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PUBLIC LAWS
First Special Session of the 122nd

CHAPTER 378
H.P. 1072 - L.D. 1525

An Act To Amend the Real Estate Brokerage Laws

Be it enacted by the People of the State of Maine as follows:

     Sec. 1. 10 MRSA §8003-C, sub-§6 is enacted to read:

     6. Unlicensed practice; private cause of action; repeal. In addition to the penalties and remedies provided under this chapter, an affected person may bring an action in District Court to enjoin any person from violating the provisions of subsection 4. For the purposes of this section, "affected person" may include, but is not limited to, a person who has used the services of a person suspected of violating the provisions of subsection 4 or a private association composed primarily of members practicing a profession for which licensure is required pursuant to this chapter.

If an affected person is successful in obtaining a permanent injunction, that person is entitled to the costs of suit and attorney's fees. In any action brought by an affected person against a person for violating the terms of an injunction issued under this subsection, the court may make the necessary orders or judgments to restore to any person who has suffered any ascertainable loss of money or personal or real property or to compel the return of compensation received by reason of such conduct found to be in violation of an injunction.
This subsection is repealed July 1, 2007.

     Sec. 2. 32 MRSA §13171, as enacted by PL 1987, c. 395, Pt. A, §212, is amended to read:

§13171. Real estate brokerage agency

     "Real As used in this chapter, except for subchapter 7, "real estate brokerage agency" or "agency" means any person or entity engaged in real estate brokerage services through its designated broker, associates or employees and licensed by the commission as a real estate brokerage agency.

     Sec. 3. 32 MRSA §13177, as amended by PL 1999, c. 129, §8 and affected by §16, is repealed.

     Sec. 4. 32 MRSA §13177-A is enacted to read:

§13177-A. Brokerage agreements

     1. Definitions. As used in this section, "brokerage agreement," "real estate brokerage agency" and "client" have the same meanings as in section 13271.

     2. Written agreements. A brokerage agreement between a real estate brokerage agency and a client must be in writing and, at a minimum, include the following:

A brokerage agreement may not be enforced against any client who in good faith subsequently engages the services of another real estate brokerage agency following the expiration date of the first brokerage agreement. Any brokerage agreement provision extending a real estate brokerage agency's right to a fee following expiration of the brokerage agreement may not extend that right beyond 6 months.

     Sec. 5. 32 MRSA §13178, as enacted by PL 1987, c. 395, Pt. A, §212, is amended to read:

§13178. Trust accounts

     Every agency shall maintain a trust federally insured account or accounts in a banking institution located in the financial institution authorized to do business in this State, as defined in Title 9-B, section 131, subsection 17-A, or a credit union authorized to do business in this State, as defined in Title 9-B, section 131, subsection 12-A, for the sole purpose of depositing all earnest money deposits and all other money held by it as an agency in which its clients or other persons with whom it is dealing have an interest. The trust account and withdrawal orders, including all checks drawn on the account, shall must name the subject agency and be identified as a real estate trust account. Real estate trust accounts shall must be free from trustee process, except by those persons for whom the brokerage agency has made the deposits and then only to the extent of the interest. The designated broker, except for an amount necessary to maintain the accounts not to exceed an amount prescribed by commission rule, shall withdraw from the accounts all fees due within 30 days after, but not until consummation or termination of the transaction when the designated broker makes or causes to be made a full accounting to his the broker's principal. The designated broker shall maintain, at the agency's place of business, contracts and other necessary records to verify the adequacy and proper use of the accounts trust accounts and supporting records in a manner prescribed by commission rule. These accounts and records shall must be opened open for inspection by the director or his the director's authorized representative at the agency's place of business during generally recognized business hours. Upon order of the director, the designated broker shall authorize the director in writing to confirm the balance of funds held in all agency trust accounts. Rules adopted pursuant to this section are routine technical rules as defined in Title 5, chapter 375, subchapter 2-A.

     Sec. 6. 32 MRSA §13184 is enacted to read:

§13184. Real estate brokerage records; retention

     A designated broker shall maintain complete and adequate records of all real estate brokerage activity conducted on behalf of the broker's agency. The commission shall specify by rule the records required to establish complete and adequate records, including retention schedules. The records must be open for inspection by the director or the director's authorized representative at the agency's place of business during generally recognized business hours.

