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10  AN ACT concerning real estate; relating to the brokerage relationships
11    in real estate transactions act; amending K.S.A. 17-2707, 58-3045 and
12    58-3063 and K.S.A. 1996 Supp. 58-3036, 58-3037, 58-3039, 58-3042
13    and 58-3046a and repealing the existing sections; reviving K.S.A. 1996
14    Supp. 58-3035, 58-3050, 58-3062, 58-3064, 58-3065, 58-3068, 58-
15    30,101, 58-30,102, 58-30,103, 58-30,104, 58-30,105, 58-30,106, 58-
16    30,107, 58-30,108, 58-30,109, 58-30,110, 58-30,111, 58-30,112 and 74-
17    4202; amending K.S.A. 1996 Supp. 58-3035, as revived by section 3 of
18    this act, 58-3050, as revived by section 11 of this act, 58-3062, as re-
19    vived by section 13 of this act, 58-3064, as revived by section 16 of this
20    act, 58-3065, as revived by section 18 of this act, 58-3068, as revived
21    by section 20 of this act, 58-30,101, as revived and amended by section
22    22 of this act, 58-30,102, as revived by section 24 of this act, 58-30,103,
23    as revived by section 26 of this act, 58-30,104, as revived by section 28
24    of this act, 58-30,105, as revived by section 30 of this act, 58-30,106,
25    as revived by section 32 of this act, 58-30,107, as revived by section 34
26    of this act, 58-30,109, as revived by section 37 of this act, 58-30,110,
27    as revived by section 39 of this act, 58-30,111, as revived by section 41
28    of this act, 58-30,112, as revived by section 43 of this act, and 74-4202,
29    as revived by section 45 of this act, and repealing the existing sections;
30    also repealing K.S.A. 1995 Supp. 58-3035, as amended by section 20
31    of chapter 212 of the 1996 Session Laws of Kansas, 58-3050, as
32    amended by section 12 of chapter 212 of the 1996 Session Laws of
33    Kansas, 58-3062, as amended by section 13 of chapter 212 of the 1996
34    Session Laws of Kansas, 58-3064, as amended by section 14 of chapter
35    212 of the 1996 Session Laws of Kansas, 58-3065, as amended by
36    section 15 of chapter 212 of the 1996 Session Laws of Kansas, 58-3068,
37    as amended by section 16 of chapter 212 of the 1996 Session Laws of
38    Kansas, 74-4202, as amended by section 17 of chapter 212 of the 1996
39    Session Laws of Kansas and K.S.A. 1996 Supp. 58-30,108, as revived
40    by section 36 of this act and 74-4209.
41
42  Be it enacted by the Legislature of the State of Kansas:
43    New Section 1.  On and after October 1, 1997:
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 1    (a)   A broker engaged as a transaction broker is not an agent for either
 2  party.
 3    (b)  A transaction broker shall have the following obligations and re-
 4  sponsibilities:
 5    (1)  To perform the terms of any written or oral agreement made with
 6  any party to the transaction;
 7    (2)  to exercise reasonable skill and care as a transaction broker, in-
 8  cluding, but not limited to:
 9    (A)  Presenting all offers and counteroffers in a timely manner, even
10  when the property is subject to a contract of sale;
11    (B)  advising the parties regarding the transaction and suggesting that
12  such parties obtain expert advice as to material matters about which the
13  transaction broker knows but the specifics of which are beyond the ex-
14  pertise of the licensee;
15    (C)  accounting in a timely manner for all money and property re-
16  ceived;
17    (D)  keeping the parties fully informed regarding the transaction;
18    (E)  assisting the parties in complying with the terms and conditions
19  of any contract including closing the transaction;
20    (F)  disclosing to all prospective buyers or tenants all adverse material
21  facts actually known by the transaction broker, including but not limited
22  to:
23    (i)  Any environmental hazards affecting the property which are re-
24  quired by law to be disclosed;
25    (ii) the physical condition of the property;
26    (iii) any material defects in the property;
27    (iv) any material defects in the title to the property; or
28    (v)  any material limitation on the seller's or landlord's ability to per-
29  form under the terms of the contract; and
30    (G)  disclosing to any prospective seller or landlord all adverse ma-
31  terial facts actually known by the transaction broker, including but not
32  limited to material facts concerning the buyer's or tenant's financial ability
33  to perform the terms of the transaction;
34    (3)  comply with all requirements of this act and rules and regulations
35  adopted hereunder; and
36    (4)  comply with any applicable federal, state and local laws, rules and
37  regulations and ordinances, including fair housing and civil rights and
38  rules and regulations.
