Bill Summary – FastDemocracy

Stricken language would be deleted from and underlined language would be added to present law.
 State of Arkansas
 94th General Assembly                        A Bill
 Regular Session, 2023                                                             HOUSE BILL 1361
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 By: Representatives McGrew, Achor, Andrews, Bentley, Breaux, Duffield, Gazaway, Gramlich, Hawk,
 Ladyman, McAlindon, McCollum, B. McKenzie, Painter, Ray, J. Richardson, R. Scott Richardson, Rye,
 Underwood, Womack
 By: Senator Caldwell
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                                   For An Act To Be Entitled
                AN ACT TO AMEND THE REAL ESTATE LICENSE LAW; TO
                CREATE A PROPERTY MANAGER LICENSE REQUIREMENT; TO
                AMEND THE LAW CONCERNING THE ARKANSAS REAL ESTATE
                COMMISSION; AND FOR OTHER PURPOSES.
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                                               Subtitle
                         TO AMEND THE REAL ESTATE LICENSE LAW; TO
                         CREATE A PROPERTY MANAGER LICENSE
                         REQUIREMENT; AND TO AMEND THE LAW
                         CONCERNING THE ARKANSAS REAL ESTATE
                         COMMISSION.
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 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:
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        SECTION 1. DO NOT CODIFY. Legislative findings.
        The General Assembly finds that:
        (1)    The Arkansas Real Estate Commission currently requires an
 individual to have a real estate broker license issued through the commission
 to rent or lease real property on behalf of an owner;
        (2)    The knowledge and skills necessary for a property manager to
 protect citizens and the business community can be specialized and does not
 require all of the same skills and knowledge for a real estate broker or
 salesperson;
        (3)    A property manager license would create a higher quality of
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 property manager in Arkansas with specialized knowledge;
      (4)   The creation of a property manager license would reduce the
 education burden on individuals who will not pursue other real estate broker
 license activities and potentially create new jobs; and
      (5)   The Arkansas Real Estate Commission is the appropriate entity to
 license an individual as a property manager.
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      SECTION 2.      Arkansas Code § 17-42-103, concerning the definitions of
 Real Estate License Law, is amended to add an additional subdivision to read
 as follows:
               (14)   "Property manager" means an individual expecting to act or
 acting for another for a fee, commission, or other consideration who:
                      (A)   Has a property manager license;
                      (B)   Rents or leases real estate;
                      (C)   Offers to rent or lease real estate;
                      (D)   Negotiates, offers, attempts, or agrees to negotiate
 the rent or lease of real estate;
                      (E)   Collects, offers, attempts, or agrees to collect rent
 for the use of real estate;
                      (F)   Advertises or holds himself or herself out as being
 engaged in the business of renting or leasing real estate;
                      (G)   Assists or directs in the procuring of prospects
 calculated to result in the rent or lease of real estate;
                      (H)   Assists or directs in the negotiation of any
 transaction calculated or intended to result in the rent or lease of real
 estate;
                      (I)   Engages in the business of charging an advance fee in
 connection with any contract whereby he or she undertakes to promote the
 lease of real estate either through its listing in a publication issued for
 such a purpose or for referral of information concerning the real estate to
 brokers, or both; or
                      (J)   Performs any of the acts described in this
 subdivisions (14)(A)-(I) as an employee of or on behalf of the owner of, or
 any person who has an interest in, real estate.
