SB124 (2005) Detail

Relative to the regulation of real estate brokers by the real estate commission.


CHAPTER 286

SB 124 – FINAL VERSION

03/24/05 0676s

25May2005… 1337h

06/29/05 2025cofc

2005 SESSION

05-1024

10/04

SENATE BILL 124

AN ACT relative to the regulation of real estate brokers by the real estate commission.

SPONSORS: Sen. Gallus, Dist 1; Rep. Emerton, Hills 7

COMMITTEE: Public and Municipal Affairs

ANALYSIS

This bill makes various changes to the law regulating real estate brokers and the real estate commission, including a criminal records check for all applicants for a salesperson or brokers license.

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Explanation: Matter added to current law appears in bold italics.

Matter removed from current law appears [in brackets and struckthrough.]

Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.

03/24/05 0676s

25May2005… 1337h

05-1024

10/04

STATE OF NEW HAMPSHIRE

In the Year of Our Lord Two Thousand Five

AN ACT relative to the regulation of real estate brokers by the real estate commission.

Be it Enacted by the Senate and House of Representatives in General Court convened:

286:1 Definition; Seller. Amend RSA 331-A:2, XI to read as follows:

XI. "Seller" means a party in the transaction who owns the real estate intended for the sale [or], exchange, rent, or lease of real estate.

286:2 New Paragraph; Definition; Non-agent Amend RSA 331-A:2 by inserting after paragraph VI-a the following new paragraph:

VI-b. “Non-agent” means an individual licensed under this chapter who assists one or more parties throughout a real estate transaction without being an agent or advocate for the interests of any party to such transaction.

286:3 New Paragraph; Definition; Unprofessional Conduct. Amend RSA 331-A:2 by inserting after paragraph XIV the following new paragraph:

XV. “Unprofessional conduct” means any action by a licensee which is unlawful, dishonorable, unethical, or immoral.

286:4 Ethics Code. Amend RSA 331-A:9, II to read as follows:

II. No commission member or commission employee shall, for compensation of any type, teach or participate in any preparatory or continuing education effort approved by the commission, except that a commission member or commission employee may, in such capacity, participate in a preparatory or continuing education program and receive such compensation as is normally authorized for commission-related business.

286:5 New Paragraph; Ethics Code; Commission Employees. Amend RSA 331-A:9 by inserting after paragraph III the following new paragraph:

IV. No commission employee shall be issued an active real estate license throughout the duration of employment with the commission. A commission employee shall be allowed to apply for an inactive real estate license during employment with the commission, but the license shall remain inactive during such employment. A commission employee shall not obtain a real estate license in another state based on the inactive license obtained in New Hampshire during such employment with the commission.

286:6 Qualifications; Salesperson. Amend RSA 331-A:10, I(c) and (d) to read as follows:

(c) Demonstrates no record of unprofessional conduct; [and]

(d) Furnishes any evidence required by the commission relative to good reputation for honesty, trustworthiness and integrity; and

(e) Complies with the criminal records check under RSA 331-A:10-a.

286:7 Qualifications; Broker. Amend RSA 331-A:10, II(c) - (f) to read as follows:

(c)(1) Has been employed full time by an active principal broker for at least one year in this state within 5 years of the date of application; or

(2) Has at least 2,000 part-time hours as a licensed salesperson in this state within 5 years of the date of application; or

(3) Proves to the commission that the applicant has experience equivalent to the experience required by subparagraph (c)(1) or (c)(2);

(d) Demonstrates no record of unprofessional conduct;

(e) Furnishes any evidence required by the commission relative to good reputation for honesty, trustworthiness and integrity; [and]

(f) For a broker acting as a principal broker or a managing broker, but excluding associate brokers or a corporation, partnership, limited liability company, or association, files a surety bond with the commission which shall be held in accordance with RSA 331-A:14[.];

(g) Submits evidence acceptable to the commission of at least 6 separate real estate transactions in which the applicant was actively involved and was compensated or proves to the commission that the applicant has equivalent experience; and

(h) Complies with the criminal records check under RSA 331-A:10-a.

286:8 New Section; Criminal Records Check. Amend RSA 331-A by inserting after section 10 the following new section:

331-A:10-a Criminal Records Check.

I. All applicants for a new salesperson or broker license shall submit to the New Hampshire department of safety, division of state police, a notarized criminal record release authorization form, along with the appropriate fee, prior to submitting an application for a real estate license.

II. The commission shall supply the criminal record release authorization form to new salespersons and broker applicants.

III. Upon receipt of an applicant’s criminal record information, the commission shall make a determination of eligibility for licensure.

