 following new subsection: 22 NEW SUBSECTION . 01. “Agent” means an individual designated 23 by a transferee to accept delivery of a disclosure statement 24 from a transferor. 25 Sec. 15. Section 558A.1, subsection 4, paragraph e, Code 26 2017, is amended to read as follows: 27 e. A transfer made to a spouse, or to a person in the lineal 28 line within the third degree of consanguinity or affinity of 29 a person making the transfer. 30 Sec. 16. Section 558A.2, subsection 2, Code 2017, is amended 31 to read as follows: 32 2. The disclosure statement shall be made by personal 33 delivery , or by certified or registered mail , or electronic 34 delivery to the transferee or to the transferee’s agent . If 35 -9- HF541.1620 (1) 87 gh/rn 9/ 10

delivery is electronic, acknowledgment of receipt shall be 1 provided pursuant to rules adopted by the commission. The 2 delivery may be made to the spouse of the transferee, unless 3 otherwise provided by the parties. If the disclosure statement 4 is not timely delivered, the transferee may withdraw the offer 5 or revoke the acceptance without liability, within three days 6 following personal delivery of the statement or five days 7 following electronic delivery or delivery by mail. > 8 ______________________________ LANDON of Polk -10- HF541.1620 (1) 87 gh/rn 10/ 10