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      SECTION 3.      Arkansas Code § 17-42-104(a)(6), concerning exemptions to
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 Real Estate License Law, is amended to read as follows:
              (6)   A person employed only at a salaried or hourly rate to
 engage in the leasing of real property for or on behalf of a licensed
 principal broker, the real estate firm of a licensed principal broker, a
 licensed property manager, or an owner of real estate, if the person:
                     (A)   Does not engage in or offer to perform any practice,
 act, or operation set forth in § 17-42-103(10) or § 17-42-103(14) other than
 receiving a security deposit or payment as permitted by subdivision
 (a)(6)(B)(iii) of this section; and
                     (B)   Performs only one (1) or more of the following
 functions:
                           (i)     Delivering a lease application, lease, or an
 amendment to a lease application or lease to any person;
                           (ii)    Receiving a lease application, lease, or an
 amendment to a lease application for delivery to the principal broker, real
 estate firm, property manager, or owner;
                           (iii)    Receiving a security deposit, rental payment,
 or any related payment for delivery to and made payable to the principal
 broker, real estate firm, property broker, or owner;
                           (iv)    Acting under the direct written instructions of
 the principal broker, real estate firm, property broker, or owner:
                                   (a)   Showing a rental unit to any person; or
                                   (b)   Assisting in the execution of a preprinted
 lease or rental agreement containing terms established by the principal
 broker, real estate firm, property manager, or owner; or
                           (v)     Conveying information prepared by the principal
 broker, real estate firm, property manager, or owner about a lease
 application, lease, the status of a security deposit, or the payment of rent
 to or from any person;
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      SECTION 4.     Arkansas Code § 17-42-107(a), concerning the capacity to
 sue and be sued under Real Estate License Law, is amended to read as follows:
      (a)     An action or suit shall not be instituted, nor recovery be had, in
 any court of this state by any person or other legal entity for compensation
 for performance of any acts described in § 17-42-103(10) or § 17-42-103(14)
 unless at the time of offering to perform and performing any such act or
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 procuring any promise to contract for the payment of compensation for any
 such contemplated act:
            (1)    The person holds an active license under this chapter as a
 principal broker; or
            (2)    The person or other legal entity was the owner of the real
 estate firm that contracted for or otherwise performed the acts for the
 compensation that is the subject of the action or suit through either a
 principal broker or a person approved by the Arkansas Real Estate Commission
 under § 17-42-301(f) while licensed or approved by the commission at the time
 of the acts;
            (3)    The person holds an active license under this chapter as a
 property manager; or
            (4)    The person or other legal entity was the owner of the
 property management firm that contracted for or otherwise performed the acts
 for the compensation that is the subject of the action or suit through either
 a property manager or a person approved by the commission under § 17-42-
 301(g) while licensed or approved by the commission at the time of the acts.
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      SECTION 5.    Arkansas Code § 17-42-301(a) and (b), concerning license
 required by the Arkansas Real Estate Commission and violations of Real Estate
 License Law, are amended to read as follows:
      (a)   No person shall practice or represent himself or herself as a real
 estate broker, property manager, or salesperson without first applying for
 and receiving a license to practice under this chapter.
      (b)   Any person who directly or indirectly for another with the
 intention, or on the promise of receiving any valuable consideration, offers,
 attempts, or agrees to perform any single act described in § 17-42-103(10) or
 § 17-42-103(14), whether as part of a transaction or as an entire
 transaction, shall be deemed a broker, property manager, or salesperson
 within the meaning of this chapter.
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      SECTION 6.    Arkansas Code § 17-42-301(d), concerning license required
 by the Arkansas Real Estate Commission and violations of Real Estate License
 Law, is amended to read as follows:
      (d)   It shall be unlawful for any person, directly or indirectly, to
 act as a real estate broker, property manager, or salesperson without first
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 obtaining a license and otherwise complying with the provisions of this
 chapter.
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      SECTION 7.      Arkansas Code § 17-42-301, concerning license required by
 the Arkansas Real Estate Commission and violations of Real Estate License
 Law, is amended to add additional subsections to read as follows:
      (g)(1)     Notwithstanding the provisions of this section, a person or
 other legal entity not licensed by the Arkansas Real Estate Commission may
 own a property management firm, provided the employees or agents employed by
 or associated with the firm who perform real estate activities identified
 under § 17-42-103(14) hold an active license under this chapter.
               (2)   A firm under subdivision (g)(1) of this section may enter
 into contracts or otherwise perform activities identified under § 17-42-
 103(14) only through a property manager and a licensee employed by or
 associated with the property manager that holds an active license issued by
 the commission at the time of performing the contract or activities.
      (h)   The commission may provide for the continuing temporary operation
 of a property management firm having all rights under § 17-42-107(a) upon the
 death, resignation, termination, or incapacity of the property manager or
 upon the closing of a property management firm, under the direction of a
 person approved by the commission, subject to time limitations and other
 conditions imposed by the commission.
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      SECTION 8.      Arkansas Code § 17-42-303(a), concerning Real Estate
 License Law education and experience requirements, is amended to add an
 additional subdivision to read as follows:
               (3)   The maximum number of hours required of an applicant for a
 property manager's license shall not exceed sixty (60) hours to include
 property management principles and practices, including without limitation:
                      (A)   Three (3) hours of education regarding the Fair
 Housing Act, 43 USC § 3601 et seq.;
                      (B)   Seven (7) hours of property management accounting and
 record keeping;
                      (C)   Seven (7) hours of education regarding the law
 concerning habitability and tenant rights; and
                      (D)   Seven (7) hours of property manager best practices.
