Pennsylvania Act 1990-69 — REAL ESTATE LICENSING AND REGISTRATION ACT - AMEND

Act text

REAL ESTATE LICENSING AND REGISTRATION ACT - AMEND
                  Act of Jul. 1, 1990, P.L. 304, No. 69               Cl. 63
                             Session of 1990
                               No. 1990-69

                                  AN ACT

     SB 430

     Amending the act of February 19, 1980 (P.L.15, No.9), entitled
        "An act establishing the State Real Estate Commission and
        providing for the licensing of real estate brokers and
        salesmen," further providing for the broker's disclosures to
        the buyer, timeshares, campground memberships and prohibited
        acts.

        The General Assembly of the Commonwealth of Pennsylvania
     hereby enacts as follows:

        Section 1.  The definition of "time share" in section 201 of
     the act of February 19, 1980 (P.L.15, No.9), known as the Real
     Estate Licensing and Registration Act, amended March 29, 1984
     (P.L.162, No.32), is amended and the section is amended by
     adding definitions to read:
      Section 201.  Definitions.
        The following words and phrases when used in this act shall
     have, unless the context clearly indicates otherwise, the
     meanings given to them in this section:
        * * *
        "Campground membership."  An interest, other than in fee
     simple or by lease, which gives the purchaser the right to use a
     unit of real property for the purpose of locating a recreational
     vehicle, trailer, tent, tent trailer, pickup camper or other
     similar device on a periodic basis pursuant to a membership
     contract allocating use and occupancy rights between other
     similar users.
        "Campground membership salesperson."  A person who either as
     an employee or an independent contractor sells or offers to sell
     campground memberships. Such person shall sell campground
     memberships under the active supervision of a broker. A person
     licensed as a broker, as a salesperson or as a time-share
     salesperson shall not be required to be licensed as a campground
     membership salesperson as a condition for selling or offering to
     sell campground memberships.
        * * *
        "Time share."  The right, however evidenced or documented, to
     use or occupy [a dwelling unit held in fee simple or by lease]
     one or more units on a periodic basis according to an
     arrangement allocating use and occupancy rights of that unit or
     those units between other similar users. As used in this
     definition, the term "unit" is a building or portion thereof
     permanently affixed to real property and designated for separate
     occupancy or a campground or portion thereof designated for
     separate occupancy. The phrase "time share" does not include
     campground membership.
        "Time-share salesperson."  A person who either as an employee
     or independent contractor sells or offers to sell time shares.
     Such person shall sell time shares under the active supervision
     of a broker. A person licensed as a broker or as a salesperson
     shall not be required to be licensed as a time-share salesperson
     as a condition for selling or offering to sell time shares.
        Section 2.  Section 301 of the act, amended March 29, 1984
     (P.L.162, No.32), is amended to read:
      Section 301.  Unlawful to conduct business without license or
                            registration certificate.
        It shall be unlawful for any person, directly or indirectly,
     to engage in or conduct, or to advertise or hold himself out as
     engaging in or conducting the business, or acting in the
     capacity of a broker or salesperson, limited broker, limited
     salesperson, campground membership salesperson, time-share
     salesperson, builder-owner salesperson, rental listing referral
     agent or cemetery company within this Commonwealth without first
     being licensed or registered as provided in this act, unless he
     is exempted from obtaining a license or registration certificate
     under the provisions of section 304.
