House File 541 - Introduced HOUSE FILE 541 BY COMMITTEE ON COMMERCE (SUCCESSOR TO HSB 125) A BILL FOR An Act relating to licensed real estate professionals and real 1 estate disclosure statements. 2 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 3 TLSB 1925HV (3) 87 gh/rn/nh

H.F. 541 DIVISION I 1 REAL ESTATE LICENSEES 2 Section 1. Section 543B.15, subsections 1, 2, 3, 4, 5, and 3 9, Code 2017, are amended to read as follows: 4 1. Except as provided in section 543B.20 an applicant for a 5 real estate broker’s or salesperson’s license must be a person 6 whose application has not been rejected for licensure in this 7 or any other state within twelve months prior to the date of 8 application, and whose real estate license has not been revoked 9 in this or any other state within two years prior to date of 10 application. 11 2. To qualify for a real estate license as a real estate 12 broker or salesperson a person shall be eighteen years of age 13 or over. However, an applicant is not ineligible because of 14 citizenship, sex, race, religion, marital status, or national 15 origin, although the application form may require citizenship 16 information. 17 3. a. An applicant for a real estate broker’s or 18 salesperson’s license who has been convicted of an offense 19 specified in this subsection shall not be considered for 20 licensure until the following time periods have elapsed 21 following completion of any applicable period of incarceration, 22 or payment of a fine or fulfillment of any other type of 23 sentence: 24 (1) For an offense which is classified as a felony, two 25 an offense including or involving forgery, embezzlement, 26 obtaining money under false pretenses, theft, arson, extortion, 27 conspiracy to defraud, or other similar offense, or any other 28 offense involving a criminal breach of fiduciary duty, five 29 years. 30 (2) Notwithstanding subparagraph (1), for offenses 31 including or involving forgery, embezzlement, obtaining money 32 under false pretenses, theft, arson, extortion, conspiracy to 33 defraud, or other similar offense, any offense involving moral 34 turpitude, or other offense involving a criminal breach of 35 -1- LSB 1925HV (3) 87 gh/rn/nh 1/ 21

H.F. 541 fiduciary duty, five years. For any offense not described in 1 subparagraph (1) involving moral turpitude, one year. 2 b. After expiration of the time periods specified in 3 paragraph “a” , an application shall be considered by the 4 commission pursuant to subsection 6 and may be denied on the 5 grounds of the conviction. An applicant may request a hearing 6 pursuant to section 543B.19 in the event of a denial. 7 c. For purposes of this section , “convicted” or “conviction” 8 means a guilty plea, deferred judgment from the time of entry 9 of the deferred judgment until the time the defendant is 10 discharged by the court without entry of judgment, or other 11 finding of guilt by a court of competent jurisdiction in this 12 state, or in any other state, territory, or district of the 13 United States, or in any foreign jurisdiction. A copy of the 14 record of conviction is conclusive evidence of such conviction. 15 4. An applicant for a real estate broker’s or salesperson’s 16 license who has had a professional license of any kind revoked 17 or suspended or who has had any other form of discipline 18 imposed, in this or any other jurisdiction, may be denied a 19 license by the commission on the grounds of the revocation, 20 suspension, or other discipline. 21 5. A person who makes a false statement of material fact 22 on an application for a real estate broker’s or salesperson’s 23 license, or who causes to be submitted, or has been a party to 24 preparing or submitting any false application for such license, 25 may be denied a license by the commission on the grounds of the 26 false statement or submission. 27 9. An applicant for an initial real estate broker’s or 28 salesperson’s license shall be subject to a national criminal 29 history check through the federal bureau of investigation. 30 The commission shall request the criminal history check and 31 shall provide the applicant’s fingerprints to the department 32 of public safety for submission through the state criminal 33 history repository to the federal bureau of investigation. 34 The applicant shall authorize release of the results of the 35 -2- LSB 1925HV (3) 87 gh/rn/nh 2/ 21

