Bill Text: OR SB23 | 2013 | Regular Session | Enrolled
Bill Title: Relating to the regulation of real estate activities; and declaring an emergency.
Spectrum: Unknown
Status: (Passed) 2013-05-24 - Effective date, May 16, 2013. [SB23 Detail]
Download: Oregon-2013-SB23-Enrolled.html
77th OREGON LEGISLATIVE ASSEMBLY--2013 Regular Session
Enrolled
Senate Bill 23
Printed pursuant to Senate Interim Rule 213.28 by order of the
President of the Senate in conformance with presession filing
rules, indicating neither advocacy nor opposition on the part
of the President (at the request of Governor John A. Kitzhaber,
M.D., for Real Estate Agency)
CHAPTER ................
AN ACT
Relating to the regulation of real estate activities; creating
new provisions; amending ORS 270.120, 696.010, 696.020,
696.026, 696.030, 696.130, 696.184, 696.186, 696.241, 696.290,
696.315, 696.385, 696.425, 696.445 and 696.890; repealing ORS
696.361; and declaring an emergency.
Be It Enacted by the People of the State of Oregon:
{ +
PROPERTY MANAGEMENT AGREEMENTS + }
SECTION 1. ORS 696.010 is amended to read:
696.010. As used in ORS 696.010 to 696.495, 696.600 to 696.785,
696.800 to 696.870, 696.990 and 696.995, unless the context
requires otherwise:
(1) 'Associated with' means to be employed, engaged or
otherwise supervised by, with respect to the relationship
between:
(a) A real estate broker and a principal real estate broker;
(b) A licensed real estate property manager and a principal
real estate broker; or
(c) A licensed real estate property manager and another
licensed real estate property manager.
(2) 'Bank' includes any bank or trust company, savings bank,
mutual savings bank, savings and loan association or credit union
that maintains a head office or a branch in this state in the
capacity of a bank or trust company, savings bank, mutual savings
bank, savings and loan association or credit union.
(3)(a) 'Branch office' means a business location, other than
the main office designated under ORS 696.200 (1), where
professional real estate activity is regularly conducted or that
is advertised to the public as a place where such business may be
regularly conducted.
(b) Model units or temporary structures used solely for the
dissemination of information and distribution of lawfully
required public reports shall not be considered branch offices. A
model unit means a permanent residential structure located in a
subdivision or development used for such dissemination and
Enrolled Senate Bill 23 (SB 23-INTRO) Page 1
distribution, so long as the unit is at all times available for
sale, lease, lease option or exchange.
(4) 'Compensation' means any fee, commission, salary, money or
valuable consideration for services rendered or to be rendered as
well as the promise thereof and whether contingent or otherwise.
(5) 'Competitive market analysis' means a method or process
used by a real estate licensee in pursuing a listing agreement or
in formulating an offer to acquire real estate in a transaction
for the sale, lease, lease-option or exchange of real estate. The
objective of competitive market analysis is a recommended
listing, selling or purchase price or a lease or rental
consideration. A competitive market analysis may be expressed as
an opinion of the value of the real estate in a contemplated
transaction. Competitive market analysis may include but is not
limited to an analysis of market conditions, public records, past
transactions and current listings of real estate.
(6) 'Expired' means, in the context of a real estate licensee,
that the license has not been renewed in a timely manner, but may
still be renewed.
(7) 'Inactive' means, in the context of a real estate licensee,
that the license has been returned to the agency to be held until
the licensee reactivates the license or the license expires or
lapses.
(8) 'Lapsed' means, in the context of a real estate licensee,
that the license has not been renewed in a timely manner and is
not eligible for renewal.
(9) 'Letter opinion' has the meaning given that term in ORS
696.294.
(10) 'Licensed real estate property manager' means an
individual who holds an active real estate property manager's
license issued under ORS 696.022.
(11) 'Management of rental real estate' means:
(a) Representing the owner of real estate in the rental or
lease of the real estate and includes but is not limited to:
(A) Advertising the real estate for rent or lease;
(B) Procuring prospective tenants to rent or lease the real
estate;
(C) Negotiating with prospective tenants;
(D) Accepting deposits from prospective tenants;
(E) Checking the qualifications and creditworthiness of
prospective tenants;
(F) Charging and collecting rent or lease payments;
(G) Representing the owner in inspection or repair of the real
estate;
(H) Contracting for repair or remodeling of the real estate;
(I) Holding trust funds or property received in managing the
real estate and accounting to the owner for the funds or
property;
(J) Advising the owner regarding renting or leasing the real
estate;
(K) Providing staff and services to accommodate the tax
reporting and other financial or accounting needs of the real
estate;
(L) Providing copies of records of acts performed on behalf of
the owner of the real estate; and
(M) Offering or attempting to do any of the acts described in
this paragraph for the owner of the real estate; or
(b) Representing a tenant or prospective tenant when renting or
leasing real estate and includes but is not limited to:
Enrolled Senate Bill 23 (SB 23-INTRO) Page 2
(A) Consulting with tenants or prospective tenants about
renting or leasing real estate;
(B) Assisting prospective tenants in renting or leasing real
estate;
(C) Assisting prospective tenants in qualifying for renting or
leasing real estate;
(D) Accepting deposits or other funds from prospective tenants
for renting or leasing real estate and holding the funds in trust
for the prospective tenants;
(E) Representing tenants or prospective tenants renting or
leasing real estate; and
(F) Offering or attempting to do any of the acts described in
this paragraph for a tenant or prospective tenant.
(12) 'Nonlicensed individual' means an individual:
(a) Who has not obtained a real estate license; or
(b) Whose real estate license is lapsed, expired, inactive,
suspended, surrendered or revoked.
(13) 'Principal real estate broker' means:
(a) An individual who holds an active license as a principal
real estate broker; or
(b) A sole practitioner who conducted professional real estate
activity as a sole practitioner prior to January 1, 2010.
