Stricken language would be deleted from and underlined language would be added to present law.
1 State of Arkansas
2 94th General Assembly A Bill
3 Regular Session, 2023 HOUSE BILL 1573
4
5 By: Representatives McGrew, Achor, Andrews, Bentley, Breaux, Duffield, Gazaway, Gramlich, Hawk,
6 Ladyman, McAlindon, McCollum, B. McKenzie, Painter, Ray, J. Richardson, R. Scott Richardson, Rye,
7 Underwood, Womack
8 By: Senator Caldwell
9
10 For An Act To Be Entitled
11 AN ACT TO AMEND THE LAW CONCERNING THE ARKANSAS REAL
12 ESTATE COMMISSION; TO CREATE A PROPERTY MANAGEMENT
13 BROKER AND PROPERTY MANAGEMENT ASSOCIATE LICENSE; TO
14 AMEND THE REAL ESTATE LICENSE LAW; AND FOR OTHER
15 PURPOSES.
16
17
18 Subtitle
19 TO AMEND THE LAW CONCERNING THE ARKANSAS
20 REAL ESTATE COMMISSION; TO CREATE A
21 PROPERTY MANAGEMENT BROKER AND PROPERTY
22 MANAGEMENT ASSOCIATE LICENSE; AND TO
23 AMEND THE REAL ESTATE LICENSE LAW.
24
25
26 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:
27
28 SECTION 1. DO NOT CODIFY. Legislative findings.
29 The General Assembly finds that:
30 (1) The Arkansas Real Estate Commission currently requires an
31 individual to have a real estate broker license issued through the commission
32 to rent or lease real property on behalf of an owner;
33 (2) The knowledge and skills necessary for a property management
34 broker to protect citizens and the business community can be specialized and
35 does not require all of the same skills and knowledge for a real estate
36 broker or salesperson;
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1 (3) A property management broker license would create a higher quality
2 of property management broker in Arkansas with specialized knowledge;
3 (4) The creation of a property management broker license would reduce
4 the education burden on individuals who would not pursue other real estate
5 broker license activities and potentially create new jobs; and
6 (5) The commission is the appropriate entity to license an individual
7 as a property management broker and as property management associate.
8
9 SECTION 2. Arkansas Code § 17-42-103 is amended to read as follows:
10 17-42-103. Definitions.
11 As used in this chapter:
12 (1)(A) “Associate broker” means an individual who has a broker's
13 license and who is employed by a principal broker, or is associated with a
14 principal broker as an independent contractor, and who participates in any
15 activity described in subdivision (10) or subdivision (12) of this section
16 while under the supervision of a principal broker or executive broker.
17 (B) An associate broker shall have no supervisory
18 authority over any other licensee;
19 (2) “Branch office” means a principal broker's office or
20 property management broker's office other than his or her principal place of
21 business;
22 (3) “Broker's price opinion” means an estimate prepared by a
23 licensee salesperson or real estate broker that details the probable selling
24 price of real estate and provides a varying level of detail about the real
25 estate's condition, market, and neighborhood, and information about sales of
26 comparable real estate;
27 (4) “Classroom hour” means a period of at least fifty (50)
28 minutes, but not more than sixty (60) minutes, of actual classroom
29 instruction with the an instructor present;
30 (5) “Continuing education” means postlicensure education derived
31 from participation in courses in real estate-related subjects that have been
32 approved by the Arkansas Real Estate Commission or that are not required to
33 be approved by the commission;
34 (6) “Continuing education unit” means a period of ten (10)
35 contact hours of actual classroom instruction with the an instructor present;
36 (7)(A) “Executive broker” means an individual who:
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1 (i) Has a real estate broker's license;
2 (ii) Is employed by a principal broker or associated
3 with a principal broker as an independent contractor; and
4 (iii) Participates in any activity described in
5 subdivision (10) or subdivision (12) of this section while under the
6 supervision of a principal broker.
7 (B) An executive broker may supervise associate brokers
8 and salespersons;
9 (8)(A) “Licensee” means an individual who holds any type of
10 license issued by the commission.
11 (B) “Licensee” includes a principal broker, an executive
12 broker, an associate broker, and a salesperson, a property management
13 associate, and a property management broker.
