SESSION OF 2024
SUPPLEMENTAL NOTE ON HOUSE BILL NO. 2598
As Amended by the House Committee on
Commerce, Labor and Economic Development
Brief*
HB 2598, as amended, would prohibit dealing in
assignable contracts for the purchase or sale of, or options
on, real estate or improvements of certain residential
properties and deem such dealing a deceptive act or practice
under the Kansas Consumer Protection Act (KCPA).
The bill would also authorize the Kansas Real Estate
Commission (Commission) to issue cease-and-desist orders
on a person the Commission has determined is practicing
without a valid broker’s or salesperson’s license issued by the
Commission.
The bill would also prohibit a seller from executing a
contract for deed with a buyer if the seller does not hold the
property’s title. This prohibition would require the seller to
maintain fee simple title to the property free from certain
encumbrances, and it would establish that any violation of
provisions pertaining to the execution of a contract for deed
would be deemed a deceptive act or practice under the
KCPA.
Assignable Contracts
The bill would prohibit any person, association,
corporation, limited liability company, limited liability
partnership, partnership, professional corporation, or trust
from buying, selling, offering to buy or sell, market for sale,
____________________
*Supplemental notes are prepared by the Legislative Research
Department and do not express legislative intent. The supplemental
note and fiscal note for this bill may be accessed on the Internet at
http://www.kslegislature.org exchange, or otherwise deal in assignable contracts for the
purchase or sale of, or options on, real estate or
improvements for single-family residential housing and
multifamily residential housing of four units or fewer.
Any violation would constitute a deceptive act or practice
under the KCPA and would be subject to civil penalty and any
other remedy or penalty provided by the KCPA. Each
unlawful transaction would be considered a separate violation
of the KCPA.
Cease-And-Desist Orders
If the Commission determines a person has practiced
without a valid broker’s or salesperson’s licenses issued by
the Commission, the Commission may issue a cease-and-
desist order in accordance with the Kansas Administrative
Procedure Act against such unlicensed person or associated
association, corporation, limited liability company, limited
liability partnership, partnership, professional corporation, or
trust.
Contract for Deed
Definitions
The bill would define terms, including:
●“Contract for deed,” to mean an executory
agreement in which the seller agrees to convey title
to real property to the buyer and the buyer agrees
to pay the purchase price in five or more
subsequent payments, exclusive of a down
payment, while the seller retains title to the
property as security for the buyer’s obligation. The
term would specifically exclude option contracts for
the purchase of real property; and
2- 2598 ●“Property,” to mean real property located in Kansas
upon which there is located or will be located a
structure designed principally for occupancy of one
to four families that is or will be occupied by the
buyer as the buyer’s principal place of residence.
The bill also would define the terms “buyer” and “seller”
for this purpose.
Recording of Contract for Deed
The bill would provide that any contract for deed or
affidavit of equitable interest may be recorded by any
interested person in the office of the county register of deeds
where the property is located.
Seller to Hold Title to the Property; Exceptions
The bill would prohibit a seller from executing a contract
for deed if the seller does not hold fee simple title to the
property, free from any mortgage, lien, or other
encumbrances (liability), subject to certain exceptions
specified in the bill:
●Due to the conduct of the buyer;
●With the agreement of the buyer as a condition of a
loan obtained to make improvements to the
property; or
●By the seller prior to the execution of the contract
for deed if:
○The seller disclosed the liability to the buyer;
○The seller continues to make timely payments
on the outstanding liability;
○The seller disclosed the contract for deed to a
party of interest to the liability; and
3- 2598 ○The seller satisfies and obtains a release of
the liability not later than the date of the final
contract for deed payment by the buyer,
unless the buyer assumes the liability as part
of such contract.
Violations of the specified title liability prohibitions would
be considered a deceptive act and be subject to enforcement
under the KCPA.
Contract for Deed: Buyer’s Rights
The bill would provide that a buyer’s rights under a
contract for deed would not be forfeited or canceled except as
specified in the bill. However, under the bill, a contract could
provide for forfeiture of buyer’s rights. Additionally, the bill
would contain a statement that the provisions on a buyer’s
rights could not be construed to limit the power of a district
court to require equitable foreclosure proceedings.
