H.F. _____ DIVISION I 1 REAL ESTATE LICENSEES 2 Section 1. Section 543B.1, Code 2017, is amended to read as 3 follows: 4 543B.1 License mandatory. 5 A person shall not, directly or indirectly, with the 6 intention or upon the promise of receiving any valuable 7 consideration, offer, attempt, agree to perform, or perform any 8 single act as a real estate broker constituting dealing in real 9 estate as provided in section 543B.6, whether as a part of a 10 transaction or as an entire transaction, or represent oneself 11 as a real estate broker, broker associate, or salesperson 12 licensee , without first obtaining a license and otherwise 13 complying with the requirements of this chapter . 14 Sec. 2. Section 543B.2, Code 2017, is amended to read as 15 follows: 16 543B.2 Individual licenses necessary Brokerage ownership . 17 A partnership, association, corporation, professional 18 corporation, or professional limited liability company 19 brokerage shall not be granted a license , unless every member 20 or officer of the partnership, association, corporation, 21 professional corporation, or professional limited liability 22 company brokerage who actively participates in the brokerage 23 business of the partnership, association, corporation, 24 professional corporation, or professional limited liability 25 company brokerage services holds a license as a real estate 26 broker or salesperson licensee , and unless every employee 27 who acts as a salesperson licensee for the partnership, 28 association, corporation, professional corporation, or 29 professional limited liability company brokerage holds a 30 license as a real estate broker or salesperson licensee . At 31 least one member or officer of each partnership, association, 32 corporation, professional corporation, or professional limited 33 liability company shall be a real estate broker. 34 Sec. 3. Section 543B.3, Code 2017, is amended to read as 35 -1- LSB 1925HC (6) 87 gh/rn/nh 1/ 35

H.F. _____ follows: 1 543B.3 Broker Brokerage services —— definition. 2 As used in this chapter , “real estate broker” “brokerage 3 services” means a person acting for on behalf of another person 4 for a fee, commission, or other compensation or promise, 5 whether it be for all or part of a person’s time, and who 6 engages engaging directly or indirectly in any of the following 7 acts: 8 1. Sells Selling , exchanges exchanging , purchases 9 purchasing , rents renting , or leases leasing real estate. 10 2. Lists Listing , offers or offering , attempts attempting , 11 or agrees agreeing to list , real estate for sale, exchange, 12 purchase, rent, or lease. 13 3. Advertises Advertising or holds holding oneself out 14 as being engaged in the business of selling, exchanging, 15 purchasing, renting, leasing, or managing real estate. 16 4. Negotiates Negotiating , or offers offering , attempts 17 attempting , or agrees agreeing to negotiate, the sale, 18 exchange, purchase, rental, or lease of real estate. 19 5. Buys Buying , sells selling , offers offering to buy or 20 sell, or otherwise deals dealing in options on real estate or 21 improvements on real estate. 22 6. Collects Collecting , or offers offering , attempts 23 attempting , or agrees agreeing to collect, rent for the use of 24 real estate. 25 7. Assists Assisting, referring, or directs directing in 26 the procuring of prospects, intended to result in the sale, 27 exchange, purchase, rental, or leasing of real estate. 28 8. Assists Assisting or directs directing in the 29 negotiation of any transaction intended to result in the sale, 30 exchange, purchase, rental, or leasing of real estate. 31 9. Prepares Preparing offers to purchase or purchase 32 agreements, listing contracts, agency disclosures, real 33 property residential and agricultural rental agreements, real 34 property commercial rental agreements of one year or less, and 35 -2- LSB 1925HC (6) 87 gh/rn/nh 2/ 35

H.F. _____ groundwater hazard statements, including any modifications, 1 amendments, or addendums to these specific documents. 2 Sec. 4. Section 543B.5, Code 2017, is amended to read as 3 follows: 4 543B.5 Other definitions. 5 As used in this chapter , unless the context otherwise 6 requires: 7 1. “Agency” means a relationship in which a real estate 8 broker licensee acts for or represents another by the other 9 person’s express authority in a transaction. 10 2. “Agency agreement” means a written agreement between a 11 broker licensee and a client which identifies the party the 12 broker licensee represents in a transaction. 13 3. “Appointed agent” means that affiliated an associated 14 licensee who is appointed by the designated broker of the 15 affiliated associated licensee’s real estate brokerage agency 16 to act solely for a client of that brokerage agency to the 17 exclusion of other affiliated associated licensees of that 18 brokerage agency . 19 4. “Branch office” means a real estate broker’s office other 20 than a brokerage located separately from the principal place 21 of business of the brokerage . 22 5. “Broker associate” means a person who has a broker’s 23 license but licensee who is licensed under, and employed by 24 or otherwise associated with, another a designated broker as 25 a salesperson . 26 6. “Brokerage” means the a business or occupation of a real 27 estate broker entity offering brokerage services . 28 7. “Brokerage agreement” means a contract between a broker 29 brokerage and a client which establishes the relationship 30 between the parties as to the brokerage services to be 31 performed and contains the provisions required in section 32 543B.56A . 33 8. “Brokerage services” means those activities identified 34 in sections 543B.3 and 543B.6 . 35 -3- LSB 1925HC (6) 87 gh/rn/nh 3/ 35

H.F. _____ 9. 8. “Client” means a party to a transaction who has 1 an agency a brokerage agreement with a broker brokerage for 2 brokerage services. 3 10. 9. “Customer” means a consumer who is not being 4 represented by a licensee but for whom the licensee may perform 5 ministerial acts. 6 11. 10. “Designated broker” means a licensee designated 7 by a real estate brokerage agency to act for the agency a 8 brokerage in conducting real estate brokerage services. 9 12. 11. “Inactive license” means either a broker or 10 salesperson license certificate that is on file with the real 11 estate commission in the commission office and during pursuant 12 to which time the licensee is precluded from engaging in any of 13 the acts of this chapter . 14 13. “Licensee” means a broker or a salesperson licensed 15 pursuant to this chapter . 16 14. 12. “Listing” is means an agreement between a property 17 owner or other authorized person and another a brokerage or 18 other person in pursuant to which that person the brokerage or 19 other person holds or advertises the property to the public as 20 being available for sale or lease. 21 15. 13. a. “Material adverse fact” means an adverse 22 fact that a party indicates is of such significance, or that 23 is generally recognized by a competent licensee as being of 24 such significance to a reasonable party, that it affects or 25 would affect the party’s decision to enter into a contract 26 or agreement concerning a transaction, or affects or would 27 affect the party’s decision about the terms of the contract or 28 agreement. 29 b. For purposes of this subsection , “adverse fact” means 30 a condition or occurrence that is generally recognized by a 31 competent licensee as resulting in any of the following: 32 (1) Significantly and adversely affecting the value of the 33 property. 34 (2) Significantly reducing the structural integrity of 35 -4- LSB 1925HC (6) 87 gh/rn/nh 4/ 35

