HF 2360 (LSB 5648HV (2) 84)

HOUSE FILE 2360

BY  COMMITTEE ON COMMERCE

(SUCCESSOR TO HSB 572)

A BILL FOR

An Act relating to the authorized activities of a real estate broker or real estate salesperson and the authorized activities of auctioneers in relation thereto.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 543B.7, subsection 5, Code 2011, is amended to read as follows:
   5.
  a.  The acts of an auctioneer in conducting a public sale or auction. The auctioneer’s role must be limited to establishing the time, place, and method of an auction; advertising the auction including
 
which shall be limited to a brief description of the property for auction and the time and place for the auction; and crying the property at the auction. The auctioneer shall provide in any advertising the name and address of the real estate broker who is providing brokerage services for the transaction and the name of the real estate broker, or attorney, or closing company who is responsible for closing the sale of the property. The real estate broker providing brokerage services shall be present at the time of the auction and, if found to be in violation of this subsection, shall be subject to a civil penalty of two thousand five hundred dollars. If the auctioneer closes or attempts to close the sale of the property or otherwise engages in acts defined in sections 543B.3 and 543B.6, then the requirements of this chapter do apply to the auctioneer. If an investigation pursuant to this chapter reveals that an auctioneer has violated this subsection or has assumed to act in the capacity of a real estate broker or real estate salesperson, the real estate commission may
 
shall issue a cease and desist order, and shall issue a warning letter notifying the auctioneer of the violation
 
impose a penalty of two thousand five hundred dollars for the first offense, and impose a penalty of up to the greater of ten thousand dollars or ten percent of the real estate sales price for each subsequent violation.
   b.  An auctioneer conducting a real property auction shall not do any of the following:
   (1)  Contact the public by telephone or in person for the purpose of securing prospects for real property auctions, listings, leasing, sales, exchanges, or property management.
   (2)  Independently host open houses.

   (3)  Prepare promotional materials or advertisements beyond a brief description of the real property and the time and place for the auction, unless approved by a supervising licensed real estate broker.
   (4)  Independently show real property.
   (5)  Answer any questions regarding real property title, financing, or closings other than time and location information.
   (6)  Answer any questions regarding a real property auction listing except for information regarding price and amenities expressly provided in writing by the owner or a supervising real estate broker.
   (7)  Discuss or explain a real property contract, lease, agreement, or other real estate document.
   (8)  Negotiate or agree to any commission, partial commission, management fee, or referral fee on behalf of a supervising real estate broker.
   (9)  Discuss with the owner of real property the terms and conditions of the real property offered for sale or lease.
   (10)  Collect or hold deposit moneys, rent, other moneys, or anything of value received from the owner of real property or from a prospective buyer or tenant.
   (11)  Provide owners of real property or prospective buyers or tenants with any advice, recommendations, or suggestions regarding the sale, purchase, exchange, rental, or leasing of real property that is listed, anticipated to be listed, or currently available for auction, sale, or lease.
   (12)  Represent in any manner, orally or in writing, that the auctioneer is licensed or affiliated with a particular real estate firm or real estate broker as a licensee under this chapter.
    Sec. 2.  Section 543B.34, Code Supplement 2011, is amended by adding the following new subsection:
   NEW SUBSECTION.  1A.  For the purposes of subsection 1, a complaint which would otherwise be considered a verified complaint shall not be disqualified from verification on the basis of being received anonymously or in an unsigned form.
EXPLANATION
   This bill relates to licensing provisions governing real estate brokers and real estate salespersons contained in Code chapter 543B.
   The bill modifies provisions in Code section 543B.7 which exclude the acts of an auctioneer in conducting a public sale or auction from the provisions of the Code chapter under specified circumstances. Currently, to qualify for the exclusion an auctioneer’s role must be limited to establishing the time, place, and method of an auction; advertising the auction including a brief description of the property for auction and the time and place for the auction; and crying the property at the auction. The bill changes this provision such that advertising the auction shall be limited to a brief description of the property for auction and the time and place for the auction. The bill also adds providing the name of the closing company to individuals or entities required to be identified by an auctioneer in advertisements.
   The bill mandates issuance of a cease and desist order by the real estate commission if an investigation reveals that an auctioneer has violated provisions governing exclusion from the Code chapter or has assumed to act in the capacity of a real estate broker or real estate salesperson. Currently, issuance of an order is optional. The bill deletes a current provision that the commission issue a warning letter notifying the auctioneer of the violation, substituting this with imposition of a penalty in the amount of $2,500 for a first offense.
   Additionally, the bill contains a list of specifically prohibited activities of an auctioneer when conducting real property auctions.
   The bill also provides, with reference to commission investigations regarding the actions of a real estate broker, real estate salesperson, or other person assuming to act in either capacity, that in the event an investigation is commenced upon receipt of a verified complaint in writing from a person, the complaint shall not be disqualified on the basis of being received anonymously or in an unsigned form.