(14) 'Professional real estate activity' means any of the
following actions, when engaged in for another and for
compensation or with the intention or in the expectation or upon
the promise of receiving or collecting compensation, by any
person who:
(a) Sells, exchanges, purchases, rents or leases real estate;
(b) Offers to sell, exchange, purchase, rent or lease real
estate;
(c) Negotiates, offers, attempts or agrees to negotiate the
sale, exchange, purchase, rental or leasing of real estate;
(d) Lists, offers, attempts or agrees to list real estate for
sale;
(e) Offers, attempts or agrees to perform or provide a
competitive market analysis or letter opinion, to represent a
taxpayer under ORS 305.230 or 309.100 or to give an opinion in
any administrative or judicial proceeding regarding the value of
real estate for taxation, except when the activity is performed
by a state certified appraiser or state licensed appraiser;
(f) Auctions, offers, attempts or agrees to auction real
estate;
(g) Buys, sells, offers to buy or sell or otherwise deals in
options on real estate;
(h) Engages in management of rental real estate;
(i) Purports to be engaged in the business of buying, selling,
exchanging, renting or leasing real estate;
(j) Assists or directs in the procuring of prospects,
calculated to result in the sale, exchange, leasing or rental of
real estate;
(k) Assists or directs in the negotiation or closing of any
transaction calculated or intended to result in the sale,
exchange, leasing or rental of real estate;
(L) Except as otherwise provided in ORS 696.030
{ - (1)(L) - } { + (12) + }, advises, counsels, consults or
analyzes in connection with real estate values, sales or
dispositions, including dispositions through eminent domain
procedures;
Enrolled Senate Bill 23 (SB 23-INTRO) Page 3
(m) Advises, counsels, consults or analyzes in connection with
the acquisition or sale of real estate by an entity if the
purpose of the entity is investment in real estate; or
(n) Performs real estate marketing activity as described in ORS
696.600.
{ + (15) 'Property management agreement' means a written
contract for the management of rental real estate between a real
estate property manager and the owner of the rental real
estate. + }
{ - (15) - } { + (16) + } 'Real estate' includes leaseholds
and licenses to use including, but not limited to, timeshare
estates and timeshare licenses as defined in ORS 94.803, as well
as any and every interest or estate in real property, whether
corporeal or incorporeal, whether freehold or nonfreehold,
whether held separately or in common with others and whether the
real property is situated in this state or elsewhere.
{ - (16) - } { + (17) + } 'Real estate broker' means an
individual who engages in professional real estate activity and
who holds an active license as a real estate broker.
{ - (17) - } { + (18) + } 'Real estate licensee' means an
individual who holds an active license as a real estate broker,
principal real estate broker or real estate property manager.
{ - (18) - } { + (19) + } 'Real estate property manager'
means a real estate licensee who engages in the management of
rental real estate and is a licensed real estate property
manager, a principal real estate broker or a real estate broker
who is associated with and supervised by a principal real estate
broker.
{ - (19) - } { + (20) + } 'Registered business name' means
a name registered with the Real Estate Agency under which the
individual registering the name engages in professional real
estate activity.
{ - (20) - } { + (21) + } 'Sole practitioner' means a real
estate broker conducting professional real estate activity not in
conjunction with other real estate brokers or principal real
estate brokers and who, prior to January 1, 2010:
(a) Acquired three years of active experience as a real estate
broker; or
(b) Acquired three years of active experience as a real estate
salesperson as defined in ORS 696.025 (1999 Edition) and
successfully completed the real estate broker's examination
required by rule of the agency.
SECTION 2. ORS 696.890 is amended to read:
696.890. (1) As used in this section:
(a) 'Management of rental real estate' has the meaning given
that term in ORS 696.010.
{ + (b) 'Property management agreement' has the meaning given
that term in ORS 696.010. + }
{ - (b) - } { + (c) + } 'Real estate property manager' has
the meaning given that term in ORS 696.010.
(2) A real estate property manager who represents a property
owner, for compensation, in the management of rental real estate
is the property owner's agent.
{ + (3) A real estate property manager may engage in the
management of rental real estate for an owner of rental real
estate only pursuant to a property management agreement. + }
{ - (3) - } { + (4) + } A real estate property manager owes
the property owner the following affirmative duties:
(a) To deal honestly and in good faith;
Enrolled Senate Bill 23 (SB 23-INTRO) Page 4
(b) To disclose material facts known by the property manager
and not apparent or readily ascertainable to the owner;
(c) To exercise reasonable care and diligence;
(d) To account in a timely manner for all funds received from
or on behalf of the owner;
(e) To act in a fiduciary manner in all matters relating to
trust funds;
(f) To be loyal to the owner by not taking action that is
adverse or detrimental to the owner's interest;
(g) To disclose in a timely manner to the owner any existing or
contemplated conflict of interest;
(h) To advise the owner to seek expert advice on matters that
are beyond the property manager's expertise; and
(i) To maintain as confidential all information from or about
the owner, except under subpoena or court order, even after the
agency relationship ends.
{ - (4) - } { + (5) + } The affirmative duties listed in
subsection { - (3) - } { + (4) + } of this section may not be
waived.
{ - (5) - } { + (6) + } Nothing in this section implies a
duty beyond or in addition to those activities that are
reasonably within the scope of the management of rental real
estate.
SECTION 3. ORS 696.290 is amended to read:
696.290. (1) { + (a) Except as provided in paragraph (b) of
this subsection, + } a real estate licensee may not offer,
promise, allow, give, pay or rebate, directly or indirectly, any
part or share of the licensee's compensation arising or accruing
from any real estate transaction or pay a finder's fee to any
person who is not a real estate licensee licensed under ORS
696.022.
{ + (b) + } { - However, - } A real estate broker or
principal real estate broker may pay a finder's fee or a share of
the licensee's compensation on a cooperative sale when the
payment is made to a licensed real estate broker in another state
or country, provided that { + :
(A) + } The state or country in which { - that - } { + the
nonresident real estate + } broker is licensed has a law
permitting real estate brokers to cooperate with real estate
brokers or principal real estate brokers in this state { + ; + }
and
{ + (B) + } { - That such - } { + The + } nonresident
real estate broker does not conduct in this state any acts
constituting professional real estate activity and for which
compensation is paid. If a country does not license real estate
brokers, the payee must be a citizen or resident of the country
and represent that the payee is in the business of real estate
brokerage in the other country.
{ + (2) + } A real estate broker associated with a principal
real estate broker may not accept compensation from any person
other than the principal real estate broker with whom the real
estate broker is associated at the time.
{ + (3) + } A principal real estate broker may not make
payment to the real estate broker of another principal real
estate broker except through the principal real estate broker
with whom the real estate broker is associated.
