H.F. 541 DIVISION I 1 REAL ESTATE LICENSEES 2 Section 1. Section 543B.15, subsection 3, Code 2017, is 3 amended to read as follows: 4 3. a. An applicant for a real estate broker’s or 5 salesperson’s license who has been convicted of an offense 6 specified in this subsection shall not be considered for 7 licensure until the following time periods have elapsed 8 following completion of any applicable period of incarceration, 9 or payment of a fine or fulfillment of any other type of 10 sentence: 11 (1) For an offense which is classified as a felony, two 12 an offense including or involving forgery, embezzlement, 13 obtaining money under false pretenses, theft, arson, extortion, 14 conspiracy to defraud, or other similar offense, or any other 15 offense involving a criminal breach of fiduciary duty, five 16 years. 17 (2) Notwithstanding subparagraph (1), for offenses 18 including or involving forgery, embezzlement, obtaining money 19 under false pretenses, theft, arson, extortion, conspiracy to 20 defraud, or other similar offense, any offense involving moral 21 turpitude, or other offense involving a criminal breach of 22 fiduciary duty, five years. For any offense not described in 23 subparagraph (1) involving moral turpitude, one year. 24 b. After expiration of the time periods specified in 25 paragraph “a” , an application shall be considered by the 26 commission pursuant to subsection 6 and may be denied on the 27 grounds of the conviction. An applicant may request a hearing 28 pursuant to section 543B.19 in the event of a denial. 29 c. For purposes of this section , “convicted” or “conviction” 30 means a conviction for an indictable offense and includes a 31 court’s acceptance of a guilty plea, deferred judgment from 32 the time of entry of the deferred judgment until the time the 33 defendant is discharged by the court without entry of judgment, 34 or other finding of guilt by a court of competent jurisdiction 35 -1- HF 541 (4) 87 gh/rn/nh/md 1/ 10

H.F. 541 in this state, or in any other state, territory, or district 1 of the United States, or in any foreign jurisdiction. A copy 2 of the record of conviction is conclusive evidence of such 3 conviction. 4 Sec. 2. Section 543B.16, Code 2017, is amended to read as 5 follows: 6 543B.16 Application forms. 7 1. Every applicant for a real estate broker’s license shall 8 apply in writing upon blanks prepared or furnished by the 9 real estate commission. The real estate commission shall not 10 require that a recent photograph of the applicant be attached 11 to the application. The real estate commission shall only 12 require an applicant to disclose on the application criminal 13 convictions for crimes classified as indictable offenses. 14 2. Every applicant for a license shall furnish information 15 setting forth the applicant’s present mailing address , both of 16 business and residence, a complete list of all former places 17 where the applicant may have been engaged in business for a 18 period of sixty days or more, during the last five years, 19 accounting for such entire period and electronic mail address . 20 3. The commission shall prepare and furnish written 21 application blanks for the salesperson’s license requesting 22 information as the commission may require. The commission 23 shall not require that a recent photograph of the applicant be 24 attached to the application. The application Every applicant 25 for the a salesperson’s license shall be accompanied by furnish 26 a written statement by the designated broker whose service the 27 applicant is about to enter recommending that the license be 28 granted to the applicant. 29 Sec. 3. Section 543B.29, subsection 4, Code 2017, is amended 30 to read as follows: 31 4. A real estate broker’s or salesperson’s license shall be 32 revoked following three violations of this section or section 33 543B.34 within a five-year three-year period. 34 Sec. 4. Section 543B.31, Code 2017, is amended to read as 35 -2- HF 541 (4) 87 gh/rn/nh/md 2/ 10

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

H.F. 541 broker at the time of mailing submitting a copy of the real 1 estate salesperson’s license to the commission shall address 2 a communication to the last known residence address of the 3 real estate salesperson stating that a copy of the license 4 has been delivered , or mailed , or electronically submitted 5 to the commission. A copy of the communication to the real 6 estate salesperson shall accompany the copy of the license 7 when mailed or delivered submitted to the commission. It is 8 unlawful for any real estate salesperson to perform any of the 9 acts contemplated by this chapter either directly or indirectly 10 under authority of a license from and after the date of receipt 11 of a copy of the license by the commission. The commission 12 shall, upon presentation of evidence by the salesperson that 13 the salesperson has been employed by or is associated with 14 another broker, issue another license for the balance of the 15 current license period showing each change of employment or 16 association . A fee as determined by the commission shall be 17 charged for the issuance of the license. Not more than one 18 license shall be issued to any real estate salesperson for the 19 same period of time. 20 Sec. 7. Section 543B.34, subsection 1, unnumbered paragraph 21 1, Code 2017, is amended to read as follows: 22 The real estate commission may upon its own motion and 23 shall upon the verified complaint in writing of any person, 24 if the complaint together with evidence, documentary or 25 otherwise, presented in connection with the complaint makes 26 out a prima facie case, request commission staff or any other 27 duly authorized representative or designee to investigate the 28 actions of any real estate broker, real estate salesperson, or 29 other person who assumes to act in either such capacity within 30 this state . The commission may assess civil penalties against 31 any person or entity , and may suspend or revoke a license 32 issued under this chapter at any time if the licensee has by 33 false or fraudulent representation obtained a license, or if 34 the licensee or other person assuming to act in the capacity 35 -4- HF 541 (4) 87 gh/rn/nh/md 4/ 10

