HB 638 (BR 1867) - J. Tilley, D. Keene
AN ACT relating to real estate brokerage.
Create new sections of KRS Chapter 324, relating to real estate brokers, to allow an out-of-state broker to practice in Kentucky relative to commercial real estate through a cooperation agreement with a Kentucky real estate broker; define "commercial real estate," "cooperation agreement"; "Kentucky cooperating broker," "out-of-state principal broker," and "out-of-state licensee," require that out-of-state licensees be licensed with and work under the direct supervision of an out-of-state principal broker; set out minimum contents of cooperation agreements, to include terms of compensation, description of the parties, and the start and end date of the agreement; mandate that, for transactions that fall within the scope of the cooperation agreement, out-of-state brokers work under the supervision and control of the Kentucky cooperating broker and supply the commission with an affiliation notice and insurance certification; include licensure status and other disclosures; limit types of transactions and advertising; prohibit holding out-of-state escrow accounts or engaging in improper conduct; list information to be completed on the notice of affiliation form filed with the commission, including identifying information, agreement effective dates, and consent to jurisdiction; make each notice of affiliation expire 12 months after the date it is filed with the commission; require disclosure of this expiration date on the notice of affiliation form; exempt preliminary exchanges of information from those acts that constitute real estate brokerage; direct out-of-state brokers to notify the commission and the Kentucky cooperating broker of any changes preventing compliance with the agreement; grant the commission the authority to impose sanctions or penalties against out-of-state brokers for failure to substantially comply with the cooperation agreement restrictions; amend KRS 324.020 to allow out-of-state brokers working under cooperation agreements to practice real estate brokerage; permit Kentucky brokers to pay a commission or other compensation to a broker licensed outside of Kentucky under a cooperation agreement; amend KRS 324.287 to add a "notice of affiliation" fee to be paid to the commission by out-of-state brokers; EFFECTIVE January 1, 2009.
HB 638 - AMENDMENTS
HCS - Retain original provisions, except clarify various portions of text to more accurately narrow their focus toward relevant commercial real estate transactions; restrict the scope of the Real Estate Commission's administrative regulations to only the items specifically listed, when the regulations relate to the information required on a written cooperation agreement or a notice of affiliation; remove the requirement that out-of-state principal brokers and licensees submit a form to the commission stating that they carry errors and omissions insurance; limit commission background checks to those conducted in verification of the notice of affiliation, rather than allowing the commission to conduct the checks at any time before or after it has received the notice of affiliation; delete the amendment to KRS 324.287, which would have added a "notice of affiliation" fee to be paid to the commission by out-of-state brokers; remove all references to this amendment.
HFA (1, R. Palumbo) - Exempt community association managers from the purview of this Act; establish qualifications to be met for designation as a community association manager.
SCS - Retain original provisions, except redefine "commercial real estate" to exclude agricultural and mining properties; make an "out-of-state principal broker" mean the designated broker with whom out-of-state licensees are affiliated, rather than the broker responsible for the operation and supervision of the company; narrow the scope of cooperation agreements to refer to specific transactions; exempt multistate portfolio listings from the regular advertising requirement by mandating that the Kentucky broker be printed in legible type and not necessarily with equal prominence in the advertising; designate the cooperating Kentucky broker, and not the Real Estate Commission, as the recipient of the notice of affiliation; require that a notice of affiliation contain the consent of the out-of-state broker to allow the service of process on the Secretary of State, rather than the commission, for legal actions commenced against the out-of-state broker; limit commission criminal records checks of out-of-state brokers to those conducted as a part of a disciplinary investigation; remove mandatory expiration of a notice of affiliation after 12 months; delete commission power to pursue criminal prosecution for false statements in a notice of affiliation; declare that preliminary exchanges of materials, discussions, and investment or other advice by an out-of-state broker do not constitute the practice of real estate; prohibit the commission from requiring that an out-of-state broker forfeit any improperly received fee, commission, or other consideration; delete delayed effective date.
Feb 26-introduced in House
Feb 27-to Licensing & Occupations (H)
Feb 28-posted in committee
Mar 5-reported favorably, 1st reading, to Calendar with Committee Substitute
Mar 6-2nd reading, to Rules
Mar 10-posted for passage in the Regular Orders of the Day for Tuesday, March 11, 2008
Mar 11-floor amendment (1) filed to Committee Substitute
Mar 13-3rd reading, passed 93-0 with Committee Substitute
Mar 14-received in Senate
Mar 18-to Licensing, Occupations and Administrative Regulations (S)
Mar 25-reported favorably, 1st reading, to Consent Calendar with Committee Substitute
Mar 26-2nd reading, to Rules
Apr 2-posted for passage in the Consent Orders of the Day for Wednesday, April 2; 3rd reading, passed 38-0 with Committee Substitute ; received in House; to Rules (H)
Apr 14-taken from Rules; posted for passage for concurrence in Senate Committee Substitute ; House concurred in Senate Committee Substitute ; passed 94-0; enrolled, signed by Speaker of the House
Apr 15-enrolled, signed by President of the Senate; delivered to Governor
Apr 24-signed by Governor (Acts Ch. 156)