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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
S1439
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-fifth Legislature Second Regular Session - 2000
IN THE SENATE
SENATE BILL NO. 1439
BY COMMERCE AND HUMAN RESOURCES COMMITTEE
1 AN ACT
2 RELATING TO REAL ESTATE BROKERS AND SALESPERSONS; AMENDING SECTION 54-2054,
3 IDAHO CODE, AS ADDED BY SENATE BILL 1312, ENACTED BY THE SECOND REGULAR
4 SESSION OF THE FIFTY-FIFTH IDAHO LEGISLATURE, TO ALLOW A LICENSED REAL
5 ESTATE BROKER OR SALESPERSON TO SHARE COMMISSIONS DIRECTLY WITH THE BUYER
6 OR SELLER IN A REGULATED REAL ESTATE TRANSACTION.
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:
11 54-2054. COMPENSATION, COMMISSIONS AND FEES -- PROHIBITED CONDUCT. (1)
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.
2
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
3
1 status at the time the commission or fee is actually paid.
STATEMENT OF PURPOSE
RS09357
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.
CONTACT
Name: Donna Jones
Agency: Idaho Real Estate Commission
Phone: 334-3285 ext. 232
STATEMENT OF PURPOSE/FISCAL IMPACT S 1439