Session of 2023
HOUSE BILL No. 2389
By Committee on Commerce, Labor and Economic Development
2-9
AN ACT concerning real estate brokers and salespersons; application of
licensure provisions to trusts; authorizing the Kansas real estate
commission to issue cease and desist orders; providing that dealing in
assignable contracts for the purchase or sale of, or options on real estate
requires licensure; amending K.S.A. 58-3036 and 58-3065 and K.S.A.
2022 Supp. 58-3035, 58-3037 and 58-3042 and repealing the existing
sections.
Be it enacted by the Legislature of the State of Kansas:
Section 1. K.S.A. 2022 Supp. 58-3035 is hereby amended to read as
follows: 58-3035. As used in this act, unless the context otherwise
requires:
(a) "Act" means the real estate brokers' and salespersons' license act.
(b) "Advance listing fee" means any fee charged for services related
to promoting the sale or lease of real estate and paid in advance of the
rendering of such services, including any fees charged for listing,
advertising or offering for sale or lease any real estate, but excluding any
fees paid solely for advertisement or for listing in a publication issued for
the sole purpose of promoting the sale or lease of real estate wherein
inquiries are directed to the owner of the real estate or to real estate
brokers and not to unlicensed persons who publish the listing.
(c) "Associate broker" means an individual who has a broker's license
and a broker licensee who is employed by another broker or is associated
with another broker as an independent contractor and participates in any
activity described in subsection (f).
(d) "Branch broker" means an individual who has a broker's license
and a broker licensee who has been designated to supervise a branch office
and the activities of salespersons and associate brokers assigned to the
branch office.
(e) "Branch office" means a place of business other than the principal
place of business of a broker.
(f) "Broker" means an individual a licensee, other than a salesperson,
who advertises or represents that such individual engages in the business
of buying, selling, exchanging or leasing real estate or who, for
compensation, engages in any of the following activities as an employee
of, or on behalf of, the owner, purchaser, lessor or lessee of real estate:
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(1) Sells, exchanges, purchases or leases real estate.
(2) Offers to sell, exchange, purchase or lease real estate.
(3) Negotiates or offers, attempts or agrees to negotiate the sale,
exchange, purchase or leasing of real estate.
(4) Lists or offers, attempts or agrees to list real estate for sale, lease
or exchange.
(5) Auctions or offers, attempts or agrees to auction real estate or
assists an auctioneer by procuring bids at a real estate auction.
(6) Buys, sells, offers to buy or sell or otherwise deals in options on
real estate, markets for sale, exchanges or otherwise deals in assignable
contracts for the purchase or sale of, or options on real estate or
improvements thereon.
(7) Assists or directs in the procuring of prospects calculated to result
in the sale, exchange or lease of real estate.
(8) Assists in or directs the negotiation of any transaction calculated
or intended to result in the sale, exchange or lease of real estate.
(9) Engages in the business of charging an advance listing fee.
(10) Provides lists of real estate as being available for sale or lease,
other than lists provided for the sole purpose of promoting the sale or lease
of real estate wherein inquiries are directed to the owner of the real estate
or to real estate brokers and not to unlicensed persons who publish the list.
(g) "Commission" means the Kansas real estate commission.
(h) "Exchange" means a type of sale or purchase of real estate.
(i) "Interest" means:
(1) Having any type of ownership in the real estate involved in the
transaction; or
(2) an officer, member, partner or shareholder of any entity that owns
such real estate excluding an ownership interest of less than 5% in a
publicly traded entity.
(j) "Lease" means rent or lease for nonresidential use.
(k) "Licensee" means any person licensed under this act as a broker
or salesperson.
(l) (1) "Office" means any permanent location where one or more
licensees regularly conduct real estate business as described in subsection
(f) or a location that is held out as an office.
(2) "Office" does not mean a model home office in a new home
subdivision if the real estate transaction files are maintained in the primary
office or branch office.