{ + (4) + } Nothing in this section prevents payment of
compensation earned by a real estate broker or principal real
estate broker while licensed { - , - } because of { - change
of affiliation - } { + the real estate broker's or principal
Enrolled Senate Bill 23 (SB 23-INTRO) Page 5
real estate broker's association with a different principal real
estate broker + } or { + because of + } inactivation of the
{ + real estate broker's or principal real estate + } broker's
license.
{ - (2) - } { + (5) + } Nothing in subsection (1) of this
section prohibits a real estate licensee who has a
{ - written - } property management agreement with the owner of
a residential building or facility from authorizing the payment
of a referral fee, rent credit or other compensation to an
existing tenant of the owner or licensee, or a former tenant if
the former tenant resided in the building or facility within the
previous six months, as compensation for referring new tenants to
the licensee.
{ - (3)(a) - } { + (6)(a) + } Nothing in subsection (1) of
this section prevents an Oregon real estate broker or principal
real estate broker from sharing compensation on a cooperative
nonresidential real estate transaction with a person who holds an
active real estate license in another state or country, provided:
(A) Before the out-of-state real estate licensee performs any
act in this state that constitutes professional real estate
activity, the licensee and the cooperating Oregon real estate
broker or principal real estate broker agree in writing that the
acts constituting professional real estate activity conducted in
this state will be under the supervision and control of the
cooperating Oregon broker and will comply with all applicable
Oregon laws;
(B) The cooperating Oregon real estate broker or principal real
estate broker accompanies the out-of-state real estate licensee
and the client during any property showings or negotiations
conducted in this state; and
(C) All property showings and negotiations regarding
nonresidential real estate located in this state are conducted
under the supervision and control of the cooperating Oregon real
estate broker or principal real estate broker.
(b) As used in this subsection, 'nonresidential real estate'
means real property that is improved or available for improvement
by commercial structures or five or more residential dwelling
units.
SECTION 4. { + The amendments to ORS 696.290 by section 3 of
this 2013 Act apply to property management agreements that are
entered into on or after the operative date specified in section
18 of this 2013 Act. + }
{ +
LICENSURE PROVISIONS + }
SECTION 5. ORS 696.020 is amended to read:
696.020. (1) The Real Estate Agency may issue a real estate
license only to an individual.
(2) An individual may not engage in, carry on, advertise or
purport to engage in or carry on professional real estate
activity, or act in the capacity of a real estate licensee,
within this state unless the individual holds an active license
as provided for in this chapter.
(3) { - A real estate licensee is - } { + Real estate
brokers and principal real estate brokers are + }bound by and
subject to the requirements of ORS 696.010 to 696.495, 696.600 to
696.785, 696.800 to 696.870, 696.990 and 696.995 while:
(a) Engaging in professional real estate activity; or
Enrolled Senate Bill 23 (SB 23-INTRO) Page 6
(b) Acting on the licensee's own behalf in the sale, exchange,
lease option or purchase of real estate or in the offer or
negotiations for the sale, exchange, lease option or purchase of
real estate.
{ + (4) A real estate licensee is bound by and subject to the
requirements of ORS 696.010 to 696.495, 696.600 to 696.785,
696.890, 696.990 and 696.995 while engaging in the management of
rental real estate. + }
{ - (4) - } { + (5) + } The agency by rule may establish
provisions for a nonlicensed individual whose license is inactive
or suspended and who acts on the licensee's own behalf in the
sale, exchange, lease option or purchase of real estate or in the
offer or negotiations for the sale, exchange, lease option or
purchase of real estate.
SECTION 6. ORS 696.315 is amended to read:
696.315. { + (1) Except as provided in subsection (2) of this
section, + } a real estate licensee may not knowingly permit a
nonlicensed individual to engage in professional real estate
activity, with or on behalf of the licensee.
{ + (2)(a) A principal real estate broker engaging in the
management of rental real estate or a licensed real estate
property manager may delegate to a person who is not licensed
under this chapter the authority to conduct an activity described
in ORS 696.030 (9). A delegation made under this paragraph must
be in writing.
(b) The principal real estate broker or licensed real estate
property manager is liable for the conduct of the nonlicensed
person that the principal real estate broker or licensed real
estate property manager authorizes under paragraph (a) of this
subsection. + }
SECTION 7. ORS 696.130 is amended to read:
696.130. (1) { + (a) + } If the license of { - any - }
{ + a + } real estate broker or principal real estate broker is
revoked by the Real Estate Commissioner { + on grounds related
to professional real estate activity other than the management of
rental real estate + }, the commissioner may not issue a new
license until the individual complies with the provisions of ORS
696.010 to 696.495, 696.600 to 696.785 and 696.800 to 696.870.
{ + (b) If the license of a licensed real estate property
manager is revoked by the commissioner, or if the license of a
real estate broker or principal real estate broker is revoked by
the commissioner, on grounds related to the management of rental
real estate, the commissioner may not issue a new license until
the individual complies with the provisions of ORS 696.010 to
696.495, 696.600 to 696.785 and 696.890. + }
(2) Notwithstanding subsection (1) of this section, the
commissioner may issue the individual a limited license if, in
the discretion of the commissioner, it is in the public interest
to do so. The commissioner may limit a license issued under this
subsection:
(a) By term;
(b) To acts subject to the supervision of a specific principal
real estate broker; or
(c) By conditions to be observed in the exercise and the
privileges granted.
(3) A limited license issued under this section does not confer
any property right in the privileges to be exercised thereunder,
and the holder of a limited license does not have the right to
renewal of such license. A limited license may be suspended or
Enrolled Senate Bill 23 (SB 23-INTRO) Page 7
revoked, or the licensee may be reprimanded, by the commissioner
on the grounds set out in ORS 696.301.
SECTION 8. ORS 270.120 is amended to read:
270.120. (1) In exercising certain of its functions under ORS
184.634, 270.005 to 270.015, 270.100 to 270.190, 273.416, 273.426
to 273.436 and 273.551, the Oregon Department of Administrative
Services shall be advised by an advisory committee consisting of
seven members appointed by the Governor.
(2) The advisory committee appointed under subsection (1) of
this section shall consist of two members of the Legislative
Assembly, one real estate licensee { - under ORS 696.020 - }
{ + as defined in ORS 696.010 + }, two persons who serve in the
executive branch of state government, one person qualified as a
land use planner, and one person qualified as a real estate
management expert.
(3) Members of the advisory committee shall meet at such times
and places and elect such officers and make such rules for the
conduct of committee business as the committee may specify.
