Session Law

Identifying Information:L. 2002 ch. 072
Other Identifying Information:2002 Senate Bill 440
Tax Type:Other
Brief Description:An Act concerning real estate brokers and salespersons; relating to prohibited acts; amending K.S.A. 2001 Supp. 58-3062 and repealing the existing section.
Keywords:


Body:

CHAPTER 72

SENATE BILL No. 440

An Act concerning real estate brokers and salespersons; relating to prohibited acts;

amending K.S.A. 2001 Supp. 58-3062 and repealing the existing section.


Be it enacted by the Legislature of the State of Kansas:

Section 1. K.S.A. 2001 Supp. 58-3062 is hereby amended to read as

follows: 58-3062. (a) No licensee, whether acting as an agent or a prin-

cipal, shall:

(1) Intentionally use advertising that is misleading or inaccurate in

any material particular or that in any way misrepresents any property,

terms, values, policies or services of the business conducted, or uses the

trade name, collective membership mark, service mark or logo of any

organization owning such name, mark or logo without being authorized

to do so.

(2) Fail to account for and remit any money which comes into the

licensee's possession and which belongs to others.

(3) Misappropriate moneys required to be deposited in a trust ac-

count pursuant to K.S.A. 58-3061, and amendments thereto, convert such

moneys to the licensee's personal use or commingle the money or other

property of the licensee's principals with the licensee's own money or

property, except that nothing herein shall prohibit a broker from having

funds in an amount not to exceed $100 in the broker's trust account to

pay expenses for the use and maintenance of such account.

(4) Accept, give or charge any rebate or undisclosed commission.

(5) Pay a referral fee to a person who is properly licensed as a broker

or salesperson in another jurisdiction or who holds a corporate real estate

license in another jurisdiction if the licensee knows that the payment of

the referral fee will result in the payment of a rebate by the out-of-state

licensee.

(6) Represent or attempt to represent a broker without the broker's

express knowledge and consent.

(7) Guarantee or authorize any person to guarantee future profits that

may result from the resale of real property.

(8) Place a sign on any property offering it for sale or lease without

the written consent of the owner or the owner's authorized agent.

(9) Offer real estate for sale or lease without the knowledge and con-

sent of the owner or the owner's authorized agent or on terms other than

those authorized by the owner or the owner's authorized agent.

(10) Induce any party to break any contract of sale or lease.

(11) Offer or give prizes, gifts or gratuities which are contingent upon

an agency agreement or the sale, purchase or lease of real estate. Products

or services which are offered or given pursuant to a licensee carrying out

the duties of a seller's agent pursuant to K.S.A. 2001 Supp. 58-30,106,

and amendments thereto, a buyer's agent pursuant to K.S.A. 2001 Supp.

58-30,107, and amendments thereto, or a transaction broker pursuant to

K.S.A. 2001 Supp. 58-30,113, and amendments thereto, shall not be con-

sidered to be a prize, gift or gratuity.

(12) Fail to see that financial obligations and commitments between

the parties to an agreement to sell, exchange or lease real estate are in

writing, expressing the exact agreement of the parties or to provide, within

a reasonable time, copies thereof to all parties involved.

(13) Procure a signature to a purchase contract which has no definite

purchase price, method of payment, description of property or method

of determining the closing date.

(14) Engage in fraud or make any substantial misrepresentation.

(15) Represent to any lender, guaranteeing agency or any other in-

terested party, either verbally or through the preparation of false docu-

ments, an amount in excess of the true and actual sale price of the real

estate or terms differing from those actually agreed upon.

(16) Fail to make known to any purchaser or lessee any interest the

licensee has in the real estate the licensee is selling or leasing or to make

known to any seller or lessor any interest the licensee will have in the real

estate the licensee is purchasing or leasing.

(17) Fail to inform both the buyer, at the time an offer is made, and

the seller, at the time an offer is presented, that certain closing costs must

be paid and the approximate amount of such costs.

(18) Fail without just cause to surrender any document or instrument

to the rightful owner.

(19) Accept anything other than cash as earnest money unless that

fact is communicated to the owner prior to the owner's acceptance of the

offer to purchase, and such fact is shown in the purchase agreement.

