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Kansas House Bill HB2389

Kansas 2023-2024 Regular Session

Kansas House Bill HB2389 Compare Versions

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11 Session of 2023
22 HOUSE BILL No. 2389
33 By Committee on Commerce, Labor and Economic Development
44 2-9
55 AN ACT concerning real estate brokers and salespersons; application of
66 licensure provisions to trusts; authorizing the Kansas real estate
77 commission to issue cease and desist orders; providing that dealing in
88 assignable contracts for the purchase or sale of, or options on real estate
99 requires licensure; amending K.S.A. 58-3036 and 58-3065 and K.S.A.
1010 2022 Supp. 58-3035, 58-3037 and 58-3042 and repealing the existing
1111 sections.
1212 Be it enacted by the Legislature of the State of Kansas:
1313 Section 1. K.S.A. 2022 Supp. 58-3035 is hereby amended to read as
1414 follows: 58-3035. As used in this act, unless the context otherwise
1515 requires:
1616 (a) "Act" means the real estate brokers' and salespersons' license act.
1717 (b) "Advance listing fee" means any fee charged for services related
1818 to promoting the sale or lease of real estate and paid in advance of the
1919 rendering of such services, including any fees charged for listing,
2020 advertising or offering for sale or lease any real estate, but excluding any
2121 fees paid solely for advertisement or for listing in a publication issued for
2222 the sole purpose of promoting the sale or lease of real estate wherein
2323 inquiries are directed to the owner of the real estate or to real estate
2424 brokers and not to unlicensed persons who publish the listing.
2525 (c) "Associate broker" means an individual who has a broker's license
2626 and a broker licensee who is employed by another broker or is associated
2727 with another broker as an independent contractor and participates in any
2828 activity described in subsection (f).
2929 (d) "Branch broker" means an individual who has a broker's license
3030 and a broker licensee who has been designated to supervise a branch office
3131 and the activities of salespersons and associate brokers assigned to the
3232 branch office.
3333 (e) "Branch office" means a place of business other than the principal
3434 place of business of a broker.
3535 (f) "Broker" means an individual a licensee, other than a salesperson,
3636 who advertises or represents that such individual engages in the business
3737 of buying, selling, exchanging or leasing real estate or who, for
3838 compensation, engages in any of the following activities as an employee
3939 of, or on behalf of, the owner, purchaser, lessor or lessee of real estate:
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7676 (1) Sells, exchanges, purchases or leases real estate.
7777 (2) Offers to sell, exchange, purchase or lease real estate.
7878 (3) Negotiates or offers, attempts or agrees to negotiate the sale,
7979 exchange, purchase or leasing of real estate.
8080 (4) Lists or offers, attempts or agrees to list real estate for sale, lease
8181 or exchange.
8282 (5) Auctions or offers, attempts or agrees to auction real estate or
8383 assists an auctioneer by procuring bids at a real estate auction.
8484 (6) Buys, sells, offers to buy or sell or otherwise deals in options on
8585 real estate, markets for sale, exchanges or otherwise deals in assignable
8686 contracts for the purchase or sale of, or options on real estate or
8787 improvements thereon.
8888 (7) Assists or directs in the procuring of prospects calculated to result
8989 in the sale, exchange or lease of real estate.
9090 (8) Assists in or directs the negotiation of any transaction calculated
9191 or intended to result in the sale, exchange or lease of real estate.
9292 (9) Engages in the business of charging an advance listing fee.
9393 (10) Provides lists of real estate as being available for sale or lease,
9494 other than lists provided for the sole purpose of promoting the sale or lease
9595 of real estate wherein inquiries are directed to the owner of the real estate
9696 or to real estate brokers and not to unlicensed persons who publish the list.
9797 (g) "Commission" means the Kansas real estate commission.
9898 (h) "Exchange" means a type of sale or purchase of real estate.
9999 (i) "Interest" means:
100100 (1) Having any type of ownership in the real estate involved in the
101101 transaction; or
102102 (2) an officer, member, partner or shareholder of any entity that owns
103103 such real estate excluding an ownership interest of less than 5% in a
104104 publicly traded entity.
105105 (j) "Lease" means rent or lease for nonresidential use.
106106 (k) "Licensee" means any person licensed under this act as a broker
107107 or salesperson.
108108 (l) (1) "Office" means any permanent location where one or more
109109 licensees regularly conduct real estate business as described in subsection
110110 (f) or a location that is held out as an office.
111111 (2) "Office" does not mean a model home office in a new home
112112 subdivision if the real estate transaction files are maintained in the primary
113113 office or branch office.
