HF 541 (LSB 1925HV (3) 87)

HOUSE FILE 541

BY  COMMITTEE ON COMMERCE

(SUCCESSOR TO HSB 125)

A BILL FOR

An Act relating to licensed real estate professionals and real estate disclosure statements.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

DIVISION I
REAL ESTATE LICENSEES

    Section 1.  Section 543B.15, subsections 1, 2, 3, 4, 5, and 9, Code 2017, are amended to read as follows:
   1.  Except as provided in section 543B.20 an applicant for a real estate broker’s or salesperson’s license must be a person whose application has not been rejected for licensure in this or any other state within twelve months prior to the date of application, and whose real estate license has not been revoked in this or any other state within two years prior to date of application.
   2.  To qualify for a real estate license as a real estate broker or salesperson a person shall be eighteen years of age or over. However, an applicant is not ineligible because of citizenship, sex, race, religion, marital status, or national origin, although the application form may require citizenship information.
   3.  a.  An applicant for a real estate broker’s or salesperson’s license who has been convicted of an offense specified in this subsection shall not be considered for licensure until the following time periods have elapsed following completion of any applicable period of incarceration, or payment of a fine or fulfillment of any other type of sentence:
   (1)  For an offense which is classified as a felony, two an offense including or involving forgery, embezzlement, obtaining money under false pretenses, theft, arson, extortion, conspiracy to defraud, or other similar offense, or any other offense involving a criminal breach of fiduciary duty, five years.
   (2)  Notwithstanding subparagraph (1), for offenses including or involving forgery, embezzlement, obtaining money under false pretenses, theft, arson, extortion, conspiracy to defraud, or other similar offense, any offense involving moral turpitude, or other offense involving a criminal breach of fiduciary duty, five years.  For any offense not described in subparagraph (1) involving moral turpitude, one year.
   b.  After expiration of the time periods specified in paragraph “a”, an application shall be considered by the commission pursuant to subsection 6 and may be denied on the grounds of the conviction. An applicant may request a hearing pursuant to section 543B.19 in the event of a denial.
   c.  For purposes of this section, “convicted” or “conviction” means a guilty plea, deferred judgment from the time of entry of the deferred judgment until the time the defendant is discharged by the court without entry of judgment, or other finding of guilt by a court of competent jurisdiction in this state, or in any other state, territory, or district of the United States, or in any foreign jurisdiction.  A copy of the record of conviction is conclusive evidence of such conviction.
   4.  An applicant for a real estate broker’s or salesperson’s license who has had a professional license of any kind revoked or suspended or who has had any other form of discipline imposed, in this or any other jurisdiction, may be denied a license by the commission on the grounds of the revocation, suspension, or other discipline.
   5.  A person who makes a false statement of material fact on an application for a real estate broker’s or salesperson’s license, or who causes to be submitted, or has been a party to preparing or submitting any false application for such license, may be denied a license by the commission on the grounds of the false statement or submission. 
   9.  An applicant for an initial real estate broker’s or salesperson’s license shall be subject to a national criminal history check through the federal bureau of investigation. The commission shall request the criminal history check and shall provide the applicant’s fingerprints to the department of public safety for submission through the state criminal history repository to the federal bureau of investigation. The applicant shall authorize release of the results of the criminal history check to the real estate commission. The applicant shall pay the actual cost of the fingerprinting and criminal history check, if any. Unless the criminal history check was completed within the two hundred ten calendar days prior to the date the license application is received by the real estate commission, the commission shall reject and return the application to the applicant. The commission shall process the application but hold delivery of the license until the background check is complete. The results of a criminal history check conducted pursuant to this subsection shall not be considered a public record under chapter 22.
    Sec. 2.  Section 543B.16, Code 2017, is amended to read as follows:
   543B.16  Application forms.
   1.  Every applicant for a real estate broker’s license shall apply in writing upon blanks prepared or furnished by the real estate commission. The real estate commission shall not require that a recent photograph of the applicant be attached to the application.  The real estate commission shall not require an applicant to disclose criminal background information on the application except for a conviction of an offense described in section 543B.15, subsection 3.
   2.  Every applicant for a license shall furnish information setting forth the applicant’s present mailing address, both of business and residence, a complete list of all former places where the applicant may have been engaged in business for a period of sixty days or more, during the last five years, accounting for such entire period and electronic mail address.