(20) Fail to deposit any check or cash received as an earnest money

deposit or as a deposit on the purchase of a lot within five business days

after the purchase agreement or lot reservation agreement is signed by

all parties, unless otherwise specifically provided by written agreement of

all parties to the purchase agreement or lot reservation agreement, in

which case the licensee shall deposit the check or cash received on the

date provided by such written agreement.

(21) Fail in response to a request by the commission or the director

to produce any document, book or record in the licensee's possession or

under the licensee's control that concerns, directly or indirectly, any real

estate transaction or the licensee's real estate business.

(22) Refuse to appear or testify under oath at any hearing held by

the commission.

(23) Demonstrate incompetency to act as a broker, associate broker

or salesperson.

(24) Knowingly receive or accept, directly or indirectly, any rebate,

reduction or abatement of any charge, or any special favor or advantage

or any monetary consideration or inducement, involving the issuance of

a title insurance policy or contract concerning which the licensee is di-

rectly or indirectly connected, from a title insurance company or title

insurance agent, or any officer, employee, attorney, agent or solicitor

thereof.

(25) Engage in the purchase of one-, two-, three- or four-family

dwellings, including condominiums and cooperatives, or the acquisition

of any right, title or interest therein, including any equity or redemption

interests, if:

(A) (i) At the time of such purchase, the dwellings are subject to a

right of redemption pursuant to foreclosure of a mortgage on such dwell-

ings; (ii) the licensee fails to give written notice of the purchase, within

20 days thereafter, to the mortgage holder or judgment creditor who held

such mortgage; and (iii) the licensee, unless otherwise required by law or

court order, fails to apply any rent proceeds from the dwellings to the

judgment lien arising from the foreclosure of such mortgage, as payments

become due under the loan, regardless of whether the licensee is obli-

gated to do so;

(B) (i) the dwellings are subject to a loan which is secured by a mort-

gage and which is in default at the time of such purchase or in default

within one year after such purchase; (ii) the licensee fails to give written

notice of the purchase, within 20 days thereafter, to the mortgage holder;

and (iii) the licensee, unless otherwise required by law or court order,

fails to apply any rent proceeds from the dwellings to the mortgage as the

payments come due, regardless of whether the licensee is obligated on

the loan; or

(C) the licensee fails to notify, at the time of rental, any person rent-

ing any such dwelling of the extent and nature of the licensee's interest

in such dwelling and the probable time until possession will be taken by

the mortgage holder or judgment creditor.

(26) Commit forgery or, unless authorized to do so by a duly executed

power of attorney, sign or initial any contractual agreement on behalf of

another person in a real estate transaction.

(b) No salesperson or associate broker shall:

(1) Except as provided in paragraph (A) or (B), accept a commission

or other valuable consideration from anyone other than the broker by

whom the licensee is employed or with whom the licensee is associated

as an independent contractor.

(A) A salesperson or associate broker may accept a commission or

other valuable consideration from a licensee who employs the salesperson

or associate broker as a personal assistant provided that: (i) the licensee

and the salesperson or associate broker who is employed as a personal

assistant are licensed under the supervision of the same broker, and (ii)

the supervising broker agrees in writing that the personal assistant may

be paid by the licensee.

(B) If a salesperson or associate broker has (i) organized as a profes-

sional corporation pursuant to K.S.A. 17-2706 et seq., and amendments

thereto, (ii) incorporated under the Kansas general corporation code con-

tained in K.S.A. 17-6001 et seq., and amendments thereto, (iii) organized

under the Kansas limited liability company act contained in K.S.A. 2001

Supp. 17-7662 et seq., and amendments thereto, or (iv) has organized as

a limited liability partnership as defined in K.S.A. 2001 Supp. 56a-101,

and amendments thereto, the commission or other valuable consideration

may be paid by the licensee's broker to such professional corporation,

corporation, limited liability company or limited liability partnership. This

provision shall not alter any other provisions of this act.

(2) Fail to place, as soon after receipt as practicable, any deposit

money or other funds entrusted to the salesperson or associate broker in

the custody of the broker whom the salesperson or associate broker rep-

resents.

(3) (A) Except as provided by paragraph (B), be employed by or as-

sociated with a licensee at any one time other than the supervising broker

who employs such salesperson or associate broker or with who the sales-

person or associate broker is associated as an independent contractor.