        Section 3.  Section 302 of the act is amended to read:
      Section 302.  Civil suits.
        No action or suit shall be instituted, nor recovery be had,
     in any court of this Commonwealth by any person for compensation
     for any act done or service rendered, the doing or rendering of
     which is prohibited under the provisions of this act by a person
     other than a licensed broker, salesperson, limited broker,
     limited salesperson, campground membership salesperson, time-
     share salesperson, builder-owner salesperson or rental listing
     referral agent, unless such person was duly licensed and
     registered hereunder as broker or salesperson at the time of
     offering to perform any such act or service or procuring any
     promise or contract for the payment of compensation for any such
     contemplated act or service.
        Section 4.  Section 303 of the act, amended March 29, 1984
     (P.L.162, No.32), is amended to read:
      Section 303.  Criminal penalties.
        Any person who shall engage in or carry on the business, or
     act in the capacity of a broker, salesperson, limited broker,
     limited salesperson, campground membership salesperson, time-
     share salesperson, builder-owner salesperson, rental listing
     referral agent or cemetery company, within this Commonwealth,
     without a license or registration certificate, or shall carry on
     or continue business after the suspension or revocation of any
     such license or registration certificate issued to him, or shall
     employ any person as a salesperson or limited salesperson to
     whom a license has not been issued, or whose license or
     registration certificate as such shall have been revoked or
     suspended, shall be guilty of a summary offense and upon
     conviction thereof for a first offense shall be sentenced to pay
     a fine not exceeding $500 or suffer imprisonment, not exceeding
     three months, or both and for a second or subsequent offense
     shall be guilty of a felony of the third degree and upon
     conviction thereof, shall be sentenced to pay a fine of not less
     than $2,000 but not more than $5,000 or to imprisonment for not
     less than one year but not more than two years, or both.
        Section 5.  Section 406 of the act, amended March 7, 1982
     (P.L.158, No.50), is amended to read:
      Section 406.  Administration and enforcement.
        The commission shall have the power and its duty shall be to
     administer and enforce the laws of the Commonwealth relating to:
            (1)  Those activities involving real estate for which
        licensing is required under this act and to instruct and
        require its agents to bring prosecutions for unauthorized and
        unlawful practice.
            (2)  Those activities involving cemeteries and cemetery
        companies for which registration is required under this act
        and to instruct and require its agents to bring prosecutions
        for unauthorized or unlawful activities.
            (3)  Those activities involving campground memberships
        for which licensing is required under this act and to
        instruct and require its agents to bring prosecutions for
        unauthorized or unlawful activities.
        Section 6.  Section 501(a) of the act, amended March 29, 1984
     (P.L.162, No.32), is amended to read:
      Section 501.  Reputation; inactive licensee; revoked license.
        (a)  Licenses shall be granted only to and renewed only for
     persons who bear a good reputation for honesty, trustworthiness,
     integrity and competence to transact the business of broker,
     salesperson, limited broker, limited salesperson, campground
     membership salesperson, time-share salesperson, builder-owner
     salesperson or rental listing referral agent, in such manner as
     to safeguard the interest of the public, and only after
     satisfactory proof of such qualifications has been presented to
     the commission as it shall by regulation require.
        * * *
        Section 7.  Chapter 5 of the act is amended by adding
     subchapters to read:

                                CHAPTER 5
               QUALIFICATIONS AND APPLICATIONS FOR LICENSES
                      AND REGISTRATION CERTIFICATES

                                  * * *

                               SUBCHAPTER I
               CAMPGROUND MEMBERSHIP SALESPERSON'S LICENSE

      Section 581.  Qualifications for license.
        (a)  The applicant for a campground salesperson's license
     shall be at least 18 years of age.
        (b)  The applicant shall have successfully completed 15 hours
     in the following areas of study:
            (1)  Basic contract law.
            (2)  Sales practices and procedures.
            (3)  Sales ethics.
            (4)  Basic theory of campground memberships.
        (c)  The applicant shall undergo not less than 30 days of
     onsite training at a campground membership facility.
      Section 582.  Application for license.
        (a)  An application for a license as a campground membership
     salesperson shall be made in writing to the department upon a
     form provided for the purpose by the department and shall
     contain such information as to the applicant as the commission
     shall require.
        (b)  The applicant for a license shall submit a sworn
     affidavit by a broker certifying that the broker will actively
     supervise and train the applicant and certifying the truth and
     accuracy of the certification of the applicant.
        (c)  A license shall be renewed biennially.
        (d)  The commission shall establish an application fee and a
     biennial renewal fee by regulation.

                               SUBCHAPTER J
                     TIME-SHARE SALESPERSON'S LICENSE

      Section 591.  Qualifications for license.
        (a)  The applicant for a time-share salesperson's license
     shall be at least 18 years of age.
        (b)  The applicant shall have successfully completed 30 hours
     of instruction in the following areas of study:
            (1)  Basic contract law.
            (2)  Sales practices and procedures.
            (3)  Sales ethics.
            (4)  Basic theory of resort time sharing.
        (c)  The applicant shall undergo not less than 30 days of
     onsite training at a time-share facility.
      Section 592.  Application for license.
        (a)  An application for a license as a time-share salesperson
     shall be made in writing to the department upon a form provided
     for the purpose by the department and shall contain such
     information as to the applicant as the commission shall require.
        (b)  The applicant shall submit a sworn statement by a broker
     certifying that the broker will actively supervise and train the
     applicant and certifying the truth and accuracy of the
     certification of the applicant.
        (c)  A license shall be renewed biennially.
        (d)  The commission shall establish an application fee and a
     biennial renewal fee by regulation.
        Section 8.  Section 603 of the act, amended March 29, 1984
     (P.L.162, No.32), is amended to read:
      Section 603.  Employment of associate brokers, salesperson.
        (a)  No associate broker or salesperson (which term in this
     section shall include limited salesperson) shall be employed by
     any other broker than is designated upon the current license
     issued to said associate broker or said salesperson. Whenever a
     licensed salesperson or associate broker desires to change his
     employment from one licensed broker to another, he shall notify
     the commission in writing no later than ten days after the
     intended date of change, pay the required fee, and return his
     current license. The commission, shall, upon receipt of
     acknowledgment from the new broker of the change of employment
     issue a new license. In the interim at such time as the change
     in affiliation of the salesperson or associate broker occurs, he
     shall maintain a copy of the notification sent to the commission
     as his temporary license pending receipt of his new current
     license. It shall be the duty of the applicant to notify the
     commission if a new license or other pertinent communication is
     not received from the commission within 30 days.
        (b)  No campground membership salesperson or time-share
     salesperson shall be supervised by any other broker than is
     designated upon the current license issued to such salesperson.
     Whenever a campground membership salesperson or a time-share
     salesperson desires to be supervised by a different broker, such
     licensee and the commission shall follow the procedure specified
     in subsection (a) for real estate salespersons.
        Section 9.  Section 604(a)(18) of the act, amended March 29,
     1984 (P.L.162, No.32), is amended and the subsection is amended
     by adding paragraphs to read:
      Section 604.  Prohibited acts.
        (a)  The commission may upon its own motion, and shall
     promptly upon the verified complaint in writing of any person
     setting forth a complaint under this section, ascertain the
     facts and, if warranted, hold a hearing for the suspension or
     revocation of a license or registration certificate or for the
     imposition of fines not exceeding $1,000, or both. The
     commission shall have power to refuse a license or registration
     certificate for cause or to suspend or revoke a license or
     registration certificate or to levy fines up to $1,000, or both,
     where the said license has been obtained by false
     representation, or by fraudulent act or conduct, or where a
     licensee or registrant, in performing or attempting to perform
     any of the acts mentioned herein, is found guilty of:
            * * *
            (18)  Soliciting, selling or offering for sale real
        property by offering free lots, or conducting lotteries or
        contests or offering prizes for the purpose of influencing by
        deceptive conduct any purchaser or prospective purchaser of
        real property. The commission shall promulgate necessary
        rules and regulations to provide standards for nondeception
        conduct under this paragraph.
                (i)  Any offering by mail or by telephone of any
            prize, gift, award or bonus in relation to the offering
            of sale of real property, including time sharing, shall
            be accompanied by a statement of the fair market value,
            not suggested retail price, of all prizes offered, plus a
            statement of the odds of receiving any such prize. If the
            offering is by mail the statement of value and odds shall
            be printed in [the same size type as the prize
            description and shall appear immediately adjacent to said
            description.] a clear and conspicuous manner.
                (ii)  If a prize is to be awarded as a rebate, coupon
            or discount certificate, a statement of that fact shall
            be included. An offering by mail shall include a
            statement of any fees and the maximum amount of each
            which the prizewinner must pay in order to receive the