286:9 Escrow Accounts. Amend RSA 331-A:13 to read as follows:

331-A:13 Escrow Accounts of Broker; Interest; Audit.

I. The principal broker shall maintain an escrow account or accounts, separate and apart from the individual or office account, in which all deposits on fully executed contracts shall be promptly deposited. The escrow account or accounts shall be maintained in an insured financial institution within the state of New Hampshire.

II. The principal broker may place the deposit in an interest-bearing escrow or trust account or instrument. The interest earned shall accrue to the party making the deposit as a sum to be used toward the purchase price unless otherwise agreed in writing.

III. No checks shall be drawn against uncollected contract deposits in the escrow account.

IV. Withdrawal of contract deposits shall be allowed to be forwarded to the closing agent, title company, or attorney, prior to performance of a contract for the purpose of performance. Otherwise, none of the contract deposits shall be withdrawn until the contract has been terminated by performance, by contemporaneous agreement in writing between all parties, or by order of a court of competent jurisdiction, except as provided by paragraph VI of this section.

V. On licensure, the principal broker shall sign a permit giving the commission permission to audit the escrow account or accounts.

VI. If a principal broker retains a contract deposit for a period exceeding 90 days from the contract closing date, without securing performance, a written agreement, or a court order as required in paragraph IV of this section, the principal broker may release the contract deposit to one or more parties to the contract by initiating a release process. The release process requires the principal broker to notify all parties by certified mail that the deposit will be distributed to the parties specified in the letter if the parties fail to perform, enter into a written mutual release, or initiate litigation within 60 days of the mailing date of the certified letter. If neither buyer nor seller initiates litigation or enters into a written release within 60 days of the mailing date of the certified letter, the principal broker may release the deposit without penalty under this section. The principal broker's release of this deposit under this paragraph releases the principal broker solely from liability under this chapter, as opposed to civil liability.

VII. A principal broker may deposit business or personal funds into an escrow account to cover service charges only, assessed to the account by the bank or depository where the account is located, or to maintain a minimum balance in the account as required by the regulations of the bank or depository.

286:10 Supervision. Amend RSA 331-A:16, IV(a) to read as follows:

(a) All advertisements by an associate broker or salesperson shall include the associate broker’s or salesperson’s legal name or reasonable derivative thereof and the regular business name of the firm or the principal broker’s name when licensed under an individual principal broker license. The firm or principal broker’s name, within the advertisement, shall be clearly identifiable. This requirement shall apply to all categories of advertising including all publications, radio or television broadcasts, all electronic media including electronic mail and the Internet, business stationery, business and legal forms and documents, and signs and billboards.

286:11 License Amendments. Amend RSA 331-A:17 to read as follows:

331-A:17 License Amendments.

I. Any principal broker who changes the place of business shall notify the commission of the change in writing within 10 days of the change.

II. A real estate principal broker who proposes to use a registered trade name in connection with [the] a business [as] principal broker license or the individual principal broker license shall state that fact on [the application and the license shall be issued in that trade name. If already licensed, the broker shall return the license for appropriate amendment together with notice, in writing, of the broker’s intention to use a registered trade name and the appropriate fee] an amendment form, and submit the form along with the appropriate fee, the business or individual principal broker license to be amended, and a trade name registration form. The business or individual principal broker license shall be amended to include the trade name.

III. It is the responsibility of all licensees to notify the commission in writing of any changes to the licensee’s resident address, mailing address and work location address.

IV. The license of a real estate salesperson or associate broker shall be retained at all times by the principal broker and whenever a licensed salesperson or associate broker changes his or her affiliation from one licensed principal broker to another or ceases to represent the principal broker, the principal broker shall notify the commission in writing of the termination. Such notice shall be accompanied by the salesperson's or associate broker's license. Failure of any principal broker to notify the commission of such salesperson's or associate broker's termination within 10 days after [demand by] the termination of the salesperson or associate broker shall be grounds to discipline the principal broker.

V. The commission shall issue a new license for the unexpired term if the salesperson or associate broker meets all requirements of licensure, upon receipt of a statement from a principal broker, together with the appropriate fee, that such salesperson or associate broker has become affiliated with such principal broker.

VI. [The license of an unaffiliated salesperson shall lapse unless the person obtains an affiliation with a broker within a period of 2 years.

VII.] When a salesperson's or broker's services are terminated by the principal broker for a violation of any of the provisions of this chapter, a written statement of the facts shall be submitted immediately to the commission by the principal broker.

