EXPLANATION: CAPITALS INDICATE MATTER ADDE D TO EXISTING LAW .
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
*sb0542*
SENATE BILL 542
C3 4lr2414
By: Senator Brooks
Introduced and read first time: January 25, 2024
Assigned to: Education, Energy, and the Environment
Committee Report: Favorable
Senate action: Adopted
Read second time: February 13, 2024
CHAPTER ______
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 SENATE BILL 542
(2) the earlier of: 1
(i) any date of expiration as agreed on by the parties in the 2
brokerage agreement or in any amendments to the brokerage agreement; 3
(ii) any mutually agreed on termination of the brokerage 4
relationship; 5
(iii) a default by any party under the terms of the brokerage 6
agreement; or 7
(iv) a termination under § 17–530 of this subtitle. 8
(b) The brokerage agreement BETWEEN A BROKER AND A SELLER OR LESSOR 9
shall: 10
(1) have a definite termination date that is effective automatically without 11
notice from the client; 12
(2) state the amount of compensation to be paid to the broker [and whether 13
the broker is authorized to receive the compensation from a person other than the client]; 14
(3) state whether the broker is authorized to cooperate with other brokers 15
and share compensation with the other brokers and the amount of the compensation 16
DESCRIBED AS A PERCENTAGE OF T HE PURCHASE PRICE , A SPECIFIC DOLLAR 17
AMOUNT, OR A COMBINATION OF BOTH; 18
(4) explain the events or conditions that will entitle the broker to a 19
commission or other compensation; and 20
(5) contain a provision for the cancellation of the brokerage relationship by 21
either the client or the broker OR BY MUTUAL AGREEME NT OF THE CLIENT AND THE 22
BROKER. 23
(C) THE BROKERAGE AGREEMENT BETWEEN A BROKER AND A BUYER OR 24
LESSEE SHALL: 25
(1) HAVE A DEFINITE TERM INATION DATE THAT IS EFFECTIVE 26
AUTOMATICALLY WITHOU T NOTICE FROM THE CL IENT; 27
(2) STATE THE AMOUNT OF COMPENSATION TO BE P AID TO THE 28
BROKER, DESCRIBED AS A PERCENTAGE OF T HE PURCHASE PRICE , A SPECIFIC 29
DOLLAR AMOUNT, OR A COMBINATION OF BOTH; 30
SENATE BILL 542 3
(3) STATE WHETHER THE BR OKER IS AUTHORIZED T O RECEIVE SOME 1
OR ALL OF THE COMPEN SATION TO BE PAID TO THE BROKER FROM A PE RSON OTHER 2
THAN THE CLIENT; 3
(4) STATE THE CLIENT’S RIGHTS AND OBLIGATIO NS REGARDING THE 4
COMPENSA TION TO BE PAID TO T HE BROKER IF THE BROKER IS AUTHOR IZED TO 5
RECEIVE SOME OR ALL OF THE COMPENSATION TO BE PAID TO THE BR OKER FROM A 6
PERSON OTHER THAN TH E CLIENT; 7
(5) EXPLAIN THE EVENTS T HAT MUST OCCUR OR CO NDITIONS THAT 8
MUST BE MET IN ORDER FOR THE BROKER TO BE ENTITLE D TO A COMMISSION OR 9
OTHER COMPENSATION ; AND 10
(6) CONTAIN A PROVISION FOR THE CANCELLATION OF THE 11
BROKERAGE RELATIONSH IP BY EITHER THE CLIENT OR THE BROKER OR BY MUT UAL 12
AGREEMENT OF THE CLIENT AND THE BROKER . 13
[(c)] (D) Except as otherwise provided in the brokerage agreement, a licensee 14
shall have no further duties or obligations to a client after the termination, expiration, or 15
completion of performance of the brokerage relationship, except to: 16
(1) account for all trust money in the licensee’s possession in accordance 17
with this title; and 18
(2) except as otherwise provided by this title or another law, keep 19
confidential all personal and financial information received from the client during the 20
course of the brokerage relationship and any other information that the client requests 21
during the brokerage relationship to be kept confidential, unless: 22
(i) the client consents in writing to the disclosure of the information; 23
or 24
(ii) the information becomes public from a source other than the 25
licensee. 26
[(d)] (E) The payment or promise of payment of compensation to a licensed real 27
estate broker by a seller, lessor, buyer, or lessee, or by a licensee acting for a seller, lessor, 28
buyer, or lessee: 29
(1) is not determinative of whether a brokerage relationship has been 30
created or exists; and 31
(2) does not create or determine the existence of a brokerage relationship 32
between a broker and a seller, lessor, buyer, lessee, or licensee. 33
4 SENATE BILL 542
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 1
October 1, 2024. 2
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
President of the Senate.
________________________________________________________________________________
Speaker of the House of Delegates.