H.F. 541 of a real estate broker or real estate salesperson, except for 1 those actions exempt pursuant to section 543B.7 , is found to be 2 guilty of any of the following: 3 Sec. 8. Section 543B.34, subsection 1, paragraph i, 4 subparagraph (1), subparagraph division (b), Code 2017, is 5 amended to read as follows: 6 (b) A citizen of another country acting as a referral 7 agent if that country does not license real estate brokers or 8 salespersons and if the Iowa licensee paying the commission or 9 consideration obtains and maintains reasonable written evidence 10 that the payee is a citizen of the other country, is not a 11 resident of this country, and is in the business of brokering 12 real estate in that other country. 13 Sec. 9. Section 543B.34, subsection 1, paragraph i, 14 subparagraph (2), subparagraph division (b), Code 2017, is 15 amended to read as follows: 16 (b) The employing broker is not relieved of any obligation 17 to supervise the employed licensee or any other requirement of 18 this chapter or the rules adopted pursuant to this chapter . 19 Sec. 10. Section 543B.46, Code 2017, is amended to read as 20 follows: 21 543B.46 Trust accounts. 22 1. Each real estate broker who is in the practice of 23 depositing funds in a trust account shall maintain a common 24 trust account in a bank, savings association, or credit union 25 federally insured depository institution for the deposit of 26 all down payments, earnest money deposits, or other trust 27 funds received by the broker or the broker’s salespersons on 28 behalf of the broker’s principal, except that a broker acting 29 as a salesperson shall deposit these funds in the common trust 30 account of the broker for whom the broker acts as salesperson. 31 The account shall be an interest-bearing account. The interest 32 on the account shall be transferred quarterly to the treasurer 33 of state and transferred to the Iowa finance authority for 34 deposit in the housing trust fund established in section 35 -5- HF 541 (4) 87 gh/rn/nh/md 5/ 10

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

H.F. 541 by the principal of a transaction constituting dealing in real 1 estate as defined in section 543B.6 in the common trust account 2 and shall not commingle the broker’s personal funds or other 3 funds in the trust account with the exception that a broker may 4 deposit and keep a sum not to exceed five hundred one thousand 5 dollars in the account from the broker’s personal funds, which 6 sum shall be specifically identified and deposited to cover 7 bank service charges relating to the trust account. 8 5. A broker may maintain more than one trust account 9 provided the commission is advised of said account as specified 10 in subsections 2 and 3 above. 11 6. The commission shall verify on a test basis, a 12 random sampling of the brokers, corporations, professional 13 corporations, professional limited liability companies, 14 and partnerships for their trust account compliance. The 15 commission may upon reasonable cause, or as a part of or after 16 an investigation, request or order a special report. 17 7. The examination of a trust account shall be conducted by 18 the commission or the commission’s authorized representative. 19 8. The commission shall adopt rules to ensure 20 implementation of this section . 21 Sec. 11. Section 543B.53, Code 2017, is amended to read as 22 follows: 23 543B.53 Application of chapter. 24 The provisions of this chapter which require successful 25 completion of a real estate education course before being 26 licensed as a real estate salesperson shall not apply to 27 persons who hold real estate salesperson’s licenses on July 1, 28 1976 or to the issuance of new licenses to these persons under 29 the provisions of pursuant to section 543B.28 . 30 Sec. 12. Section 543B.57, Code 2017, is amended to read as 31 follows: 32 543B.57 Confirmation and disclosure of relationship. 33 1. A licensee shall not represent any party or parties 34 to a transaction or otherwise as a licensee unless that 35 -7- HF 541 (4) 87 gh/rn/nh/md 7/ 10

H.F. 541 licensee makes a disclosure to all parties to the transaction 1 identifying which party that person represents in the 2 transaction an agency disclosure to the party or parties 3 represented by the licensee . 4 2. a. The disclosure required in subsection 1 shall 5 be made by the licensee at the time the licensee provides 6 specific assistance to the client. A change in a licensee’s 7 representation that makes the initial disclosure incomplete, 8 misleading, or inaccurate requires that a new disclosure be 9 made immediately. 10 b. A written disclosure is required to be made to the client 11 prior to an offer being made or accepted by any party to a 12 transaction . The written disclosure shall be acknowledged by 13 separate signatures of all parties to the transaction the party 14 or parties represented by the licensee prior to any offer being 15 made or accepted by any party to a transaction. 16 c. For purposes of this section , “specific assistance” means 17 eliciting or accepting confidential information about a party’s 18 real estate needs, motivation, or financial qualifications, 19 or eliciting or accepting information involving a proposed 20 or preliminary offer associated with specific real estate. 21 “Specific assistance” does not mean an open house showing, 22 preliminary conversations concerning price range, location, and 23 property styles, or responding to general factual questions 24 concerning properties which have been advertised for sale or 25 lease. 26 3. The written agency disclosure form shall contain all of 27 the following: 28 a. A statement of which party is the licensee’s client or, 29 if the licensee is providing brokerage services to more than 30 one client as provided under section 543B.60 , a statement of 31 all persons who are the licensee’s clients. 32 b. A statement of the licensee’s duties to the licensee’s 33 client under section 543B.56, subsections 1 and 2 . 34 c. Any additional information that the licensee determines 35 -8- HF 541 (4) 87 gh/rn/nh/md 8/ 10

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