     Sec. 7. 32 MRSA §13196, sub-§2, ¶¶A, B and C, as enacted by PL 1999, c. 129, §10 and affected by §16, are amended to read:

     Sec. 8. 32 MRSA §13197, sub-§1, as amended by PL 1999, c. 129, §11 and affected by §16, is further amended to read:

     1. Requirement. As a prerequisite to renewal of a license, applicants must complete 15 21 clock hours of continuing education within 2 years prior to the date of application in programs or courses approved by the commission. This requirement does not apply to agency and company licenses.

     Sec. 9. 32 MRSA §13199, sub-§2, as amended by PL 1999, c. 129, §12 and affected by §16, is repealed.

     Sec. 10. 32 MRSA §13199, sub-§2-A is enacted to read:

     2-A. Professional qualifications. An applicant for an associate broker license must have practiced as a real estate sales agent for 2 years within the 5 years immediately preceding the date of application and satisfactorily completed a course of study meeting guidelines established by the commission. The commission may not issue a license under this section until an individual has completed 2 years as a licensed real estate sales agent.

     Sec. 11. 32 MRSA §13200, sub-§2, as enacted by PL 1987, c. 395, Pt. A, §212, is amended to read:

     2. Professional qualification. Each applicant for a sales agent license shall must meet one of the following qualifications.:

     Sec. 12. 32 MRSA c. 114, sub-c. 7, as amended, is further amended by repealing the subchapter headnote and enacting the following in its place:

SUBCHAPTER 7
REAL ESTATE BROKERAGE RELATIONSHIPS

     Sec. 13. 32 MRSA §13271, as amended by PL 1999, c. 129, §15 and affected by §16, is further amended to read:

§13271. Definitions

     As used in this subchapter, unless the context otherwise indicates, the following terms have the following meanings.

     1. Affiliated licensee. "Affiliated licensee" means a licensee who is authorized to engage in brokerage activity by and on behalf of a real estate brokerage agency.

     2. Appointed agent. "Appointed agent" means that affiliated licensee who is appointed by the designated broker of the affiliated licensee's real estate brokerage agency to act solely for a client of that real estate brokerage agency to the exclusion of other affiliated licensees of that real estate brokerage agency.

     3. Brokerage agreement. "Brokerage agreement" means a contract that establishes the relationships between the parties as to that and the brokerage services to be performed.

     4. Buyer agent. "Buyer agent" means a real estate brokerage agency that is engaged by and represents has entered into a written brokerage agreement with the buyer in a real estate transaction to represent the buyer as its client.

     5. Client. "Client" means a person who has entered into a written brokerage agreement creating a special agency relationship with a real estate brokerage agency that has agreed to represent that person and be bound by the duties set forth in section 13272 on behalf of that person.

     6. Designated broker. "Designated broker" means a licensee broker designated by a real estate brokerage agency to act for it the real estate brokerage agency in the conduct of real estate brokerage.

     7. Disclosed dual agent. "Disclosed dual agent" means a real estate brokerage agency representing 2 or more clients whose interests are adverse in the same transaction with the knowledge and informed consent of the clients.

     8. Material fact. "Material fact" means a fact that relates to the transaction and is so substantial and important as to influence the parties client to whom it is imparted.

     9. Ministerial acts. "Ministerial acts" means those acts that a real estate brokerage agency or its affiliated licensees perform performs for a person who is not a client and that do not require discretion or the exercise of the brokerage agency's or its affiliated licensees' judgment are informative or clerical in nature and do not rise to the level of active representation on behalf of the person.

     10. Real estate brokerage agency. "Real estate brokerage agency" means a person or entity providing real estate brokerage services through that person's designated broker, affiliated licensees, associates or employees and licensed by the commission as a real estate brokerage agency.

     11. Seller agent. "Seller agent" means a real estate brokerage agency that is engaged by and represents has entered into a written brokerage agreement with the seller in a real estate transaction to represent the seller as the real estate brokerage agency's client.