114114 (m) "Primary office" means a supervising broker's principal place of
115115 business for each company created or established by the broker.
116116 (n) "Real estate" means any interest or estate in land, including any
117117 leasehold or condominium, whether corporeal, incorporeal, freehold or
118118 nonfreehold and whether the real estate is situated in this state or
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162162 elsewhere, but does not include oil and gas leases, royalties and other
163163 mineral interests, and rights of way and easements acquired for the
164164 purpose of constructing roadways, pipelines, conduits, wires and facilities
165165 related to these types of improvement projects for private and public
166166 utilities, municipalities, federal and state governments, or any political
167167 subdivision. For purpose of this act, any rights of redemption are
168168 considered to be an interest in real estate.
169169 (o) "Salesperson" means an individual a licensee, other than an
170170 associate broker, who is employed by a broker or is associated with a
171171 broker as an independent contractor and participates in any activity
172172 described in subsection (f).
173173 (p) "Supervising broker" means an individual a broker licensee, other
174174 than a branch broker, who has a broker's license and who has been
175175 designated as the broker who is responsible for the supervision of the
176176 primary office of a broker and the activities of salespersons and associate
177177 brokers who are assigned to such office and all of whom are licensed
178178 pursuant to subsection (b) of K.S.A. 58-3042(b), and amendments thereto.
179179 "Supervising broker" also means a broker who operates a sole
180180 proprietorship and with whom associate brokers or salespersons are
181181 affiliated as employees or independent contractors.
182182 Sec. 2. K.S.A. 58-3036 is hereby amended to read as follows: 58-
183183 3036. Unless exempt from this act under K.S.A. 58-3037, and amendments
184184 thereto, no person acting individually or as an employee, owner, officer or
185185 member of an association, corporation, limited liability company, limited
186186 liability partnership, partnership, professional corporation or trust shall:
187187 (a) Directly or indirectly engage in or conduct or represent that such
188188 person engages in or conducts the business of a broker, associate broker or
189189 salesperson within this state unless such person is licensed as such a
190190 broker, associate broker or salesperson in accordance with this act.
191191 (b) Directly or indirectly act or represent that such person acts as a
192192 broker, associate broker or salesperson within this state unless such person
193193 is licensed as such a broker, associate broker or salesperson in accordance
194194 with this act.
195195 (c) Perform or offer, attempt or agree to perform any act described in
196196 subsection (f) of K.S.A. 58-3035(f), and amendments thereto, whether as a
197197 part of a transaction or as an entire transaction, unless such person is
198198 licensed pursuant to this act.
199199 Sec. 3. K.S.A. 2022 Supp. 58-3037 is hereby amended to read as
200200 follows: 58-3037. The provisions of this act shall not apply to:
201201 (a) Any person, other than a person licensed under this act, who
202202 directly performs any of the acts within the scope of this act with reference
203203 to such person's own property real estate, except such person shall not
204204 buy, sell, offer to buy or sell, market for sale, exchange or otherwise deal
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248248 in assignable contracts for the purchase or sale of, or options on, real
249249 estate or improvements thereon.
250250 (b) Any person who directly performs any of the acts within the
251251 scope of this act with reference to property that such person is authorized
252252 to transfer in any way by a power of attorney from the owner, provided
253253 that such person receives no commission or other compensation, direct or
254254 indirect, for performing any such act.
255255 (c) Services rendered by an attorney licensed to practice in this state
256256 in performing such attorney's professional duties as an attorney.
257257 (d) Any person acting as receiver, trustee in bankruptcy,
258258 administrator, executor or guardian, or while acting under a court order or
259259 under the authority of a will or a trust instrument or as a witness in any
260260 judicial proceeding or other proceeding conducted by the state or any
261261 governmental subdivision or agency.
262262 (e) Any officer or employee of the federal or state government, or any
263263 political subdivision or agency thereof, when performing the official duties
264264 of the officer or employee.
265265 (f) Any multiple listing service wholly owned by a nonprofit
266266 organization or association of brokers.
267267 (g) Any nonprofit referral system or organization of brokers formed
268268 for the purpose of referral of prospects for the sale or listing of real estate.
269269 (h) Railroads or other public utilities regulated by the state of Kansas,
270270 or their subsidiaries, affiliated corporations, officers or regular employees,
271271 unless performance of any of the acts described in subsection (f) of K.S.A.