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      SECTION 9.     Arkansas Code § 17-42-304 is amended to read as follows:
      17-42-304.     Fees.
      The Arkansas Real Estate Commission shall have authority to establish,
 charge, and collect the following fees:
             (1)    An application fee not to exceed fifty dollars ($50.00);
             (2)    An original broker's license fee not to exceed eighty
 dollars ($80.00);
             (3)    A broker's license annual renewal fee not to exceed eighty
 dollars ($80.00);
             (4)    An original salesperson's license fee not to exceed sixty
 dollars ($60.00);
             (5)    A salesperson's license annual renewal fee not to exceed
 sixty dollars ($60.00);
             (6)    A broker's expired license fee not to exceed one hundred ten
 dollars ($110) per year or fraction thereof;
             (7)    A salesperson's expired license fee not to exceed eighty
 dollars ($80.00) per year or fraction thereof;
             (8)    An original property manager license fee not to exceed sixty
 dollars ($60.00);
             (9)    A property manager license annual renewal fee not to exceed
 sixty dollars ($60.00);
             (10)    A property manager expired license fee not to exceed eighty
 dollars ($80.00) per year or fraction thereof;
             (11)    A license reissuance fee not to exceed thirty dollars
 ($30.00);
             (9)(12)       An initial duplicate license fee not to exceed thirty
 dollars ($30.00);
             (10)(13)      A duplicate license annual renewal fee not to exceed
 thirty dollars ($30.00);
             (11)(14)      A transfer fee not to exceed thirty dollars ($30.00);
             (12)(A)(15)(A)       An examination fee not to exceed seventy-five
 dollars ($75.00).
                     (B)    However, the commission at its discretion may direct
 each applicant to pay the actual costs of the examination fee directly to a
 testing service engaged by the commission to administer the examination;
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               (13)(16)     Pursuant to § 17-42-313, an appeal filing fee not to
 exceed one hundred dollars ($100);
               (14)(17)     A Real Estate Recovery Fund fee not to exceed twenty-
 five dollars ($25.00); and
               (15)(18)     The actual cost of a state and federal criminal history
 background check.
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      SECTION 10.      Arkansas Code § 17-42-307(b)(4), concerning license
 expiration and renewal under Real Estate License Law, is amended to read as
 follows:
               (4)   Effective September 30, 2019, the The commission may
 promulgate rules to add additional hours of continuing education to the
 annual amount required under subdivision (b)(1)(A) of this section with no
 statutory maximum for hours of continuing education.
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      SECTION 11.      Arkansas Code § 17-42-307(c)-(f), concerning license
 expiration and renewal under Real Estate License Law, are amended to read as
 follows:
      (c)(1)     A property manager shall complete annually:
                      (A)   Not less than six (6) hours of more than seven (7)
 classroom hours of continuing education required by the commission;
                      (B)   The distance education equivalent of subdivision
 (c)(1)(A) of this section required by the commission; or
                      (C)   A course that the commission has determined to
 demonstrate mastery of an acceptable property management subject.
               (2)   A licensee who satisfies subdivision (c)(1) of this section
 completes the continuing education requirements for the licensing year.
               (3)   If a licensee files for renewal of a license but fails to
 provide proof of continuing education, the licensee's license is inactive
 until proof is provided to the commission.
      (d)(1)     To renew or reactivate a license, a licensee shall complete the
 number of classroom hours of continuing education or the distance education
 equivalent of continuing education required by the commission for each
 inactive year not to exceed a total of thirty (30) classroom hours.
               (2)   Except as provided in subdivision (c)(1)(d)(1) of this
 section, a person is not subject to the education requirements of this
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 section while the person's license is inactive.
               (3)   The commission may waive all or part of the requirements of
 subdivision (c)(1)(d)(1) of this section if a licensee is unable to complete
 the continuing education due to extenuating circumstances.
      (d)(1)(e)(1)        For each active licensee, the commission shall issue a
 new license for each ensuing renewal period in the absence of a reason or
 condition that may warrant the refusal of a license, upon receipt of the:
                        (A)   Written request for license renewal at least ninety
 (90) days before the expiration of the license upon forms provided by the
 commission; and
                        (B)   Renewal fee.
               (2)(A)     A broker, or salesperson, or property manager who does
 not wish to engage in the real estate business may renew a licen