   3.  The commission shall prepare and furnish written application blanks for the salesperson’s license requesting information as the commission may require. The commission shall not require that a recent photograph of the applicant be attached to the application. The application Every applicant for the a salesperson’s license shall be accompanied by furnish a written statement by the designated broker whose service the applicant is about to enter recommending that the license be granted to the applicant.
    Sec. 3.  Section 543B.19, Code 2017, is amended to read as follows:
   543B.19  License denied —— hearing.
   If the real estate commission, after an application in proper form has been filed with it the commission, accompanied by the proper fee, shall deny denies a license to the applicant, upon the applicant’s application applicant may apply in writing, and within a period of thirty days of such denial, and the applicant shall be entitled to a hearing as provided in section 543B.35.
    Sec. 4.  Section 543B.21, Code 2017, is amended to read as follows:
   543B.21  Nonresident license Out-of-state licensee —— reciprocity.
   A nonresident of this state person holding a valid and active license to engage in brokerage services in another state may be licensed as a real estate broker or a real estate salesperson in this state, upon complying with all requirements of law and with all the provisions and conditions of this chapter relative to resident brokers or salespersons and the filing by the applicant with the real estate commission of a certification from the state of original licensure signed by the duly qualified and authorized official or officials of that state that the applicant is there currently licensed, that no charges against the applicant are there pending, and that the applicant’s record in that state justifies the issuance of a license to the applicant in Iowa. The commission may waive the requirement of an examination in the case of a nonresident broker an out-of-state licensee who is licensed under the laws of a state having similar requirements and where similar recognition and courtesies are extended to licensed real estate brokers and salespersons licensees of this state.
    Sec. 5.  Section 543B.22, Code 2017, is amended to read as follows:
   543B.22  Nonresident’s Out-of-state licensee’s place of business.
   A nonresident An out-of-state licensee to whom a license is issued upon compliance with all the other requirements of law and provisions of this chapter, is not required to maintain a definite an active place of business within this state. Provided that However, the nonresident, if a broker, out-of-state licensee shall maintain an active place of business within the state of the nonresident’s domicile, and that the original licensure. The privilege of submitting a certification of licensure certified to by the qualified and authorized official or officials of the state of original licensure, in lieu of the recommendations and statements otherwise required, only applies to licensed real estate brokers and real estate salespersons of those states under the laws of which similar recognition and courtesies are extended to licensed real estate brokers and real estate salespersons licensees of this state.
    Sec. 6.  Section 543B.23, Code 2017, is amended to read as follows:
   543B.23  Actions against nonresidents out-of-state licensees.
   Every nonresident out-of-state licensee applicant, before the issuance of a license in this state, shall file an irrevocable consent that suits and actions may be commenced against such applicant in the proper court of any county of this state in which a cause of action may arise, by the service of any process or pleadings authorized by the laws of this state on the chairperson of the real estate commission, said such consent stipulating and agreeing that such service of such process or pleadings on the commission shall be taken and held in all courts to be as valid and binding as if due service had been made upon said the applicant within the state of Iowa. Said The instrument containing such consent shall be authenticated by the seal thereof of the out-of-state licensee, and if a corporation, or by the acknowledged signature of a member or officer thereof, if otherwise of the corporation. All such applications, except from individuals, shall be accompanied by a duly certified copy of the resolutions of the proper officers, or managing board, authorizing the proper officer to execute the same application. In case any process or pleadings mentioned in the case are served upon the commission it shall be by duplicate copies, one of which shall be filed in the office of the commission, and the other immediately forwarded by certified mail to the main office of the applicant against whom or which said such process or pleadings are directed.
    Sec. 7.  Section 543B.29, subsections 2, 3, and 4, Code 2017, are amended to read as follows:
   2.  The revocation of a designated broker’s license shall automatically suspend every license granted to any person by virtue of the person’s employment by the broker whose license has been revoked who is employed or associated with the brokerage, pending a change of employer the designated broker and the issuance of a new license. The new license shall be issued upon payment of a fee in an amount determined by the commission based upon the administrative costs involved, if granted during the same license period in which the original license was granted.
   3.  A real estate broker or salesperson licensee who is an owner or lessor of property or an employee of an owner or lessor may have the broker’s or salesperson’s their license revoked or suspended for violations of this section or section 543B.34, except section 543B.34, subsection 1, paragraphs “d”, “e”, “f”, and “i”, with respect to that property.