(m) "Primary office" means a supervising broker's principal place of
business for each company created or established by the broker.
(n) "Real estate" means any interest or estate in land, including any
leasehold or condominium, whether corporeal, incorporeal, freehold or
nonfreehold and whether the real estate is situated in this state or
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elsewhere, but does not include oil and gas leases, royalties and other
mineral interests, and rights of way and easements acquired for the
purpose of constructing roadways, pipelines, conduits, wires and facilities
related to these types of improvement projects for private and public
utilities, municipalities, federal and state governments, or any political
subdivision. For purpose of this act, any rights of redemption are
considered to be an interest in real estate.
(o) "Salesperson" means an individual a licensee, other than an
associate broker, who is employed by a broker or is associated with a
broker as an independent contractor and participates in any activity
described in subsection (f).
(p) "Supervising broker" means an individual a broker licensee, other
than a branch broker, who has a broker's license and who has been
designated as the broker who is responsible for the supervision of the
primary office of a broker and the activities of salespersons and associate
brokers who are assigned to such office and all of whom are licensed
pursuant to subsection (b) of K.S.A. 58-3042(b), and amendments thereto.
"Supervising broker" also means a broker who operates a sole
proprietorship and with whom associate brokers or salespersons are
affiliated as employees or independent contractors.
Sec. 2. K.S.A. 58-3036 is hereby amended to read as follows: 58-
3036. Unless exempt from this act under K.S.A. 58-3037, and amendments
thereto, no person acting individually or as an employee, owner, officer or
member of an association, corporation, limited liability company, limited
liability partnership, partnership, professional corporation or trust shall:
(a) Directly or indirectly engage in or conduct or represent that such
person engages in or conducts the business of a broker, associate broker or
salesperson within this state unless such person is licensed as such a
broker, associate broker or salesperson in accordance with this act.
(b) Directly or indirectly act or represent that such person acts as a
broker, associate broker or salesperson within this state unless such person
is licensed as such a broker, associate broker or salesperson in accordance
with this act.
(c) Perform or offer, attempt or agree to perform any act described in
subsection (f) of K.S.A. 58-3035(f), and amendments thereto, whether as a
part of a transaction or as an entire transaction, unless such person is
licensed pursuant to this act.
Sec. 3. K.S.A. 2022 Supp. 58-3037 is hereby amended to read as
follows: 58-3037. The provisions of this act shall not apply to:
(a) Any person, other than a person licensed under this act, who
directly performs any of the acts within the scope of this act with reference
to such person's own property real estate, except such person shall not
buy, sell, offer to buy or sell, market for sale, exchange or otherwise deal
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in assignable contracts for the purchase or sale of, or options on, real
estate or improvements thereon.
(b) Any person who directly performs any of the acts within the
scope of this act with reference to property that such person is authorized
to transfer in any way by a power of attorney from the owner, provided
that such person receives no commission or other compensation, direct or
indirect, for performing any such act.
(c) Services rendered by an attorney licensed to practice in this state
in performing such attorney's professional duties as an attorney.
(d) Any person acting as receiver, trustee in bankruptcy,
administrator, executor or guardian, or while acting under a court order or
under the authority of a will or a trust instrument or as a witness in any
judicial proceeding or other proceeding conducted by the state or any
governmental subdivision or agency.
(e) Any officer or employee of the federal or state government, or any
political subdivision or agency thereof, when performing the official duties
of the officer or employee.
(f) Any multiple listing service wholly owned by a nonprofit
organization or association of brokers.
(g) Any nonprofit referral system or organization of brokers formed
for the purpose of referral of prospects for the sale or listing of real estate.
(h) Railroads or other public utilities regulated by the state of Kansas,
or their subsidiaries, affiliated corporations, officers or regular employees,
unless performance of any of the acts described in subsection (f) of K.S.A.
58-3035(f), and amendments thereto, is in connection with the sale,
purchase, lease or other disposition of real estate or investment therein
unrelated to the principal business activity of such railroad or other public
utility or affiliated or subsidiary corporation thereof.