(4) Members of the advisory committee who are not members of
the Legislative Assembly are entitled to compensation under ORS
292.495. Members of the advisory committee who are members of the
Legislative Assembly shall be paid compensation and expense
reimbursement as provided in ORS 171.072, payable from funds
appropriated to the Legislative Assembly.
(5) Expenses of the committee shall be paid from funds
appropriated to the department to carry out subsection (6) of
this section.
(6)(a) The advisory committee shall advise the department on
the acquisition, exchange or disposal of real property valued at
$100,000 or more.
(b) The department may request the advice of the committee
involving any real property transaction valued less than
$100,000.
{ +
BUSINESS NAME REGISTRY + }
SECTION 9. ORS 696.026 is amended to read:
696.026. (1) The Real Estate Agency shall establish by rule a
system for the registration of business names.
(2) { + (a) + } The system must require:
{ - (a) - } { + (A) + } The { - location of a business
with a registered name to - } { + physical address associated
with a registered business name to + } be the main office of a
principal real estate broker or licensed real estate property
manager; and
{ - (b) - } { + (B) + } { - A business name registered
under this section to be a - } { + The registered business name
to be the + } corporate name, professional corporate name,
business corporate name, cooperative name, limited partnership
name, business trust name, reserved name, registered corporate
name or assumed business name of active record with the Office of
the Secretary of State { - . - } { + ;
(b) The agency may establish by rule that the registration
system must:
(A) Identify the principal real estate broker or the licensed
real estate property manager who is responsible for:
(i) Maintaining the registration of the business name, as
described in subsection (2)(a) of this section;
Enrolled Senate Bill 23 (SB 23-INTRO) Page 8
(ii) Registering any branch offices of the registered business
name; and
(iii) Registering any additional business names as described in
subsection (9)(a) of this section.
(B) Maintain the information described in ORS 696.241 (4) and
(6) for each clients' trust account opened, closed or transferred
by a principal real estate broker or by a licensed real estate
property manager who conducts professional real estate activity
under the registered business name; and + }
{ - (3) - } { + (c) + } The system must allow a principal
real estate broker or licensed real estate property manager to
register { - a branch office - } { + one or more branch
offices + } under the registered business name of the main
office.
{ - (4) - } { + (3) + } Only a principal real estate broker
or licensed real estate property manager may register a business
name or register a branch office under the registered business
name of the main office.
{ + (4) + } Only a principal real estate broker or licensed
real estate property manager may control and supervise the
professional real estate activity conducted under the registered
business name.
(5) A business name registered under this section has no
license standing.
(6) A principal real estate broker or licensed real estate
property manager may conduct professional real estate activity
only under:
(a) The name under which the principal broker or property
manager's license was issued; or
(b) A registered business name.
(7) If a principal real estate broker or licensed real estate
property manager has a registered business name:
(a) All professional real estate activity conducted by the
principal broker or property manager must be conducted under the
registered business name; and
(b) All professional real estate activity conducted by a
{ - real estate broker or another licensed real estate property
manager - } { + real estate licensee + } associated with the
principal broker or property manager must be conducted under the
registered business name.
(8) A principal real estate broker or licensed real estate
property manager who registers a business name need not be an
owner or officer of any entity lawfully entitled to use or have
an ownership interest in the registered business name. However,
only a principal real estate broker or licensed real estate
property manager may control and supervise the professional real
estate activity conducted under the registered business name.
(9)(a) A principal real estate broker or licensed real estate
property manager who registers a business name may register
additional business names for { - affiliated - } { + business
organizations that are affiliated with the business with the
registered name, + }or
{ - subsidiary - } business organizations { + that are
subsidiaries + } of the business with the registered name.
(b) { - If - } A principal real estate broker or licensed
real estate property manager { - registers two or more business
names under this subsection, the real estate licensee may conduct
professional real estate activity separately under each
registered business name - } { + may conduct professional real
estate activity under two or more registered business names only
Enrolled Senate Bill 23 (SB 23-INTRO) Page 9
if the business organizations are affiliated with, or
subsidiaries of, the business with the registered name + }.
(10) A real estate broker or licensed real estate property
manager associated with a principal real estate broker may have
an ownership interest in any business through which the principal
real estate broker conducts professional real estate activity,
but may not control or supervise the professional real estate
activity of any other real estate licensee.
(11) A nonlicensed individual may have an ownership interest in
any business through which a licensed real estate property
manager or principal real estate broker engages in professional
real estate activity, but may not control or supervise the
professional real estate activity of any real estate licensee.
(12) Two or more principal real estate brokers operating under
the same registered business name who do not exercise any
administrative or supervisory control over one another are solely
responsible for their own professional real estate activity.
(13) Notwithstanding any other provision of ORS 696.010 to
696.495, 696.600 to 696.785, 696.800 to 696.870, 696.990 and
696.995, a principal real estate broker or real estate broker
associated with a principal real estate broker may create a
corporation, limited liability company, limited liability
partnership or any other lawfully constituted business
organization for the purpose of receiving compensation. A real
estate broker associated with a principal real estate broker may
{ - only - } receive compensation { + only + } from a
principal real estate broker. A business organization created
under this subsection may not be licensed under ORS 696.022 or
conduct in its own name professional real estate activity
requiring a real estate license.
{ +
EXEMPTIONS + }
SECTION 10. ORS 696.030 is amended to read:
696.030. { - (1) - } ORS 696.010 to 696.375, 696.392,
696.395 to 696.430, 696.490, 696.600 to 696.785, 696.990 and
696.995 do not apply to:
{ - (a) - } { + (1)(a) + } A nonlicensed individual who is
a full-time employee of { - a single - } { + an + } owner of
real estate { + and + } whose real estate activity { + :
(A) + } Involves { + only + } the real estate of the employer
{ - and: - } { + ; and + }
{ - (A) - } { + (B)(i) + } Is incidental to the employee's
normal, nonreal estate activities; or
{ - (B) - } { + (ii) + } Is the employee's principal
activity, but the employer's principal activity or business is
not the sale, exchange, lease option or acquisition of real
estate.