   4.  A real estate broker’s or salesperson’s licensee’s license shall be revoked following three violations of this section or section 543B.34 within a five-year three-year period.
    Sec. 8.  Section 543B.31, Code 2017, is amended to read as follows:
   543B.31  Place of business —— branch license.
   Every real estate broker brokerage, except as provided in section 543B.22, shall maintain a place of business in this state.  A brokerage may maintain more than one place of business within the state and a broker may be the designated broker of more than one branch office within the state. If the real estate broker brokerage maintains more than one place of business within the state, a duplicate branch license shall be issued to such broker brokerage for each branch office maintained. Provided, that if such broker be a partnership, association, corporation, professional corporation, or professional limited liability company a duplicate shall be issued to the members or officers thereof, and a A fee determined by the real estate commission in each case shall be paid for each duplicate branch license.
    Sec. 9.  Section 543B.32, Code 2017, is amended to read as follows:
   543B.32  Change of location.
   Notice in writing, electronic or otherwise, shall be given to the real estate commission by each licensee of any change of principal business location, whereupon the commission shall issue a new license for the unexpired period upon the payment of a fee established by rule to cover the cost of issuing the license.
    Sec. 10.  Section 543B.33, Code 2017, is amended to read as follows:
   543B.33  Salespersons Licensees —— change of employment brokerage employment or association.
   When any real estate salesperson a licensee is discharged or terminates employment or association with the real estate broker by whom the salesperson is employed a brokerage, the real estate designated broker for the brokerage shall immediately deliver, or mail, or electronically submit to the real estate commission a copy of the real estate salesperson’s licensee’s license on the reverse side of which the employing designated broker shall set out the date and cause of termination of employment. The real estate designated broker at the time of mailing submitting a copy of the real estate salesperson’s licensee’s license to the commission shall address a communication to the last known residence address of the real estate salesperson licensee stating that a copy of the licensee’s license has been delivered, or mailed, or electronically submitted to the commission. A copy of the communication to the real estate salesperson licensee shall accompany the copy of the license when mailed or delivered submitted to the commission. It is unlawful for any real estate salesperson a licensee to perform any of the acts contemplated by this chapter either directly or indirectly under authority of a license from and after the date of receipt of a copy of the licensee’s license by the commission. The commission shall, upon presentation of evidence by the salesperson licensee that the salesperson licensee has been employed by or is associated with another broker brokerage, issue another license for the balance of the current license period showing each change of employment or association with a brokerage. A fee as determined by the commission shall be charged for the issuance of the license. Not more than one license shall be issued to any real estate salesperson licensee for the same period of time.
    Sec. 11.  Section 543B.34, Code 2017, is amended to read as follows:
   543B.34  Investigations by commission —— licensing sanctions —— civil penalty.
   1.  The real estate commission may upon its own motion and shall upon the verified complaint in writing of any person, if the complaint together with evidence, documentary or otherwise, presented in connection with the complaint makes out a prima facie case, request commission staff or any other duly authorized representative or designee to investigate the actions of any real estate broker, real estate salesperson, licensee or other person who assumes to act in either such capacity within this state. The commission may assess civil penalties against any person or entity, and may suspend or revoke a license issued under this chapter at any time if the licensee has by false or fraudulent representation obtained a license, or if the licensee or other person assuming to act in the capacity of a real estate broker or real estate salesperson licensee, except for those actions exempt pursuant to section 543B.7, is found to be guilty of any of the following:
   a.  Making any substantial misrepresentation.
   b.  Making any false promise of a character likely to influence, persuade, or induce.
   c.  Pursuing a continued and flagrant course of misrepresentation, or making of false promises through agents or salespersons licensees or advertising or otherwise.
   d.  Acting for more than one party in a transaction without the knowledge of all parties for whom the licensee acts.
   e.  Accepting a commission or valuable consideration as a real estate broker associate or salesperson licensee for the performance of any of the acts specified in this chapter, from any person, except the broker associate’s or salesperson’s employer, who must be a licensed real estate broker licensee’s brokerage. However, a broker associate or salesperson licensee may, without violating this paragraph, accept a commission or valuable consideration from a corporation which is wholly owned, or owned with a spouse, by the broker associate or salesperson licensee if the conditions described in paragraph “i” are met.
   f.  Representing or attempting to represent a real estate broker brokerage other than the licensee’s employer, without the express knowledge and consent of the employer brokerage.