39    (c)  Except as provided in subsection (d), the transaction broker is not
40  required to disclose to any party to the transaction information relating
41  to the physical condition of the property if a written report regarding the
42  physical condition of the property has been prepared by a qualified third
43  party and provided to the party.
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 1    (d)  A transaction broker shall disclose to the party any facts actually
 2  known by the transaction broker that were omitted from or contradict
 3  any information included in a written report described in subsection (c).
 4    (e)  If pursuant to subsection (b)(2)(B), the transaction broker advised
 5  the parties to obtain expert advice as to material matters about which the
 6  transaction broker knows but the specifics of which are beyond the ex-
 7  pertise of the transaction broker, no cause of action for any person shall
 8  arise against the transaction broker pertaining to such material matters.
 9    (f)  The In any transaction regarding the sale or lease of real
10  estate other than commercial property or residential property of
11  more than four units, the following information shall not be disclosed
12  by a transaction broker without the consent of all parties:
13    (1)  That a buyer or tenant is willing to pay more than the purchase
14  price or lease rate offered for the property;
15    (2)  that a seller or landlord is willing to accept less than the asking
16  price or lease rate for the property;
17    (3)  what the motivating factors are for any party buying, selling, or
18  leasing the property;
19    (4)  that a seller, buyer, landlord or tenant will agree to financing
20  terms other than those offered; or
21    (5)  any information or personal confidences about a party to the
22  transaction which might place the other party at an advantage over the
23  party unless the disclosure is required by law or failure to disclose such
24  information would constitute fraudulent misrepresentation.
25    (g)  (1)  Except as provided in subsection (g)(2), in any trans-
26  action regarding the sale or lease of commercial property or res-
27  idential property of more than four units, the following informa-
28  tion may be disclosed by a transaction broker unless prohibited by
29  the parties:
30    (A)  That a buyer or tenant is willing to pay more than the pur-
31  chase price or lease rate offered for the property;
32    (B)  that a seller or landlord is willing to accept less than the
33  asking price or lease rate for the property;
34    (C)  what the motivating factors are for any party buying, sell-
35  ing or leasing the property; or
36    (D)  that a seller, buyer, landlord or tenant will agree to fi-
37  nancing terms other than those offered.
38    (2)  Any information or personal confidences about a party to
39  the transaction which might place the other party at an advantage
40  over the party shall not be disclosed unless the disclosure is re-
41  quired by law or failure to disclose such information would con-
42  stitute fraudulent misrepresentation.
43    (h)  A transaction broker has no duty to conduct an independent in-
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 1  spection of the property for the benefit of any party to the transaction
 2  and has no duty to independently verify the accuracy or completeness of
 3  statements made by the seller, landlord, buyer, tenant or qualified third
 4  party inspectors.
 5    (h) (i)  A transaction broker has no duty to conduct an independent
 6  investigation of the buyer's or tenant's financial condition or to verify the
 7  accuracy or completeness of any statement made by the buyer or tenant.
 8    (i) (j)  A transaction broker may do the following without breaching
 9  any obligation or responsibility:
10    (1)  Show alternative properties not owned by the seller or landlord
11  to a prospective buyer or tenant;
12    (2)  list competing properties for sale or lease;
13    (3)  show properties in which the buyer or tenant is interested to other
14  prospective buyers or tenants; and
15    (4)  serve as a single agent or subagent for the same or for different
16  parties in other real estate transactions.
17    (j) (k)  Information known to a transaction broker shall not be im-
18  puted to any party to the transaction or to any licensee within the bro-
19  kerage firm engaged as a transaction broker.
20    (k) (l)  A transaction broker may cooperate with other brokers or co-
21  operate and pay compensation to other brokers but shall not engage any
22  subagents.