{ + (b) For the purpose of this subsection, 'owner of real
estate' means:
(A) An individual who has a sole ownership interest in the real
estate; or
(B) More than one individual, each of whom has an ownership
interest in the real estate, if the ownership interest is by
survivorship, tenancy in common or tenancy by the entirety. + }
{ - (b) - } { + (2) + } A nonlicensed individual who acts
as attorney in fact under a duly executed power of attorney from
the owner or purchaser authorizing the supervision of the closing
of or supervision of the performance of a contract for the sale,
Enrolled Senate Bill 23 (SB 23-INTRO) Page 10
leasing or exchanging of real estate if the power of attorney was
executed prior to July 1, 2002, in compliance with the
requirements of law at the time of execution or if:
{ - (A) - } { + (a) + } The power of attorney is recorded
in the office of the recording officer for the county in which
the real estate is located;
{ - (B) - } { + (b) + } The power of attorney specifically
describes the real estate; and
{ - (C) - } { + (c) + } The individual does not use the
power of attorney as a device to engage in professional real
estate activity without obtaining the necessary real estate
license.
{ - (c) - } { + (3) + } A nonlicensed individual who acts
as attorney in fact under a duly executed power of attorney in
which the authorized agent is the spouse of the principal, or the
child, grandchild, parent, grandparent, sibling, aunt, uncle,
niece or nephew of the principal or of the spouse of the
principal, authorizing real estate activity if the power of
attorney is recorded in the office of the recording officer for
the county in which the real estate to be sold, leased or
exchanged is located.
{ - (d) - } { + (4) + } A nonlicensed individual who is an
attorney at law rendering services in the performance of duties
as an attorney at law.
{ - (e) - } { + (5) + } A nonlicensed individual who acts
in the individual's official capacity as a receiver, a
conservator, a trustee in bankruptcy, a personal representative
or a trustee, or a regular salaried employee of the trustee,
acting under a trust agreement, deed of trust or will.
{ - (f) - } { + (6) + } A nonlicensed individual who
performs an act of professional real estate activity under order
of a court.
{ - (g) - } { + (7) + } A nonlicensed individual who is a
regular full-time employee of a single corporation, partnership,
association, limited liability company or nonlicensed individual
owner of real property acting for the corporation, partnership,
association, limited liability company or nonlicensed individual
owner in the rental or management of the real property, but not
in the sale, exchange, lease option or purchase of the real
property.
{ - (h) - } { + (8) + } An individual who is a registered
professional engineer or architect rendering services in
performance of duties as a professional engineer or architect.
{ - (i) - } { + (9) + } A nonlicensed individual who is
employed by a { - real estate broker or - } principal real
estate broker { + engaged in the management of rental real
estate or by a licensed real estate property manager + } and who
acts { - as a manager for real estate - } { + on behalf of
the principal real estate broker or licensed real estate property
manager pursuant to a written delegation of the principal real
estate broker's or licensed real estate property manager's
authority, as provided by the agency by rule, + } if the real
estate activity of the nonlicensed individual is limited to { + :
(a) + } Negotiating rental or lease agreements { - , - }
{ + ;
(b) + } Checking tenant and credit references { - , - } { + ;
(c) + } Physically maintaining the real estate { - , - }
{ + ;
(d) + } Conducting tenant relations { - , - } { + ;
(e) + } Collecting the rent { - , - } { + ;
Enrolled Senate Bill 23 (SB 23-INTRO) Page 11
(f) + }Supervising the premises' managers { - and - } { + ;
(g) + } Discussing financial matters relating to { + the + }
management of the real estate with the owner { + ; and
(h) Receiving and disbursing trust funds in a clients' trust
account under ORS 696.241 + }.
{ - (j) - } { + (10) + } An individual who sells or leases
cemetery lots, parcels or units while engaged in the disposition
of human bodies under ORS 97.010 to 97.040, 97.110 to 97.450,
97.510 to 97.730, 97.810 to 97.920 and 97.990 or an employee of
the nonlicensed individual performing similar activities.
{ - (k) - } { + (11) + } An individual who is a salaried
employee of the State of Oregon, or any of its political
subdivisions, engaging in professional real estate activity as a
part of such employment.
{ - (L) - } { + (12) + } A nonlicensed individual who
analyzes or provides advice regarding permissible land use
alternatives, environmental impact, building and use permit
procedures or demographic market studies, or a regular full-time
employee of the nonlicensed individual performing similar
activities. This exclusion does not apply to the handling of
transactional negotiations for transfer of an interest in real
estate.
{ - (m) - } { + (13) + } An individual who is a hotelkeeper
or innkeeper as defined by ORS 699.005 arranging the rental of
transient lodging at a hotel or inn in the course of business as
a hotelkeeper or innkeeper.
{ - (n) - } { + (14) + } An individual who is a travel
agent arranging the rental of transient lodging at a hotel or inn
as defined in ORS 699.005 in the course of business as a travel
agent for compensation. For the purpose of this
{ - paragraph - } { + subsection + }, ' travel agent' means a
person, and employees of the person, regularly representing and
selling travel services to the public directly or indirectly
through other travel agents.
{ - (o) - } { + (15) + } An individual who is a common
carrier arranging the rental of transient lodging at a hotel or
inn as defined in ORS 699.005 in the course of business as a
common carrier. For the purpose of this { - paragraph - } { +
subsection + }, 'common carrier' means a person that transports
or purports to be willing to transport individuals from place to
place by rail, motor vehicle, boat or aircraft for hire,
compensation or consideration.
{ - (p) - } { + (16) + } An individual who is a hotel
representative arranging the rental of transient lodging at a
hotel or inn as defined in ORS 699.005 in the course of business
as a hotel representative. For the purpose of this
{ - paragraph - } { + subsection + }, ' hotel representative'
means a person that provides reservations or sale services to
independent hotels, airlines, steamship companies and government
tourist agencies.
{ - (q) - } { + (17) + } A nonlicensed individual
transferring or acquiring an interest in real estate owned or to
be owned by the individual.
{ - (r) - } { + (18) + } An individual who is a general
partner for a domestic or foreign limited partnership duly
registered and operating within this state under ORS chapter 70
engaging in the sale of limited partnership interests and the
acquisition, sale, exchange, lease, transfer or management of the
real estate of the limited partnership.
Enrolled Senate Bill 23 (SB 23-INTRO) Page 12
{ - (s) - } { + (19) + } An individual who is a membership
camping contract broker or salesperson registered with the Real
Estate Agency selling membership camping contracts.
{ - (t) - } { + (20) + } An individual who is a
professional forester or farm manager engaging in property
management activity on forestland or farmland when the activity
is incidental to the nonreal estate duties involving overall
management of forest or farm resources.
