Bill Text: IA HSB639 | 2023-2024 | 90th General Assembly | Introduced
Bill Title: A bill for an act relating to real estate brokers and brokerage agreements.(See HF 2552.)
Spectrum: Committee Bill
Status: (Introduced - Dead) 2024-02-15 - Committee report approving bill, renumbered as HF 2552. [HSB639 Detail]
Download: Iowa-2023-HSB639-Introduced.html
House
Study
Bill
639
-
Introduced
HOUSE
FILE
_____
BY
(PROPOSED
COMMITTEE
ON
COMMERCE
BILL
BY
CHAIRPERSON
LUNDGREN)
A
BILL
FOR
An
Act
relating
to
real
estate
brokers
and
brokerage
1
agreements.
2
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
3
TLSB
5977YC
(6)
90
nls/ko
H.F.
_____
Section
1.
Section
543B.3,
subsection
9,
Code
2024,
is
1
amended
to
read
as
follows:
2
9.
Prepares
offers
to
purchase
or
purchase
agreements,
3
listing
contracts,
buyer’s
representation
agreements,
agency
4
disclosures,
real
property
residential
and
agricultural
rental
5
agreements,
real
property
commercial
rental
agreements
of
one
6
year
or
less,
and
groundwater
hazard
statements,
including
7
any
modifications,
amendments,
or
addendums
to
these
specific
8
documents.
9
Sec.
2.
Section
543B.5,
subsections
2,
7,
9,
and
10,
Code
10
2024,
are
amended
to
read
as
follows:
11
2.
“Agency
agreement”
“Agency
disclosure”
means
a
written
12
agreement
disclosure
between
a
broker
and
a
client
which
13
identifies
the
party
the
broker
represents
in
a
transaction.
14
7.
“Brokerage
agreement”
means
a
contract
between
a
broker
15
and
a
client
which
establishes
the
relationship
between
the
16
parties
as
to
,
and
the
broker’s
compensation
for,
the
brokerage
17
services
to
be
performed
and
contains
the
provisions
required
18
in
section
543B.56A
.
19
9.
“Client”
means
a
party
to
a
transaction
who
has
an
agency
20
a
brokerage
agreement
with
a
broker
for
brokerage
services.
21
10.
“Customer”
means
a
consumer
who
is
not
being
represented
22
by
a
licensee
under
a
brokerage
agreement
but
for
whom
the
23
licensee
may
perform
ministerial
acts.
24
Sec.
3.
Section
543B.5,
Code
2024,
is
amended
by
adding
the
25
following
new
subsection:
26
NEW
SUBSECTION
.
8A.
“Buyer’s
representation
agreement”
27
means
a
brokerage
agreement
between
a
prospective
buyer
and
a
28
broker.
29
Sec.
4.
Section
543B.56,
subsection
1,
Code
2024,
is
amended
30
to
read
as
follows:
31
1.
Duties
to
all
parties
in
a
transaction.
In
providing
32
brokerage
services
to
all
parties
a
client
to
a
transaction,
a
33
licensee
shall
do
all
of
the
following:
34
a.
Provide
brokerage
services
to
Treat
all
parties
to
the
a
35
-1-
LSB
5977YC
(6)
90
nls/ko
1/
4
H.F.
_____
transaction
honestly
and
in
with
honesty
and
good
faith.
1
b.
Diligently
exercise
reasonable
skill
and
care
in
2
providing
brokerage
services
to
all
parties.
3
c.
b.
Disclose
to
each
party
all
material
adverse
facts
4
that
the
licensee
knows
except
for
the
following:
5
(1)
Material
adverse
facts
known
by
the
party.
6
(2)
Material
adverse
facts
the
party
could
discover
7
through
a
reasonably
diligent
inspection,
and
which
would
be
8
discovered
by
a
reasonably
prudent
person
under
like
or
similar
9
circumstances.
10
(3)
Material
adverse
facts
the
disclosure
of
which
is
11
prohibited
by
law.
12
(4)
Material
adverse
facts
that
are
known
to
a
person
who
13
conducts
an
inspection
on
behalf
of
the
party.
14
d.
c.
Account
for
all
property
coming
into
the
possession
15
of
a
licensee
that
belongs
to
any
party
within
a
reasonable
16
time
of
receiving
the
property.
17
Sec.
5.