286:12 Renewal. Amend RSA 331-A:19, II to read as follows:

II. Upon receiving a completed renewal application, the required fees, [an affidavit from the sponsor of an accredited program attesting to the successful] certification of completion of [the] required continuing education [requirements] as set by the commission under RSA 331-A:20 and, in the case of a principal or managing broker licensee, evidence that the required bond is in full force and effect, the executive director shall issue the appropriate license for [an additional] 2 consecutive years from the date of expiration.

286:13 Education; Section Heading. Amend the section heading of RSA 331-A:20 to read as follows:

331-A:20 Programs of Study; Preparatory Education; Continuing Education.

286:14 Preparatory Education. RSA 331-A:20, I is repealed and reenacted to read as follows:

I. An individual, institution, or organization seeking accreditation or renewal of accreditation to offer a preparatory or continuing education program of study shall meet criteria and submit documentation as required by the commission prior to approval. The commission shall require any individual, institution, or organization seeking accreditation or renewal of accreditation of a real estate course to submit documents, statements, and forms prior to approval.

286:15 Temporary Licenses. Amend RSA 331-A:21 to read as follows:

331-A:21 Temporary Licenses. In the event of the death or total incapacity of a licensed real estate principal broker [who is the sole proprietor] of a real estate business, the commission may, upon application by the principal broker's legal representative, issue without examination a temporary license to such legal representative or to an individual designated by the legal representative and approved by the commission, and by the payment of the prescribed fee, which shall authorize such temporary licensee to continue to transact real estate business for a period not to exceed one year from the date of death or incapacitation.

286:16 Practice in Other Jurisdictions. Amend RSA 331-A:22-a, II to read as follows:

II. A broker licensed in another jurisdiction representing a buyer or tenant [who] wherein the broker is not licensed under this chapter, may be actively involved in a real estate transaction in this state only if the broker has entered into a cooperative brokerage agreement with a broker licensed under this chapter who shall represent the buyer or tenant according to this chapter.

286:17 Dual Agents. Amend RSA 331-A:25-d, I to read as follows:

I. A licensee may act as a disclosed dual agent only with the written consent of all parties [involved in the real estate transaction] to the anticipated transaction at the time in which a dual agency relationship occurs, but no later than the preparation of a written offer for sale or lease.

286:18 Prohibited Conduct. Amend RSA 331-A:26, X - XII to read as follows:

X. Advertising in any manner without stating the broker’s legal name as licensed or reasonable derivative thereof, and in the case of a salesperson or associate broker, without stating the name of the principal broker or business name as licensed for whom or under whom the salesperson or associate broker operates.

XI. Accepting other than cash or its equivalent as earnest money, unless that fact is communicated in writing to the owner prior to the owner's acceptance of the offer to purchase, and such fact is shown in the earnest money receipt and acknowledged in writing by the owner.

XII. Acting for more than one party in a transaction without [the knowledge] making full disclosure and obtaining written consent [in writing] of all parties [for whom the licensee acts, and without first making full disclosure of all the facts to all parties interested in the transaction] to the anticipated transaction at the time in which a dual agency relationship occurs, but no later than the preparation of a written offer for sale or lease.

286:19 Prohibited Conduct. Amend RSA 331-A:26, XVIII - XX to read as follows:

XVIII. Failing to keep for a period of 3 years, records of escrow and trust accounts pertaining to funds entrusted with the [licensee] principal broker relating to a real estate transaction showing date deposited, date of withdrawal, to whom paid, and such other pertinent information as the commission may require. Such records shall be available to the commission, or its representatives, on demand [from the licensee].

XIX. In the case of a principal broker, failing to preserve for 3 years following its consummation, records relating to any real estate transaction.

XX. Acceptance by a salesperson or broker of a commission or any valuable consideration for the performance of any acts specified in this chapter, from any person, except the licensed real estate principal broker with whom the salesperson or broker is licensed.

286:20 Prohibited Conduct. Amend RSA 331-A:26, XXIX to read as follows:

XXIX. Unprofessional conduct defined [by statute or rule] in RSA 331-A:2, XV.

286:21 Gender Neutral. Amend RSA 331-A:29, I to read as follows:

I. Upon receipt of a complaint, the executive director or his or her designee shall be responsible for investigation of the complaint. Upon completion of the investigation the investigator shall present the complaint file to a commission member who shall evaluate the complaint. Such commission member may direct the executive director to meet with the complainant and the licensee to attempt to reconcile their differences.

286:22 Effective Date. This act shall take effect July 1, 2005.

(Approved: July 22, 2005)

(Effective Date: July 1, 2005)

Links

SB124 at GenCourtMobile

Action Dates

Date Body Type

Bill Text Revisions

SB124 Revision: 9185 Date: Jan. 21, 2010, midnight

Docket