{ - (u) - } { + (21) + } An individual who is a registered
investment adviser under the Investment Advisers Act of 1940, 15
U.S.C. s80b-1 et seq., rendering real estate investment services
for the office of the State Treasurer or the Oregon Investment
Council.
{ - (v) - } { + (22) + } A nonlicensed individual who
refers a new tenant for compensation to a real estate licensee
acting as the property manager for a residential building or
facility while the individual resides in the building or facility
or within six months after termination of the individual's
tenancy.
{ - (w) - } { + (23) + } A nonlicensed individual who gives
an opinion in an administrative or judicial proceeding regarding
the value of real estate for taxation or representing a taxpayer
under ORS 305.230 or 309.100.
{ - (x) - } { + (24) + } A nonlicensed individual acting as
a paid fiduciary whose real estate activity is limited to
negotiating { - or closing a transaction - } { + a
contract + } to obtain the services of a real estate licensee.
{ - (y) - } { + (25) + } A nonlicensed individual who is a
fiduciary under a court order, without regard to whether the
court order specifically authorizes real estate activity.
{ - (z) - } { + (26) + } An individual who is a
representative of a financial institution or trust company, as
those terms are defined in ORS 706.008, that is attorney in fact
under a duly executed power of attorney from the owner or
purchaser authorizing real estate activity, if the power of
attorney is recorded in the office of the county clerk for the
county in which the real estate to be sold, leased or exchanged
is located.
{ - (aa) - } { + (27) + } An individual who is the sole
member or a managing member of a domestic or foreign limited
liability company duly registered and operating within this state
under ORS chapter 63 and who is engaging in the acquisition,
sale, exchange, lease, transfer or management of the real estate
of the limited liability company.
{ - (bb) - } { + (28) + } An individual who is a partner in
a partnership as defined in ORS 67.005 and who is engaging in the
acquisition, sale, exchange, lease, transfer or management of the
real estate of the partnership.
{ - (cc) - } { + (29) + } An individual who is an officer
or director of a domestic or foreign corporation duly registered
and operating within this state under ORS chapter 60 and who is
engaging in the acquisition, sale, exchange, lease, transfer or
management of the real estate of the corporation.
{ - (2) The vesting of title to real estate in more than one
person by tenancy by the entirety, tenancy in common or by
survivorship shall be construed as that of a single owner for the
purposes of this section. - }
{ +
REAL ESTATE CONTINUING EDUCATION + }
Enrolled Senate Bill 23 (SB 23-INTRO) Page 13
SECTION 11. ORS 696.184 is amended to read:
696.184. (1) A real estate continuing education provider shall:
{ - (a) Ensure that the courses offered by the continuing
education provider that are eligible for continuing education
credit meet the learning objectives for the course topic as
provided by rule of the Real Estate Agency under ORS 696.182; - }
{ - (b) Ensure that instructors who teach a real estate
continuing education course that is eligible for continuing
education credit under ORS 696.182 for the continuing education
provider meet the requirements set forth in ORS 696.186; and - }
{ - (c) Keep records of each course that the continuing
education provider offered, the length of time of each course,
the name of the instructor who taught each course and other
information required by the agency. The continuing education
provider shall keep the records for at least three years. - }
{ + (a) Ensure that the courses offered by the continuing
education provider meet the learning objectives adopted under ORS
696.182 (4)(b);
(b) Ensure that instructors who teach a real estate continuing
education course meet the requirements set forth in ORS 696.186;
and
(c) Keep records of each course offered, for at least three
years, in a manner and form prescribed by the Real Estate Agency
by rule. + }
(2) { - The records kept under subsection (1) of - }
{ + Records maintained under + } this section must be open at
all times for inspection by the Real Estate Commissioner or the
commissioner's authorized representatives. { - The records may
be maintained in any format that allows for inspection and
copying by the commissioner or the commissioner's representatives
as determined by the commissioner by rule and that complies with
rules adopted by the Real Estate Agency. - } { + Upon request
by the commissioner, a real estate continuing education provider
must produce records within 15 business days after the date of
the request.
(3) The agency may require by rule a real estate continuing
education provider to submit a record maintained under this
section to the agency electronically.
(4) + }The agency may prescribe by rule terms and conditions
under which a { + real estate + } continuing education provider
may maintain records outside this state.
SECTION 12. ORS 696.186 is amended to read:
696.186. (1) A person must have one of the following
qualifications to teach a real estate continuing education course
that is eligible for credit required under ORS 696.174:
(a) A bachelor's degree and two years of experience working in
a field related to the topic of the course;
(b) Six years of experience working in a field related to the
topic of the course;
(c) A total of six years of any combination of college-level
coursework and experience working in a field related to the topic
of the course;
(d) A designation by a professional real estate organization as
determined by rule of the Real Estate Agency and two years of
college-level coursework;
(e) A designation by an association of real estate educators of
competency as an instructor; { + or + }
{ - (f) Successful completion of an instructor training
course approved by the Real Estate Board and two years of
Enrolled Senate Bill 23 (SB 23-INTRO) Page 14
experience working in a field related to the topic of the course;
or - }
{ - (g) - } { + (f) + } Certification or approval in good
standing as a real estate instructor for the same or a similar
course topic in any other state or jurisdiction.
(2) Notwithstanding subsection (1) of this section, a person
may not teach a real estate continuing education course if the
person:
(a) Has had a professional or occupational license related to
the topic of the course revoked for disciplinary reasons, or has
a professional or occupational license related to the topic of
the course that is currently suspended for disciplinary reasons;
or
(b) Has been determined by a state court or an administrative
law judge to have violated any statute, rule, regulation or order
pertaining to real estate activity in this or any other state in
the preceding five years.
(3) Before a person teaches a course for a real estate
continuing education provider, the continuing education provider
shall require the person to sign a form in which the person
attests to:
(a) Meeting one of the qualifications described in subsection
(1) of this section; and
(b) Not being disqualified from teaching a course for reasons
described in subsection (2) of this section.
(4) The agency, with the advice of real estate professionals
and educators, shall prescribe by rule the content of the form
described in subsection (3) of this section.
{ +
CLIENTS' TRUST ACCOUNT + }
SECTION 13. ORS 696.241 is amended to read:
696.241. (1) As used in this section, 'trust funds' means money
belonging to others that is received or handled by a licensed
real estate property manager or principal real estate broker in
the course of conducting professional real estate activity and in
the real estate licensee's fiduciary capacity.