H.F. _____ improvement to real estate. 1 (3) Presenting a significant health risk to occupants of 2 the property. 3 16. 14. “Negotiate” means to act as an intermediary between 4 the parties to a transaction, and includes any of the following 5 acts: 6 a. Participating in the parties’ discussion of the terms of 7 a contract or agreement concerning a transaction. 8 b. Completing, when requested by a party, appropriate forms 9 or other written record to document the party’s proposal in a 10 manner consistent with the party’s intent. 11 c. Presenting to a party the proposals of other parties to 12 the transaction and informing the party receiving a proposal of 13 the advantages and disadvantages of the proposal. 14 17. 15. “Party” means a person seeking to sell, exchange, 15 buy, or rent an interest in real estate, a business, or a 16 business opportunity. “Party” includes a person who seeks to 17 grant or accept an option to buy, sell, or rent an interest in 18 real estate. 19 18. 16. “Person” means an individual, partnership, 20 association, corporation, professional corporation, or 21 professional limited liability company. 22 17. “Real estate broker” or “broker” means a person who is 23 licensed as a real estate broker pursuant to this chapter. 24 18. “Real estate license” or “license” means a license 25 issued pursuant to this chapter. 26 19. “Real estate licensee” or “licensee” means the holder of 27 a license issued pursuant to this chapter. 28 20. “Real estate salesperson” or “salesperson” means a 29 person who is licensed as a real estate salesperson pursuant 30 to this chapter and who is employed by or otherwise associated 31 with a brokerage as a selling, renting, or listing agent or 32 representative of the brokerage. 33 19. 21. “Regular employee” means a person whose 34 compensation is fixed in advance, who does not receive a 35 -5- LSB 1925HC (6) 87 gh/rn/nh 5/ 35

H.F. _____ commission, who works exclusively full-time for the owner of a 1 brokerage , and whose total compensation is subject to state and 2 federal withholding. 3 20. “Salesperson” means a person who is licensed under, and 4 employed by or otherwise associated with, a real estate broker, 5 as a selling, renting, or listing agent or representative of 6 the broker. 7 21. 22. “Transaction” means the sale, exchange, purchase, 8 or rental of, or the granting or acceptance of an option to 9 sell, exchange, purchase, or rent an interest in real estate. 10 Sec. 5. Section 543B.6, Code 2017, is amended to read as 11 follows: 12 543B.6 Acts constituting dealing in real estate. 13 A person who, for another, in consideration of compensation, 14 by fee, commission, salary, or otherwise, or with the intention 15 or in the expectation or upon the promise of receiving or 16 collecting a fee, does, offers or attempts or agrees to do, 17 engages in or offers or attempts or agrees to engage in, either 18 directly or indirectly, any single act or transaction contained 19 in the definition of a real estate broker brokerage services as 20 set out in section 543B.3 , whether the act be is an incidental 21 part of a transaction or the entire transaction is a real 22 estate broker or real estate salesperson dealing in real estate 23 within the meaning of this chapter . 24 Sec. 6. Section 543B.7, subsection 5, paragraph a, 25 subparagraphs (1) and (2), Code 2017, are amended to read as 26 follows: 27 (1) The auctioneer shall provide in any advertising the name 28 and address of the real estate broker licensee who is providing 29 brokerage services for the transaction and the name of the real 30 estate broker brokerage , attorney, or closing company who is 31 responsible for closing the sale of the property. 32 (2) The real estate broker licensee providing brokerage 33 services shall be present at the time of the auction and, if 34 found to be in violation of this subsection , shall be subject 35 -6- LSB 1925HC (6) 87 gh/rn/nh 6/ 35

H.F. _____ to a civil penalty of one thousand dollars. 1 Sec. 7. Section 543B.7, subsection 5, paragraph c, Code 2 2017, is amended to read as follows: 3 c. If an investigation pursuant to this chapter reveals 4 that an auctioneer has violated this subsection or has assumed 5 to act in the capacity of a real estate broker or real estate 6 salesperson licensee , the real estate commission shall issue 7 a cease and desist order, and shall impose a civil penalty of 8 one thousand dollars for the first offense, and impose a civil 9 penalty of up to the greater of ten thousand dollars or ten 10 percent of the real estate sales price for each subsequent 11 violation. 12 Sec. 8. Section 543B.15, subsections 1, 2, 3, 4, 5, and 9, 13 Code 2017, are amended to read as follows: 14 1. Except as provided in section 543B.20 an applicant for a 15 real estate broker’s or salesperson’s license must be a person 16 whose application has not been rejected for licensure in this 17 or any other state within twelve months prior to the date of 18 application, and whose real estate license has not been revoked 19 in this or any other state within two years prior to date of 20 application. 21 2. To qualify for a real estate license as a real estate 22 broker or salesperson a person shall be eighteen years of age 23 or over. However, an applicant is not ineligible because of 24 citizenship, sex, race, religion, marital status, or national 25 origin, although the application form may require citizenship 26 information. 27 3. a. An applicant for a real estate broker’s or 28 salesperson’s license who has been convicted of an offense 29 specified in this subsection shall not be considered for 30 licensure until the following time periods have elapsed 31 following completion of any applicable period of incarceration, 32 or payment of a fine or fulfillment of any other type of 33 sentence: 34 (1) For an offense which is classified as a felony, two 35 -7- LSB 1925HC (6) 87 gh/rn/nh 7/ 35

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

H.F. _____ may be denied a license by the commission on the grounds of the 1 false statement or submission. 2 9. An applicant for an initial real estate broker’s or 3 salesperson’s license shall be subject to a national criminal 4 history check through the federal bureau of investigation. 5 The commission shall request the criminal history check and 6 shall provide the applicant’s fingerprints to the department 7 of public safety for submission through the state criminal 8 history repository to the federal bureau of investigation. 9 The applicant shall authorize release of the results of the 10 criminal history check to the real estate commission. The 11 applicant shall pay the actual cost of the fingerprinting and 12 criminal history check, if any. Unless the criminal history 13 check was completed within the two hundred ten calendar days 14 prior to the date the license application is received by 15 the real estate commission, the commission shall reject and 16 return the application to the applicant. The commission shall 17 process the application but hold delivery of the license until 18 the background check is complete. The results of a criminal 19 history check conducted pursuant to this subsection shall not 20 be considered a public record under chapter 22 . 21 Sec. 9. Section 543B.16, Code 2017, is amended to read as 22 follows: 23 543B.16 Application forms. 24 1. Every applicant for a real estate broker’s license 25 shall apply in writing upon blanks prepared or furnished 26 by the real estate commission. The real estate commission 27 shall not require that a recent photograph of the applicant 28 be attached to the application. The real estate commission 29 shall not require an applicant to disclose criminal background 30 information on the application except for a conviction of an 31 offense described in section 543B.15, subsection 3. 32 2. Every applicant for a license shall furnish information 33 setting forth the applicant’s present mailing address , both of 34 business and residence, a complete list of all former places 35 -9- LSB 1925HC (6) 87 gh/rn/nh 9/ 35

