1998 Legislation
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HOUSE BILL NO. 568 – Real estate licensee/gross neglegnc


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Daily Data Tracking History

H0568................................by JUDICIARY, RULES AND ADMINISTRATION
REAL ESTATE LICENSEE - Amends existing law to provide that real estate
licensees found guilty of gross negligence or reckless conduct in a real
estate transaction are subject to discipline by the Real Estate Commission.

01/30    House intro - 1st rdg - to printing
02/02    Rpt prt - to Bus
02/20    Rpt out - rec d/p - to 2nd rdg
02/23    2nd rdg - to 3rd rdg
02/26    3rd rdg - PASSED - 67-0-3
      AYES -- Alltus, Barraclough, Barrett, Bell, Bieter, Bivens,
      Black(15), Black(23), Boe, Bruneel, Callister, Campbell, Chase,
      Clark, Crow, Cuddy, Deal, Denney, Ellsworth, Field(13), Field(20),
      Gagner, Geddes, Gould, Hadley, Hansen, Henbest, Hornbeck, Jaquet,
      Jones(9), Jones(22), Jones(20), Judd, Kellogg, Kempton, Kendell,
      Kjellander, Kunz, Lake, Linford, Loertscher, Mader, Marley, McKague,
      Meyer, Miller, Mortensen, Newcomb, Pischner, Pomeroy, Reynolds,
      Richman, Ridinger, Robison, Sali, Schaefer, Stevenson, Stoicheff,
      Stone, Stubbs, Taylor, Tilman, Tippets, Trail, Watson, Wheeler,
      NAYS -- None
      Absent and excused -- Crane, Wood, Mr Speaker
    Floor Sponsor - Jones(9)
    Title apvd - to Senate
02/27    Senate intro - 1st rdg - to Com/HuRes
03/06    Rpt out - rec d/p - to 2nd rdg
03/09    2nd rdg - to 3rd rdg
03/17    3rd rdg - PASSED - 31-0-4
      AYES--Andreason, Boatright, Branch, Bunderson, Burtenshaw, Cameron,
      Crow, Darrington, Dunklin, Frasure, Geddes, Hawkins, Ingram, Ipsen,
      Keough, King, Lee, McLaughlin, Noh, Parry, Richardson, Risch, Sandy,
      Schroeder, Sorensen, Stennett, Sweeney, Thorne, Twiggs, Wheeler,
      Absent and excused--Danielson, Deide, Hansen, Riggs
    Floor Sponsor - Frasure
    Title apvd - to House
03/18    To enrol
03/18    Rpt enrol - Sp signed
03/19    Pres signed - to Governor
03/20    Governor signed
         Session Law Chapter 162
         Effective: 03/20/98

Bill Text


 ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
Fifty-fourth Legislature                 Second Regular Session - 1998

                             IN THE HOUSE OF REPRESENTATIVES

                                    HOUSE BILL NO. 568


 1                                        AN ACT

 7    Be It Enacted by the Legislature of the State of Idaho:

 8        SECTION  1.  That  Section 54-2040, Idaho Code, be, and the same is hereby
 9    amended to read as follows:

11    commission may upon its own motion, and shall upon verified complaint in writ-
12    ing  of any person claiming to have been injured or defrauded, investigate the
13    action of any person engaged in the business or acting in the capacity of real
14    estate broker or real estate salesman within this state  and  shall  have  the
15    power  to  temporarily suspend or permanently revoke licenses issued under the
16    provisions of this act and/or to impose a civil penalty in an  amount  not  to
17    exceed  five  thousand  dollars ($5,000) and to assess costs and attorney fees
18    against the person for the cost of any investigation and/or administrative  or
19    other  proceedings  upon  the licensee at any time where the holder thereof in
20    performing or attempting to perform any  of  the  acts  mentioned  in  section
21    54-2022,  Idaho  Code, regardless of whether the acts were for his own account
22    or in his capacity as a broker or salesman, is guilty of (a) making any fraud-
23    ulent misrepresentations; or, (b) a continued or flagrant course of  misrepre-
24    sentation  or making of false promises whether through agents or salesmen; or,
25    (c) failure to account for or remit any property or  moneys  coming  into  his
26    possession  which  belong to another; or, (d) failure to keep adequate records
27    of all property transactions in which he acts in the capacity of  real  estate
28    broker  or  real  estate  salesman; or, (e) failing or refusing upon demand to
29    disclose any information within his knowledge, or to  produce  any  documents,
30    books,  or  records  in his possession for inspection by the commission or its
31    authorized representatives when acting within the jurisdiction or by authority
32    of law; or, (f) employment of fraud, deception,  misrepresentation,  misstate-
33    ment  or  any  unlawful  means in applying for or securing a license to act as
34    real estate broker or salesman in the state of Idaho; or, (g) acting as a real
35    estate broker or salesman under an assumed name;  or,  (h)  violation  of  any
36    provision  of  sections  54-2021  to   through  54-2053,
37    Idaho Code, or any of the rules made or promulgated by the real estate commis-
38    sion, or final order of the commission; or, (i) any other conduct  whether  of
39    the same or a different character than hereinabove specified which constitutes
40    dishonest  or dishonorable dealings; or, (j) the use by a licensee of any pro-
41    vision allowing the licensee an option to purchase in any agreement  authoriz-
42    ing  or employing such licensee to sell, buy, list or exchange real estate for
43    compensation or commission, except when such licensee, prior to or  coincident


