Bill Summary – FastDemocracy

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                                                             SENATE BILL 553
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 5   By: Senator C. Penzo
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 7                                     For An Act To Be Entitled
 8                  AN ACT TO ADD AN EXEMPTION TO REAL ESTATE LICENSURE;
 9                  TO CREATE THE ARKANSAS REAL ESTATE WHOLESALE CONSUMER
10                  PROTECTION ACT; AND FOR OTHER PURPOSES.
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13                                                 Subtitle
14                           TO ADD AN EXEMPTION TO REAL ESTATE
15                           LICENSURE; AND TO CREATE THE ARKANSAS
16                           REAL ESTATE WHOLESALE CONSUMER PROTECTION
17                           ACT.
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20   BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF ARKANSAS:
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22          SECTION 1.        Arkansas Code § 17-42-104(c), concerning exemptions to real
23   estate licensure, is amended to read as follows:
24          (c)    A person or entity shall not under any circumstance qualify for an
25   exemption under this section if the person or entity:
26                  (1)      Obtains an equitable interest in real estate with knowledge
27   that the interest was obtained on behalf of a person or entity that intends
28   to gain an interest in the real estate other than that of ownership; or
29                  (2)      Publicly markets for sale an equitable interest in a
30   contract for the purchase of residential real property between a property
31   owner and a prospective purchaser; or
32                  (3)      Strategically circumvents the requirement for licensure
33   thereby eliminating remedies available to consumers through the commission.
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35          SECTION 2.        Arkansas Code § 17-42-109(b), concerning civil penalties
36   for engaging in unlicensed real estate activity, is amended to read as
     *MLD346*                                                                  3/30/2023 2:46:47 PM MLD346
                                                                                 SB553
 1   follows:
 2        (b)   The fact that a person offers to engage in or offers to perform
 3   any practice, act, or operation set forth in § 17-42-103(10) or § 17-42-
 4   104(c) without a license is prima facie evidence that the person is engaged
 5   in unlicensed real estate activity.
 6
 7        SECTION 3.    Arkansas Code Title 18, Chapter 12, is amended to add an
 8   additional subchapter to read as follows:
 9        Subchapter 8 – Arkansas Real Estate Wholesale Consumer Protection Act
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11        18-12-801.    Title.
12        This subchapter shall be known and may be cited as the “Arkansas Real
13   Estate Wholesale Consumer Protection Act”.
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15        18-12-802.    Definitions.
16        As used in this subchapter:
17              (1)    “Residential real property” means real property with fewer
18   than five (5) dwelling units;
19              (2)    “Wholesale buyer” means a person or entity that enters into
20   a purchase contract for residential real property as the buyer for the
21   purpose of assigning the contract to another person or entity; and
22              (3)    “Wholesale seller” means a person or entity that:
23                     (A)   Enters into a purchase contract for residential real
24   property as the seller;
25                     (B)   Does not hold legal title to the real property; and
26                     (C)   Assigns the contract to another person or entity.
27
28        18-12-803.    Disclosure required.
29        Before a wholesale buyer or wholesale seller enter into any binding
30   agreement regarding the transfer of residential real property:
31              (1)    A wholesale buyer shall disclose in writing attached to the
32   contract to a seller that the buyer is a wholesale buyer; and
33              (2)    A wholesale seller shall disclose in writing attached to the
34   contract to a buyer that the seller is a wholesale seller and that the
35   wholesale seller may not be able to convey title to the property.
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                                                                             SB553
 1        18-12-804.    Failure to disclose.
 2        (a)   Notwithstanding any other provisions contained in the contract for
 3   sale, if a wholesale buyer fails to disclosure any information as required by
 4   this subchapter, the seller may terminate the contract for sale at any time
 5   before closing without penalty and may retain any earnest money paid by the
 6   wholesale buyer.
 7        (b)   Notwithstanding any other provisions contained in the contract for
 8   sale, if a wholesale seller violates this subchapter, the buyer may terminate
 9   the contract for sale at any time before closing without penalty and shall be
10   refunded all earnest money paid by the buyer.
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Statutes affected: 
SB 553: 17-42-104(c), 17-42-109(b)