(2) A licensed real estate property manager { + , + } or
{ + a + } principal real estate broker { + who engages in the
management of rental real estate, + } shall { + open and + }
maintain in this state one or more separate federally insured
bank accounts that are designated clients' trust accounts under
ORS 696.245. { - Except as provided in subsection (3) of this
section, a licensed real estate property manager or principal
real estate broker - } { + A principal real estate broker who
engages in the management of rental real estate or a licensed
real estate property manager + } shall deposit { + in a client's
trust account + } all trust funds received or handled by the
{ - licensed real estate property manager or - } principal real
estate broker { + , licensed real estate property manager or + }
{ - and the - } real estate licensees subject to the
supervision of the principal real estate broker { - in a
clients' trust account - } .
(3) { + (a) A principal real estate broker who receives or
handles trust funds and does not deposit the trust funds in a
licensed neutral escrow depository as described in paragraph (b)
of this subsection shall open and maintain in this state one or
more separate federally insured bank accounts that are designated
clients' trust accounts under ORS 696.245. + } { - A principal
Enrolled Senate Bill 23 (SB 23-INTRO) Page 15
real estate broker, - } Pursuant to written agreement of all
parties to a real estate transaction having an interest in the
trust funds, { + the principal real estate broker + } shall
immediately place the trust funds in a clients' trust account
{ - as provided in subsection (2) of this section or - } { + .
(b) A principal real estate broker may deposit trust funds + }
in a licensed neutral escrow depository in this state.
(4) Within 10 business days after the date a clients' trust
account is opened, a licensed real estate property manager or
principal real estate broker shall file with the Real Estate
Agency, on forms approved by the agency, the following
information about the clients' trust account:
(a) The name of the bank;
(b) The account number;
(c) The name of the account;
(d) The date the account was opened; and
(e) A statement by the { + licensed real estate + } property
manager or principal { + real estate + } broker authorizing the
Real Estate Commissioner or the commissioner's representative to
examine the clients' trust account at such times as the
commissioner may direct.
{ + (5) A principal real estate broker or licensed real
estate property manager who opens a clients' trust account under
subsection (2) or (3) of this section, or to whom ownership of a
clients' trust account is transferred under subsection (6) of
this section, is liable for all deposits and disbursements made
using the clients' trust account until the principal real estate
broker or licensed real estate property manager closes the
account or transfers ownership of the account. + }
{ - (5) - } { + (6) + } A licensed real estate property
manager or principal real estate broker who closes a clients'
trust account { + , or to whom ownership of a client's trust
account is transferred as authorized by the agency by rule, + }
shall notify the agency { + , + } within 10 business days after
the date the account is closed { + or transferred, + } on a form
approved by the agency.
{ - (6) - } { + (7) + } Except for earned interest on a
clients' trust account as provided in subsections { - (8)
and - } (9) { + and (10) + } of this section, { - only trust
funds may be held by - } a licensed real estate property manager
or principal real estate broker { - in a clients' trust
account - } { + may not commingle any other funds with the
trust funds held in a clients' trust account + }.
{ - (7) - } { + (8) + } If a licensed real estate property
manager or principal real estate broker maintains a separate
clients' trust account in a branch office, a separate bookkeeping
system must be maintained in the branch office and a copy of the
records required under ORS 696.280 must be maintained in the main
office of the { + licensed real estate + } property manager or
principal { + real estate + } broker.
{ - (8) - } { + (9) + } Trust funds received by a licensed
real estate property manager or principal real estate broker may
be deposited by the { + licensed real estate + } property
manager or principal { + real estate + } broker in a federally
insured interest-bearing bank account that is designated a
clients' trust account under ORS 696.245, but only with the prior
written approval of all parties having an interest in the trust
funds. The earnings of the interest-bearing account do not inure
to the benefit of the licensed real estate property manager or
principal real estate broker unless expressly approved in writing
Enrolled Senate Bill 23 (SB 23-INTRO) Page 16
by all parties having an interest in the trust funds before
deposit of the trust funds.
{ - (9) - } { + (10) + } With prior written notice to all
parties who have an interest in the trust funds, a principal real
estate broker may place trust funds received by the principal
real estate broker in a real estate sales, purchase or exchange
transaction in a federally insured interest-bearing bank account
that is designated a clients' trust account under ORS 696.245,
the earnings of which inure to the benefit of a public benefit
corporation, as defined in ORS 65.001, for distribution to
organizations and individuals for first-time homebuying
assistance and for development of affordable housing. The
principal real estate broker shall select a qualified public
benefit corporation to receive the interest earnings.
{ - (10) - } { + (11) + } In connection with a real estate
sales, purchase or exchange transaction, a principal real estate
broker is not entitled to any part of any interest earnings on
trust funds deposited under subsection { - (8) - }
{ + (9) + } of this section or to any part of the earnest money
or other money paid to the { + principal real estate + } broker
as part or all of the { + principal real estate + } broker's
compensation until the transaction has been completed or
terminated. The principal real estate broker and the seller shall
negotiate and agree in writing to the disposition of forfeited
earnest money at the time of execution by the seller of any
listing agreement or earnest money agreement. An agreement about
the disposition of forfeited earnest money must be initialed by
the seller or immediately precede the seller's signature.
{ - (11) - } { + (12) + } Trust funds in a clients' trust
account are not subject to execution or attachment on any claim
against a licensed real estate property manager or principal real
estate broker.
{ - (12) - } { + (13) + } The agency by rule shall
establish an optional procedure by which a principal real estate
broker may elect to disburse disputed funds held in relation to
the sale, exchange or purchase of real estate from a clients'
trust account to the person who delivered the funds to the
principal real estate broker. The procedure must allow disbursal
not more than 20 days after a request is made for the disbursal.
A disbursal pursuant to the procedure does not affect the claim
of any other person to the funds.
{ - (13) - } { + (14) + } The agency may provide by rule
for other records to be maintained and for the manner in which
trust funds are deposited, held and disbursed.
{ +
RULEMAKING PROCEDURES + }
SECTION 14. ORS 696.385 is amended to read:
696.385. The Real Estate Agency shall have the power to:
(1) Adopt a seal by which it shall authenticate its
proceedings.
(2) From time to time, prepare and cause to be printed and
circulated among the real estate licensees of Oregon such printed
matter as it may deem helpful or educational or proper for the
guidance and welfare of such licensees.