14 (C) This chapter does not preclude a licensee from:
15 (i) Doing business as a professional corporation
16 under § 4-29-101 et seq.; or
17 (ii) Receiving payment from a real estate firm or
18 principal broker of an earned commission to the licensee's legal business
19 entity if the licensee earned the commission on behalf of the real estate
20 firm or principal broker;
21 (9) “Participate in a real estate auction” means to do any act
22 or conduct for compensation or the expectation of compensation on behalf of a
23 seller at auction and designed, intended, or expected to affect the bidding
24 or results of a real estate auction, including without limitation serving as
25 an auctioneer or ringman or encouraging, soliciting, or receiving bids;
26 (10)(A) “Principal broker” means an individual expecting to act
27 or acting for another for a fee, commission, or other consideration who:
28 (A)(i) Sells, exchanges, purchases, rents, or leases real
29 estate;
30 (B)(ii) Offers to sell, exchange, purchase, rent, or lease
31 real estate;
32 (C)(iii) Negotiates, offers, attempts, or agrees to
33 negotiate the sale, exchange, purchase, rent, or lease of real estate;
34 (D)(iv) Lists, offers, attempts, or agrees to list real
35 estate for sale, lease, or exchange;
36 (E)(v) Auctions, offers, attempts, or agrees to auction
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1 real estate, or participates in a real estate auction;
2 (F)(vi) Buys, sells, or assigns or offers to buy, sell, or
3 assign or otherwise deals in options on real estate or improvements to real
4 estate;
5 (G)(vii) Collects, offers, attempts, or agrees to collect
6 rent for the use of real estate;
7 (H)(viii) Advertises or holds himself or herself out as
8 being engaged in the business of buying, selling, exchanging, renting, or
9 leasing real estate;
10 (I)(ix) Assists or directs in the procuring of prospects
11 calculated to result in the sale, exchange, lease, or rent of real estate;
12 (J)(x) Assists or directs in the negotiation of any
13 transaction calculated or intended to result in the sale, exchange, lease, or
14 rent of real estate;
15 (K)(xi) Engages in the business of charging an advance fee
16 in connection with any contract whereby he or she undertakes to promote the
17 sale or lease of real estate either through its listing in a publication
18 issued for such a purpose or for referral of information concerning the real
19 estate to brokers, or both; or
20 (L)(xii) Performs any of the acts described in this
21 subdivision (10) as an employee of or on behalf of the owner of, or any
22 person who has an interest in, real estate;
23 (B) A principal broker may perform any act listed in
24 subdivision (12) of this section;
25 (11)(A) “Property management associate” means an individual who
26 has a property management associate license and who is employed by a property
27 management broker, or is associated with a property management broker as an
28 independent contractor, and who participates in any activity described in
29 subdivision (12) of this section while under the supervision of a property
30 management broker.
31 (B) A property management associate shall have no
32 supervisory authority over any other licensee;
33 (12) "Property management broker" means an individual licensed
34 under this chapter who for a salary, commission, or compensation of any kind
35 or with the intent or expectation of receiving valuable consideration engages
36 in the business of leasing, renting, or subleasing real estate located in
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1 this state on behalf of an owner, lessor, or potential lessee and who:
2 (A) Accepts employment by or on behalf of the owner,
3 lessor, or potential lessee of real estate to promote or conduct the leasing
4 or subleasing of the real estate;
5 (B) Negotiates or attempts to negotiate the lease of any
6 real estate located in this state or of the improvements on any real estate
7 located in this state;
8 (C) Engages in the business of promoting the lease or
9 rental of real estate located in this state;
10 (D) Assists in completing real estate lease contracts or
11 property management agreements;
12 (E) Procures tenants for owners of real estate located in
13 this state;
14 (F) Aids or offers to aid for a fee any person in locating
15 or obtaining any real estate for lease in this state;
16 (G) Makes the advertising of real property for lease
17 available by public display to potential tenants;
18 (H) Shows rental or leased properties to potential
19 tenants;
20 (I) In conjunction with property management
21 responsibilities, acts as a liaison between the owners of real estate and a
22 tenant or potential tenant;
23 (J) In conjunction with property management
24 responsibilities, generally oversees the inspection, maintenance, and upkeep
25 of leased real estate belonging to others;
26 (K) In conjunction with property management
27 responsibilities, collects rents or attempts to collect rents for any real
28 estate located in this state;
29 (L) Pays a fee, commission, or other compensation to a
30 licensed broker, salesperson, or property manager for referral of the name of
31 a prospective lessor or lessee of real property;
32 (M) Receives a fee, commission, or other compensation from
33 a licensed real estate broker, salesperson, or property management broker for
34 referring the name of a prospective lessor or lessee of real property; or
35 (N) Advertises or represents to the public that the
36 individual is engaged in any of the activities referred to in this
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1 subdivision (12);
2 (11)(A)(13)(A) “Real estate” means an interest in real property.