272272 58-3035(f), and amendments thereto, is in connection with the sale,
273273 purchase, lease or other disposition of real estate or investment therein
274274 unrelated to the principal business activity of such railroad or other public
275275 utility or affiliated or subsidiary corporation thereof.
276276 (i) The sale or lease of real estate by an employee of a person,
277277 association, corporation, limited liability company, limited liability
278278 partnership, partnership or, professional corporation which or trust that
279279 owns or leases such real estate, if such employee owns 5% or greater
280280 interest in such association, limited liability company, limited liability
281281 partnership, partnership or, professional corporation or trust or of the stock
282282 of such corporation, except such employee shall not buy, sell, offer to buy
283283 or sell, market for sale, exchange or otherwise deal in assignable
284284 contracts for the purchase or sale of or options on real estate or
285285 improvements thereon.
286286 (j) The sale or lease of new homes by a person, association,
287287 corporation, limited liability company, limited liability partnership or,
288288 professional corporation or trust who constructed such homes, but the
289289 provisions of this act shall apply to the sale or lease of any such homes by
290290 any employee of such person, association, corporation, limited liability
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334334 company, limited liability partnership, partnership or, professional
335335 corporation or trust if such employee owns less than 5% interest in such
336336 association, limited liability company, limited liability partnership,
337337 partnership or, professional corporation or trust or by any employee of a
338338 corporation who owns less than 5% of the stock of such corporation.
339339 (k) The lease of real estate for agricultural purposes.
340340 Sec. 4. K.S.A. 2022 Supp. 58-3042 is hereby amended to read as
341341 follows: 58-3042. (a) No real estate license shall give authority to any
342342 person other than the person to whom the license is issued.
343343 (b) No license shall be granted to an association, corporation, limited
344344 liability company, limited liability partnership, partnership or, professional
345345 corporation or trust. Each person who is an owner, officer or member of an
346346 association, corporation, limited liability company, limited liability
347347 partnership, partnership or, professional corporation or trust and who
348348 performs any act described in subsection (f) of K.S.A. 58-3035(f), and
349349 amendments thereto, and each person who is employed by or associated
350350 with an association, corporation, limited liability company, limited liability
351351 partnership, partnership or, professional corporation or trust and who
352352 performs any act described in subsection (f) of K.S.A. 58-3035(f), and
353353 amendments thereto, shall be a licensed broker or licensed salesperson.
354354 (c) If any person who is an owner, officer or member of an
355355 association, corporation, limited liability company, limited liability
356356 partnership or, professional corporation or trust performs any act described
357357 in subsection (f) of K.S.A. 58-3035(f), and amendments thereto, a primary
358358 office shall be established and a supervising broker shall be designated
359359 pursuant to K.S.A. 58-3060, and amendments thereto, to supervise the
360360 office and any employed or associated salespersons or associate brokers
361361 and the supervising broker shall obtain approval for the supervising
362362 broker's business name or trade name pursuant to K.S.A. 58-3079, and
363363 amendments thereto.
364364 Sec. 5. K.S.A. 58-3065 is hereby amended to read as follows: 58-
365365 3065. (a) Willful violation of any provision of this act or the brokerage
366366 relationships in real estate transactions act is a misdemeanor punishable by
367367 imprisonment for not more than 12 months or a fine of not less than $100
368368 or more than $1,000, or both, for the first offense and imprisonment for not
369369 more than 12 months or a fine of not less than $1,000 or more than
370370 $10,000, or both, for a second or subsequent offense.
371371 (b) Nothing in this act or the brokerage relationships in real estate
372372 transactions act shall be construed as requiring the commission or the
373373 director to report minor violations of the acts for criminal prosecution
374374 whenever the commission or the director believes that the public interest
375375 will be adequately served by other administrative action.
376376 (c) If the commission determines that a person, acting individually or
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420420 as an employee, owner, officer or member of an association, corporation,
421421 limited liability company, limited liability partnership, partnership,
422422 professional corporation or trust, has practiced without a valid broker's or
423423 salesperson's license issued by the commission, in addition to any other
424424 penalties imposed by law, the commission, in accordance with the Kansas
425425 administrative procedure act, may issue a cease and desist order against
426426 such unlicensed person or associated association, corporation, limited
427427 liability company, limited liability partnership, partnership, professional
428428 corporation or trust.
429429 Sec. 6. K.S.A. 58-3036 and 58-3065 and K.S.A. 2022 Supp. 58-3035,
430430 58-3037 and 58-3042 are hereby repealed.
431431 Sec. 7. This act shall take effect and be in force from and after its
432432 publication in the statute book.
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