MD
Maryland Senate Bill SB542

Maryland 2024 Regular Session

Maryland Senate Bill SB542 Compare Versions

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1- WES MOORE, Governor Ch. 359
21
3-– 1 –
4-Chapter 359
5-(Senate Bill 542)
62
7-AN ACT concerning
3+EXPLANATION: CAPITALS INDICATE MATTER ADDE D TO EXISTING LAW .
4+ [Brackets] indicate matter deleted from existing law.
5+ Underlining indicates amendments to bill.
6+ Strike out indicates matter stricken from the bill by amendment or deleted from the law by
7+amendment.
8+ *sb0542*
89
9-Real Estate Brokers – Brokerage Agreements – Requirements
10+SENATE BILL 542
11+C3 4lr2414
1012
11-FOR the purpose of requiring certain provisions to be included in a brokerage agreement
12-between a real estate broker and a seller or lessor or a buyer or lessee; and generally
13-relating to real estate brokerage agreements.
13+By: Senator Brooks
14+Introduced and read first time: January 25, 2024
15+Assigned to: Education, Energy, and the Environment
16+Committee Report: Favorable
17+Senate action: Adopted
18+Read second time: February 13, 2024
1419
15-BY repealing and reenacting, with amendments,
16- Article – Business Occupations and Professions
17-Section 17–534
18- Annotated Code of Maryland
19- (2018 Replacement Volume and 2023 Supplement)
20+CHAPTER ______
2021
21- SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
22-That the Laws of Maryland read as follows:
22+AN ACT concerning 1
2323
24-Article – Business Occupations and Professions
24+Real Estate Brokers – Brokerage Agreements – Requirements 2
2525
26-17–534.
26+FOR the purpose of requiring certain provisions to be included in a brokerage agreement 3
27+between a real estate broker and a seller or lessor or a buyer or lessee; and generally 4
28+relating to real estate brokerage agreements. 5
2729
28- (a) A brokerage relationship commences at the time that a client enters into a
29-brokerage agreement and shall continue until:
30+BY repealing and reenacting, with amendments, 6
31+ Article – Business Occupations and Professions 7
32+Section 17–534 8
33+ Annotated Code of Maryland 9
34+ (2018 Replacement Volume and 2023 Supplement) 10
3035
31- (1) the completion of performance in accordance with the brokerage
32-agreement; or
36+ SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 11
37+That the Laws of Maryland read as follows: 12
3338
34- (2) the earlier of:
39+Article – Business Occupations and Professions 13
3540
36- (i) any date of expiration as agreed on by the parties in the
37-brokerage agreement or in any amendments to the brokerage agreement;
41+17–534. 14
3842
39- (ii) any mutually agreed on termination of the brokerage
40-relationship;
43+ (a) A brokerage relationship commences at the time that a client enters into a 15
44+brokerage agreement and shall continue until: 16
4145
42- (iii) a default by any party under the terms of the brokerage
43-agreement; or
46+ (1) the completion of performance in accordance with the brokerage 17
47+agreement; or 18
48+ 2 SENATE BILL 542
4449
45- (iv) a termination under § 17–530 of this subtitle.
4650
47- (b) The brokerage agreement BETWEEN A BROKER AND A SELLER OR LESSOR
48-shall:
49- Ch. 359 2024 LAWS OF MARYLAND
51+ (2) the earlier of: 1
5052
51-– 2 –
52- (1) have a definite termination date that is effective automatically without
53-notice from the client;
53+ (i) any date of expiration as agreed on by the parties in the 2
54+brokerage agreement or in any amendments to the brokerage agreement; 3
5455
55- (2) state the amount of compensation to be paid to the broker [and whether
56-the broker is authorized to receive the compensation from a person other than the client];
56+ (ii) any mutually agreed on termination of the brokerage 4
57+relationship; 5
5758
58- (3) state whether the broker is authorized to cooperate with other brokers
59-and share compensation with the other brokers and the amount of the compensation
60-DESCRIBED AS A PERCENTAGE OF T HE PURCHASE PRICE , A SPECIFIC DOLLAR
61-AMOUNT, OR A COMBINATION OF BOTH;
59+ (iii) a default by any party under the terms of the brokerage 6
60+agreement; or 7
6261
63- (4) explain the events or conditions that will entitle the broker to a
64-commission or other compensation; and
62+ (iv) a termination under § 17–530 of this subtitle. 8
6563
66- (5) contain a provision for the cancellation of the brokerage relationship by
67-either the client or the broker OR BY MUTUAL AGREEME NT OF THE CLIENT AND THE
68-BROKER.