23    Sec. 2.  On and after October 1, 1997, K.S.A. 17-2707 is hereby
24  amended to read as follows: 17-2707. As used in this act, unless the con-
25  text clearly indicates that a different meaning is intended, the following
26  words mean:
27    (a)  ``Professional corporation,'' a corporation organized under this act.
28    (b)  ``Professional service,'' the type of personal service rendered by a
29  person duly licensed by this state as a member of any of the following
30  professions, each paragraph constituting one type:
31    (1)  A certified public accountant;
32    (2)  An architect;
33    (3)  An attorney-at-law;
34    (4)  A chiropractor;
35    (5)  A dentist;
36    (6)  An engineer;
37    (7)  An optometrist;
38    (8)  An osteopathic physician or surgeon;
39    (9)  A physician, surgeon or doctor of medicine;
40    (10)  A veterinarian;
41    (11)  A podiatrist;
42    (12)  A pharmacist;
43    (13)  A land surveyor;
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 1    (14)  A licensed psychologist;
 2    (15)  A specialist in clinical social work;
 3    (16)  A registered physical therapist;
 4    (17)  A landscape architect;
 5    (18)  A registered professional nurse;
 6    (19)  A real estate broker or salesperson.
 7    (c)  ``Regulating board,'' the board or state agency which is charged
 8  with the licensing and regulation of the practice of the profession which
 9  the professional corporation is organized to render.
10    (d)  ``Qualified person'':
11    (1)  Any natural person licensed to practice the same type of profes-
12  sion which any professional corporation is authorized to practice;
13    (2)  the trustee of a trust which is a qualified trust under subsection
14    (a) of section 401 of the internal revenue code of 1954, as amended, or
15  of a contribution plan which is a qualified employee stock ownership plan
16  under subsection (a) of section 409A of the internal revenue code of 1954,
17  as amended; or
18    (3)  the trustee of a revocable living trust established by a natural
19  person who is licensed to practice the type of profession which any pro-
20  fessional corporation is authorized to practice, if the terms of such trust
21  provide that such natural person is the principal beneficiary and sole
22  trustee of such trust and such trust does not continue to hold title to
23  professional corporation stock following such natural person's death for
24  more than a reasonable period of time necessary to dispose of such stock.
25    Sec. 3.  On and after July 1, 1997, K.S.A. 1996 Supp. 58-3035 is
26  hereby revived to read as follows: 58-3035. As used in this act, unless the
27  context otherwise requires:
28    (a)  ``Advance listing fee'' means any fee charged for services related
29  to promoting the sale or lease of real estate and paid in advance of the
30  rendering of such services, including any fees charged for listing, adver-
31  tising or offering for sale or lease any real estate, but excluding any fees
32  paid solely for advertisement or for listing in a publication issued for the
33  sole purpose of promoting the sale or lease of real estate wherein inquiries
34  are directed to the owner of the real estate or to real estate brokers and
35  not to unlicensed persons who publish the listing.
36    (b)  ``Agency agreement'' means a written agreement between the
37  principal and the licensee setting forth the terms and conditions of the
38  relationship.
39    (c)  ``Associate broker'' means an individual who has a broker's license
40  and who is employed by another broker or is associated with another
41  broker as an independent contractor and participates in any activity de-
42  scribed in subsection (f).
43    (d)  ``Branch broker'' means an individual who has a broker's license
HB 2264--Am.
                                     

 1  and who has been designated to supervise a branch office and the activ-
 2  ities of salespersons and associate brokers assigned to the branch office.
 3    (e)  ``Branch office'' means a place of business other than the principal
 4  place of business of a broker.
 5    (f)  ``Broker'' means an individual, other than a salesperson, who ad-
 6  vertises or represents that such individual engages in the business of buy-
 7  ing, selling, exchanging or leasing real estate or who, for compensation,
 8  engages in any of the following activities as an employee of, or on behalf
 9  of, the owner, purchaser, lessor or lessee of real estate:
10    (1)  Sells, exchanges, purchases or leases real estate.
11    (2)  Offers to sell, exchange, purchase or lease real estate.
12    (3)  Negotiates or offers, attempts or agrees to negotiate the sale,
13  exchange, purchase or leasing of real estate.