H.F. _____ where the applicant may have been engaged in business for a 1 period of sixty days or more, during the last five years, 2 accounting for such entire period and electronic mail address . 3 3. The commission shall prepare and furnish written 4 application blanks for the salesperson’s license requesting 5 information as the commission may require. The commission 6 shall not require that a recent photograph of the applicant be 7 attached to the application. The application Every applicant 8 for the a salesperson’s license shall be accompanied by furnish 9 a written statement by the designated broker whose service the 10 applicant is about to enter recommending that the license be 11 granted to the applicant. 12 Sec. 10. Section 543B.19, Code 2017, is amended to read as 13 follows: 14 543B.19 License denied —— hearing. 15 If the real estate commission, after an application in 16 proper form has been filed with it the commission , accompanied 17 by the proper fee, shall deny denies a license to the 18 applicant, upon the applicant’s application applicant may apply 19 in writing , and within a period of thirty days of such denial, 20 and the applicant shall be entitled to a hearing as provided 21 in section 543B.35 . 22 Sec. 11. Section 543B.20, Code 2017, is amended to read as 23 follows: 24 543B.20 Examination. 25 Examinations for a license shall be given as often as deemed 26 necessary by the real estate commission, but no less than one 27 time per year. Each applicant for a license must pass an 28 examination authorized by the commission and administered by 29 the commission or persons designated by the commission. The 30 examination shall be of scope and wording sufficient in the 31 judgment of the commission to establish the competency of the 32 applicant to act as a real estate broker or salesperson in a 33 manner to protect the interests of the public. An examination 34 for a real estate broker shall be of a more exacting nature 35 -10- LSB 1925HC (6) 87 gh/rn/nh 10/ 35

H.F. _____ than that for a real estate salesperson and require higher 1 standards of knowledge of real estate. The identity of the 2 persons taking the examinations shall be concealed until after 3 the examination has been graded. A person who fails to pass 4 either examination once may immediately apply to take the next 5 available examination. Thereafter, the applicant may take the 6 examination at the discretion of the commission. An applicant 7 who has failed either examination may request in writing 8 information from the commission concerning the applicant’s 9 examination grade and subject areas or questions which the 10 applicant failed to answer correctly, except that if the 11 commission administers a uniform, standardized examination, the 12 commission is only required to provide the examination grade 13 and other information concerning the applicant’s examination 14 results which is available to the commission. 15 Sec. 12. Section 543B.21, Code 2017, is amended to read as 16 follows: 17 543B.21 Nonresident license Out-of-state licensee —— 18 reciprocity . 19 A nonresident of this state person holding a valid and 20 active license to engage in brokerage services in another 21 state may be licensed as a real estate broker or a real estate 22 salesperson in this state , upon complying with all requirements 23 of law and with all the provisions and conditions of this 24 chapter relative to resident brokers or salespersons and the 25 filing by the applicant with the real estate commission of a 26 certification from the state of original licensure signed by 27 the duly qualified and authorized official or officials of that 28 state that the applicant is there currently licensed, that no 29 charges against the applicant are there pending, and that the 30 applicant’s record in that state justifies the issuance of a 31 license to the applicant in Iowa. The commission may waive 32 the requirement of an examination in the case of a nonresident 33 broker an out-of-state licensee who is licensed under the 34 laws of a state having similar requirements and where similar 35 -11- LSB 1925HC (6) 87 gh/rn/nh 11/ 35

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

H.F. _____ service had been made upon said the applicant within the state 1 of Iowa. Said The instrument containing such consent shall be 2 authenticated by the seal thereof of the out-of-state licensee , 3 and if a corporation, or by the acknowledged signature of a 4 member or officer thereof, if otherwise of the corporation . 5 All such applications, except from individuals, shall be 6 accompanied by a duly certified copy of the resolutions 7 of the proper officers, or managing board, authorizing the 8 proper officer to execute the same application . In case any 9 process or pleadings mentioned in the case are served upon 10 the commission it shall be by duplicate copies, one of which 11 shall be filed in the office of the commission, and the other 12 immediately forwarded by certified mail to the main office 13 of the applicant against whom or which said such process or 14 pleadings are directed. 15 Sec. 15. Section 543B.24, Code 2017, is amended to read as 16 follows: 17 543B.24 Custody of salesperson’s license. 18 The A license of a real estate salesperson shall be delivered 19 or mailed to the real estate broker brokerage by whom the real 20 estate salesperson licensee is employed and shall be kept in 21 the custody and control of the broker brokerage . 22 Sec. 16. Section 543B.27, subsection 1, unnumbered 23 paragraph 1, Code 2017, is amended to read as follows: 24 The real estate commission shall set fees for examination 25 and licensing of real estate brokers and real estate 26 salespersons licensees . The commission shall determine the 27 annual cost of administering the examination and shall set the 28 examination fee accordingly. The commission shall set the 29 fees for the real estate broker’s licenses and for real estate 30 salesperson’s licenses based upon the administrative costs of 31 sustaining the commission. The fees shall include, but shall 32 not be limited to, the costs for: 33 Sec. 17. Section 543B.27, subsection 2, Code 2017, is 34 amended to read as follows: 35 -13- LSB 1925HC (6) 87 gh/rn/nh 13/ 35

H.F. _____ 2. Notwithstanding subsection 1 , a nonresident person an 1 out-of-state licensee seeking to procure a license pursuant to 2 this chapter shall be charged a fee equal to the greater of the 3 following: 4 a. The fee as determined pursuant to subsection 1 . 5 b. A fee equal to the fee the nonresident person 6 out-of-state licensee would be charged by such person’s state 7 of residence if that person were a resident of this state 8 making application for a license in that state and that state 9 charges a nonresident an out-of-state licensee a fee which is 10 greater than that charged by that state to a resident of that 11 state. 12 Sec. 18. Section 543B.29, subsection 1, unnumbered 13 paragraph 1, Code 2017, is amended to read as follows: 14 A license to practice the profession of real estate broker 15 and salesperson may be revoked or suspended when the licensee 16 is guilty of any of the following acts or offenses: 17 Sec. 19. Section 543B.29, subsection 1, paragraph b, Code 18 2017, is amended to read as follows: 19 b. Having made a false statement of material fact on 20 an application for a real estate broker’s or salesperson’s 21 license, or having caused to be submitted, or having been a 22 party to preparing or submitting any false application for such 23 license. 24 Sec. 20. Section 543B.29, subsection 1, paragraph f, 25 subparagraphs (1) and (2), Code 2017, are amended to read as 26 follows: 27 (1) A licensed real estate broker or salesperson licensee 28 shall notify the commission of the licensee’s conviction of an 29 offense included in section 543B.15, subsection 3 , paragraph 30 “a” , within ten days of the conviction. Notification of a 31 conviction for an offense which is classified as a felony shall 32 result in the immediate suspension of a license pending the 33 outcome of a hearing conducted pursuant to section 543B.35 to 34 determine the nature of the disciplinary action, if any, the 35 -14- LSB 1925HC (6) 87 gh/rn/nh 14/ 35

