House Study Bill 646 HOUSE FILE BY (PROPOSED COMMITTEE ON COMMERCE, REGULATION AND LABOR BILL BY CHAIRPERSON JENKINS) Passed House, Date Passed Senate, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act conferring additional enforcement authority on the real 2 estate commission, and providing penalties. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 5945HC 80 5 rn/sh/8 PAG LIN 1 1 Section 1. Section 543B.34, unnumbered paragraph 1, Code 1 2 2003, is amended to read as follows: 1 3 The real estate commission may upon its own motion and 1 4 shall upon the verified complaint in writing of any person, if 1 5 the complaint together with evidence, documentary or 1 6 otherwise, presented in connection with the complaint makes 1 7 out a prima facie case, request commission staff or any other 1 8 duly authorized representative or designee to investigate the 1 9 actions of any real estate broker, real estate salesperson, or 1 10 other person who assumes to act in either capacity within this 1 11 state, and may suspend or revoke a license issued under this 1 12 chapter at any time if the licensee has by false or fraudulent 1 13 representation obtained a license, or if the licensee or other 1 14 person assuming to act in the capacity of a real estate broker 1 15 or real estate salesperson is found to be guilty of any of the 1 16 following: 1 17 Sec. 2. Section 543B.34, Code 2003, is amended by adding 1 18 the following new unnumbered paragraph: 1 19 NEW UNNUMBERED PARAGRAPH. If an investigation pursuant to 1 20 this section reveals that an unlicensed person has assumed to 1 21 act in the capacity of a real estate broker or real estate 1 22 salesperson, the commission may issue a cease and desist 1 23 order, and may impose a civil penalty of up to the greater of 1 24 ten thousand dollars or ten percent of the real estate sale 1 25 price. 1 26 Sec. 3. NEW SECTION. 543B.49 INJUNCTIVE RELIEF. 1 27 1. In addition to the penalty and complaint provisions of 1 28 sections 543B.43, 543B.44, and 543B.48, an injunction may be 1 29 granted through an action in district court to prohibit a 1 30 person from engaging in an activity which violates the 1 31 provisions of section 543B.1. The action for injunctive 1 32 relief may be brought by an affected person. For the purposes 1 33 of this section, "affected person" means any person directly 1 34 impacted by the actions of a person suspected of violating the 1 35 provisions of section 543B.1, including but not limited to the 2 1 commission created in section 543B.8, a person who has 2 2 utilized the services of a person suspected of violating the 2 3 provisions of section 543B.1, or a private association 2 4 composed primarily of members practicing a profession for 2 5 which licensure is required pursuant to this chapter. 2 6 2. If successful in obtaining injunctive relief, the 2 7 affected person shall be entitled to actual costs and attorney 2 8 fees. For the purposes of this section, "actual costs" means 2 9 those costs other than attorney fees which were actually 2 10 incurred in connection with the action, including but not 2 11 limited to court and witness fees, investigative expenses, 2 12 travel expenses, legal research expenses, and other related 2 13 fees and expenses. 2 14 EXPLANATION 2 15 This bill confers additional enforcement authority upon the 2 16 real estate commission. 2 17 The bill provides that if an investigation conducted 2 18 pursuant to Code section 543B.34 reveals that an unlicensed 2 19 person has assumed to act in the capacity of a real estate 2 20 broker or real estate salesperson, the commission may issue a 2 21 cease and desist order, and may impose a civil penalty of up 2 22 to the greater of $10,000 or 10 percent of the real estate 2 23 sale price. 2 24 The bill also provides that an injunction may be granted 2 25 through an action in district court to prohibit a person from 2 26 engaging in an activity which violates the provisions of Code 2 27 section 543B.1. That section provides that a person shall 2 28 not, directly or indirectly, with the intention or upon the 2 29 promise of receiving any valuable consideration, offer, 2 30 attempt, agree to perform, or perform any single act as a real 2 31 estate broker whether as a part of a transaction or as an 2 32 entire transaction, or represent oneself as a real estate 2 33 broker, broker associate, or salesperson, without first 2 34 obtaining a license and otherwise complying with the 2 35 requirements of Code chapter 543B. The bill provides that the 3 1 action for injunctive relief may be brought by an affected 3 2 person, which the bill defines to mean any person directly 3 3 impacted by the actions of a person suspected of violating the 3 4 provisions of Code section 543B.1, including but not limited 3 5 to the real estate commission, a person who has utilized the 3 6 services of a person suspected of violating the provisions of 3 7 Code section 543B.1, or a private association composed 3 8 primarily of members practicing a profession for which 3 9 licensure pursuant to Code chapter 543B is required. 3 10 The bill provides that if successful in obtaining 3 11 injunctive relief, the affected person shall be entitled to 3 12 actual costs and attorney fees. The bill defines "actual 3 13 costs" as those costs other than attorney fees which were 3 14 actually incurred in connection with the action, including but 3 15 not limited to court and witness fees, investigative expenses, 3 16 travel expenses, legal research expenses, and other related 3 17 fees and expenses. 3 18 LSB 5945HC 80 3 19 rn/sh/8