(i) The sale or lease of real estate by an employee of a person,
association, corporation, limited liability company, limited liability
partnership, partnership or, professional corporation which or trust that
owns or leases such real estate, if such employee owns 5% or greater
interest in such association, limited liability company, limited liability
partnership, partnership or, professional corporation or trust or of the stock
of such corporation, except such employee shall not buy, sell, offer to buy
or sell, market for sale, exchange or otherwise deal in assignable
contracts for the purchase or sale of or options on real estate or
improvements thereon.
(j) The sale or lease of new homes by a person, association,
corporation, limited liability company, limited liability partnership or,
professional corporation or trust who constructed such homes, but the
provisions of this act shall apply to the sale or lease of any such homes by
any employee of such person, association, corporation, limited liability
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company, limited liability partnership, partnership or, professional
corporation or trust if such employee owns less than 5% interest in such
association, limited liability company, limited liability partnership,
partnership or, professional corporation or trust or by any employee of a
corporation who owns less than 5% of the stock of such corporation.
(k) The lease of real estate for agricultural purposes.
Sec. 4. K.S.A. 2022 Supp. 58-3042 is hereby amended to read as
follows: 58-3042. (a) No real estate license shall give authority to any
person other than the person to whom the license is issued.
(b) No license shall be granted to an association, corporation, limited
liability company, limited liability partnership, partnership or, professional
corporation or trust. Each person who is an owner, officer or member of an
association, corporation, limited liability company, limited liability
partnership, partnership or, professional corporation or trust and who
performs any act described in subsection (f) of K.S.A. 58-3035(f), and
amendments thereto, and each person who is employed by or associated
with an association, corporation, limited liability company, limited liability
partnership, partnership or, professional corporation or trust and who
performs any act described in subsection (f) of K.S.A. 58-3035(f), and
amendments thereto, shall be a licensed broker or licensed salesperson.
(c) If any person who is an owner, officer or member of an
association, corporation, limited liability company, limited liability
partnership or, professional corporation or trust performs any act described
in subsection (f) of K.S.A. 58-3035(f), and amendments thereto, a primary
office shall be established and a supervising broker shall be designated
pursuant to K.S.A. 58-3060, and amendments thereto, to supervise the
office and any employed or associated salespersons or associate brokers
and the supervising broker shall obtain approval for the supervising
broker's business name or trade name pursuant to K.S.A. 58-3079, and
amendments thereto.
Sec. 5. K.S.A. 58-3065 is hereby amended to read as follows: 58-
3065. (a) Willful violation of any provision of this act or the brokerage
relationships in real estate transactions act is a misdemeanor punishable by
imprisonment for not more than 12 months or a fine of not less than $100
or more than $1,000, or both, for the first offense and imprisonment for not
more than 12 months or a fine of not less than $1,000 or more than
$10,000, or both, for a second or subsequent offense.
(b) Nothing in this act or the brokerage relationships in real estate
transactions act shall be construed as requiring the commission or the
director to report minor violations of the acts for criminal prosecution
whenever the commission or the director believes that the public interest
will be adequately served by other administrative action.
(c) If the commission determines that a person, acting individually or
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as an employee, owner, officer or member of an association, corporation,
limited liability company, limited liability partnership, partnership,
professional corporation or trust, has practiced without a valid broker's or
salesperson's license issued by the commission, in addition to any other
penalties imposed by law, the commission, in accordance with the Kansas
administrative procedure act, may issue a cease and desist order against
such unlicensed person or associated association, corporation, limited
liability company, limited liability partnership, partnership, professional
corporation or trust.
Sec. 6. K.S.A. 58-3036 and 58-3065 and K.S.A. 2022 Supp. 58-3035,
58-3037 and 58-3042 are hereby repealed.
Sec. 7. This act shall take effect and be in force from and after its
publication in the statute book.
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