(B) An associate broker may be employed by or associated with more

than one supervising broker at any one time if each supervising broker

who employs or associates with the associate broker consents to such

multiple employment or association. Such consent shall be on a form pro-

vided by the commission and shall not be effective until a signed copy of

the completed form has been filed with the commission.

(c) No broker shall:

(1) Pay a commission or compensation to any person for performing

the services of an associate broker or salesperson unless such person is

licensed under this act and employed by or associated with the broker.

(2) Fail to deliver to the seller in every real estate transaction, at the

time the transaction is closed, a complete, detailed closing statement

showing all of the receipts and disbursements handled by the broker for

the seller, or fail to deliver to the buyer a complete statement showing

all money received in the transaction from such buyer and how and for

what the same was disbursed, or fail to retain true copies of such state-

ments in the broker's files, except that the furnishing of such statements

to the seller and buyer by an escrow agent shall relieve the broker's re-

sponsibility to the seller and the buyer.

(3) Fail to properly supervise the activities of an associated or em-

ployed salesperson or associate broker.

(4) Lend the broker's license to a salesperson, or permit a salesperson

to operate as a broker.

(5) Fail to provide to the principal a written report every 30 days,

along with a final report, itemizing disbursements made by the broker

from advance listing fees.

(d) (1) If a purchase agreement provides that the earnest money be

held by an escrow agent other than a real estate broker, no listing broker

shall:

(A) Fail to deliver the purchase agreement and earnest money de-

posit to the escrow agent named in the purchase agreement within five

business days after the purchase agreement is signed by all parties unless

otherwise specifically provided by written agreement of all parties to the

purchase agreement, in which case the broker shall deliver the purchase

agreement and earnest money deposit to the escrow agent named in the

purchase agreement on the date provided by such written agreement; or

(B) fail to obtain and keep in the transaction file a receipt from the

escrow agent showing date of delivery of the purchase agreement and

earnest money deposit.

(2) If a purchase agreement provides that the earnest money be held

by an escrow agent other than a real estate broker and the property was

not listed with a broker, no broker for the buyer shall:

(A) Fail to deliver the purchase agreement and earnest money de-

posit to the escrow agent named in the purchase agreement within five

business days after the purchase agreement is signed by all parties unless

otherwise specifically provided by written agreement of all parties to the

purchase agreement, in which case the broker shall deliver the purchase

agreement and earnest money deposit to the escrow agent named in the

purchase agreement on the date provided by such written agreement; or

(B) fail to obtain and keep in the transaction file a receipt from the

escrow agent showing date of delivery of the purchase agreement and

earnest money deposit.

(3) If a purchase agreement provides that the earnest money be held

by an escrow agent other than a real estate broker and neither the seller

nor buyer is represented by a broker, no transaction broker shall:

(A) Fail to deliver the purchase agreement and earnest money de-

posit to the escrow agent named in the purchase agreement within five

business days after the purchase agreement is signed by all parties unless

otherwise specifically provided by written agreement of all parties to the

purchase agreement, in which case the broker shall deliver the purchase

agreement and earnest money deposit to the escrow agent named in the

purchase agreement on the date provided by such written agreement; or

(B) fail to obtain and keep in the transaction file a receipt from the

escrow agent showing date of delivery of the purchase agreement and

earnest money deposit.

The commission may adopt rules and regulations to require that such

purchase agreement which provides that the earnest money be held by

an escrow agent other than a real estate broker include: (1) notification

of whether or not the escrow agent named in the purchase agreement

maintains a surety bond, and (2) notification that statutes governing the

disbursement of earnest money held in trust accounts of real estate bro-

kers do not apply to earnest money deposited with the escrow agent

named in the purchase agreement.

(e) A branch broker shall not be employed by or associated with more

than one supervising broker at any one time unless each supervising bro-

ker who employs or associates with the branch broker consents to such

multiple employment or association. Such consent shall be on a form pro-

vided by the commission and shall not be effective until a signed copy of

the completed form has been filed with the commission.

(e) (f) Nothing in this section shall be construed to grant any person

a private right of action for damages or to eliminate any right of action

pursuant to other statutes or common law.

Sec. 2. K.S.A. 2001 Supp. 58-3062 is hereby repealed.

Sec. 3. This act shall take effect and be in force from and after its

publication in the statute book.

Approved April 15, 2002.


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Date Composed: 10/10/2002 Date Modified: 10/10/2002