   g.  Failing, within a reasonable time, to account for or to remit any moneys coming into the licensee’s possession which belong to others.
   h.  Being unworthy or incompetent to act as a real estate broker or salesperson licensee in such manner as to safeguard the interests of the public.
   i.  (1)  Paying a commission or other valuable consideration or any part of such commission or consideration for performing any of the acts specified in this chapter to a person who is not a licensed broker or salesperson under this chapter or who is not engaged in the real estate business brokerage services in another state or foreign country, provided that the provisions of this section shall not be construed to prohibit the payment of earned commissions or consideration to any of the following:
   (a)  The estate or heirs of a deceased real estate licensee when such licensee had a valid real estate license in effect at the time the commission or consideration was earned.
   (b)  A citizen of another country acting as a referral agent if that country does not license real estate brokers or salespersons and if the Iowa licensee paying the commission or consideration obtains and maintains reasonable written evidence that the payee is a citizen of the other country, is not a resident of this country, and is in the business of brokering real estate in that other country.
   (c)  A corporation pursuant to subparagraph (2).
   (2)  A broker brokerage may pay a commission to a corporation which is wholly owned, or owned with a spouse, by a salesperson or broker associate licensee employed by or otherwise associated with the broker brokerage, if all of the following conditions are met:
   (a)  The corporation does not engage in real estate transactions as a third-party agent or in any other activity requiring a license under this chapter.
   (b)  The employing broker brokerage is not relieved of any obligation to supervise the employed licensee or any other requirement of this chapter or the rules adopted pursuant to this chapter.
   (c)  The employed broker associate or salesperson licensee is not relieved from any personal civil liability for any licensed activities by interposing the corporate form.
   j.  Failing, within a reasonable time, to provide information requested by the commission as the result of a formal or informal complaint to the commission which would indicate a violation of this chapter.
   k.  Any other conduct, whether of the same or different character from that specified in this section, which demonstrates bad faith, or improper, fraudulent, or dishonest dealings which would have disqualified the licensee from securing a license under this chapter.
   2.  Any unlawful act or violation of any of the provisions of this chapter by any real estate broker associate or salesperson licensee, employee, or partner or associate of a licensed real estate broker licensee, is not cause for the revocation of the license of any real estate broker licensee, unless the commission finds that the real estate broker licensee had guilty knowledge of the unlawful act or violation.
   3.  If an investigation pursuant to this section reveals that an unlicensed person has assumed to act in the capacity of a real estate broker or real estate salesperson licensee, the commission shall issue a cease and desist order, and shall impose a civil penalty of up to the greater of ten thousand dollars or ten percent of the real estate sale price.
    Sec. 12.  Section 543B.46, Code 2017, is amended to read as follows:
   543B.46  Trust accounts.
   1.  Each real estate broker who is in the practice of depositing funds in a trust account shall maintain a common trust account in a bank, savings association, or credit union federally insured depository institution for the deposit of all down payments, earnest money deposits, or other trust funds received by the broker or the broker’s salespersons on behalf of the broker’s principal, except that a broker acting as a salesperson shall deposit these funds in the common trust account of the broker for whom the broker acts as salesperson. The account shall be an interest-bearing account. The interest on the account shall be transferred quarterly to the treasurer of state and transferred to the Iowa finance authority for deposit in the housing trust fund established in section 16.181 unless there is a written agreement between the buyer and seller to the contrary. The broker shall not benefit from interest received on funds of others in the broker’s possession.  A broker who is not in the practice of depositing funds in a trust account shall not be required to maintain a common trust account pursuant to this section.
   2.  Each broker required to maintain a trust account pursuant to this section shall notify the real estate commission of the name of each bank, savings association, or credit union the federally insured depository institution in which a trust account is maintained and also the name of the account on forms provided therefor.
   3.  Each broker required to maintain a trust account pursuant to this section shall authorize the real estate commission to examine each trust account and shall obtain the certification of the bank, savings association, or credit union federally insured depository institution attesting to each trust account and consenting to the examination and audit of each account by a duly authorized representative of the commission. The certification and consent shall be furnished on forms prescribed by the commission. This subsection does not apply to an individual farm account maintained in the name of the owner or owners for the purpose of conducting ongoing farm business whether it is conducted by the farm owner or by an agent or farm manager when the account is part of a farm management agreement between the owner and agent or manager. This subsection also does not apply to an individual property management account maintained in the name of the owner or owners for the purpose of conducting ongoing property management whether it is conducted by the property owner or by an agent or manager when the account is part of a property management agreement between the owner and agent or manager.
