2000 Legislation
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SENATE BILL NO. 1439 – Real estate, commissions shared


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Daily Data Tracking History

S1439.......................................by COMMERCE AND HUMAN RESOURCES
REAL ESTATE COMMISSIONS - Amends existing law to allow a licensed real
estate broker or salesperson to share commissions directly with a buyer or
seller in a regulated real estate transaction.
02/16    Senate intro - 1st rdg - to printing
02/17    Rpt prt - to Com/HuRes
03/01    Rpt out - rec d/p - to 2nd rdg
03/02    2nd rdg - to 3rd rdg
03/08    3rd rdg - PASSED - 31-3-1
      AYES--Andreason, Boatright, Bunderson, Burtenshaw, Cameron, Crow,
      Danielson, Darrington, Deide, Dunklin, Frasure, Geddes, Hawkins,
      Ingram, Ipsen, Keough, King-Barrutia, Lee, McLaughlin, Parry,
      Richardson, Riggs, Risch, Sandy, Schroeder, Sorensen, Stegner,
      Thorne, Walton/Branch, Wheeler, Williams
      NAYS--Noh, Stennett, Whitworth
      Absent and excused--Davis
    Floor Sponsor - Andreason
    Title apvd - to House
03/09    House intro - 1st rdg - to Bus
03/22    Rpt out - rec d/p - to 2nd rdg
03/23    2nd rdg - to 3rd rdg
04/03    3rd rdg - PASSED - 60-2-8
      AYES -- Alltus, Barraclough(Barraclough), Barrett, Bell, Bieter,
      Black, Boe, Bruneel, Callister, Campbell, Chase, Cheirrett, Crow,
      Cuddy, Deal, Denney, Ellsworth, Field(13), Field(20), Gagner, Geddes,
      Hadley, Hammond, Hansen(23), Hornbeck, Jones, Judd, Kellogg, Kempton,
      Kendell, Kunz, Lake, Loertscher(Loertscher), Mader, Marley, McKague,
      Meyer, Montgomery, Mortensen, Moss, Pearce, Pischner, Pomeroy,
      Reynolds, Ridinger, Ringo, Robison, Sali, Schaefer, Sellman,
      Shepherd, Smith, Smylie, Stevenson, Stone, Taylor, Tilman, Trail,
      Wood, Zimmermann
      NAYS -- Jaquet, Stoicheff
      Absent and excused -- Clark, Gould, Hansen(29), Henbest, Linford,
      Moyle, Wheeler, Mr Speaker
    Floor Sponsor - Callister
    Title apvd - to Senate
04/04    To enrol - rpt enrol - Pres signed
04/05    Sp signed
04/06    To Governor
04/12    Governor signed
         Session Law Chapter 261
         Effective: 07/01/00