64+ (b) The brokerage agreement BETWEEN A BROKER AND A SELLER OR LESSOR 9
65+shall: 10
6966
70- (C) THE BROKERAGE AGREEMENT BETWEEN A BROKER AND A BUYER OR
71-LESSEE SHALL:
67+ (1) have a definite termination date that is effective automatically without 11
68+notice from the client; 12
7269
73- (1) HAVE A DEFINITE TERM INATION DATE THAT IS EFFECTIVE
74-AUTOMATICALLY WITHOU T NOTICE FROM THE CL IENT;
70+ (2) state the amount of compensation to be paid to the broker [and whether 13
71+the broker is authorized to receive the compensation from a person other than the client]; 14
7572
76- (2) STATE THE AMOUNT OF COMPENSATION TO BE P AID TO THE
77-BROKER, DESCRIBED AS A PERCENTAGE OF T HE PURCHASE PRICE , A SPECIFIC
78-DOLLAR AMOUNT , OR A COMBINATION OF BOT H;
73+ (3) state whether the broker is authorized to cooperate with other brokers 15
74+and share compensation with the other brokers and the amount of the compensation 16
75+DESCRIBED AS A PERCENTAGE OF T HE PURCHASE PRICE , A SPECIFIC DOLLAR 17
76+AMOUNT, OR A COMBINATION OF BOTH; 18
7977
80- (3) STATE WHETHER THE BR OKER IS AUTHORIZED T O RECEIVE SOME
81-OR ALL OF THE COMPEN SATION TO BE PAID TO THE BROKER FROM A PE RSON OTHER
82-THAN THE CLIENT;
78+ (4) explain the events or conditions that will entitle the broker to a 19
79+commission or other compensation; and 20
8380
84- (4) STATE THE CLIENT’S RIGHTS AND OBLIGATIO NS REGARDING THE
85-COMPENSATION TO BE PAID TO THE BROKER I F THE BROKER IS AUTHOR IZED TO
86-RECEIVE SOME OR ALL OF THE COMPENSATION TO BE PAID TO THE BR OKER FROM A
87-PERSON OTHER THAN TH E CLIENT;
81+ (5) contain a provision for the cancellation of the brokerage relationship by 21
82+either the client or the broker OR BY MUTUAL AGREEME NT OF THE CLIENT AND THE 22
83+BROKER. 23
8884
89- (5) EXPLAIN THE EVENTS T HAT MUST OCCUR OR CO NDITIONS THAT
90-MUST BE MET IN ORDER FOR THE BROKER TO BE ENTITLED TO A COMMIS SION OR
91-OTHER COMPENSATION ; AND
92- WES MOORE, Governor Ch. 359
85+ (C) THE BROKERAGE AGREEMENT BETWEEN A BROKER AND A BUYER OR 24
86+LESSEE SHALL: 25
9387
94-– 3 –
95- (6) CONTAIN A PROVISION FOR THE CANCELLATION OF THE
96-BROKERAGE RELATIONSH IP BY EITHER THE CLIENT OR THE BROKER OR BY MUT UAL
97-AGREEMENT OF THE CLIENT AND THE BROKER .