H.F. 541 criminal history check to the real estate commission. The 1 applicant shall pay the actual cost of the fingerprinting and 2 criminal history check, if any. Unless the criminal history 3 check was completed within the two hundred ten calendar days 4 prior to the date the license application is received by 5 the real estate commission, the commission shall reject and 6 return the application to the applicant. The commission shall 7 process the application but hold delivery of the license until 8 the background check is complete. The results of a criminal 9 history check conducted pursuant to this subsection shall not 10 be considered a public record under chapter 22 . 11 Sec. 2. Section 543B.16, Code 2017, is amended to read as 12 follows: 13 543B.16 Application forms. 14 1. Every applicant for a real estate broker’s license 15 shall apply in writing upon blanks prepared or furnished 16 by the real estate commission. The real estate commission 17 shall not require that a recent photograph of the applicant 18 be attached to the application. The real estate commission 19 shall not require an applicant to disclose criminal background 20 information on the application except for a conviction of an 21 offense described in section 543B.15, subsection 3. 22 2. Every applicant for a license shall furnish information 23 setting forth the applicant’s present mailing address , both of 24 business and residence, a complete list of all former places 25 where the applicant may have been engaged in business for a 26 period of sixty days or more, during the last five years, 27 accounting for such entire period and electronic mail address . 28 3. The commission shall prepare and furnish written 29 application blanks for the salesperson’s license requesting 30 information as the commission may require. The commission 31 shall not require that a recent photograph of the applicant be 32 attached to the application. The application Every applicant 33 for the a salesperson’s license shall be accompanied by furnish 34 a written statement by the designated broker whose service the 35 -3- LSB 1925HV (3) 87 gh/rn/nh 3/ 21

H.F. 541 applicant is about to enter recommending that the license be 1 granted to the applicant. 2 Sec. 3. Section 543B.19, Code 2017, is amended to read as 3 follows: 4 543B.19 License denied —— hearing. 5 If the real estate commission, after an application in 6 proper form has been filed with it the commission , accompanied 7 by the proper fee, shall deny denies a license to the 8 applicant, upon the applicant’s application applicant may apply 9 in writing , and within a period of thirty days of such denial, 10 and the applicant shall be entitled to a hearing as provided 11 in section 543B.35 . 12 Sec. 4. Section 543B.21, Code 2017, is amended to read as 13 follows: 14 543B.21 Nonresident license Out-of-state licensee —— 15 reciprocity . 16 A nonresident of this state person holding a valid and 17 active license to engage in brokerage services in another 18 state may be licensed as a real estate broker or a real estate 19 salesperson in this state , upon complying with all requirements 20 of law and with all the provisions and conditions of this 21 chapter relative to resident brokers or salespersons and the 22 filing by the applicant with the real estate commission of a 23 certification from the state of original licensure signed by 24 the duly qualified and authorized official or officials of that 25 state that the applicant is there currently licensed, that no 26 charges against the applicant are there pending, and that the 27 applicant’s record in that state justifies the issuance of a 28 license to the applicant in Iowa. The commission may waive 29 the requirement of an examination in the case of a nonresident 30 broker an out-of-state licensee who is licensed under the 31 laws of a state having similar requirements and where similar 32 recognition and courtesies are extended to licensed real estate 33 brokers and salespersons licensees of this state. 34 Sec. 5. Section 543B.22, Code 2017, is amended to read as 35 -4- LSB 1925HV (3) 87 gh/rn/nh 4/ 21

H.F. 541 follows: 1 543B.22 Nonresident’s Out-of-state licensee’s place of 2 business. 3 A nonresident An out-of-state licensee to whom a license 4 is issued upon compliance with all the other requirements 5 of law and provisions of this chapter , is not required to 6 maintain a definite an active place of business within this 7 state. Provided that However, the nonresident, if a broker, 8 out-of-state licensee shall maintain an active place of 9 business within the state of the nonresident’s domicile, and 10 that the original licensure. The privilege of submitting a 11 certification of licensure certified to by the qualified and 12 authorized official or officials of the state of original 13 licensure, in lieu of the recommendations and statements 14 otherwise required, only applies to licensed real estate 15 brokers and real estate salespersons of those states under the 16 laws of which similar recognition and courtesies are extended 17 to licensed real estate brokers and real estate salespersons 18 licensees of this state. 19 Sec. 6. Section 543B.23, Code 2017, is amended to read as 20 follows: 21 543B.23 Actions against nonresidents out-of-state licensees . 22 Every nonresident out-of-state licensee applicant, before 23 the issuance of a license in this state , shall file an 24 irrevocable consent that suits and actions may be commenced 25 against such applicant in the proper court of any county of 26 this state in which a cause of action may arise, by the service 27 of any process or pleadings authorized by the laws of this 28 state on the chairperson of the real estate commission, said 29 such consent stipulating and agreeing that such service of 30 such process or pleadings on the commission shall be taken 31 and held in all courts to be as valid and binding as if due 32 service had been made upon said the applicant within the state 33 of Iowa. Said The instrument containing such consent shall be 34 authenticated by the seal thereof of the out-of-state licensee , 35 -5- LSB 1925HV (3) 87 gh/rn/nh 5/ 21

