Real Estate License Law Update (H.4754) – The real estate industry has undergone significant transformations in recent years with the rapid integration of new technologies. Such advancements in technology have revolutionized how properties are bought, sold, and managed, presenting unprecedented opportunities and challenges.
With these changes, lawmakers must collaborate with industry regulators and leaders to update existing laws and regulations to reflect these changes effectively to maintain an efficient and modernized real estate market.
Specific updates to the current license law include:
Modernization:
- Will allow for internet and social media marketing of other brokerage’s listed properties that is not currently allowed so long as the Listing Brokerage and Seller authorize it and the Listing Brokerage is given credit. [40-57-135(E)(1)]
- Acknowledges the increase of AI in the real estate industry, explains the responsibility on licensees who use it, and allows the Commission to promulgate regulations on the subject as needed. [40-57-820]
Better Governance:
- Eliminates distinctions in the existing statute which gave non resident licensees preferential treatment and a lower barrier to entry than resident licensees.[40-57-120; 40-57-320(B)(6) ; 40-57-340(B)(1)(c)]
- Increases the time period for a license to go to lapsed status(meaning the licensee has to start from from scratch) from 6 months to 24 months[ 40-57-110(E)]
- Brokers-in-Charge will be required to attend any disciplinary hearings involving one of their associated licensees.[40-57-710(B)]
Consumer Protection:
- No agreements regarding residential real estate(exceptions provided) can be in effect for more than one year. [40-57-135(I)(9-10)]
- Real estates licensees will be prohibited from participating in the practice of “wholesaling”. [40-57-350(A) and 40-57-350)L)(5)]
- All salespersons and brokers will be required to take 16 hours of continuing education(an increase from 10 hours in current law) every two years. [40-57-340(A)(1-2)]
- In order to become a Broker-in-Charge you will need 5 years of experience( an increase from 3 years of experience in current law).[40-57-320(A)(2)]
- Licensees will be required to be competent in the jurisdiction and type of real estate in which they practice. [40-57-710(A)(30)]
- Licensees are required to make sure trust funds are delivered even if the funds are held by a law firm [40-57-136(H)]
Industry Changes:
- Real estates licensees will be prohibited from participating in the practice of “wholesaling”. [40-57-350(A) and 40-57-350)L)(5)]
- Real estate teams will be required to have their name be “[team name] team at [name of real estate brokerage firm]. Any advertising they do must also have the name of the brokerage firm be at least equal in size to their team name. [40-57-360(D-E)]
- Real estate licensees will be required to have the full name of the brokerage firm in all advertising including advertising of their services that is not tied to a particular property. [40-57-135(E)(2)]
- All salespersons and brokers will be required to take 16 hours of continuing education(an increase from 10 hours in current law) every two years. [40-57-340(A)(1-2)] (may be negotiated lower)