88+ (1) HAVE A DEFINITE TERM INATION DATE THAT IS EFFECTIVE 26
89+AUTOMATICALLY WITHOU T NOTICE FROM THE CL IENT; 27
9890
99- [(c)] (D) Except as otherwise provided in the brokerage agreement, a licensee
100-shall have no further duties or obligations to a client after the termination, expiration, or
101-completion of performance of the brokerage relationship, except to:
91+ (2) STATE THE AMOUNT OF COMPENSATION TO BE P AID TO THE 28
92+BROKER, DESCRIBED AS A PERCENTAGE OF T HE PURCHASE PRICE , A SPECIFIC 29
93+DOLLAR AMOUNT, OR A COMBINATION OF BOTH; 30
94+ SENATE BILL 542 3
10295
103- (1) account for all trust money in the licensee’s possession in accordance
104-with this title; and
10596
106- (2) except as otherwise provided by this title or another law, keep
107-confidential all personal and financial information received from the client during the
108-course of the brokerage relationship and any other information that the client requests
109-during the brokerage relationship to be kept confidential, unless:
97+ (3) STATE WHETHER THE BR OKER IS AUTHORIZED T O RECEIVE SOME 1
98+OR ALL OF THE COMPEN SATION TO BE PAID TO THE BROKER FROM A PE RSON OTHER 2
99+THAN THE CLIENT; 3
110100
111- (i) the client consents in writing to the disclosure of the information;
112-or
101+ (4) STATE THE CLIENT’S RIGHTS AND OBLIGATIO NS REGARDING THE 4
102+COMPENSA TION TO BE PAID TO T HE BROKER IF THE BROKER IS AUTHOR IZED TO 5
103+RECEIVE SOME OR ALL OF THE COMPENSATION TO BE PAID TO THE BR OKER FROM A 6
104+PERSON OTHER THAN TH E CLIENT; 7
113105
114- (ii) the information becomes public from a source other than the
115-licensee.
106+ (5) EXPLAIN THE EVENTS T HAT MUST OCCUR OR CO NDITIONS THAT 8
107+MUST BE MET IN ORDER FOR THE BROKER TO BE ENTITLE D TO A COMMISSION OR 9
108+OTHER COMPENSATION ; AND 10
116109
117- [(d)] (E) The payment or promise of payment of compensation to a licensed real
118-estate broker by a seller, lessor, buyer, or lessee, or by a licensee acting for a seller, lessor,
119-buyer, or lessee:
110+ (6) CONTAIN A PROVISION FOR THE CANCELLATION OF THE 11
111+BROKERAGE RELATIONSH IP BY EITHER THE CLIENT OR THE BROKER OR BY MUT UAL 12
112+AGREEMENT OF THE CLIENT AND THE BROKER . 13
120113
121- (1) is not determinative of whether a brokerage relationship has been
122-created or exists; and
114+ [(c)] (D) Except as otherwise provided in the brokerage agreement, a licensee 14
115+shall have no further duties or obligations to a client after the termination, expiration, or 15
116+completion of performance of the brokerage relationship, except to: 16
123117
124- (2) does not create or determine the existence of a brokerage relationship
125-between a broker and a seller, lessor, buyer, lessee, or licensee.
118+ (1) account for all trust money in the licensee’s possession in accordance 17
119+with this title; and 18
126120
127- SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect
128-October 1, 2024.
121+ (2) except as otherwise provided by this title or another law, keep 19
122+confidential all personal and financial information received from the client during the 20
123+course of the brokerage relationship and any other information that the client requests 21
124+during the brokerage relationship to be kept confidential, unless: 22
129125
130-Approved by the Governor, April 25, 2024.
126+ (i) the client consents in writing to the disclosure of the information; 23
127+or 24
128+
129+ (ii) the information becomes public from a source other than the 25
130+licensee. 26
131+
132+ [(d)] (E) The payment or promise of payment of compensation to a licensed real 27
133+estate broker by a seller, lessor, buyer, or lessee, or by a licensee acting for a seller, lessor, 28
134+buyer, or lessee: 29
135+
136+ (1) is not determinative of whether a brokerage relationship has been 30
137+created or exists; and 31
138+
139+ (2) does not create or determine the existence of a brokerage relationship 32
140+between a broker and a seller, lessor, buyer, lessee, or licensee. 33
141+ 4 SENATE BILL 542
142+
143+
144+ SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 1
145+October 1, 2024. 2
146+
147+
148+
149+Approved:
150+________________________________________________________________________________
151+ Governor.
152+________________________________________________________________________________
153+ President of the Senate.
154+________________________________________________________________________________
155+ Speaker of the House of Delegates.