H.F. _____ commission will impose on the licensee. The hearing shall be 1 conducted within thirty days of the licensee’s notification to 2 the commission, and the commission’s decision shall be provided 3 to the licensee no later than thirty days following the 4 hearing. The failure of the licensee to notify the commission 5 of the conviction within ten days of the date of the conviction 6 is sufficient grounds for revocation of the license. 7 (2) The commission, when considering the revocation 8 or suspension of a license pursuant to this paragraph “f” , 9 shall consider the nature of the offense; any aggravating or 10 extenuating circumstances which are documented; the time lapsed 11 since the conduct or conviction; the rehabilitation, treatment, 12 or restitution performed by the licensee; and any other factors 13 the commission deems relevant. Character references may be 14 required but shall not be obtained from licensed real estate 15 brokers or salespersons licensees . 16 Sec. 21. Section 543B.29, subsections 2, 3, and 4, Code 17 2017, are amended to read as follows: 18 2. The revocation of a designated broker’s license shall 19 automatically suspend every license granted to any person by 20 virtue of the person’s employment by the broker whose license 21 has been revoked who is employed or associated with the 22 brokerage , pending a change of employer the designated broker 23 and the issuance of a new license. The new license shall be 24 issued upon payment of a fee in an amount determined by the 25 commission based upon the administrative costs involved, if 26 granted during the same license period in which the original 27 license was granted. 28 3. A real estate broker or salesperson licensee who is 29 an owner or lessor of property or an employee of an owner or 30 lessor may have the broker’s or salesperson’s their license 31 revoked or suspended for violations of this section or section 32 543B.34 , except section 543B.34, subsection 1 , paragraphs “d” , 33 “e” , “f” , and “i” , with respect to that property. 34 4. A real estate broker’s or salesperson’s licensee’s 35 -15- LSB 1925HC (6) 87 gh/rn/nh 15/ 35

H.F. _____ license shall be revoked following three violations of this 1 section or section 543B.34 within a five-year three-year 2 period. 3 Sec. 22. Section 543B.30, Code 2017, is amended to read as 4 follows: 5 543B.30 Actions —— license as prerequisite. 6 A person engaged in the business or acting in the capacity 7 of a real estate broker or a real estate salesperson licensee 8 within this state shall not bring or maintain any action in 9 the courts of this state for the collection of compensation 10 for services performed as a real estate broker or salesperson 11 licensee without alleging and proving that the person was a 12 duly licensed real estate broker or real estate salesperson at 13 the time the alleged cause of action arose. 14 Sec. 23. Section 543B.31, Code 2017, is amended to read as 15 follows: 16 543B.31 Place of business —— branch license . 17 Every real estate broker brokerage , except as provided 18 in section 543B.22 , shall maintain a place of business in 19 this state. A brokerage may maintain more than one place of 20 business within the state. If the real estate broker brokerage 21 maintains more than one place of business within the state, 22 a duplicate branch license shall be issued to such broker 23 brokerage for each branch office maintained. Provided, that 24 if such broker be a partnership, association, corporation, 25 professional corporation, or professional limited liability 26 company a duplicate shall be issued to the members or officers 27 thereof, and a A fee determined by the real estate commission 28 in each case shall be paid for each duplicate branch license. 29 Sec. 24. Section 543B.32, Code 2017, is amended to read as 30 follows: 31 543B.32 Change of location. 32 Notice in writing , electronic or otherwise, shall be given 33 to the real estate commission by each licensee of any change 34 of principal business location, whereupon the commission shall 35 -16- LSB 1925HC (6) 87 gh/rn/nh 16/ 35

H.F. _____ issue a new license for the unexpired period upon the payment 1 of a fee established by rule to cover the cost of issuing the 2 license. 3 Sec. 25. Section 543B.33, Code 2017, is amended to read as 4 follows: 5 543B.33 Salespersons Licensees —— change of employment 6 brokerage employment or association . 7 When any real estate salesperson a licensee is discharged 8 or terminates employment or association with the real estate 9 broker by whom the salesperson is employed a brokerage , 10 the real estate designated broker for the brokerage shall 11 immediately deliver , or mail , or electronically submit 12 to the real estate commission a copy of the real estate 13 salesperson’s licensee’s license on the reverse side of which 14 the employing designated broker shall set out the date and 15 cause of termination of employment . The real estate designated 16 broker at the time of mailing submitting a copy of the real 17 estate salesperson’s licensee’s license to the commission shall 18 address a communication to the last known residence address 19 of the real estate salesperson licensee stating that a copy 20 of the licensee’s license has been delivered , or mailed , or 21 electronically submitted to the commission. A copy of the 22 communication to the real estate salesperson licensee shall 23 accompany the copy of the license when mailed or delivered 24 submitted to the commission. It is unlawful for any real 25 estate salesperson a licensee to perform any of the acts 26 contemplated by this chapter either directly or indirectly 27 under authority of a license from and after the date of 28 receipt of a copy of the licensee’s license by the commission. 29 The commission shall, upon presentation of evidence by the 30 salesperson licensee that the salesperson licensee has been 31 employed by or is associated with another broker brokerage , 32 issue another license for the balance of the current license 33 period showing each change of employment or association with 34 a brokerage . A fee as determined by the commission shall be 35 -17- LSB 1925HC (6) 87 gh/rn/nh 17/ 35

H.F. _____ charged for the issuance of the license. Not more than one 1 license shall be issued to any real estate salesperson licensee 2 for the same period of time. 3 Sec. 26. Section 543B.34, Code 2017, is amended to read as 4 follows: 5 543B.34 Investigations by commission —— licensing sanctions 6 —— civil penalty. 7 1. The real estate commission may upon its own motion and 8 shall upon the verified complaint in writing of any person, 9 if the complaint together with evidence, documentary or 10 otherwise, presented in connection with the complaint makes 11 out a prima facie case, request commission staff or any other 12 duly authorized representative or designee to investigate the 13 actions of any real estate broker, real estate salesperson, 14 licensee or other person who assumes to act in either such 15 capacity within this state . The commission may assess civil 16 penalties against any person or entity , and may suspend or 17 revoke a license issued under this chapter at any time if the 18 licensee has by false or fraudulent representation obtained a 19 license, or if the licensee or other person assuming to act in 20 the capacity of a real estate broker or real estate salesperson 21 licensee , except for those actions exempt pursuant to section 22 543B.7 , is found to be guilty of any of the following: 23 a. Making any substantial misrepresentation. 24 b. Making any false promise of a character likely to 25 influence, persuade , or induce. 26 c. Pursuing a continued and flagrant course of 27 misrepresentation, or making of false promises through agents 28 or salespersons licensees or advertising or otherwise. 29 d. Acting for more than one party in a transaction without 30 the knowledge of all parties for whom the licensee acts. 31 e. Accepting a commission or valuable consideration as a 32 real estate broker associate or salesperson licensee for the 33 performance of any of the acts specified in this chapter , from 34 any person, except the broker associate’s or salesperson’s 35 -18- LSB 1925HC (6) 87 gh/rn/nh 18/ 35

