SB 478

This bill makes various changes to the law governing the practice of real estate, specifically with respect to transactions involving residential property with one to four dwelling units (residential property). Changes in the bill include the following:

1. Creates obligations for listing firms to share information, respond to inquiries, show property, and advertise property on Internet platforms for transactions involving residential property. The bill contains exceptions that allow an owner to a) withhold the owner’s property from public marketing or advertising identified by the owner and b) identify by name any real estate broker or salesperson (licensee), prospective buyer, or prospective tenant that the owner does not wish to work with or allow to view the property, provided that such restrictions comply with all applicable state and federal laws. The bill provides civil immunity to a licensee who, in good faith, acts to fulfill the duties under the bill for any disclosure or representation made in fulfilling those duties, unless the licensee knowingly makes a false, deceptive, or misleading representation. The bill also requires the Real Estate Examining Board to develop a brochure covering the benefits and impacts of publicly marketing property and the disclosures described above.

2. Requires, in a transaction involving residential property, that if a seller agrees to pay compensation to a firm that is not the listing firm for brokerage services provided to a buyer, the agreement a) be expressly stated in the fully executed offer to purchase or option to purchase and b) be signed by the buyer and the seller as part of the contract. The bill prohibits a firm that is not the listing firm from receiving compensation from a party to a transaction who is not the client of the firm unless the agreement to pay the compensation is documented in the executed offer to purchase or option to purchase. The bill also prohibits a listing contract from requiring or implying that a seller will pay compensation to a firm that is not the listing firm, as prohibited under the bill, unless that obligation is contingent upon its inclusion in the executed offer to purchase or option to purchase as described above. The bill requires a listing contract to include a statement as to whether the seller authorizes the listing firm to disclose if the seller is offering compensation to a firm other than the listing firm.

3. Prohibits a firm from accepting compensation of any kind from another firm in connection with brokerage services performed as part of a real estate transaction involving a residential property containing one to four dwelling units. The prohibition does not apply to compensation for a referral or as a finder’s fee.

4. Requires licensees, when developing advertising for property, to disclose if the advertising has been altered or modified using technology, including artificial intelligence, to add, remove, or change elements of the property that creates a false or misleading impression of the property.

Current law prohibits licensees from accepting any fee or compensation without the prior written consent of all parties to a transaction. The bill provides that this does not prohibit the acceptance of a fee or compensation in the context of certain arrangements involving out-of-state brokers acting pursuant to cooperative agreements with in-state real estate firms.