Bill Summary – FastDemocracy

House File 2552 - Introduced
                                  HOUSE FILE 2552
                                  BY COMMITTEE ON COMMERCE
                                  (SUCCESSOR TO HSB 639)
                                  (COMPANION TO SF 2291 BY
                                   COMMITTEE ON COMMERCE)
                            A BILL FOR
An Act relating to real estate brokers and brokerage
  agreements.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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                               H.F. 2552
    Section 1. Section 543B.3, subsection 9, Code 2024, is
 amended to read as follows:
    9. Prepares offers to purchase or purchase agreements,
 listing contracts, buyer’s representation agreements, agency
 disclosures, real property residential and agricultural rental
 agreements, real property commercial rental agreements of one
 year or less, and groundwater hazard statements, including
 any modifications, amendments, or addendums to these specific
 documents.
    Sec. 2. Section 543B.5, subsections 2, 7, 9, and 10, Code
 2024, are amended to read as follows:
    2. “Agency agreement” “Agency disclosure” means a written
 agreement disclosure between a broker and a client which
 identifies the party the broker represents in a transaction.
    7. “Brokerage agreement” means a contract between a broker
 and a client which establishes the relationship between the
 parties as to, and the broker’s compensation for, the brokerage
 services to be performed and contains the provisions required
 in section 543B.56A.
    9. “Client” means a party to a transaction who has an agency
 a brokerage agreement with a broker for brokerage services.
    10. “Customer” means a consumer who is not being represented
 by a licensee under a brokerage agreement but for whom the
 licensee may perform ministerial acts.
    Sec. 3. Section 543B.5, Code 2024, is amended by adding the
 following new subsection:
    NEW SUBSECTION. 8A. “Buyer’s representation agreement”
 means a brokerage agreement between a prospective buyer and a
 broker.
    Sec. 4. Section 543B.56, subsection 1, Code 2024, is amended
 to read as follows:
    1. Duties to all parties in a transaction. In providing
 brokerage services to all parties a client to a transaction, a
 licensee shall do all of the following:
    a. Provide brokerage services to Treat all parties to the a
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                               H.F. 2552
 transaction honestly and in with honesty and good faith.
    b. Diligently exercise reasonable skill and care in
 providing brokerage services to all parties.
    c. b. Disclose to each party all material adverse facts
 that the licensee knows except for the following:
    (1) Material adverse facts known by the party.
    (2) Material adverse facts the party could discover
 through a reasonably diligent inspection, and which would be
 discovered by a reasonably prudent person under like or similar
 circumstances.
    (3) Material adverse facts the disclosure of which is
 prohibited by law.
    (4) Material adverse facts that are known to a person who
 conducts an inspection on behalf of the party.
    d. c. Account for all property coming into the possession
 of a licensee that belongs to any party within a reasonable
 time of receiving the property.
    Sec. 5. Section 543B.56, subsection 2, paragraph c, Code
 2024, is amended to read as follows:
    c. Fulfill any obligation that is within the scope of the
 agency brokerage agreement, except those obligations that are
 inconsistent with other duties that the licensee has under this
 chapter or any other law.
    Sec. 6. Section 543B.56, subsection 2, Code 2024, is amended
 by adding the following new paragraph:
    NEW PARAGRAPH. e. Diligently exercise reasonable skill and
 care in providing brokerage services.
    Sec. 7. Section 543B.56A, subsection 2, Code 2024, is
 amended by adding the following new paragraph:
    NEW PARAGRAPH. e. Review the broker’s compensation under
 the brokerage agreement.
    Sec. 8. Section 543B.56A, Code 2024, is amended by adding
 the following new subsection:
    NEW SUBSECTION. 3. A brokerage agreement must be signed by
 both the broker and the client prior to the broker listing any
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                                        H.F. 2552
 property for sale on behalf of a seller, or making an offer on a
 property on behalf of a buyer.
    Sec. 9. Section 543B.60, Code 2024, is amended to read as
 follows:
    543B.60 Licensees providing services in more than one
 transaction.
    A licensee may provide brokerage services simultaneously
 to more than one party in different transactions unless the
 licensee agrees with a client that the licensee is to provide
 brokerage services only to that client. If the licensee and a
 client agree that the licensee is to provide brokerage services
 only to that client, the agency agreement disclosure required
 under section 543B.57, subsection 1, shall contain a statement
 of that agreement.
                            EXPLANATION
         The inclusion of this explanation does not constitute agreement with
          the explanation’s substance by the members of the general assembly.
    This bill relates to real estate brokers and brokerage
 agreements.
    The bill includes in the current definition of a real estate
 broker a person acting for another for a fee, commission,
 or other compensation or promise who prepares buyer’s
 representation agreements, including any modifications,
 amendments, or addendums. “Buyer’s representation agreement”
 is defined by the bill.
    The bill requires a licensee, when providing brokerage
 services to a client, to treat all parties to a transaction
 with honesty and good faith, disclose to each party all
 material adverse facts as laid out in the bill, and to account
 for all property coming into the possession of the licensee
 that belongs to any party within a reasonable time. The bill
 requires the licensee to place the client’s interests ahead
 of the interests of any other party, disclose to the client
 all information known by the licensee that is material to the
 transaction and that is not known by the client or could not
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                                H.F. 2552
 be discovered by the client through a reasonably diligent
 inspection, fulfill any obligation that is within the scope of
 the brokerage agreement, and diligently exercise reasonable
 skill and care in providing brokerage services.
    Under the bill, a brokerage agreement shall specify that a
 broker shall review the broker’s compensation. Additionally,
 a brokerage agreement must be signed by both a broker and a
 client prior to the broker listing any property for sale on
 behalf of a seller or making an offer on a property on behalf
 of a buyer.
    The bill makes a conforming change to Code section 543B.60.
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Statutes affected: 
Introduced: 543B.3, 543B.56, 543B.56A, 543B.60