H.F. 541 and if a corporation, or by the acknowledged signature of a 1 member or officer thereof, if otherwise of the corporation . 2 All such applications, except from individuals, shall be 3 accompanied by a duly certified copy of the resolutions 4 of the proper officers, or managing board, authorizing the 5 proper officer to execute the same application . In case any 6 process or pleadings mentioned in the case are served upon 7 the commission it shall be by duplicate copies, one of which 8 shall be filed in the office of the commission, and the other 9 immediately forwarded by certified mail to the main office 10 of the applicant against whom or which said such process or 11 pleadings are directed. 12 Sec. 7. Section 543B.29, subsections 2, 3, and 4, Code 2017, 13 are amended to read as follows: 14 2. The revocation of a designated broker’s license shall 15 automatically suspend every license granted to any person by 16 virtue of the person’s employment by the broker whose license 17 has been revoked who is employed or associated with the 18 brokerage , pending a change of employer the designated broker 19 and the issuance of a new license. The new license shall be 20 issued upon payment of a fee in an amount determined by the 21 commission based upon the administrative costs involved, if 22 granted during the same license period in which the original 23 license was granted. 24 3. A real estate broker or salesperson licensee who is 25 an owner or lessor of property or an employee of an owner or 26 lessor may have the broker’s or salesperson’s their license 27 revoked or suspended for violations of this section or section 28 543B.34 , except section 543B.34, subsection 1 , paragraphs “d” , 29 “e” , “f” , and “i” , with respect to that property. 30 4. A real estate broker’s or salesperson’s licensee’s 31 license shall be revoked following three violations of this 32 section or section 543B.34 within a five-year three-year 33 period. 34 Sec. 8. Section 543B.31, Code 2017, is amended to read as 35 -6- LSB 1925HV (3) 87 gh/rn/nh 6/ 21

H.F. 541 follows: 1 543B.31 Place of business —— branch license . 2 Every real estate broker brokerage , except as provided 3 in section 543B.22 , shall maintain a place of business in 4 this state. A brokerage may maintain more than one place of 5 business within the state and a broker may be the designated 6 broker of more than one branch office within the state. If 7 the real estate broker brokerage maintains more than one place 8 of business within the state, a duplicate branch license shall 9 be issued to such broker brokerage for each branch office 10 maintained. Provided, that if such broker be a partnership, 11 association, corporation, professional corporation, or 12 professional limited liability company a duplicate shall 13 be issued to the members or officers thereof, and a A fee 14 determined by the real estate commission in each case shall be 15 paid for each duplicate branch license. 16 Sec. 9. Section 543B.32, Code 2017, is amended to read as 17 follows: 18 543B.32 Change of location. 19 Notice in writing , electronic or otherwise, shall be given 20 to the real estate commission by each licensee of any change 21 of principal business location, whereupon the commission shall 22 issue a new license for the unexpired period upon the payment 23 of a fee established by rule to cover the cost of issuing the 24 license. 25 Sec. 10. Section 543B.33, Code 2017, is amended to read as 26 follows: 27 543B.33 Salespersons Licensees —— change of employment 28 brokerage employment or association . 29 When any real estate salesperson a licensee is discharged 30 or terminates employment or association with the real estate 31 broker by whom the salesperson is employed a brokerage , 32 the real estate designated broker for the brokerage shall 33 immediately deliver , or mail , or electronically submit 34 to the real estate commission a copy of the real estate 35 -7- LSB 1925HV (3) 87 gh/rn/nh 7/ 21