   4.  Each broker required to maintain a trust account pursuant to this section shall only deposit trust funds received on real estate or business opportunity transactions as directed by the principal of a transaction constituting dealing in real estate as defined in section 543B.6 in the common trust account and shall not commingle the broker’s personal funds or other funds in the trust account with the exception that a broker may deposit and keep a sum not to exceed five hundred one thousand dollars in the account from the broker’s personal funds, which sum shall be specifically identified and deposited to cover bank service charges relating to the trust account.
   5.  A broker may maintain more than one trust account provided the commission is advised of said account as specified in subsections 2 and 3 above.
   6.  The commission shall verify on a test basis, a random sampling of the brokers, corporations, professional corporations, professional limited liability companies, and partnerships for their trust account compliance. The commission may upon reasonable cause, or as a part of or after an investigation, request or order a special report.
   7.  The examination of a trust account shall be conducted by the commission or the commission’s authorized representative.
   8.  The commission shall adopt rules to ensure implementation of this section.
    Sec. 13.  Section 543B.53, Code 2017, is amended to read as follows:
   543B.53  Application of chapter.
   The provisions of this chapter which require successful completion of a real estate education course before being licensed as a real estate salesperson shall not apply to persons who hold real estate salesperson’s licenses on July 1, 1976 or to the issuance of new licenses to these persons under the provisions of pursuant to section 543B.28.
    Sec. 14.  Section 543B.57, Code 2017, is amended to read as follows:
   543B.57  Confirmation and disclosure of relationship.
   1.  A licensee shall not represent any party or parties to a transaction or otherwise as a licensee unless that licensee makes a disclosure to all parties to the transaction identifying which party that person represents in the transaction an agency disclosure to the party or parties represented by the licensee.
   2.  a.  The disclosure required in subsection 1 shall be made by the licensee at the time the licensee provides specific assistance to the client. A change in a licensee’s representation that makes the initial disclosure incomplete, misleading, or inaccurate requires that a new disclosure be made immediately.
   b.  A written disclosure is required to be made to a licensee’s client prior to an offer being made or accepted by any party to a transaction. The written disclosure shall be acknowledged by separate signatures of all parties to the transaction prior to any offer being made or accepted by any party to a transaction.
   c.  For purposes of this section, “specific assistance” means eliciting or accepting confidential information about a party’s real estate needs, motivation, or financial qualifications, or eliciting or accepting information involving a proposed or preliminary offer associated with specific real estate. “Specific assistance” does not mean an open house showing, preliminary conversations concerning price range, location, and property styles, or responding to general factual questions concerning properties which have been advertised for sale or lease.
   3.  The written agency disclosure form shall contain all of the following:
   a.  A statement of which party is the licensee’s client or, if the licensee is providing brokerage services to more than one client as provided under section 543B.60, a statement of all persons who are the licensee’s clients.
   b.  A statement of the licensee’s duties to the licensee’s client under section 543B.56, subsections 1 and 2.
   c.  Any additional information that the licensee determines is necessary to clarify the licensee’s relationship to the licensee’s client or customer.
   4.  This section does not prohibit a person from representing oneself.
   5.  The seller, in the listing agreement, may authorize the seller’s licensee to disburse part of the licensee’s compensation to other licensees, including a buyer’s licensee solely representing the buyer. A licensee representing a buyer shall inform the listing licensee, if there is a listing licensee, either verbally or in writing, of the agency relationship before any negotiations are initiated. The obligation of either the seller or the buyer to pay compensation to a licensee is not determinative of the agency relationship.
    Sec. 15.  REPEAL.  Section 543B.25, Code 2017, is repealed.
DIVISION II
REAL ESTATE DISCLOSURES

    Sec. 16.  Section 558A.1, Code 2017, is amended by adding the following new subsection:
   NEW SUBSECTION.  01.  “Agent” means an individual designated by a transferee to accept delivery of a disclosure statement from a transferor.
    Sec. 17.  Section 558A.1, subsection 4, paragraph e, Code 2017, is amended to read as follows:
   e.  A transfer made to a spouse, or to a person in the lineal line within the third degree of consanguinity or affinity of a person making the transfer.