            prize. Such fees shall include, but not be limited to,
            dealer preparation, shipping, handling, redemption and
            shipping insurance. Each fee associated with a prize and
            the odds of receiving the prize shall appear in a clear
            and conspicuous manner on any offering by mail.
                (iii)  An offering by mail shall be written in a
            clear and coherent manner, using common usages of words
            and terms. A concise description of the real property or
            interest being promoted shall appear in any offering and
            shall include a statement that the interest is a time
            share, where applicable. If the prospective prizewinner
            must personally visit and inspect the real property or
            interest being promoted and listen to a sales
            presentation in order to win a prize, the offering shall
            include a statement of that fact. An offering may include
            instructions for a recipient to contact a certain
            telephone number within a specified time period or by a
            specified date, if the offeror identifies the business
            entity and its relationship to the offeror and complies
            with this paragraph.
                (iv)  Substitutions of prizes having equal or greater
            fair market value may be made if the offeror complies
            with this paragraph.
                (v)  As used in this paragraph, the term "prize"
            includes, but is not limited to, money, personal
            property, vacations, travel certificates, motor vehicles
            and appliances.
            * * *
            (27)  In the case of a broker licensee, failing to
        exercise adequate supervision over the activities of a
        campground membership salesperson or a time-share salesperson
        within the scope of this act.
            (28)  Failure of a broker, campground membership
        salesperson or time-share salesperson to comply with the
        requirements of paragraph (5), or such alternative
        requirements established by the rules of the commission, in
        connection with deposits or other moneys received by the
        broker, campground membership salesperson or time-share
        salesperson in conjunction with the sale of a campground
        membership or a time share.
        * * *
        Section 10.  Sections 606, 607 and 608 of the act, added
     March 29, 1984 (P.L.162, No.32), are amended to read:
      Section 606.  Broker's disclosure to seller.
        In any listing agreement or contract of agency, the broker
     shall make the following disclosures to any seller of real
     property:
            (1)  A statement that the broker's commission and the
        time period of the listing [are negotiable.] have been
        determined as a result of negotiations between the broker and
        the seller.
            (2)  A statement describing the purpose of the Real
        Estate Recovery Fund established under section 801 and the
        telephone number of the commission at which the seller can
        receive further information about the fund.
      Section 607.  Broker's disclosure to buyer.
        In any sales agreement or sales contract, a broker shall make
     the following disclosures to any prospective buyer of real
     property:
            (1)  A statement that the broker is the agent of the
        seller[, not the buyer.] or that the broker is the agent of
        the buyer.
            (2)  A statement describing the purpose of the Real
        Estate Recovery Fund established under section 801 and the
        telephone number of the commission at which the purchaser can
        receive further information about the fund.
            (3)  A statement of the zoning classification of the
        property except [for single-family dwellings. Failure of any
        sales agreement or sales contract to contain a statement of
        the zoning classification of the property] in cases where the
        property (or each parcel thereof, if subdividable) is zoned
        solely or primarily to permit single-family dwellings.
        Failure to comply with this requirement shall render the
        sales agreement or sales contract [null and void and]
        voidable at the option of the buyer, and, if voided, any
        deposits tendered by the buyer shall be returned to the buyer
        without any requirement for any court action.
            (4)  A statement that access to a public road may require
        issuance of a highway occupancy permit from the Department of
        Transportation.
      Section 608.  Information to be given at initial interview.
        The commission shall establish rules or regulations which
     shall set forth the manner and method of disclosure of
     information to the prospective buyer or seller during the
     initial interview. Such disclosure shall include, but shall not
     be limited to:
            (1)  A statement that the broker is the agent of the
        seller or that the broker is the agent of the buyer.
            (2)  The purpose of the Real Estate Recovery Fund and the
        telephone number of the commission at which further
        information about the fund may be obtained.
            (3)  A statement that the duration of the listing
        agreement or contract and the broker's commission are
        negotiable.
            (4)  A statement that any sales agreement must contain
        the zoning classification of a property except in cases where
        the property (or each parcel thereof, if subdividable) is
        zoned solely or primarily to permit single-family dwellings.
        Section 11.  Section 702 of the act is amended by adding a
     subsection to read:
      Section 702.  Imputed knowledge, limitations.
        * * *
        (d)  No violation of any of the provisions of this act on the
     part of any campground membership salesperson or time-share
     salesperson shall be grounds for the revocation or suspension of
     the license of the broker responsible for supervising such
     salesperson unless it shall appear upon the hearings held that
     such broker had actual knowledge of such violation. A course of
     dealing shown to have been followed by such salesperson shall
     constitute prima facie evidence of such knowledge upon the part
     of such broker.
        Section 12.  Section 801 of the act is amended to read:
      Section 801.  Establishment of the fund.
        (a)  There is hereby established the Real Estate Recovery
     Fund for the purposes hereinafter set forth in this act.
        (b)  The Real Estate Recovery Fund shall not apply to the
     sale of, or the offer to sell, a campground membership or to a
     campground membership salesperson.
        Section 13.  This act shall take effect as follows:
            (1)  Section 2 (section 301) shall take effect in one
        year.
            (2)  The remainder of this act shall take effect in 60
        days.

     APPROVED--The 1st day of July, A. D. 1990.

     ROBERT P. CASEY