H.F. _____ employer, who must be a licensed real estate broker licensee’s 1 brokerage . However, a broker associate or salesperson licensee 2 may, without violating this paragraph, accept a commission 3 or valuable consideration from a corporation which is wholly 4 owned, or owned with a spouse, by the broker associate or 5 salesperson licensee if the conditions described in paragraph 6 “i” are met. 7 f. Representing or attempting to represent a real estate 8 broker brokerage other than the licensee’s employer, without 9 the express knowledge and consent of the employer brokerage . 10 g. Failing, within a reasonable time, to account for or to 11 remit any moneys coming into the licensee’s possession which 12 belong to others. 13 h. Being unworthy or incompetent to act as a real estate 14 broker or salesperson licensee in such manner as to safeguard 15 the interests of the public. 16 i. (1) Paying a commission or other valuable consideration 17 or any part of such commission or consideration for performing 18 any of the acts specified in this chapter to a person who is not 19 a licensed broker or salesperson under this chapter or who is 20 not engaged in the real estate business brokerage services in 21 another state or foreign country, provided that the provisions 22 of this section shall not be construed to prohibit the payment 23 of earned commissions or consideration to any of the following: 24 (a) The estate or heirs of a deceased real estate licensee 25 when such licensee had a valid real estate license in effect at 26 the time the commission or consideration was earned. 27 (b) A citizen of another country acting as a referral 28 agent if that country does not license real estate brokers or 29 salespersons and if the Iowa licensee paying the commission or 30 consideration obtains and maintains reasonable written evidence 31 that the payee is a citizen of the other country, is not a 32 resident of this country, and is in the business of brokering 33 real estate in that other country. 34 (c) A corporation pursuant to subparagraph (2). 35 -19- LSB 1925HC (6) 87 gh/rn/nh 19/ 35

H.F. _____ (2) A broker brokerage may pay a commission to a corporation 1 which is wholly owned, or owned with a spouse, by a salesperson 2 or broker associate licensee employed by or otherwise 3 associated with the broker brokerage , if all of the following 4 conditions are met: 5 (a) The corporation does not engage in real estate 6 transactions as a third-party agent or in any other activity 7 requiring a license under this chapter . 8 (b) The employing broker brokerage is not relieved of any 9 obligation to supervise the employed licensee or any other 10 requirement of this chapter or the rules adopted pursuant to 11 this chapter . 12 (c) The employed broker associate or salesperson licensee 13 is not relieved from any personal civil liability for any 14 licensed activities by interposing the corporate form. 15 j. Failing, within a reasonable time, to provide information 16 requested by the commission as the result of a formal or 17 informal complaint to the commission which would indicate a 18 violation of this chapter . 19 k. Any other conduct, whether of the same or different 20 character from that specified in this section , which 21 demonstrates bad faith, or improper, fraudulent, or dishonest 22 dealings which would have disqualified the licensee from 23 securing a license under this chapter . 24 2. Any unlawful act or violation of any of the provisions of 25 this chapter by any real estate broker associate or salesperson 26 licensee , employee, or partner or associate of a licensed real 27 estate broker licensee , is not cause for the revocation of 28 the license of any real estate broker licensee , unless the 29 commission finds that the real estate broker licensee had 30 guilty knowledge of the unlawful act or violation. 31 3. If an investigation pursuant to this section reveals 32 that an unlicensed person has assumed to act in the capacity 33 of a real estate broker or real estate salesperson licensee , 34 the commission shall issue a cease and desist order, and shall 35 -20- LSB 1925HC (6) 87 gh/rn/nh 20/ 35

H.F. _____ impose a civil penalty of up to the greater of ten thousand 1 dollars or ten percent of the real estate sale price. 2 Sec. 27. Section 543B.35, Code 2017, is amended to read as 3 follows: 4 543B.35 Hearing on charges. 5 The real estate commission shall, upon request of the 6 applicant as provided in section 543B.19 , or before revoking 7 any license, set the matter down for a hearing and at least 8 twenty days prior to the date set for the hearing it shall 9 notify the applicant or licensee in writing, which said notice 10 shall contain an exact statement of the charges made and the 11 date and place of the hearing. The applicant or licensee 12 at all such hearings shall have the opportunity to be heard 13 in person and by counsel in reference thereto. Such written 14 notice of hearing may be served by delivery personally to the 15 applicant or licensee or by mailing the same by certified 16 mail to the last known business address of such applicant or 17 licensee. If such applicant or licensee be a salesperson, 18 the The commission shall also notify the designated broker 19 employing the salesperson or into whose employ the salesperson 20 is about to enter associated with the applicant or licensee’s 21 brokerage by mailing such notice by certified mail to the 22 designated broker’s last known business address. The hearing 23 on such charges shall be at such time and place as the 24 commission shall prescribe. 25 Sec. 28. Section 543B.40, Code 2017, is amended to read as 26 follows: 27 543B.40 Depositions. 28 The testimony may be taken by deposition as in civil cases, 29 and any person may be compelled to appear and depose in the 30 same manner as witnesses may be compelled to appear and testify 31 as hereinbefore provided . 32 Sec. 29. Section 543B.46, Code 2017, is amended to read as 33 follows: 34 543B.46 Trust accounts. 35 -21- LSB 1925HC (6) 87 gh/rn/nh 21/ 35

H.F. _____ 1. Each real estate broker A brokerage which is in the 1 practice of depositing funds in a trust account shall maintain 2 a common trust account in a bank, bank holding company, savings 3 bank, savings and loan association, or credit union , or other 4 similar entity for the deposit of all down payments, earnest 5 money deposits, or other trust funds received by the broker or 6 the broker’s salespersons on behalf of the broker’s a licensee 7 as directed by the licensee’s principal , except that a broker 8 acting as a salesperson shall deposit these funds in the 9 common trust account of the broker for whom the broker acts as 10 salesperson . The account shall be an interest-bearing account. 11 The interest on the account shall be transferred quarterly to 12 the treasurer of state and transferred to the Iowa finance 13 authority for deposit in the housing trust fund established in 14 section 16.181 unless there is a written agreement between the 15 buyer and seller to the contrary. The broker brokerage shall 16 not benefit from interest received on funds of others in the 17 broker’s brokerage’s possession. A brokerage which is not in 18 the practice of depositing funds in a trust account shall not 19 be required to maintain a common trust account pursuant to this 20 section. 21 2. Each broker A brokerage required to maintain a trust 22 account pursuant to this section shall notify the real estate 23 commission of the name of each bank, bank holding company, 24 savings bank, savings and loan association, or credit union , or 25 other similar entity in which a trust account is maintained and 26 also the name of the account on forms provided therefor. 27 3. Each broker A brokerage required to maintain a trust 28 account pursuant to this section shall authorize the real 29 estate commission to examine each trust account and shall 30 obtain the certification of the bank, bank holding company, 31 savings bank, savings and loan association, or credit union , 32 or other similar entity attesting to each trust account 33 and consenting to the examination and audit of each account 34 by a duly authorized representative of the commission. 35 -22- LSB 1925HC (6) 87 gh/rn/nh 22/ 35