     12. Subagent. "Subagent" means a real estate brokerage agency engaged by another real estate brokerage agency to perform brokerage tasks for a client.

     13. Third party. "Third party" means a person who is not a client and has no agency relationship to the real estate brokerage agency.

     13-A. Transaction broker. "Transaction broker" means a real estate brokerage agency that provides real estate brokerage services to one or more parties in a real estate transaction without a fiduciary relationship as a buyer agent, a seller agent, a subagent or a disclosed dual agent.

     14. Undisclosed dual agent. "Undisclosed dual agent" means a real estate brokerage agency representing 2 or more clients whose interests are adverse in the same transaction without the knowledge and informed consent of the clients.

     Sec. 14. 32 MRSA §§13272 to 13274, as enacted by PL 1993, c. 679, §1, are amended to read:

§13272. Scope of agency

     A real estate brokerage agency that provides services through a brokerage agreement for a client is bound by the duties of loyalty, obedience, disclosure, confidentiality, reasonable care, diligence and accounting as set forth in this chapter. Such an a real estate brokerage agency may be a seller agent, a buyer agent or, a subagent or a disclosed dual agent. If a different relationship between the real estate brokerage agency and the person for whom the real estate brokerage agency performs the services is intended, including a dual agent, it must be described in writing and signed by the parties.

§13273. Seller agent

     1. Duty to seller. A real estate brokerage agency engaged by a seller agent:

     2. Duty to buyer. The duty of a seller agent to a buyer is governed by the following.

§13274. Buyer agent

     1. Duty to buyer. A real estate brokerage agency engaged by a buyer agent:

     2. Duty to seller. The duty of a buyer agent to a seller is governed by the following.

     Sec. 15. 32 MRSA §13275, sub-§1, ¶C, as enacted by PL 1993, c. 679, §1, is amended to read:

     Sec. 16. 32 MRSA §13275, sub-§2, as enacted by PL 1993, c. 679, §1, is amended to read:

     2. Cause of action. A cause of action may not be brought on behalf of any person against a disclosed dual agent for making disclosures permitted or required by this subchapter and the disclosed dual agent does not terminate any real estate brokerage agency client relationship by making disclosures permitted or required by this subchapter.

     Sec. 17. 32 MRSA §13275, sub-§4 is enacted to read:

     4. Duty to parties. The duty of a disclosed dual agent to the client who is selling is the same as set forth in section 13273, and the duty to the client who is buying is the same as set forth in section 13274, except that:

     Sec. 18. 32 MRSA §13277, as enacted by PL 1993, c. 679, §1, is amended to read:

§13277. Written policy

     Every real estate brokerage agency shall adopt a written company policy that identifies and describes the types of real estate brokerage agency relationships in which the designated broker and affiliated licensees may engage.

     Sec. 19. 32 MRSA §13278, sub-§§2 and 4, as enacted by PL 1993, c. 679, §1, are amended to read:

     2. Not a dual agent. A real estate brokerage agency and the designated broker are not considered to be dual agents solely because of an appointment under the provisions of this section, except that any affiliated licensee who personally represents both the seller and the buyer, as clients, in a particular transaction is considered to be a disclosed dual agent and is required to comply with the provisions of this subchapter governing disclosed dual agents.

     4. Appointments; roles. Methods of appointment and the role of the real estate brokerage agency and the designated broker must be defined by rules adopted by the commission. The rules must include a requirement that clients be informed as to the real estate brokerage agency's appointed agent policy and give written consent to that policy in advance of entering into a real estate brokerage agreement.

     Sec. 20. 32 MRSA §13279, as amended by PL 1999, c. 100, §1, is further amended to read:

§13279.   Real estate brokerage relationship disclosure required

     A real estate brokerage agency shall provide in a timely manner to buyers and sellers of residential real property a meaningful, written real estate brokerage agency relationship disclosure form as defined and mandated by rules adopted by the commission. For purposes of this section, "residential real property" means real estate consisting of not less than one nor more than 4 residential dwelling units.

     Sec. 21. 32 MRSA §13281, sub-§1, as enacted by PL 1993, c. 679, §1, is amended to read:

     1. Effective date. The relationships set forth in this subchapter commence on the effective date of the real estate brokerage agency's brokerage agreement and continue until performance, completion, termination or expiration of that brokerage agreement.