    Sec. 18.  Section 558A.2, subsection 2, Code 2017, is amended to read as follows:
   2.  The disclosure statement shall be made by personal delivery, or by certified or registered mail, or electronic delivery to the transferee or to the transferee’s agent.  If delivery is electronic, acknowledgment of receipt shall be provided pursuant to rules adopted by the commission. The delivery may be made to the spouse of the transferee, unless otherwise provided by the parties. If the disclosure statement is not timely delivered, the transferee may withdraw the offer or revoke the acceptance without liability, within three days following personal delivery of the statement or five days following electronic delivery or delivery by mail.
    Sec. 19.  Section 558A.4, Code 2017, is amended to read as follows:
   558A.4  Required information.
   1.  a.  The disclosure statement shall include information relating to the condition and important characteristics of the property and structures located on the property, including significant defects in the structural integrity of the structure, as provided in rules which shall be adopted by the real estate commission pursuant to section 543B.9. The rules may require the disclosure to include information relating to the property’s zoning classification; the condition of plumbing, heating, or electrical systems; or the presence of pests.
   b.  The disclosure statement may include a report or written opinion prepared by a person qualified to make judgment based on education or experience, as provided by rules adopted by the commission, including but not limited to a professional land surveyor licensed pursuant to chapter 542B, a geologist, a structural pest control operator licensed pursuant to section 206.6, or a building contractor. The report or opinion on a matter within the scope of the person’s practice, profession, or expertise shall satisfy the requirements of this section or rules adopted by the commission regarding that matter required to be disclosed. If the report or opinion is in response to a request made for purposes of satisfying the disclosure statement, the report or opinion shall indicate which part of the disclosure statement the report or opinion satisfies.
   2.  a.  A transferor subject to the requirements of section 558.70 shall recommend in writing that the transferee obtain an independent home inspection report to provide full and complete information as required to be disclosed under this section and under rules adopted by the real estate commission pursuant to section 543B.9.
   b.  A transferor subject to section 558.70 shall provide the real estate disclosure statement required by this chapter at least seven days before the real estate installment sales contract is executed by all parties to the contract.
    Sec. 20.  NEW SECTION.  558A.4A  Installment sales contracts —— required disclosures.
   1.  A transferor subject to the requirements of section 558.70 shall recommend in writing that the transferee obtain an independent home inspection report to provide full and complete information as required to be disclosed under this chapter and under rules adopted by the real estate commission pursuant to section 543B.9.
   2.  A transferor subject to section 558.70 shall provide the real estate disclosure statement required by this chapter at least seven days before the real estate installment sales contract is executed by all parties to the contract.
    Sec. 21.  Section 558A.6, Code 2017, is amended to read as follows:
   558A.6  Liability under the chapter.
   A person who violates this chapter shall be liable to a transferee for the amount of actual damages suffered by the transferee, but subject to the following limitations:
   1.  The provided, however, that the transferor, or a broker or salesperson, shall not be liable under this chapter for the error, inaccuracy, or omission in information required in a disclosure statement, unless that person has actual knowledge of the inaccuracy, or fails to exercise ordinary care in obtaining the information.
   2.  The person submitting a report or opinion within the scope of the person’s practice, profession, or expertise, as provided in section 558A.4, for purposes of satisfying the disclosure statement, shall not be liable under this chapter for any matter other than a matter within the person’s practice, profession, or expertise, and which is required by the disclosure statement, unless the person failed to use care ordinary in the person’s profession, practice, or area of expertise in preparing the information.
EXPLANATION
The inclusion of this explanation does not constitute agreement with
the explanation’s substance by the members of the general assembly.
   This bill relates to real estate professionals and real estate disclosures.
   REAL ESTATE LICENSEES. The bill modifies several provisions in Code chapter 543B, dealing with the licensure of real estate brokers and salespersons.
   The bill changes several references to “real estate broker”, “broker associate”, or “salesperson” in Code chapter 543B to “real estate licensee” or “licensee”.
   Code section 543B.15(3) prohibits an applicant convicted of certain offenses from being considered for licensure until certain time periods have elapsed. The bill provides that for an applicant convicted of an offense classified as a felony, or involving forgery, embezzlement, false pretenses, theft, arson, extortion, conspiracy to defraud, or other similar offense, or any other offense involving a criminal breach of fiduciary duty, the applicant must wait five years. An applicant convicted of any other offense involving moral turpitude must wait one year. The bill provides that a copy of the record of an applicant’s conviction is conclusive evidence of the conviction. 