 1    with  entering  into such agreement, discloses in writing to his principal the
 2    purpose for which the  property  will  be  purchased,  that  the  licensee  is
 3    licensed,  and  such  other  information  as  the  commission  may  require by
 4    rule ; or, (k) gross negligence or reckless conduct in a  regulated  real
 5    estate  transaction. Conduct is grossly negligent or reckless when, taken as a
 6    whole, the conduct substantially fails to meet the generally accepted standard
 7    of care in the practice of real estate in Idaho .
 8        B.  The commission may also temporarily suspend or  permanently  revoke  a
 9    license  where the holder thereof (a) is convicted of any felony in a state or
10    federal court, or is convicted of  any   a   misdemeanor
11    involving  moral  turpitude.  The  record  of  conviction, or a certified copy
12    thereof, certified by the clerk of the court, or the judge in whose court  the
13    judgment  was  had, shall be prima facie evidence of conviction in such cases;
14    (b) is declared insane by a court of competent  jurisdiction;  provided,  how-
15    ever, that when a license shall have been revoked or suspended for this cause,
16    such license may be reactivated by the commission upon a declaration of sanity
17    being  made;  (c)  has  a  judgment entered against him in a civil action upon
18    grounds of fraud, misrepresentation, or deceit with reference to any  transac-
19    tion for which a license is required.
20        C.  The  commission  may  also temporarily suspend or permanently revoke a
21    license  of a broker or salesman where the license of such licensee, issued by
22    another jurisdiction, is suspended or revoked  for  acts  or  omissions  which
23    would  be  grounds  for  suspension  or revocation under chapter 20, title 54,
24    Idaho Code. A certified copy of the findings of fact, conclusions of law, mem-
25    orandum opinion and/or final order from the appropriate administrative  agency
26    or court shall be prima facie evidence of the suspension or revocation and the
27    facts stated therein.
28        D.  If  the  commission  temporarily  suspends  or  permanently  revokes a
29    license, and/or imposes a civil penalty, the commission may withhold execution
30    of said suspension, revocation and/or civil penalty on such terms and for such
31    time as it may prescribe.
32        E.  In the event of the revocation or suspension of the  broker's  license
33    issued to the designated broker of a partnership, limited liability company or
34    corporation, the license issued to such partnership, limited liability company
35    or  corporation  shall be revoked or suspended by the commission. However, the
36    commission may withhold execution of the  revocation  or  suspension  on  such
37    terms and for such time as it may prescribe.
38        F.  All  civil  penalties collected by the commission under the provisions
39    of this chapter shall be deposited in the state treasury to the credit of  the
40    special  real  estate  account  established pursuant to section 54-2037, Idaho
41    Code.
42        G.  The commission may accept, on such conditions as it may prescribe,  or
43    reject any offer to voluntarily terminate the license of a person whose activ-
44    ity is under investigation or against whom a formal complaint has been filed.

45        SECTION  2.  An  emergency  existing  therefor,  which emergency is hereby
46    declared to exist, this act shall be in full force and effect on and after its
47    passage and approval.

Statement of Purpose / Fiscal Impact


                           STATEMENT OF PURPOSE
    Relating to the regulatory jurisdiction of the Idaho Real 
    Estate Commission, this legislation allows the Commission to 
    investigate and discipline real estate licensees who are found 
    guilty of committing gross negligence or engaging in reckless 
    conduct in a regulated real estate transaction. Current law 
    does not allow the Commission to discipline licensees for such 
    acts, which constitute the majority of consumer complaints to 
    the agency. Under present law, the level of malfeasance an 
    Idaho real estate practitioner must commit before being 
    subject to discipline by the Commission is much higher than is 
    in the best interests of the citizens of Idaho, and this 
    legislation would give the Commission a much needed and 
    important regulatory tool, which is presently unavailable.
                               FISCAL IMPACT
    The amendment will increase personnel costs somewhat due to an 
    increase in actionable complaints to the agency, but most of 
    the negative fiscal impact to the Commission should be offset 
    by the agency's ability (already in the law) to assess civil 
    fines and to collect its costs and attorney's fees from the 
    licensee guilty of the misconduct.
    Name: Stan Burton/Nancy Matthews
    Agency:  Idaho Real Estate Commission
    Phone: 334-3285
    Statement of Purpose/Fiscal Impact
    H 568