Section
543B.56,
subsection
2,
paragraph
c,
Code
18
2024,
is
amended
to
read
as
follows:
19
c.
Fulfill
any
obligation
that
is
within
the
scope
of
the
20
agency
brokerage
agreement,
except
those
obligations
that
are
21
inconsistent
with
other
duties
that
the
licensee
has
under
this
22
chapter
or
any
other
law.
23
Sec.
6.
Section
543B.56,
subsection
2,
Code
2024,
is
amended
24
by
adding
the
following
new
paragraph:
25
NEW
PARAGRAPH
.
e.
Diligently
exercise
reasonable
skill
and
26
care
in
providing
brokerage
services.
27
Sec.
7.
Section
543B.56A,
subsection
2,
Code
2024,
is
28
amended
by
adding
the
following
new
paragraph:
29
NEW
PARAGRAPH
.
e.
Review
the
broker’s
compensation
under
30
the
brokerage
agreement.
31
Sec.
8.
Section
543B.56A,
Code
2024,
is
amended
by
adding
32
the
following
new
subsection:
33
NEW
SUBSECTION
.
3.
A
brokerage
agreement
must
be
signed
by
34
both
the
broker
and
the
client
prior
to
the
broker
listing
any
35
-2-
LSB
5977YC
(6)
90
nls/ko
2/
4
H.F.
_____
property
for
sale
on
behalf
of
a
seller,
or
making
an
offer
on
a
1
property
on
behalf
of
a
buyer.
2
Sec.
9.
Section
543B.60,
Code
2024,
is
amended
to
read
as
3
follows:
4
543B.60
Licensees
providing
services
in
more
than
one
5
transaction.
6
A
licensee
may
provide
brokerage
services
simultaneously
7
to
more
than
one
party
in
different
transactions
unless
the
8
licensee
agrees
with
a
client
that
the
licensee
is
to
provide
9
brokerage
services
only
to
that
client.
If
the
licensee
and
a
10
client
agree
that
the
licensee
is
to
provide
brokerage
services
11
only
to
that
client,
the
agency
agreement
disclosure
required
12
under
section
543B.57,
subsection
1
,
shall
contain
a
statement
13
of
that
agreement.
14
EXPLANATION
15
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
16
the
explanation’s
substance
by
the
members
of
the
general
assembly.
17
This
bill
relates
to
real
estate
brokers
and
brokerage
18
agreements.
19
The
bill
includes
in
the
current
definition
of
a
real
estate
20
broker
a
person
acting
for
another
for
a
fee,
commission,
21
or
other
compensation
or
promise
who
prepares
buyer’s
22
representation
agreements,
including
any
modifications,
23
amendments,
or
addendums.
“Buyer’s
representation
agreement”
24
is
defined
by
the
bill.
25
The
bill
requires
a
licensee,
when
providing
brokerage
26
services
to
a
client,
to
treat
all
parties
to
a
transaction
27
with
honesty
and
good
faith,
disclose
to
each
party
all
28
material
adverse
facts
as
laid
out
in
the
bill,
and
to
account
29
for
all
property
coming
into
the
possession
of
the
licensee
30
that
belongs
to
any
party
within
a
reasonable
time.
The
bill
31
requires
the
licensee
to
place
the
client’s
interests
ahead
32
of
the
interests
of
any
other
party,
disclose
to
the
client
33
all
information
known
by
the
licensee
that
is
material
to
the
34
transaction
and
that
is
not
known
by
the
client
or
could
not
35
-3-
LSB
5977YC
(6)
90
nls/ko
3/
4
H.F.
_____
be
discovered
by
the
client
through
a
reasonably
diligent
1
inspection,
fulfill
any
obligation
that
is
within
the
scope
of
2
the
brokerage
agreement,
and
diligently
exercise
reasonable
3
skill
and
care
in
providing
brokerage
services.
4
Under
the
bill,
a
brokerage
agreement
shall
specify
that
a
5
broker
shall
review
the
broker’s
compensation.
Additionally,
6
a
brokerage
agreement
must
be
signed
by
both
a
broker
and
a
7
client
prior
to
the
broker
listing
any
property
for
sale
on
8
behalf
of
a
seller
or
making
an
offer
on
a
property
on
behalf
9
of
a
buyer.
10
The
bill
makes
a
conforming
change
to
Code
section
543B.60.
11
-4-
LSB
5977YC
(6)
90
nls/ko
4/
4