H.F. _____ The certification and consent shall be furnished on forms 1 prescribed by the commission. This subsection does not 2 apply to an individual farm account maintained in the name 3 of the owner or owners for the purpose of conducting ongoing 4 farm business whether it is conducted by the farm owner or 5 by an agent or farm manager when the account is part of a 6 farm management agreement between the owner and agent or 7 manager. This subsection also does not apply to an individual 8 property management account maintained in the name of the 9 owner or owners for the purpose of conducting ongoing property 10 management whether it is conducted by the property owner or 11 by an agent or manager when the account is part of a property 12 management agreement between the owner and agent or manager. 13 4. Each broker A brokerage required to maintain a trust 14 account pursuant to this section shall only deposit trust funds 15 received on real estate or business opportunity transactions as 16 directed by the principal of a transaction constituting dealing 17 in real estate as defined in section 543B.6 in the common 18 trust account and shall not commingle the broker’s personal 19 brokerage’s operating funds or other funds in the trust account 20 with the exception that a broker brokerage may deposit and keep 21 a sum not to exceed five hundred one thousand dollars in the 22 account from the broker’s personal brokerage’s operating funds, 23 which sum shall be specifically identified and deposited to 24 cover bank service charges relating to the trust account. 25 5. A broker brokerage may maintain more than one trust 26 account provided the commission is advised of said the account 27 as specified in subsections 2 and 3 above . 28 6. The commission shall verify on a test basis, a 29 random sampling of the brokers, corporations, professional 30 corporations, professional limited liability companies, and 31 partnerships brokerages for their trust account compliance. 32 The commission may upon reasonable cause, or as a part of or 33 after an investigation, request or order a special report. 34 7. The examination of a trust account shall be conducted by 35 -23- LSB 1925HC (6) 87 gh/rn/nh 23/ 35

H.F. _____ the commission or the commission’s authorized representative. 1 8. The commission shall adopt rules to ensure 2 implementation of this section . 3 Sec. 30. Section 543B.53, Code 2017, is amended to read as 4 follows: 5 543B.53 Application of chapter. 6 The provisions of this chapter which require successful 7 completion of a real estate education course before being 8 licensed as a real estate salesperson shall not apply to 9 persons who hold real estate salesperson’s licenses on July 1, 10 1976 or to the issuance of new licenses to these persons under 11 the provisions of pursuant to section 543B.28 . 12 Sec. 31. Section 543B.55, Code 2017, is amended to read as 13 follows: 14 543B.55 Disclosure of relationship. 15 The real estate commission shall adopt rules requiring 16 that each real estate broker or salesperson licensee in a 17 real estate transaction disclose in writing the broker’s or 18 salesperson’s licensee’s agency relationship with the buyer or 19 seller in the transaction. 20 Sec. 32. Section 543B.56A, subsection 2, unnumbered 21 paragraph 1, Code 2017, is amended to read as follows: 22 A brokerage agreement shall specify that the broker licensee 23 shall, at a minimum, do all of the following: 24 Sec. 33. Section 543B.57, Code 2017, is amended to read as 25 follows: 26 543B.57 Confirmation and disclosure of relationship. 27 1. A licensee shall not represent any party or parties to 28 in a transaction or otherwise act as a licensee unless that 29 licensee makes a written agency disclosure to all parties to 30 the transaction identifying which party that person represents 31 in the transaction . 32 2. a. The disclosure required in subsection 1 shall 33 be made by the licensee at the time the licensee provides 34 specific assistance to the client. A change in a licensee’s 35 -24- LSB 1925HC (6) 87 gh/rn/nh 24/ 35

H.F. _____ representation that makes the initial disclosure incomplete, 1 misleading, or inaccurate requires that a new disclosure be 2 made immediately. 3 b. A written disclosure is required to be made to a 4 brokerage client prior to an offer being made or accepted by 5 any party to a transaction. The written disclosure shall be 6 acknowledged by separate signatures of all parties to the 7 transaction prior to any offer being made or accepted by any 8 party to a transaction . 9 c. For purposes of this section , “specific assistance” means 10 eliciting or accepting confidential information about a party’s 11 real estate needs, motivation, or financial qualifications, 12 or eliciting or accepting information involving a proposed 13 or preliminary offer associated with specific real estate. 14 “Specific assistance” does not mean an open house showing, 15 preliminary conversations concerning price range, location, and 16 property styles, or responding to general factual questions 17 concerning properties which have been advertised for sale or 18 lease. 19 3. The written agency disclosure form shall contain all of 20 the following: 21 a. A statement of which party is the licensee’s client or, 22 if the licensee is providing brokerage services to more than 23 one client as provided under section 543B.60 , a statement of 24 all persons who are the licensee’s clients. 25 b. A statement of the licensee’s duties to the licensee’s 26 client under section 543B.56, subsections 1 and 2 . 27 c. Any additional information that the licensee determines 28 is necessary to clarify the licensee’s relationship to the 29 licensee’s client or customer. 30 4. This section does not prohibit a person from representing 31 oneself. 32 5. The seller, in the listing agreement, may authorize the 33 seller’s licensee brokerage to disburse part of the licensee’s 34 brokerage’s compensation to other licensees brokerages , 35 -25- LSB 1925HC (6) 87 gh/rn/nh 25/ 35

H.F. _____ including a buyer’s licensee solely representing the buyer 1 brokerage . A licensee representing a buyer shall inform the 2 listing licensee, if there is a listing licensee, either 3 verbally or in writing, of the agency relationship before any 4 negotiations are initiated. The obligation of either the 5 seller or the buyer to pay compensation to a licensee brokerage 6 is not determinative of the agency relationship. 7 Sec. 34. Section 543B.59, Code 2017, is amended to read as 8 follows: 9 543B.59 Appointed agents within a firm. 10 1. Appointed agents. A real estate brokerage agency 11 entering into a brokerage agreement, through a designated 12 broker, may notify a client in writing of those affiliated 13 associated licensees within the real estate brokerage agency 14 who will be acting as appointed agents of that client to the 15 exclusion of all other affiliated associated licensees within 16 the real estate brokerage agency . 17 2. Dual agent. A real estate brokerage agency and a 18 designated broker are not considered to be dual agents solely 19 because of an appointment under the provisions of this section . 20 However, an affiliated associated licensee who personally 21 represents both the seller and the buyer in a particular 22 transaction is considered to be a disclosed dual agent and 23 is required to comply with the provisions of this subchapter 24 governing disclosed dual agents. 25 3. Actual knowledge —— information. A client, a real estate 26 brokerage agency , and its appointed agents are deemed to 27 possess only actual knowledge and information at the time the 28 appointed agents are appointed. Knowledge or information is 29 not imparted by operation of law among the clients, the real 30 estate brokerage agency , and its appointed agents. 31 4. Appointments —— roles. The commission shall define 32 by rule the methods of appointment and the role of the real 33 estate brokerage agency and the designated broker. The rules 34 must include a requirement that clients be informed as to the 35 -26- LSB 1925HC (6) 87 gh/rn/nh 26/ 35