A buyer’s rights would not be forfeited until the buyer
has been notified of the intent to forfeit and has been given a
right to cure the default and has not done so within the time
period allowed. A notice of default and intent to forfeit would
be required to:
●Reasonably identify the contract and describe the
property covered by it;
●Specify the terms and conditions of the contract
with which the buyer has not complied; and
●Notify the buyer that the contract will be forfeited
unless the buyer performs the terms and conditions
within the following time periods:
○If the buyer has paid less than 50 percent of
the purchase price, 30 days from completed
service of notice; or
4- 2598 ○If the buyer has paid 50 percent or more of
the purchase price, 90 days from completed
service of notice.
The bill would require such notice be served on the
buyer in-person, delivered directly to the buyer’s residence,
or delivered by certified or priority mail to the buyer’s
residence with return receipt requested.
Background
The bill was introduced by the House Committee on
Commerce, Labor and Economic Development at the request
of a representative of the Kansas Association of Realtors.
House Committee on Commerce, Labor and Economic
Development
In the House Committee hearing, proponent testimony
was provided by representatives of the Kansas Association of
Realtors and the Kansas Real Estate Commission.
The proponents generally stated the bill would ban the
use of assignable contracts and allow the Commission to
curtail this practice. Additionally, the cease-and-desist order
would give the Commission the ability to address real estate
issues that would not be a high priority for district attorneys or
the Attorney General.
No other testimony was provided.
The House Committee amended the bill to include the
contents of HB 2101, as amended by the House Committee
on Financial Institutions and Pensions, related to contract for
deed agreements. Background information for HB 2101 is
provided below.
5- 2598 HB 2101 (Contract for Deed Provisions)
The bill was introduced by the House Committee on
Financial Institutions and Pensions at the request of
Representative Hoheisel.
House Committee on Financial Institutions and Pensions
In the House Committee hearing , Representative
Probst, an attorney, a citizen lobbyist, and three private
citizens provided proponent testimony. The proponents
stated that the bill would add protections to a currently
unregulated aspect of the residential housing market. The
citizen lobbyist, formerly a member of the Judicial Council
Advisory Committee, testified that the bill is the result and
recommendation of that Committee’s 2020 study. The
attorney and the private citizens he represented in a case of
convicted fraud described the misrepresentations made in a
rent-to-own contract and protections the bill would afford to
assist other buyers in similar situations.
Neutral written-only testimony was provided by the
Kansas Judicial Council, which included the report of the
Judicial Council Advisory Committee on 2020 HB 2600 and
noted a discrepancy between the Committee’s
recommendation and HB 2101.
No other testimony was provided.
The House Committee amended the bill to insert
additional criteria by which a seller could qualify for an
exemption from the liability prohibition, which would require
that the seller disclose the contract for deed to the liability
interest holder and require that the seller obtain a release of
any outstanding liabilities on the property prior to the buyer’s
final payment.
6- 2598 Fiscal Information
HB 2598 (Assignable Contracts and Cease-and-Desist
Orders)
According to the fiscal note prepared by the Division of
Budget on the bill, as introduced, the Office of the Attorney
General indicates the agency would incur additional
expenses to take action against the bill’s KCPA violations, but
is unable to estimate the amount of additional time or
resources required to execute those actions.
The Office of Judicial Administration states the bill would
have a negligible fiscal effect and could be accommodated
within the existing budget resources. The bill has the potential
to increase the collections of docket fees that are deposited in
the State General Fund; however, the amount of additional
docket fee collections is estimated to be negligible. Any fiscal
effect associated with enactment of the bill is not reflected in
The FY 2025 Governor’s Budget Report.
HB 2101 (Contract for Deed Provisions
The Abstracters’ Board of Examiners and the League of
Kansas Municipalities state the bill would have no fiscal
effect.
The Kansas Association of Counties states the bill could
have an impact on counties if current resources are
inadequate to handle prosecutions and court needs.
Therefore, a fiscal effect cannot be determined. Any fiscal
effect associated with enactment of the bill is not reflected in
The FY 2025 Governor’s Budget Report.
Real estate; Real estate commission; cease-and-desist; residential housing; contract
for deed; Consumer Protection Act
7- 2598