   The bill prohibits the real estate commission from requiring an applicant to disclose criminal background information on an application except for a copy of conviction of certain prescribed offenses. The bill requires an application to include an applicant’s present mailing address and electronic mail address. A salesperson’s application must include a written statement from a designated broker.
   Code section 543B.21 allows a nonresident to become licensed as a broker or salesperson in Iowa if certain conditions are met. The bill specifies that the person must hold a valid and active license to engage in brokerage services in another state. The bill changes “nonresident” to “out-of-state licensee” with respect to such persons. 
   The bill repeals Code section 543B.25, which requires a licensed broker to display their license in the broker’s place of business.
   Code section 543B.29(2) provides for the automatic suspension of a license granted by virtue of a person’s employment with a broker whose license is revoked. The bill amends this provision to provide that the revocation of a designated broker’s license automatically suspends a license granted to a person associated with the brokerage. 
   Code section 543B.29(4) provides that a license must be revoked following three violations of Code section 543B.29 or 543B.34 within a five-year period. The bill changes this to a three-year period. 
   Code section 543B.31 requires a licensed broker to maintain a place of business in this state and allows a broker to obtain a duplicate license for each additional branch office. The bill changes “broker” to “brokerage” and specifies that a brokerage may maintain more than one place of business in the state and a broker may be the designated broker of more than one branch office in the state. The bill requires a brokerage to obtain a branch license, instead of a duplicate license, for each additional branch office. 
   The bill allows a licensee to provide electronic notification to the real estate commission for a change to a licensee’s principal place of business location, as required in Code section 543B.32. 
   Code section 543B.33 requires a broker to notify the real estate commission of any change of employment for a licensed salesperson and mail the salesperson’s license to the commission. The bill broadens this to include a change of employment or association for any licensee at a brokerage, and requires the designated broker to provide such notice. The bill allows the designated broker to send a copy of the licensee’s license, rather than the actual license, which can be delivered, mailed, or submitted electronically. 
   The bill provides that the real estate commission may assess civil penalties against any person or entity for conducting investigations pursuant to Code section 543B.34. 
   Code section 543B.46 requires a licensed broker to maintain a common trust account in a bank, savings association, or credit union. The bill changes this to require a broker to maintain a common trust account in a federally insured depository institution. A broker not in the practice of depositing funds in a trust account is not required to do so. The bill increases the amount of personal funds a broker may deposit in the common trust account from $500 to $1,000. The bill removes subsections 5 through 8 in Code section 543B.46.
   Code section 543B.53 provides that education requirements for licensure as a salesperson do not apply to salespersons licensed on July 1, 1976, or to the issuance of new licenses to such salespersons upon renewal. The bill removes reference to salespersons licensed on July 1, 1976, providing that the education requirements do not apply to licensed salespersons seeking license renewal. 
   Code section 543B.57 requires licensees to provide written agency disclosure statements when representing a party to a real estate transaction. The bill specifies that such disclosure must be made to a licensee’s client prior to an offer being made or accepted. The bill removes the requirement for a disclosure to be signed by all parties prior to an offer being made or accepted. The bill removes the definition of “specific assistance” in Code section 543B.57(2)(c). The bill removes subsections 3 through 5 in Code section 543B.57, including the requirements of the written agency disclosure form.
   REAL ESTATE DISCLOSURES. The bill modifies provisions in Code chapter 558A, which requires real estate disclosures to be made before the transfer of certain real estate property. 
   The bill defines “agent” in Code section 558A.1 to mean an individual designated by a transferee to accept delivery of a disclosure statement from a transferor. The bill changes the exemption to the definition of “transfer” for spouses or related persons to specify that the exemption applies to persons within the third degree of consanguinity or affinity. 
   The bill allows a real estate disclosure statement to be made by electronic delivery in addition to personal delivery, or by mail, and to the transferee’s agent in addition to the transferee. If delivery is electronic, acknowledgment of receipt shall be provided by rules adopted by the real estate commission.
   The bill removes the provision allowing a disclosure statement to include a report or written opinion by a qualified professional from Code section 558A.4(1)(b). The bill removes the limitation on liability for a qualified professional who submitted a report from Code section 558A.6.
   The bill strikes Code section 558A.4(2), which requires the transferor in an installment sales contract to provide certain disclosures. However, the language of Code section 558A.4(2) is incorporated into new Code section 558A.4A.