     Sec. 22. 32 MRSA §13281, sub-§2, ¶B, as enacted by PL 1993, c. 679, §1, is amended to read:

     Sec. 23. 32 MRSA §§13282 and 13283 are enacted to read:

§13282. Presumption

     Except as otherwise provided in this subchapter, a real estate brokerage agency providing real estate brokerage services is presumed to be acting as a transaction broker unless the real estate brokerage agency has agreed, in a written brokerage agreement, to represent one or more parties to the real estate transaction as the real estate brokerage agency's clients. Client representation may not be created orally or by implication or be assumed by a real estate brokerage agency or any party to a real estate transaction.

§13283. Transaction broker

     1. Not an agent. A transaction broker does not represent any party as a client to a real estate transaction and is not bound by the duties set forth in section 13272.

     2. Responsibilities. A transaction broker shall:

A transaction broker is not liable for providing false information if the false information was provided to the transaction broker and the transaction broker did not know that the information was false. A transaction broker is not obligated to discover latent defects in the property. A cause of action does not arise on behalf of any person against a transaction broker who reveals information or makes disclosures permitted or required by this subchapter.

     3. Prohibited acts. A transaction broker may not:

     4. No vicarious liability. A party to a real estate transaction is not vicariously liable for the acts or omissions of a transaction broker.

     5. Actual knowledge; information. In a situation in which one affiliated licensee acting as an appointed agent of a real estate brokerage agency represents a party to a real estate transaction as the real estate brokerage agency's client and another affiliated licensee of the same real estate brokerage agency is acting as a transaction broker for another party to the transaction, the real estate brokerage agency and its affiliated licensees are considered to possess only actual knowledge and information. There is no imputation of knowledge or information by operation of law among or between the parties, the real estate brokerage agency or its affiliated licensees.

     Sec. 24. 33 MRSA §172, first ¶, as enacted by PL 1999, c. 476, §1, is amended to read:

     This subchapter applies to the transfer of any interest in residential real property, whether by sale, exchange, installment land contract, lease with an option to purchase or any other option to purchase, when the transaction is without the assistance of a person licensed to practice real estate brokerage. If a person licensed to practice real estate brokerage is involved in the transaction, the licensee is subject to the requirements of licensure in Title 32, chapter 114. The following transfers are exempt from this subchapter:

     Sec. 25. 33 MRSA §173, sub-§2, as enacted by PL 1999, c. 476, §1, is repealed.

     Sec. 26. 33 MRSA §173, sub-§2-A is enacted to read:

     2-A. Heating system or heating source. Detailed information on the system or source used to supply heat to the property, including:

     Sec. 27. Transition provisions; sales agent; associate broker; applications processed. A license application for real estate sales agent must be processed according to the laws in effect on the date the application is received by the Real Estate Commission. If an applicant has satisfactorily completed the requirements for licensure by July 1, 2006, the license application must be processed according to the laws in effect on June 30, 2006. A person already licensed as a sales agent on the effective date of this Act must comply with the examination procedures of Title 32, section 13200, subsection 2 to become licensed as an associate broker.

     Sec. 28. Commercial leasing and sunrise review. Pursuant to the Maine Revised Statutes, Title 32, chapter 1-A, subchapter 2, the Commissioner of Professional and Financial Regulation shall conduct an independent assessment concerning expansion of the scope of practice of real estate brokerage under Title 32, section 13001, subsection 2, to include leasing of any nonresidential property, that, notwithstanding Title 32, section 13279, does not include any residential component. The commissioner shall submit a report to the Joint Standing Committee on Business, Research and Economic Development no later than January 15, 2006. The joint standing committee is authorized to introduce a bill to the Second Regular Session of the 122nd Legislature expanding the scope of practice of real estate brokerage to include leasing of any nonresidential property. This section takes effect 90 days after adjournment of the First Special Session of the 122nd Legislature.

     Sec. 29. Effective date. Except as otherwise provided, this Act takes effect July 1, 2006.

Effective July 1, 2006, unless otherwise indicated.

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