14    (4)  Lists or offers, attempts or agrees to list real estate for sale, lease
15  or exchange.
16    (5)  Auctions or offers, attempts or agrees to auction real estate or
17  assists an auctioneer by procuring bids at a real estate auction.
18    (6)  Buys, sells, offers to buy or sell or otherwise deals in options on
19  real estate.
20    (7)  Assists or directs in the procuring of prospects calculated to result
21  in the sale, exchange or lease of real estate.
22    (8)  Assists in or directs the negotiation of any transaction calculated
23  or intended to result in the sale, exchange or lease of real estate.
24    (9)  Engages in the business of charging an advance listing fee.
25    (10)  Provides lists of real estate as being available for sale or lease,
26  other than lists provided for the sole purpose of promoting the sale or
27  lease of real estate wherein inquiries are directed to the owner of the real
28  estate or to real estate brokers and not to unlicensed persons who publish
29  the list.
30    (g)  ``Commercial or investment real estate property'' means any real
31  estate for which the present or intended use is other than one to four
32  residential units.
33    (h)  ``Commission'' means the Kansas real estate commission.
34    (i)  ``Lease'' means rent or lease for nonresidential use.
35    (j)  ``Licensee'' means any person licensed under this act as a broker
36  or salesperson.
37    (k)  ``Office'' means a broker's place of business, where records may
38  be maintained and licenses displayed, whether or not it is the broker's
39  principal place of business.
40    (l)  ``Person'' means any individual or any foreign or domestic corpo-
41  ration, partnership or association.
42    (m)  ``Real estate'' means any interest or estate in land, including any
43  leasehold or condominium, whether corporeal, incorporeal, freehold or
HB 2264--Am.
                                     

 1  nonfreehold and whether the real estate is situated in this state or else-
 2  where, but does not include oil and gas leases, royalties and other mineral
 3  interests, and rights of way and easements acquired for the purpose of
 4  constructing roadways, pipelines, conduits, wires and facilities related to
 5  these types of improvement projects for private and public utilities, mu-
 6  nicipalities, federal and state governments, or any political subdivision.
 7  For purpose of this act, any rights of redemption are considered to be an
 8  interest in real estate.
 9    (n)  ``Salesperson'' means an individual, other than an associate bro-
10  ker, who is employed by a broker or is associated with a broker as an
11  independent contractor and participates in any activity described in sub-
12  section (f).
13    (o)  ``Supervising broker'' means an individual, other than a branch
14  broker, who has a broker's license and who has been designated as the
15  broker who is responsible for the supervision of the primary office of a
16  broker and the activities of salespersons and associate brokers who are
17  assigned to such office and all of whom are licensed pursuant to subsec-
18  tion (b) of K.S.A. 58-3042 and amendments thereto. ``Supervising broker''
19  also means a broker who operates a sole proprietorship and with whom
20  associate brokers or salespersons are affiliated as employees or independ-
21  ent contractors.
22    Sec. 4.  On and after October 1, 1997, K.S.A. 1996 Supp. 58-3035, as
23  revived by section 3 of this act, is hereby amended to read as follows: 58-
24  3035. As used in this act, unless the context otherwise requires:
25    (a)  ``Advance listing fee'' means any fee charged for services related
26  to promoting the sale or lease of real estate and paid in advance of the
27  rendering of such services, including any fees charged for listing, adver-
28  tising or offering for sale or lease any real estate, but excluding any fees
29  paid solely for advertisement or for listing in a publication issued for the
30  sole purpose of promoting the sale or lease of real estate wherein inquiries
31  are directed to the owner of the real estate or to real estate brokers and
32  not to unlicensed persons who publish the listing.
33    (b)  ``Agency agreement'' means a written agreement between the
34  principal and the licensee setting forth the terms and conditions of the
35  relationship.
36    (c)  ``Associate broker'' means an individual who has a broker's license
37  and who is employed by another broker or is associated with another
38  broker as an independent contractor and participates in any activity de-
39  scribed in subsection (f) (e).
40    (d) (c)  ``Branch broker'' means an individual who has a broker's li-
41  cense and who has been designated to supervise a branch office and the
42  activities of salespersons and associate brokers assigned to the branch
43  office.