H.F. _____ real estate brokerage agency’s brokerage’s appointed agent 1 policy and be given written notice of that policy in advance of 2 entering into a brokerage agreement. 3 Sec. 35. Section 543B.60A, subsections 3 and 9, Code 2017, 4 are amended by striking the subsections. 5 Sec. 36. Section 543B.60A, subsection 5, Code 2017, is 6 amended to read as follows: 7 5. This section does not address relationships between a 8 designated broker and the broker associates or salespersons 9 licensees licensed under, employed by, or otherwise associated 10 with the broker in a real estate brokerage agency . 11 Sec. 37. Section 543B.62, subsection 3, paragraph b, Code 12 2017, is amended to read as follows: 13 b. A designated broker is responsible for supervising 14 a salesperson or broker associate licensee employed by or 15 otherwise associated with the broker as a representative of the 16 broker brokerage . The existence of an independent contractor 17 relationship or any other special compensation arrangement 18 between the broker brokerage and the salesperson or broker 19 associate licensee does not relieve the designated broker , 20 salesperson, or broker associate licensee of the duties and 21 responsibilities established by this chapter . A salesperson or 22 broker associate licensee shall keep the employing designated 23 broker fully informed of all activities being conducted on 24 behalf of the broker brokerage and any other activities that 25 might impact on the broker’s brokerage’s responsibilities. 26 However, the failure of the salesperson or broker associate 27 licensee to keep the employing designated broker fully informed 28 does not relieve the broker brokerage of the duties and 29 responsibilities established by this chapter . 30 Sec. 38. REPEAL. Section 543B.25, Code 2017, is repealed. 31 DIVISION II 32 REAL ESTATE DISCLOSURES 33 Sec. 39. Section 136B.2, subsection 2, Code 2017, is amended 34 to read as follows: 35 -27- LSB 1925HC (6) 87 gh/rn/nh 27/ 35

H.F. _____ 2. a. Notwithstanding the requirements of this section , 1 disclosure to any person of the results of a test performed 2 on a nonpublic building for the presence of radon gas and 3 radon progeny is not required if the results do not exceed the 4 currently established United States environmental protection 5 agency action guidelines, except as required during a real 6 estate transaction pursuant to section 558A.4, subsection 2 7 558A.4A . 8 b. A person who tests a nonpublic building which the person 9 owns is not required to disclose to any person the results of 10 a test for the presence of radon gas or progeny if the test 11 is performed by the person who owns the nonpublic building, 12 except as required during a real estate transaction pursuant to 13 section 558A.4, subsection 2 558A.4A . 14 Sec. 40. Section 558A.1, Code 2017, is amended by adding the 15 following new subsection: 16 NEW SUBSECTION . 01. “Agent” means an individual designated 17 by a transferee to accept delivery of a disclosure statement 18 from a transferor. 19 Sec. 41. Section 558A.1, subsection 4, paragraph e, Code 20 2017, is amended to read as follows: 21 e. A transfer made to a spouse, or to a person in the lineal 22 line within the third degree of consanguinity or affinity of 23 a person making the transfer. 24 Sec. 42. Section 558A.2, subsection 2, Code 2017, is amended 25 to read as follows: 26 2. The disclosure statement shall be made by personal 27 delivery , or by certified or registered mail , or electronic 28 delivery to the transferee or to the transferee’s agent . The 29 delivery may be made to the spouse of the transferee, unless 30 otherwise provided by the parties. If the disclosure statement 31 is not timely delivered, the transferee may withdraw the offer 32 or revoke the acceptance without liability, within three days 33 following personal delivery of the statement or five days 34 following electronic delivery or delivery by mail. 35 -28- LSB 1925HC (6) 87 gh/rn/nh 28/ 35

H.F. _____ Sec. 43. Section 558A.4, Code 2017, is amended to read as 1 follows: 2 558A.4 Required information. 3 1. a. The disclosure statement shall include information 4 relating to the condition and important characteristics of the 5 property and structures located on the property, including 6 significant defects in the structural integrity of the 7 structure, as provided in rules which shall be adopted by the 8 real estate commission pursuant to section 543B.9 . The rules 9 may require the disclosure to include information relating 10 to the property’s zoning classification; the condition of 11 plumbing, heating, or electrical systems; or the presence of 12 pests. 13 b. The disclosure statement may include a report or written 14 opinion prepared by a person qualified to make judgment based 15 on education or experience, as provided by rules adopted by 16 the commission, including but not limited to a professional 17 land surveyor licensed pursuant to chapter 542B , a geologist, a 18 structural pest control operator licensed pursuant to section 19 206.6 , or a building contractor. The report or opinion on a 20 matter within the scope of the person’s practice, profession, 21 or expertise shall satisfy the requirements of this section or 22 rules adopted by the commission regarding that matter required 23 to be disclosed. If the report or opinion is in response 24 to a request made for purposes of satisfying the disclosure 25 statement, the report or opinion shall indicate which part of 26 the disclosure statement the report or opinion satisfies. 27 2. a. A transferor subject to the requirements of section 28 558.70 shall recommend in writing that the transferee obtain an 29 independent home inspection report to provide full and complete 30 information as required to be disclosed under this section and 31 under rules adopted by the real estate commission pursuant to 32 section 543B.9 . 33 b. A transferor subject to section 558.70 shall provide 34 the real estate disclosure statement required by this chapter 35 -29- LSB 1925HC (6) 87 gh/rn/nh 29/ 35

H.F. _____ at least seven days before the real estate installment sales 1 contract is executed by all parties to the contract. 2 Sec. 44. NEW SECTION . 558A.4A Installment sales contracts 3 —— required disclosures. 4 1. A transferor subject to the requirements of section 5 558.70 shall recommend in writing that the transferee obtain an 6 independent home inspection report to provide full and complete 7 information as required to be disclosed under this chapter and 8 under rules adopted by the real estate commission pursuant to 9 section 543B.9. 10 2. A transferor subject to section 558.70 shall provide 11 the real estate disclosure statement required by this chapter 12 at least seven days before the real estate installment sales 13 contract is executed by all parties to the contract. 14 Sec. 45. Section 558A.6, Code 2017, is amended to read as 15 follows: 16 558A.6 Liability under the chapter. 17 A person who violates this chapter shall be liable to a 18 transferee for the amount of actual damages suffered by the 19 transferee, but subject to the following limitations: 20 1. The provided, however, that the transferor, or a broker 21 or salesperson, shall not be liable under this chapter for the 22 error, inaccuracy, or omission in information required in a 23 disclosure statement, unless that person has actual knowledge 24 of the inaccuracy, or fails to exercise ordinary care in 25 obtaining the information. 26 2. The person submitting a report or opinion within the 27 scope of the person’s practice, profession, or expertise, 28 as provided in section 558A.4 , for purposes of satisfying 29 the disclosure statement, shall not be liable under this 30 chapter for any matter other than a matter within the person’s 31 practice, profession, or expertise, and which is required by 32 the disclosure statement, unless the person failed to use care 33 ordinary in the person’s profession, practice, or area of 34 expertise in preparing the information. 35 -30- LSB 1925HC (6) 87 gh/rn/nh 30/ 35