H.F. 541 salesperson’s licensee’s license on the reverse side of which 1 the employing designated broker shall set out the date and 2 cause 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 licensee’s license to the commission shall 5 address a communication to the last known residence address 6 of the real estate salesperson licensee stating that a copy 7 of the licensee’s license has been delivered , or mailed , or 8 electronically submitted to the commission. A copy of the 9 communication to the real estate salesperson licensee shall 10 accompany the copy of the license when mailed or delivered 11 submitted to the commission. It is unlawful for any real 12 estate salesperson a licensee to perform any of the acts 13 contemplated by this chapter either directly or indirectly 14 under authority of a license from and after the date of 15 receipt of a copy of the licensee’s license by the commission. 16 The commission shall, upon presentation of evidence by the 17 salesperson licensee that the salesperson licensee has been 18 employed by or is associated with another broker brokerage , 19 issue another license for the balance of the current license 20 period showing each change of employment or association with 21 a brokerage . A fee as determined by the commission shall be 22 charged for the issuance of the license. Not more than one 23 license shall be issued to any real estate salesperson licensee 24 for the same period of time. 25 Sec. 11. Section 543B.34, Code 2017, is amended to read as 26 follows: 27 543B.34 Investigations by commission —— licensing sanctions 28 —— civil penalty. 29 1. The real estate commission may upon its own motion and 30 shall upon the verified complaint in writing of any person, 31 if the complaint together with evidence, documentary or 32 otherwise, presented in connection with the complaint makes 33 out a prima facie case, request commission staff or any other 34 duly authorized representative or designee to investigate the 35 -8- LSB 1925HV (3) 87 gh/rn/nh 8/ 21

H.F. 541 actions of any real estate broker, real estate salesperson, 1 licensee or other person who assumes to act in either such 2 capacity within this state . The commission may assess civil 3 penalties against any person or entity , and may suspend or 4 revoke a license issued under this chapter at any time if the 5 licensee has by false or fraudulent representation obtained a 6 license, or if the licensee or other person assuming to act in 7 the capacity of a real estate broker or real estate salesperson 8 licensee , except for those actions exempt pursuant to section 9 543B.7 , is found to be guilty of any of the following: 10 a. Making any substantial misrepresentation. 11 b. Making any false promise of a character likely to 12 influence, persuade , or induce. 13 c. Pursuing a continued and flagrant course of 14 misrepresentation, or making of false promises through agents 15 or salespersons licensees or advertising or otherwise. 16 d. Acting for more than one party in a transaction without 17 the knowledge of all parties for whom the licensee acts. 18 e. Accepting a commission or valuable consideration as a 19 real estate broker associate or salesperson licensee for the 20 performance of any of the acts specified in this chapter , from 21 any person, except the broker associate’s or salesperson’s 22 employer, who must be a licensed real estate broker licensee’s 23 brokerage . However, a broker associate or salesperson licensee 24 may, without violating this paragraph, accept a commission 25 or valuable consideration from a corporation which is wholly 26 owned, or owned with a spouse, by the broker associate or 27 salesperson licensee if the conditions described in paragraph 28 “i” are met. 29 f. Representing or attempting to represent a real estate 30 broker brokerage other than the licensee’s employer, without 31 the express knowledge and consent of the employer brokerage . 32 g. Failing, within a reasonable time, to account for or to 33 remit any moneys coming into the licensee’s possession which 34 belong to others. 35 -9- LSB 1925HV (3) 87 gh/rn/nh 9/ 21

H.F. 541 h. Being unworthy or incompetent to act as a real estate 1 broker or salesperson licensee in such manner as to safeguard 2 the interests of the public. 3 i. (1) Paying a commission or other valuable consideration 4 or any part of such commission or consideration for performing 5 any of the acts specified in this chapter to a person who is not 6 a licensed broker or salesperson under this chapter or who is 7 not engaged in the real estate business brokerage services in 8 another state or foreign country, provided that the provisions 9 of this section shall not be construed to prohibit the payment 10 of earned commissions or consideration to any of the following: 11 (a) The estate or heirs of a deceased real estate licensee 12 when such licensee had a valid real estate license in effect at 13 the time the commission or consideration was earned. 14 (b) A citizen of another country acting as a referral 15 agent if that country does not license real estate brokers or 16 salespersons and if the Iowa licensee paying the commission or 17 consideration obtains and maintains reasonable written evidence 18 that the payee is a citizen of the other country, is not a 19 resident of this country, and is in the business of brokering 20 real estate in that other country. 21 (c) A corporation pursuant to subparagraph (2). 22 (2) A broker brokerage may pay a commission to a corporation 23 which is wholly owned, or owned with a spouse, by a salesperson 24 or broker associate licensee employed by or otherwise 25 associated with the broker brokerage , if all of the following 26 conditions are met: 27 (a) The corporation does not engage in real estate 28 transactions as a third-party agent or in any other activity 29 requiring a license under this chapter . 30 (b) The employing broker brokerage is not relieved of any 31 obligation to supervise the employed licensee or any other 32 requirement of this chapter or the rules adopted pursuant to 33 this chapter . 34 (c) The employed broker associate or salesperson licensee 35 -10- LSB 1925HV (3) 87 gh/rn/nh 10/ 21