(3) Make and enforce any and all such reasonable rules as shall
be deemed necessary to administer and enforce the provisions of,
and enforce and discharge the duties defined in, any law with the
administration or enforcement of which the agency is charged.
Enrolled Senate Bill 23 (SB 23-INTRO) Page 17
(4) Except as provided in subsection (5) of this section, when
the agency proposes to adopt, amend or repeal a rule concerning
real estate licensees, the agency shall:
(a) Submit a copy of the proposed rule to the Real Estate Board
at least { - 45 - } { + 10 + } days prior to publication of
the notice of intended action required under ORS 183.335 for the
rule.
(b) Consider any recommendations that the board, by majority
vote, makes concerning the proposed rule.
(c) Publish as part of the statement of need in the matters any
written comments submitted by the board for publication under
paragraph (b) of this subsection.
(5) Subsection (4) of this section does not apply to a
temporary rule that is adopted, amended or suspended pursuant to
ORS 183.335 (5). However, the agency shall submit to the board a
copy of any proposed temporary rule as soon as practicable and,
to the extent possible under the circumstances, consider any
recommendations that the board may make by majority vote
regarding the temporary rule.
{ +
DUTIES AND POWERS OF REAL ESTATE BOARD + }
SECTION 15. ORS 696.425 is amended to read:
696.425. (1) The Real Estate Board is authorized to inquire
into the needs of the real estate licensees of Oregon, the
functions of the Real Estate Agency and the matter of the
business policy thereof, to confer with and advise the Governor
as to how the agency may best serve the state and the licensees,
and to make recommendations and suggestions of policy to the
agency as the board may deem beneficial and proper for the
welfare and progress of the licensees and of the public and of
the real estate business in Oregon.
(2) The board shall { - conduct all examinations for
applicants for real estate licenses, prepare or cause to be
prepared the questions to be asked in the examinations and grade
or cause to be graded the papers of each applicant after the
completion of the examination and file a written report with the
agency as to applicants taking the examination who have passed
and who have failed to pass the examination. The board shall
provide - } { + make recommendations to the agency about + }
the manner and methods for conducting examinations.
(3) The board shall create or approve a { + real estate + }
continuing education course for real estate licensees based on
recent changes in real estate rule and law.
(4) The expenses of the board shall be paid from moneys
available to the agency for payment of administrative expenses
relating to the real estate activities of the agency.
{ +
EDUCATION AND DISCIPLINARY ACTIONS + }
SECTION 16. ORS 696.445 is amended to read:
696.445. (1) Pursuant to ORS 696.385 (2), the Real Estate
Agency shall provide for the advancement of education and
research in connection with the educational requirements for the
securing of licenses for real estate licensees under ORS 696.010
to 696.495, 696.600 to 696.785, 696.800 to 696.870 and 696.995.
(2) The Real Estate Commissioner may assign and reassign staff
in the agency to perform such duties as the commissioner
Enrolled Senate Bill 23 (SB 23-INTRO) Page 18
considers necessary to carry out subsection (1) of this section,
including but not limited to the preparation and distribution of
a periodic publication to be known as the Oregon Real Estate News
Journal and the preparation and publication of other printed
{ - matter - } { + or electronic information + }of an
educational nature for the benefit of real estate licensees.
(3) The commissioner shall publish in the Oregon Real Estate
News Journal the names and the city and state of { + :
(a) + } Real estate { + and escrow agent + } licensees who
have been reprimanded { - , of - } { + ;
(b) + } Real estate and escrow agent licensees whose licenses
have been suspended or revoked { + ; + } and { +
(c) + } { - of - } Real estate and escrow agent licensees
{ - who have been - } { + against whom the agency has
+ }assessed civil penalties. { +
(4) + } Each { - such - } publication { - shall - }
{ + under subsection (3) of this section must + } include { + :
(a) + } A brief description of the situation involved and the
grounds for the commissioner's action { + ; or
(b) The complete final order issued by the agency + }.
{ +
REPEALS + }
SECTION 17. { + ORS 696.361 is repealed. + }
{ +
OPERATIVE DATE + }
SECTION 18. { + (1) Section 4 of this 2013 Act, the amendments
to ORS 270.120, 696.010, 696.020, 696.026, 696.030, 696.130,
696.184, 696.186, 696.241, 696.290, 696.315, 696.385, 696.425,
696.445 and 696.890 by sections 1 to 3 and 5 to 16 of this 2013
Act and the repeal of ORS 696.361 by section 17 of this 2013 Act
become operative on July 1, 2013.
(2) The Real Estate Agency may take any action before the
operative date specified in subsection (1) of this section that
is necessary to enable the agency to exercise, on and after the
operative date specified in subsection (1) of this section, all
of the duties, functions and powers conferred on the agency by
section 4 of this 2013 Act, the amendments to ORS 270.120,
696.010, 696.020, 696.026, 696.030, 696.130, 696.184, 696.186,
696.241, 696.290, 696.315, 696.385, 696.425, 696.445 and 696.890
by sections 1 to 3 and 5 to 16 of this 2013 Act and the repeal of
ORS 696.361 by section 17 of this 2013 Act. + }
{ +
UNIT CAPTIONS + }
SECTION 19. { + The unit captions used in this 2013 Act are
provided only for the convenience of the reader and do not become
part of the statutory law of this state or express any
legislative intent in the enactment of this 2013 Act. + }
{ +
EMERGENCY CLAUSE + }
SECTION 20. { + This 2013 Act being necessary for the
immediate preservation of the public peace, health and safety, an
Enrolled Senate Bill 23 (SB 23-INTRO) Page 19
emergency is declared to exist, and this 2013 Act takes effect on
its passage. + }
----------
Passed by Senate February 14, 2013
.............................................................
Robert Taylor, Secretary of Senate
.............................................................
Peter Courtney, President of Senate
Passed by House May 8, 2013
.............................................................
Tina Kotek, Speaker of House
Enrolled Senate Bill 23 (SB 23-INTRO) Page 20
Received by Governor:
......M.,............., 2013
Approved:
......M.,............., 2013
.............................................................
John Kitzhaber, Governor
Filed in Office of Secretary of State:
......M.,............., 2013
.............................................................
Kate Brown, Secretary of State
Enrolled Senate Bill 23 (SB 23-INTRO) Page 21