3 (B) “Real estate” includes without limitation a leasehold,
4 time-share interval, or an interest in real property that is purchased or
5 sold in connection with the purchase or sale of all or part of the assets,
6 stock, or other ownership interest of a business or other organization;
7 (14) “Real estate broker” means a principal broker, an executive
8 broker, or an associate broker;
9 (12)(15) “Salesperson” means an individual who:
10 (A) Has a salesperson's license;
11 (B) Is employed by a principal broker or is associated
12 with a principal broker as an independent contractor; and
13 (C) Participates in any activity described in subdivision
14 (10) or subdivision (12) of this section while under the supervision of a
15 principal broker or executive broker; and
16 (13)(16) “Unlicensed real estate activity” means offering or
17 engaging in any practice, act, or operation set forth in subdivision (10) or
18 subdivision (12) of this section without a valid active Arkansas license
19 issued by the commission.
20
21 SECTION 3. Arkansas Code § 17-42-104(a)(6), concerning exemptions to
22 Real Estate License Law, is amended to read as follows:
23 (6) A person other than a property management associate employed
24 only at a salaried or hourly rate to engage in the leasing of real property
25 estate for or on behalf of a licensed principal broker, the real estate firm
26 of a licensed principal broker, a licensed property management broker, or an
27 owner of real estate, if the person:
28 (A) Does not otherwise engage in or offer to perform any
29 practice, act, or operation set forth in § 17-42-103(10) or § 17-42-103(11)
30 other than receiving a security deposit or payment as permitted by
31 subdivision (a)(6)(B)(iii) of this section; and
32 (B) Performs only one (1) or more of the following
33 functions:
34 (i) Delivering a lease application, lease, or an
35 amendment to a lease application or lease to any person;
36 (ii) Receiving a lease application, lease, or an
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1 amendment to a lease application for delivery to the principal broker, real
2 estate firm, property management broker, or owner;
3 (iii) Receiving a security deposit, rental payment,
4 or any related payment for delivery to and made payable to the principal
5 broker, real estate firm, property management broker, or owner;
6 (iv) Acting under the direct written instructions of
7 the principal broker, real estate firm, property management broker, or owner:
8 (a) Showing a rental unit to any person; or
9 (b) Assisting in the execution of a preprinted
10 lease or rental agreement containing terms established by the principal
11 broker, real estate firm, property management broker, or owner; or
12 (v) Conveying information prepared by the principal
13 broker, real estate firm, property management broker, or owner about a lease
14 application, lease, the status of a security deposit, or the payment of rent
15 to or from any person;
16
17 SECTION 4. Arkansas Code § 17-42-107(a), concerning the capacity to
18 sue and be sued under the Real Estate License Law, is amended to read as
19 follows:
20 (a) An action or suit shall not be instituted, nor recovery be had, in
21 any court of this state by any person or other legal entity for compensation
22 for performance of any acts described in § 17-42-103(10) or § 17-42-103(11)
23 unless at the time of offering to perform and performing any such act or
24 procuring any promise to contract for the payment of compensation for any
25 such contemplated act:
26 (1) The person holds an active license under this chapter as a
27 principal broker; or
28 (2) The person or other legal entity was the owner of the real
29 estate firm that contracted for or otherwise performed the acts for the
30 compensation that is the subject of the action or suit through either a
31 principal broker or a person approved by the Arkansas Real Estate Commission
32 under § 17-42-301(f) while licensed or approved by the commission at the time
33 of the acts;
34 (3) The person holds an active license under this chapter as a
35 property management broker; or
36 (4) The person or other legal entity was the owner of the
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1 property management firm that contracted for or otherwise performed the acts
2 for the compensation that is the subject of the action or suit through either
3 a property management broker or a person approved by the commission under §
4 17-42-301(h) while licensed or approved by the commission at the time of the
5 acts.
6
7 SECTION 5.