Bill Text

  ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
 Fifty-fifth Legislature                  Second Regular Session - 2000
                                       IN THE SENATE
                                    SENATE BILL NO. 1439
  1                                        AN ACT
  7    Be It Enacted by the Legislature of the State of Idaho:
  8        SECTION 1.  That Section 54-2054, Idaho Code,  as  added  by  Senate  Bill
  9    1312, as enacted by the Second Regular Session of the Fifty-Fifth Idaho Legis-
 10    lature, be, and the same is hereby amended to read as follows:
 12    Court action for fee collection. No person engaged in the business  or  acting
 13    in  the  capacity of real estate broker or salesperson in Idaho shall bring or
 14    maintain any action in the courts for the collection of a fee,  commission  or
 15    other  compensation  for  the  performance of any acts requiring a real estate
 16    license as provided in section 54-2002, Idaho Code, without alleging and prov-
 17    ing that such person was an actively licensed broker or salesperson  in  Idaho
 18    at the time the alleged cause of action arose.
 19        (2)  Fee-splitting  with  unlicensed persons prohibited.  Unless otherwise
 20    allowed by statute  or  rule,  a  real  estate  broker,  associate  broker  or
 21    salesperson  licensed in the state of Idaho shall not pay any part or share of
 22    a commission, fee or compensation received in the licensee's capacity as  such
 23    in  a  regulated  real  estate  transaction  to any person who is not actively
 24    licensed as a real estate broker in Idaho or in another state or jurisdiction.
 25    The Idaho broker making the payment to another licensed person is  responsible
 26    for verifying the active licensed status of the receiving broker. This section
 27    shall  not prohibit payment of a part or share of a commission, fee or compen-
 28    sation by the broker to a corporation, all of whose shareholders and directors
 29    are active real estate licensees. An Idaho licensee may pay any part or  share
 30    of a commission, fee or compensation received, directly to the buyer or seller
 31    in  the  real  estate transaction. However, no commission, fee or compensation
 32    may be split with any party  to  the  transaction  in  a  manner  which  would
 33    directly  or  indirectly create a double contract, as defined in this chapter,
 34    or which would otherwise mislead any broker, lender, title company or  govern-
 35    ment  agency involved in the transaction regarding the source of funds used to
 36    complete the real estate transaction or regarding the financial  resources  or
 37    obligations of the buyer.
 38        (3)  Finder's  fees  prohibited.  Any offer of monetary value, by an Idaho
 39    licensee, to any person who is not licensed in Idaho or any state or jurisdic-
 40    tion, made for the purpose of inducing such unlicensed person to secure  pros-
 41    pects  to buy, sell, option, or otherwise dispose of an interest in real prop-
 42    erty shall be considered to be splitting fees with an unlicensed  person,  and
 43    is prohibited.
  1        (4)  Interference  with  real  estate  brokerage  agreement prohibited. It
  2    shall be unlawful for any person, licensed or unlicensed,  to  interfere  with
  3    the  contractual  relationship  between a broker and a client. Communicating a
  4    company's relocation policy or benefits to a transferring employee or consumer
  5    shall not be considered a violation of this subsection so long as the communi-
  6    cation does not involve advice or encouragement on how to terminate  or  amend
  7    an existing contractual relationship between a broker and client.
  8        (5)  Double  contracts prohibited. No licensed broker or salesperson shall
  9    use, propose the use of, agree to the use of, or knowingly permit the use of a
 10    double contract, as defined in section 54-2004,  Idaho  Code,   in  connection
 11    with  any  regulated real estate transaction. Such conduct by a licensee shall
 12    be deemed flagrant misconduct and dishonorable and dishonest dealing and shall
 13    subject the licensee to disciplinary action by the commission.
 14        (6)  Kickbacks and rebates prohibited. No licensed real estate  broker  or
 15    salesperson  shall  receive a kickback or rebate for directing any transaction
 16    to any individual for financing. A licensee shall not receive  a  kickback  or
 17    unearned  fee for directing any transaction to any lending institution, escrow
 18    or title company, as those practices are defined and prohibited  by  the  real
 19    estate  settlement  and  procedures act of 1974, as amended, 12 U.S.C. section
 20    2601 et seq. However, a licensee legally receiving any fee or rebate from  any
 21    person  providing direct services to either the buyer or the seller in connec-
 22    tion with a regulated real estate transaction  is  required  to  disclose  the
 23    licensee's  intent  to  receive such fee, rebate or compensation in writing to
 24    all parties to the transaction prior to closing.
 25        (7)  Compensation from more than one party. No licensed real estate broker
 26    or salesperson shall charge or accept compensation  from  more  than  one  (1)
 27    party  in  any  one  (1)  transaction, without first making full disclosure in
 28    writing of the broker's intent to do so, to all parties involved in the trans-
 29    action.
 30        (8)  After-the-fact referral fees prohibited. It shall be unlawful for any
 31    person to solicit or request a referral fee or similar payment from a licensed
 32    Idaho real estate broker or sales associate, for the referral of  a  buyer  or
 33    seller in connection with a regulated real estate transaction, unless the per-
 34    son  seeking  the referral fee has reasonable cause.  "Reasonable cause" shall
 35    not exist unless:
 36        (a)  The person seeking the referral fee has a written  contractual  rela-
 37        tionship  with  the Idaho real estate broker for a referral fee or similar
 38        payment; and
 39        (b)  The contractual relationship providing for the referral fee exists at
 40        the time the buyer or seller purportedly referred by such person  signs  a
 41        written agreement with the Idaho broker for the listing of the real estate
 42        or  for  representation by the broker, or the buyer signs an offer to pur-
 43        chase the real estate involved in the transaction. It  shall  be  unlawful
 44        for any person including, but not limited to, a relocation company or com-
 45        pany  with  a  relocation  policy  or  benefits, to directly or indirectly
 46        threaten to or actually reduce or withhold promised or  expected  employee
 47        or customer relocation benefits from a buyer or seller in a regulated real
 48        estate  transaction  based  upon  a broker's participation in payment of a
 49        referral fee or other fee.
 50        (9)  All fees must be paid through broker. No sales associate shall accept
 51    any commission, compensation or fee for the performance of any acts  requiring
 52    a  real estate license from any person except the real estate broker with whom
 53    the sales associate is licensed. However, a broker  may  pay  a  former  sales
 54    associate  for  services  performed  while  the  sales  associate was actively
 55    licensed with that broker, regardless of the former sales associate's  license
  1    status at the time the commission or fee is actually paid.

Statement of Purpose / Fiscal Impact

                 STATEMENT OF PURPOSE
     Current Idaho law prohibits a licensee from sharing commission with anyone,
     including the buyer, who does not hold a real estate license. This proposal would
     change Idaho Code to allow a licensee to pay all or part of his commission to a
     buyer or seller in the transaction. 
                    FISCAL IMPACT 
     There is no fiscal impact to the General Fund, nor to any political subdivision. 
     Name:     Donna Jones 
     Agency:   Idaho Real Estate Commission
     Phone:    334-3285 ext. 232 
                                                  STATEMENT OF PURPOSE/FISCAL IMPACT           S 1439