Pennsylvania Act 2000-47 — REAL ESTATE LICENSING AND REGISTRATION ACT - OMNIBUS AMENDMENTS

Act text

REAL ESTATE LICENSING AND REGISTRATION ACT - OMNIBUS AMENDMENT
                  Act of Jun. 22, 2000, P.L. 371, No. 47              Cl. 63
                             Session of 2000
                               No. 2000-47

     HB 2220

                                  AN ACT

     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 relationships between
        brokers and consumers of real estate services, for disclosure
        at initial interviews, for duties of licensee generally and
        for application for recovery from the real estate recovery
        fund.

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

        Section 1.  Sections 606, 606.1(b) and 608 of the act of
     February 19, 1980 (P.L.15, No.9), known as the Real Estate
     Licensing and Registration Act, amended or added November 25,
     1998 (P.L.908, No.112), are amended to read:
      Section 606.  Relationships between brokers and consumers of
                    real estate services.
        A broker may act in a real estate transaction, subject to the
     provisions of this act, as a seller/landlord agent, buyer/tenant
     agent, as a dual agent for seller/landlord and buyer/tenant or
     as a transaction licensee. Licensees employed by a broker shall
     bear the same relationship to the consumer as the broker, except
     that a broker, including one serving as a dual agent, may
     designate a licensee to act exclusively as agent of [the] a
     particular seller/landlord and may designate another licensee to
     act exclusively as agent of [the] a particular buyer/tenant.
      Section 606.1.  Duties of licensee generally.
        * * *
        (b)  (1)  A licensee may not perform a service for a consumer
        of real estate services for a fee, commission or other
        valuable consideration paid by or on behalf of the consumer
        unless the nature of the service and the fee to be charged
        are set forth in a written agreement between the broker and
        the consumer that is signed by the consumer. This paragraph
        shall not prohibit a licensee from performing services before
        such an agreement is signed, but the licensee is not entitled
        to recover a fee, commission or other valuable consideration
        in the absence of such a signed agreement.
            (2)  Notwithstanding [clause] paragraph (1), an open
        listing agreement or a nonexclusive agreement for a licensee
        to act as a buyer/tenant agent may be oral if the seller or
        buyer is provided with a written memorandum stating the terms
        of the agreement.
            (3)  Nothing in this subsection shall require a
        transaction licensee or subagent who is cooperating with the
        listing broker to obtain a written agreement from the seller.
            (4)  A subagent or transaction licensee who is
        cooperating with the listing broker for a fee paid by the
        listing broker or seller shall provide the buyer, prior to
        performing any services, with a written disclosure statement
        signed by the buyer, describing the nature of the services to
        be performed by the subagent or transaction licensee and
        containing the information required by section 608. If the
        buyer refuses to sign the statement, the licensee shall note
        the refusal on the statement and retain it for six months.
        * * *
      Section 608.  Information to be given at initial interview.
        [The] (a)  Except as set forth in subsections (b), (c), (d)
     and (e), the commission shall establish rules or regulations
     which shall set forth the manner and method of disclosure of
     information to the prospective buyer/tenant or seller/landlord
     during the initial interview. For the purposes of this section,
     the initial interview is the first contact between a licensee
     and a consumer of real estate-related services where a
     substantive discussion about real estate needs occurs. Such
     disclosure shall be provided on a form adopted by the commission
     by regulation and shall include, but shall not be limited to:
            (1)  A disclosure of the relationships in which the
        broker may engage with the consumer. The disclosure shall
        describe the duties that the broker owes in each relationship
        provided for in this act.
            (2)  A statement informing sellers and buyers of their
        option to have an agency relationship with a broker, that an
        agency relationship is not to be presumed and that it will
        exist only as set forth in a written agreement between the
        broker and consumer of real estate service acknowledged by
        the consumer.
            (3)  A statement that a real estate consumer has the
        right to enter into a negotiated agreement with the broker
        limiting the activities or practices that the broker will
        provide for on behalf of the consumer and that the fee and
        services to be provided are to be determined by negotiations
        between the consumer and the broker.
            (4)  A statement identifying any possibility that the
        broker may provide services to another consumer who may be
        party to the transaction and, if so, an explanation of the
        duties the broker may owe the other party and whether the
        broker may accept a fee for those services.
            (5)  A statement identifying any possibility that the
        broker may designate one or more licensees affiliated with
        the broker to represent the separate interest of the parties
        to the transaction.
            (6)  A statement of the broker's policies regarding
        cooperation with other brokers, including the sharing of
        fees.
            (7)  A statement that a buyer's broker may be paid a fee
        that is a percentage of the purchase price and the buyer's
        broker, even if compensated by the listing broker, will
        represent the interests of the buyer.
            (8)  A statement that the duration of the broker's
        employment and the broker's fees are negotiable.
            (9)  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.
            (10)  A statement that the duration of the listing
        agreement or contract and the broker's commission are
        negotiable.
            (11)  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.
        (b)  The following apply to leases:
            (1)  Subsection (a) shall not apply and disclosure shall
        be in accordance with paragraph (2) if the licensee is
        providing information on a property or otherwise dealing with
        a prospective tenant for the purpose of rental only and if
        the licensee is:
                (i)  the actual owner/landlord of the real property,
            including the owner of an equity interest in an actual
            owner/landlord of the real property;
                (ii)  the direct employee of the owner/landlord of
            the real property; or
                (iii)  leasing the real property pursuant to a
            property management agreement or an exclusive leasing
            agreement with the owner/landlord of the real property.
            (2)  In cases under paragraph (1), the licensee shall
        provide to the prospective tenant a written statement
        indicating the capacity in which the licensee is acting. The
        written statement shall be provided at the time of the
        initial interview unless a rental application is required by
        the licensee, in which case the written statement shall be
        provided at the time the rental application is taken. The
        written statement shall be provided at the beginning of the
        rental application and shall be in the following form:
                             CONSUMER NOTICE
                          THIS IS NOT A CONTRACT
            (licensee)              hereby states that with respect
            to this property, (describe property)                 ,
            I am acting in the following capacity: (check one)
                    (i)  owner/landlord of the property;
                    (ii)  a direct employee of the owner/landlord; or
                    (iii)  an agent of the owner/landlord pursuant to
                a property management or exclusive leasing agreement.
            I acknowledge that I have received this notice:
            (consumer)           (date)
            I certify that I have provided this notice:
            (licensee)           (date)
            (3)  The licensee shall provide a copy of the written
        statement under paragraph (2) to the prospective tenant and
        shall retain a copy signed by the prospective tenant and the
        licensee for six months. If the prospective tenant refuses to
        sign the statement, the licensee shall note the refusal on
        the form and retain it for six months.
        (c)  If an initial interview with a consumer in a situation
     which is not covered by subsection (b) or (e) does not occur in
     person, the licensee shall orally advise the consumer of the
     various business relationships that the licensee may have with
     the consumer and provide an oral disclosure to the consumer as
     follows:
            The Real Estate Law requires that I provide you with a
        written consumer notice that describes the various business
        relationship choices that you may have with a real estate
        licensee. Since we are discussing real estate without you
        having the benefit of the consumer notice, I have the duty to
        advise you that any information you give me at this time is
        not considered to be confidential, and any information you
        give me will not be considered confidential unless and until
        you and I enter into a business relationship. At our first
        meeting I will provide you with a written consumer notice
        which explains those business relationships and my
        corresponding duties to you.
        (d)  If an oral disclosure is given as provided in subsection
     (c), the written disclosure form required by subsection (a)
     shall be provided to the consumer not later than the earlier of:
            (1)  the first meeting that the licensee has in person
        with the consumer after the initial interview; or
            (2)  the time a property is first shown to the consumer
        by the licensee or any person working with the licensee.
        (e)  The following apply to time-share estates:
            (1)  Subsection (a) shall not apply and disclosure shall
        be in accordance with paragraph (2) if the licensee is
        showing a time-share estate as defined in 68 Pa.C.S. §
        3403(a) (relating to public offering statement; time-share
        estates).
            (2)  In cases under paragraph (1), the licensee shall
        provide the consumer with a written statement indicating the
        capacity in which the licensee is acting. The statement shall
        be provided at the time of the initial interview and shall be
        in the following form:
                             CONSUMER NOTICE
                          THIS IS NOT A CONTRACT
            (licensee)___________hereby states that with respect to
            this property, (describe property)______________, I am
            acting in the following capacity: (check one)
                (i)  owner of the property;
                (ii)  a direct employee of the owner; or
                (iii)  an agent of the owner pursuant to a property
            management or exclusive leasing or selling agreement.
            I acknowledge that I have received this notice:
            (consumer)______________(date)__________
            I certify that I have provided this notice:
            (licensee)______________(date)__________
            (3)  The licensee shall provide a copy of the statement
        under paragraph (2) to the consumer and shall retain a copy
        signed by the consumer and the licensee for six months. If
        the prospective tenant refuses to sign the statement, the
        licensee shall note the refusal on the form and retain it for
        six months.
        Section 2.  Section 803(f) of the act, amended March 29, 1984
     (P.L.162, No.32), is amended to read:
      Section 803.  Application for recovery from fund.
        * * *
        (f)  Should the commission pay from the Real Estate Recovery
     Fund any amount in settlement of a claim as provided for in this
     act against a licensee[, the]:
            (1)  The license of that person shall automatically
        suspend upon the effective date of the payment thereof by the
        commission.
            (2)  No such licensee shall be granted reinstatement
        until he has repaid in full plus interest at the rate of 10%
        a year, the amount paid from the Real Estate Recovery Fund.
            (3)  The commission shall have the right to petition the
        court that entered the judgment against the licensee to enter
        a judgment under this subsection, and, upon proof of the
        amount paid by the fund, the court shall enter a judgment
        against the licensee for that amount in favor of the
        commission.
        * * *
        Section 3.  The addition of section 803(f)(3) of the act
     shall apply only in cases where the final judgment required
     under section 803(b)(2) is obtained in a proceeding commenced
     after the effective date of this act.
        Section 4.  This act shall take effect immediately.

     APPROVED--The 22nd day of June, A. D. 2000.

     THOMAS J. RIDGE