H.F. 541 is not relieved from any personal civil liability for any 1 licensed activities by interposing the corporate form. 2 j. Failing, within a reasonable time, to provide information 3 requested by the commission as the result of a formal or 4 informal complaint to the commission which would indicate a 5 violation of this chapter . 6 k. Any other conduct, whether of the same or different 7 character from that specified in this section , which 8 demonstrates bad faith, or improper, fraudulent, or dishonest 9 dealings which would have disqualified the licensee from 10 securing a license under this chapter . 11 2. Any unlawful act or violation of any of the provisions of 12 this chapter by any real estate broker associate or salesperson 13 licensee , employee, or partner or associate of a licensed real 14 estate broker licensee , is not cause for the revocation of 15 the license of any real estate broker licensee , unless the 16 commission finds that the real estate broker licensee had 17 guilty knowledge of the unlawful act or violation. 18 3. If an investigation pursuant to this section reveals 19 that an unlicensed person has assumed to act in the capacity 20 of a real estate broker or real estate salesperson licensee , 21 the commission shall issue a cease and desist order, and shall 22 impose a civil penalty of up to the greater of ten thousand 23 dollars or ten percent of the real estate sale price. 24 Sec. 12. Section 543B.46, Code 2017, is amended to read as 25 follows: 26 543B.46 Trust accounts. 27 1. Each real estate broker who is in the practice of 28 depositing funds in a trust account shall maintain a common 29 trust account in a bank, savings association, or credit union 30 federally insured depository institution for the deposit of 31 all down payments, earnest money deposits, or other trust 32 funds received by the broker or the broker’s salespersons on 33 behalf of the broker’s principal, except that a broker acting 34 as a salesperson shall deposit these funds in the common trust 35 -11- LSB 1925HV (3) 87 gh/rn/nh 11/ 21

H.F. 541 account of the broker for whom the broker acts as salesperson. 1 The account shall be an interest-bearing account. The interest 2 on the account shall be transferred quarterly to the treasurer 3 of state and transferred to the Iowa finance authority for 4 deposit in the housing trust fund established in section 5 16.181 unless there is a written agreement between the buyer 6 and seller to the contrary. The broker shall not benefit 7 from interest received on funds of others in the broker’s 8 possession. A broker who is not in the practice of depositing 9 funds in a trust account shall not be required to maintain a 10 common trust account pursuant to this section. 11 2. Each broker required to maintain a trust account pursuant 12 to this section shall notify the real estate commission of 13 the name of each bank, savings association, or credit union 14 the federally insured depository institution in which a trust 15 account is maintained and also the name of the account on forms 16 provided therefor. 17 3. Each broker required to maintain a trust account 18 pursuant to this section shall authorize the real estate 19 commission to examine each trust account and shall obtain the 20 certification of the bank, savings association, or credit 21 union federally insured depository institution attesting to 22 each trust account and consenting to the examination and audit 23 of each account by a duly authorized representative of the 24 commission. The certification and consent shall be furnished 25 on forms prescribed by the commission. This subsection does 26 not apply to an individual farm account maintained in the 27 name of the owner or owners for the purpose of conducting 28 ongoing farm business whether it is conducted by the farm owner 29 or by an agent or farm manager when the account is part of 30 a farm management agreement between the owner and agent or 31 manager. This subsection also does not apply to an individual 32 property management account maintained in the name of the 33 owner or owners for the purpose of conducting ongoing property 34 management whether it is conducted by the property owner or 35 -12- LSB 1925HV (3) 87 gh/rn/nh 12/ 21