H.F. _____ EXPLANATION 1 The inclusion of this explanation does not constitute agreement with 2 the explanation’s substance by the members of the general assembly. 3 This bill relates to real estate professionals and real 4 estate disclosures. 5 REAL ESTATE LICENSEES. The bill modifies several provisions 6 in Code chapter 543B, dealing with the licensure of real estate 7 brokers and salespersons. 8 The bill changes references to “real estate broker”, “broker 9 associate”, or “salesperson” throughout Code chapter 543B to 10 “real estate licensee” or “licensee”. 11 Code section 543B.1 prohibits a person from doing any act 12 as a real estate broker or representing oneself as a licensee 13 without obtaining a license. The bill changes the prohibition 14 against doing any act as a real estate broker to a prohibition 15 against doing any act constituting dealing in real estate. 16 The bill removes the requirement that at least one member 17 or officer of a licensed brokerage be a real estate broker and 18 changes references to specified forms of business entities 19 being granted a license to “brokerage” in Code section 543B.2. 20 Current Code section 543B.3 defines “real estate broker” and 21 lists the acts that a real estate broker engages in. The bill 22 modifies this provision to include the same list of acts as 23 the definition of “brokerage services”. The bill removes the 24 definition of “brokerage services” in Code section 543B.5. The 25 bill makes conforming changes to the use of this terminology 26 in Code chapter 543B. The bill makes other changes to the 27 definitions listed in Code section 543B.5. 28 Code section 543B.15(3) prohibits an applicant convicted 29 of certain offenses from being considered for licensure until 30 certain time periods have elapsed. The bill provides that for 31 an applicant convicted of an offense classified as a felony, or 32 involving forgery, embezzlement, false pretenses, theft, arson, 33 extortion, conspiracy to defraud, or other similar offense, 34 or any other offense involving a criminal breach of fiduciary 35 -31- LSB 1925HC (6) 87 gh/rn/nh 31/ 35

H.F. _____ duty, the applicant must wait five years. An applicant 1 convicted of any other offense involving moral turpitude must 2 wait one year. The bill provides that a copy of the record 3 of an applicant’s conviction is conclusive evidence of the 4 conviction. 5 The bill prohibits the real estate commission from requiring 6 an applicant to disclose criminal background information on 7 an application except for a copy of conviction of certain 8 prescribed offenses. The bill requires an application to 9 include an applicant’s present mailing address and electronic 10 mail address. A salesperson’s application must include 11 a written statement from a designated broker. The bill 12 eliminates an applicant’s ability to immediately apply to 13 take the next available licensure examination after failing a 14 licensure examination. 15 Code section 543B.21 allows a nonresident to become licensed 16 as a broker or salesperson in Iowa if certain conditions are 17 met. The bill specifies that the person must hold a valid 18 and active license to engage in brokerage services in another 19 state. The bill changes “nonresident” to “out-of-state 20 licensee” with respect to such persons. 21 Code section 543B.24 requires a salesperson’s license 22 to be delivered to the salesperson’s employing broker for 23 custody. The bill broadens this to any license, and requires a 24 license to be delivered to and in the custody of a licensee’s 25 brokerage. 26 The bill repeals Code section 543B.25, which requires a 27 licensed broker to display their license in the broker’s place 28 of business. 29 Code section 543B.29(2) provides for the automatic 30 suspension of a license granted by virtue of a person’s 31 employment with a broker whose license is revoked. The bill 32 amends this provision to provide that the revocation of a 33 designated broker’s license automatically suspends a license 34 granted to a person associated with the brokerage. 35 -32- LSB 1925HC (6) 87 gh/rn/nh 32/ 35

H.F. _____ Code section 543B.29(4) provides that a license must be 1 revoked following three violations of Code section 543B.29 or 2 543B.34 within a five-year period. The bill changes this to a 3 three-year period. 4 Code section 543B.31 requires a licensed broker to maintain 5 a place of business in this state and allows a broker to obtain 6 a duplicate license for each additional branch office. The 7 bill changes “broker” to “brokerage” and specifies that a 8 brokerage may maintain more than one place of business in 9 the state. The bill requires a brokerage to obtain a branch 10 license, instead of a duplicate license, for each additional 11 branch office. 12 The bill allows a licensee to provide electronic 13 notification to the real estate commission for a change to a 14 licensee’s principal place of business location, as required 15 in Code section 543B.32. 16 Code section 543B.33 requires a broker to notify the 17 real estate commission of any change of employment for a 18 licensed salesperson and mail the salesperson’s license to 19 the commission. The bill broadens this to include a change 20 of employment or association for any licensee at a brokerage, 21 and requires the designated broker to provide such notice. 22 The bill allows the designated broker to send a copy of the 23 licensee’s license, rather than the actual license, which can 24 be delivered, mailed, or submitted electronically. 25 The bill provides that the real estate commission may assess 26 civil penalties against any person or entity for conducting 27 investigations pursuant to Code section 543B.34. 28 Code section 543B.46 requires a licensed broker to maintain 29 a common trust account in a bank or other similar entity. The 30 bill changes this to require a brokerage in the practice of 31 depositing funds in a trust account to maintain a common trust 32 account in such an entity. A brokerage not in the practice of 33 depositing funds in a trust account is not required to do so. 34 Code section 543B.53 provides that education requirements 35 -33- LSB 1925HC (6) 87 gh/rn/nh 33/ 35

H.F. _____ for licensure as a salesperson do not apply to salespersons 1 licensed on July 1, 1976, or to the issuance of new licenses 2 to such salespersons upon renewal. The bill removes reference 3 to salespersons licensed on July 1, 1976, providing that the 4 education requirements do not apply to licensed salespersons 5 seeking license renewal. 6 Code section 543B.57 requires licensees to provide written 7 agency disclosure statements when representing a party to 8 a real estate transaction. The bill specifies that such 9 disclosure must be made to a brokerage client prior to an offer 10 being made or accepted. The bill removes the requirement for 11 a disclosure to be signed by all parties prior to an offer 12 being made or accepted. The bill provides that a seller may 13 authorize the seller’s brokerage to disburse the brokerage’s 14 compensation to other brokerages. 15 The bill strikes Code section 543B.60A(3), which prohibits 16 licensees from participating in certain conditional marketing 17 plans. The bill also strikes Code section 543B.60A(9), which 18 requires licensees to provide business referral disclosures. 19 Code section 543B.62(3)(b) provides that a broker is 20 responsible for supervising a salesperson or broker associate 21 employed by or associated with the broker. The bill amends 22 this paragraph to provide that a designated broker is 23 responsible for a licensee employed by or associated with the 24 brokerage. 25 REAL ESTATE DISCLOSURES. The bill modifies provisions in 26 Code chapter 558A, which requires real estate disclosures to be 27 made before the transfer of certain real estate property. 28 The bill defines “agent” in Code section 558A.1 to mean an 29 individual designated by a transferee to accept delivery of 30 a disclosure statement from a transferor. The bill changes 31 the exemption to the definition of “transfer” for spouses 32 or related persons to specify that the exemption applies to 33 persons within the third degree of consanguinity or affinity. 34 The bill allows a real estate disclosure statement to be 35 -34- LSB 1925HC (6) 87 gh/rn/nh 34/ 35

H.F. _____ made by electronic delivery in addition to personal delivery, 1 or by mail, and to the transferee’s agent in addition to the 2 transferee. 3 The bill removes the provision allowing a disclosure 4 statement to include a report or written opinion by a qualified 5 professional from Code section 558A.4(1)(b). The bill removes 6 the limitation on liability for a qualified professional who 7 submitted a report from Code section 558A.6. 8 The bill strikes Code section 558A.4(2), which requires the 9 transferor in an installment sales contract to provide certain 10 disclosures. However, the language of Code section 558A.4(2) 11 is incorporated into new Code section 558A.4A. 12 -35- LSB 1925HC (6) 87 gh/rn/nh 35/ 35