EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*sb0542*
SENATE BILL 542
C3 4lr2414
By: Senator Brooks
Introduced and read first time: January 25, 2024
Assigned to: Education, Energy, and the Environment
A BILL ENTITLED
AN ACT concerning 1
Real Estate Brokers – Brokerage Agreements – Requirements 2
FOR the purpose of requiring certain provisions to be included in a brokerage agreement 3
between a real estate broker and a seller or lessor or a buyer or lessee; and generally 4
relating to real estate brokerage agreements. 5
BY repealing and reenacting, with amendments, 6
Article – Business Occupations and Professions 7
Section 17–534 8
Annotated Code of Maryland 9
(2018 Replacement Volume and 2023 Supplement) 10
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 11
That the Laws of Maryland read as follows: 12
Article – Business Occupations and Professions 13
17–534. 14
(a) A brokerage relationship commences at the time that a client enters into a 15
brokerage agreement and shall continue until: 16
(1) the completion of performance in accordance with the brokerage 17
agreement; or 18
(2) the earlier of: 19
(i) any date of expiration as agreed on by the parties in the 20
brokerage agreement or in any amendments to the brokerage agreement; 21
2 SENATE BILL 542
(ii) any mutually agreed on termination of the brokerage 1
relationship; 2
(iii) a default by any party under the terms of the brokerage 3
agreement; or 4
(iv) a termination under § 17–530 of this subtitle. 5
(b) The brokerage agreement BETWEEN A BROKER AND A SELLER OR LESSOR 6
shall: 7
(1) have a definite termination date that is effective automatically without 8
notice from the client; 9
(2) state the amount of compensation to be paid to the broker [and whether 10
the broker is authorized to receive the compensation from a person other than the client]; 11
(3) state whether the broker is authorized to cooperate with other brokers 12
and share compensation with the other brokers and the amount of the compensation 13
DESCRIBED AS A PERCENTA GE OF THE PURCHASE P RICE, A SPECIFIC DOLLAR 14
AMOUNT, OR A COMBINATION OF BOTH; 15
(4) explain the events or conditions that will entitle the broker to a 16
commission or other compensation; and 17
(5) contain a provision for the cancellation of the brokerage relationship by 18
either the client or the broker OR BY MUTUAL AGREEME NT OF THE CLIENT AND THE 19
BROKER. 20
(C) THE BROKERAGE AGREEMENT BETWEEN A BROKER AND A BUYER OR 21
LESSEE SHALL: 22
(1) HAVE A DEFINITE TERM INATION DATE THAT IS EFFECTIVE 23
AUTOMATICALLY WITHOU T NOTICE FROM THE CLIE NT; 24
(2) STATE THE AMOUNT OF COMPENSATION TO BE P AID TO THE 25
BROKER, DESCRIBED AS A PERCENTAGE OF T HE PURCHASE PRICE , A SPECIFIC 26
DOLLAR AMOUNT , OR A COMBINATION OF BOTH; 27
(3) STATE WHETHER THE BR OKER IS AUTHORIZED T O RECEIVE SOME 28
OR ALL OF THE COMPENSAT ION TO BE PAID TO TH E BROKER FROM A PERS ON OTHER 29
THAN THE CLIENT; 30
(4) STATE THE CLIENT’S RIGHTS AND OBLIGATIO NS REGARDING THE 31
COMPENSATION TO BE P AID TO THE BROKER IF THE BROKER IS AUTHOR IZED TO 32 SENATE BILL 542 3
RECEIVE SOME OR ALL OF THE COMPENSATIO N TO BE PAID TO THE BROKER FROM A 1
PERSON OTHER THAN TH E CLIENT; 2
(5) EXPLAIN THE EVENTS T HAT MUST OCCUR OR CO NDITIONS THAT 3
MUST BE MET IN ORDER FOR THE BROKER TO BE ENTITLED TO A COMMIS SION OR 4
OTHER COMPENSATION ; AND 5
(6) CONTAIN A PROVISION FOR THE CA NCELLATION OF THE 6
BROKERAGE RELATIONSH IP BY EITHER THE CLIENT OR THE BROKER OR BY MUT UAL 7
AGREEMENT OF THE CLIENT AND THE BROKER . 8
[(c)] (D) Except as otherwise provided in the brokerage agreement, a licensee 9
shall have no further duties or obligations to a client after the termination, expiration, or 10
completion of performance of the brokerage relationship, except to: 11
(1) account for all trust money in the licensee’s possession in accordance 12
with this title; and 13
(2) except as otherwise provided by this title or another law, keep 14
confidential all personal and financial information received from the client during the 15
course of the brokerage relationship and any other information that the client requests 16
during the brokerage relationship to be kept confidential, unless: 17
(i) the client consents in writing to the disclosure of the information; 18
or 19
(ii) the information becomes public from a source other than the 20
licensee. 21
[(d)] (E) The payment or promise of payment of compensation to a licensed real 22
estate broker by a seller, lessor, buyer, or lessee, or by a licensee acting for a seller, lessor, 23
buyer, or lessee: 24
(1) is not determinative of whether a brokerage relationship has been 25
created or exists; and 26
(2) does not create or determine the existence of a brokerage relationship 27
between a broker and a seller, lessor, buyer, lessee, or licensee. 28
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 29
October 1, 2024. 30