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AN ACT relating to real estate brokerage. 1
Be it enacted by the General Assembly of the Commonwealth of Kentucky: 2
Section 1. KRS 324.010 is amended to read as follows: 3
As used in this chapter, unless the context requires otherwise: 4
(1) "Real estate brokerage": 5
(a) Means a single, multiple, or continuing act of dealing in time shares or 6
options, selling or offering for sale, buying or offering to buy, negotiating the 7
purchase, sale, or exchange of real estate, engaging in property management, 8
leasing or offering to lease, renting or offering for rent, or referring or offering 9
to refer for the purpose of securing prospects, any real estate or the 10
improvements thereon for others for a fee, compensation, or other valuable 11
consideration; and 12
(b) Includes advertising for sale an equitable interest in a contract for the 13
purchase of real property between a property owner and a prospective 14
purchaser; 15
(2) "Commission" means the Kentucky Real Estate Commission; 16
(3) "Net listing" means a listing agreement that provides for a stipulated net price to the 17
owner and the excess over the stipulated net price to be received by the licensee as 18
the fee compensation or other valuable consideration; 19
(4) "Principal broker" means a person licensed as a broker under KRS 324.046 who, in 20
addition to performing acts of real estate brokerage or transactions comprehended 21
by that definition, is the single broker responsible for the operation of the company 22
with which he or she is associated; 23
(5) "Real estate" means real estate in its ordinary meaning and includes timeshares, 24
options, leaseholds, and other interests less than leaseholds; 25
(6) "Sales associate" means any person licensed in accordance with KRS 324.046(2) 26
that is affiliated with a Kentucky-licensed principal broker and who, when engaging 27 UNOFFICIAL COPY 23 RS BR 461
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in real estate brokerage, does so under the supervision of the principal broker; 1
(7) "Approved real estate school" means: 2
(a) A school that has been given a certificate of approval by the Kentucky 3
Commission on Proprietary Education or other regulatory bodies that exercise 4
jurisdiction over accreditation and approval and the Kentucky Real Estate 5
Commission. The school shall also be currently in good standing with both 6
the Kentucky Commission on Proprietary Education or other regulatory 7
bodies that exercise jurisdiction over accreditation and approval and the 8
commission; or 9
(b) A National Association of Realtors recognized program which has been 10
reviewed by the Kentucky Real Estate Commission and deemed an approved 11
real estate school; 12
(8) "Accredited institution" means a college or university accredited by appropriately 13
recognized educational associations or chartered and licensed in Kentucky that 14
grants credits toward a program for either an associate, baccalaureate, graduate, or 15
professional degree; 16
(9) "Property management" means the overall management of real property for others 17
for a fee, compensation, or other valuable consideration, and may include the 18
marketing of property, the leasing of property, collecting rental payments on the 19
property, payment of notes, mortgages, and other debts on the property, 20
coordinating maintenance for the property, remitting funds and accounting 21
statements to the owner, and other activities that the commission may determine by 22
administrative regulation; 23
(10) "Broker" means any person who is licensed under KRS 324.046(1) and performs 24
acts of real estate brokerage; 25
(11) "Designated manager" means a licensed sales associate or broker who manages a 26
main or branch office for the principal broker, at the principal broker's direction, 27 UNOFFICIAL COPY 23 RS BR 461
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and has managing authority over the activities of the sales associates at that office; 1
(12) "Regular employee" means an employee who works for an employer, whose total 2
compensation is subject to withholding of federal and state taxes and FICA 3
payments, and who receives from the employer a fixed salary governed by federal 4
wage guidelines that is not affected by specific real estate transactions; 5
(13) "Referral fee" means consideration of any kind paid or demanded for the referral of 6
a potential or actual buyer, seller, lessor, or lessee of real estate; 7
(14) "Designated agency" means a form of agency relationship that exists when a 8
principal broker, in accordance with KRS 324.121, identifies different licensees in 9
the same real estate brokerage firm to separately represent more than one (1) party 10
in the same real estate transaction; 11
(15) "Affiliation" means the relationship agreed upon between a licensee and a principal 12
broker and reported to the commission, where the licensee places his or her license 13
with the principal broker for supervision of the licensee's real estate brokerage 14
activity; 15
(16) "Canceled" means the status of a license when a licensee fails to renew a license, 16
writes the commission a check for fees that is not honored, fails to re-affiliate with a 17
principal broker, or fails to complete requirements for continuing or post-license 18
education; 19
(17) "Suspended" means the status of a license when disciplinary action has been 20
ordered against a licensee that prohibits the brokerage of real estate for a specific 21
period of time; 22
(18) "Revoked" means the status of a license when disciplinary action has been ordered 23
that removes the licensee's legal authority to broker real estate for a minimum of 24
five (5) years; and 25
(19) "Post-license education" means the forty-eight (48) hours of commission-approved 26
education required within two (2) years of receiving or activating an initial sales 27 UNOFFICIAL COPY 23 RS BR 461
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associate license. 1
Section 2. KRS 324.020 is amended to read as follows: 2
(1) It shall be unlawful for any person who is not licensed as a real estate broker or 3
sales associate to: 4
(a) Hold himself or herself out to the public as a real estate broker or sales 5
associate or use any terms, titles, or abbreviations which express, infer, or 6
imply that the person is licensed as a real estate broker or sales associate; or 7
(b) Advertise for sale an equitable interest in a contract for the purchase of real 8
property between a property owner and a prospective purchaser. 9
(2) No person shall practice real estate brokerage with respect to real estate located in 10
this state unless: 11
(a) The person holds a license to practice real estate brokerage under this chapter; 12
or 13
(b) The person has complied with KRS 324.235 to 324.238. 14
(3) A licensee who is an owner or a builder-developer shall comply with the provisions 15
of this chapter and the administrative regulations applying to real estate brokers and 16
sales associates. 17
(4) No broker shall split fees with or compensate any person who is not licensed to 18
perform any of the acts regulated by this chapter, except that a broker may: 19
(a) Pay a referral fee to a broker licensed outside of Kentucky for referring a 20
client to the Kentucky broker; 21
(b) Pay a commission or other compensation to a broker licensed outside of 22
Kentucky in compliance with KRS 324.235 to 324.238; or 23
(c) Pay a licensed auctioneer for services rendered in cases where an auctioneer 24
and real estate broker collaborate in the conduct of a sale of real estate at 25
auction. 26
(5) Except as authorized in KRS 324.112(1) and 324.425, no sales associate shall 27 UNOFFICIAL COPY 23 RS BR 461
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supervise another licensed sales associate or manage a real estate brokerage office. 1
(6) The Kentucky Real Estate Commission may seek and obtain injunctive relief 2
against any individual acting in violation of this chapter by filing a civil action in 3
the Circuit Court where the commission is located or where the unlawful activity 4
took place. 5