H.F. 541 by an agent or manager when the account is part of a property 1 management agreement between the owner and agent or manager. 2 4. Each broker required to maintain a trust account pursuant 3 to this section shall only deposit trust funds received on 4 real estate or business opportunity transactions as directed 5 by the principal of a transaction constituting dealing in real 6 estate as defined in section 543B.6 in the common trust account 7 and shall not commingle the broker’s personal funds or other 8 funds in the trust account with the exception that a broker may 9 deposit and keep a sum not to exceed five hundred one thousand 10 dollars in the account from the broker’s personal funds, which 11 sum shall be specifically identified and deposited to cover 12 bank service charges relating to the trust account. 13 5. A broker may maintain more than one trust account 14 provided the commission is advised of said account as specified 15 in subsections 2 and 3 above. 16 6. The commission shall verify on a test basis, a 17 random sampling of the brokers, corporations, professional 18 corporations, professional limited liability companies, 19 and partnerships for their trust account compliance. The 20 commission may upon reasonable cause, or as a part of or after 21 an investigation, request or order a special report. 22 7. The examination of a trust account shall be conducted by 23 the commission or the commission’s authorized representative. 24 8. The commission shall adopt rules to ensure 25 implementation of this section . 26 Sec. 13. Section 543B.53, Code 2017, is amended to read as 27 follows: 28 543B.53 Application of chapter. 29 The provisions of this chapter which require successful 30 completion of a real estate education course before being 31 licensed as a real estate salesperson shall not apply to 32 persons who hold real estate salesperson’s licenses on July 1, 33 1976 or to the issuance of new licenses to these persons under 34 the provisions of pursuant to section 543B.28 . 35 -13- LSB 1925HV (3) 87 gh/rn/nh 13/ 21

H.F. 541 Sec. 14. Section 543B.57, Code 2017, is amended to read as 1 follows: 2 543B.57 Confirmation and disclosure of relationship. 3 1. A licensee shall not represent any party or parties 4 to a transaction or otherwise as a licensee unless that 5 licensee makes a disclosure to all parties to the transaction 6 identifying which party that person represents in the 7 transaction an agency disclosure to the party or parties 8 represented by the licensee . 9 2. a. The disclosure required in subsection 1 shall 10 be made by the licensee at the time the licensee provides 11 specific assistance to the client. A change in a licensee’s 12 representation that makes the initial disclosure incomplete, 13 misleading, or inaccurate requires that a new disclosure be 14 made immediately. 15 b. A written disclosure is required to be made to a 16 licensee’s client prior to an offer being made or accepted 17 by any party to a transaction . The written disclosure shall 18 be acknowledged by separate signatures of all parties to the 19 transaction prior to any offer being made or accepted by any 20 party to a transaction. 21 c. For purposes of this section , “specific assistance” means 22 eliciting or accepting confidential information about a party’s 23 real estate needs, motivation, or financial qualifications, 24 or eliciting or accepting information involving a proposed 25 or preliminary offer associated with specific real estate. 26 “Specific assistance” does not mean an open house showing, 27 preliminary conversations concerning price range, location, and 28 property styles, or responding to general factual questions 29 concerning properties which have been advertised for sale or 30 lease. 31 3. The written agency disclosure form shall contain all of 32 the following: 33 a. A statement of which party is the licensee’s client or, 34 if the licensee is providing brokerage services to more than 35 -14- LSB 1925HV (3) 87 gh/rn/nh 14/ 21

H.F. 541 one client as provided under section 543B.60 , a statement of 1 all persons who are the licensee’s clients. 2 b. A statement of the licensee’s duties to the licensee’s 3 client under section 543B.56, subsections 1 and 2 . 4 c. Any additional information that the licensee determines 5 is necessary to clarify the licensee’s relationship to the 6 licensee’s client or customer. 7 4. This section does not prohibit a person from representing 8 oneself. 9 5. The seller, in the listing agreement, may authorize 10 the seller’s licensee to disburse part of the licensee’s 11 compensation to other licensees, including a buyer’s licensee 12 solely representing the buyer. A licensee representing 13 a buyer shall inform the listing licensee, if there is a 14 listing licensee, either verbally or in writing, of the 15 agency relationship before any negotiations are initiated. 16 The obligation of either the seller or the buyer to pay 17 compensation to a licensee is not determinative of the agency 18 relationship. 19 Sec. 15. REPEAL. Section 543B.25, Code 2017, is repealed. 20 DIVISION II 21 REAL ESTATE DISCLOSURES 22 Sec. 16. Section 558A.1, Code 2017, is amended by adding the 23 following new subsection: 24 NEW SUBSECTION . 01. “Agent” means an individual designated 25 by a transferee to accept delivery of a disclosure statement 26 from a transferor. 27 Sec. 17. Section 558A.1, subsection 4, paragraph e, Code 28 2017, is amended to read as follows: 29 e. A transfer made to a spouse, or to a person in the lineal 30 line within the third degree of consanguinity or affinity of 31 a person making the transfer. 32 Sec. 18. Section 558A.2, subsection 2, Code 2017, is amended 33 to read as follows: 34 2. The disclosure statement shall be made by personal 35 -15- LSB 1925HV (3) 87 gh/rn/nh 15/ 21

H.F. 541 delivery , or by certified or registered mail , or electronic 1 delivery to the transferee or to the transferee’s agent . If 2 delivery is electronic, acknowledgment of receipt shall be 3 provided pursuant to rules adopted by the commission. The 4 delivery may be made to the spouse of the transferee, unless 5 otherwise provided by the parties. If the disclosure statement 6 is not timely delivered, the transferee may withdraw the offer 7 or revoke the acceptance without liability, within three days 8 following personal delivery of the statement or five days 9 following electronic delivery or delivery by mail. 10 Sec. 19. Section 558A.4, Code 2017, is amended to read as 11 follows: 12 558A.4 Required information. 13 1. a. The disclosure statement shall include information 14 relating to the condition and important characteristics of the 15 property and structures located on the property, including 16 significant defects in the structural integrity of the 17 structure, as provided in rules which shall be adopted by the 18 real estate commission pursuant to section 543B.9 . The rules 19 may require the disclosure to include information relating 20 to the property’s zoning classification; the condition of 21 plumbing, heating, or electrical systems; or the presence of 22 pests. 23 b. The disclosure statement may include a report or written 24 opinion prepared by a person qualified to make judgment based 25 on education or experience, as provided by rules adopted by 26 the commission, including but not limited to a professional 27 land surveyor licensed pursuant to chapter 542B , a geologist, a 28 structural pest control operator licensed pursuant to section 29 206.6 , or a building contractor. The report or opinion on a 30 matter within the scope of the person’s practice, profession, 31 or expertise shall satisfy the requirements of this section or 32 rules adopted by the commission regarding that matter required 33 to be disclosed. If the report or opinion is in response 34 to a request made for purposes of satisfying the disclosure 35 -16- LSB 1925HV (3) 87 gh/rn/nh 16/ 21

H.F. 541 statement, the report or opinion shall indicate which part of 1 the disclosure statement the report or opinion satisfies. 2 2. a. A transferor subject to the requirements of section 3 558.70 shall recommend in writing that the transferee obtain an 4 independent home inspection report to provide full and complete 5 information as required to be disclosed under this section and 6 under rules adopted by the real estate commission pursuant to 7 section 543B.9 . 8 b. A transferor subject to section 558.70 shall provide 9 the real estate disclosure statement required by this chapter 10 at least seven days before the real estate installment sales 11 contract is executed by all parties to the contract. 12 Sec. 20. NEW SECTION . 558A.4A Installment sales contracts 13 —— required disclosures. 14 1. A transferor subject to the requirements of section 15 558.70 shall recommend in writing that the transferee obtain an 16 independent home inspection report to provide full and complete 17 information as required to be disclosed under this chapter and 18 under rules adopted by the real estate commission pursuant to 19 section 543B.9. 20 2. A transferor subject to section 558.70 shall provide 21 the real estate disclosure statement required by this chapter 22 at least seven days before the real estate installment sales 23 contract is executed by all parties to the contract. 24 Sec. 21. Section 558A.6, Code 2017, is amended to read as 25 follows: 26 558A.6 Liability under the chapter. 27 A person who violates this chapter shall be liable to a 28 transferee for the amount of actual damages suffered by the 29 transferee, but subject to the following limitations: 30 1. The provided, however, that the transferor, or a broker 31 or salesperson, shall not be liable under this chapter for the 32 error, inaccuracy, or omission in information required in a 33 disclosure statement, unless that person has actual knowledge 34 of the inaccuracy, or fails to exercise ordinary care in 35 -17- LSB 1925HV (3) 87 gh/rn/nh 17/ 21