HB 2264--Am.
                                     

 1    (e) (d)  ``Branch office'' means a place of business other than the prin-
 2  cipal place of business of a broker.
 3    (f) (e)  ``Broker'' means an individual, other than a salesperson, who
 4  advertises or represents that such individual engages in the business of
 5  buying, selling, exchanging or leasing real estate or who, for compensa-
 6  tion, engages in any of the following activities as an employee of, or on
 7  behalf of, the owner, purchaser, lessor or lessee of real estate:
 8    (1)  Sells, exchanges, purchases or leases real estate.
 9    (2)  Offers to sell, exchange, purchase or lease real estate.
10    (3)  Negotiates or offers, attempts or agrees to negotiate the sale,
11  exchange, purchase or leasing of real estate.
12    (4)  Lists or offers, attempts or agrees to list real estate for sale, lease
13  or exchange.
14    (5)  Auctions or offers, attempts or agrees to auction real estate or
15  assists an auctioneer by procuring bids at a real estate auction.
16    (6)  Buys, sells, offers to buy or sell or otherwise deals in options on
17  real estate.
18    (7)  Assists or directs in the procuring of prospects calculated to result
19  in the sale, exchange or lease of real estate.
20    (8)  Assists in or directs the negotiation of any transaction calculated
21  or intended to result in the sale, exchange or lease of real estate.
22    (9)  Engages in the business of charging an advance listing fee.
23    (10)  Provides lists of real estate as being available for sale or lease,
24  other than lists provided for the sole purpose of promoting the sale or
25  lease of real estate wherein inquiries are directed to the owner of the real
26  estate or to real estate brokers and not to unlicensed persons who publish
27  the list.
28    (g)  ``Commercial or investment real estate property'' means any real
29  estate for which the present or intended use is other than one to four
30  residential units.
31    (h) (f)  ``Commission'' means the Kansas real estate commission.
32    (i) (g)  ``Lease'' means rent or lease for nonresidential use.
33    (j) (h)  ``Licensee'' means any person licensed under this act as a bro-
34  ker or salesperson.
35    (k) (i)  ``Office'' means a broker's place of business, where records may
36  be maintained and licenses displayed, whether or not it is the broker's
37  principal place of business.
38    (l) (j)  ``Person'' means any individual or any foreign or domestic cor-
39  poration, partnership or association.
40    (m) (k)  ``Real estate'' means any interest or estate in land, including
41  any leasehold or condominium, whether corporeal, incorporeal, freehold
42  or nonfreehold and whether the real estate is situated in this state or
43  elsewhere, but does not include oil and gas leases, royalties and other
HB 2264--Am.
                                     

 1  mineral interests, and rights of way and easements acquired for the pur-
 2  pose of constructing roadways, pipelines, conduits, wires and facilities
 3  related to these types of improvement projects for private and public
 4  utilities, municipalities, federal and state governments, or any political
 5  subdivision. For purpose of this act, any rights of redemption are consid-
 6  ered to be an interest in real estate.
 7    (n) (l)  ``Salesperson'' means an individual, other than an associate bro-
 8  ker, who is employed by a broker or is associated with a broker as an
 9  independent contractor and participates in any activity described in sub-
10  section (f) (e).
11    (o) (m)  ``Supervising broker'' means an individual, other than a
12  branch broker, who has a broker's license and who has been designated
13  as the broker who is responsible for the supervision of the primary office
14  of a broker and the activities of salespersons and associate brokers who
15  are assigned to such office and all of whom are licensed pursuant to
16  subsection (b) of K.S.A. 58-3042 and amendments thereto. ``Supervising
17  broker'' also means a broker who operates a sole proprietorship and with
18  whom associate brokers or salespersons are affiliated as employees or
19  independent contractors.
20    Sec. 5.  On and after October 1, 1997, K.S.A. 1996 Supp. 58-3036 is
21  hereby amended to read as follows: 58-3036. Unless exempt from this act
22  under K.S.A. 58-3037 and amendments thereto, no person shall:
23    (a)  Directly or indirectly engage in or conduct or represent that such
24  person engages in or conducts the business of a broker, associate broker
25  or salesperson within this state unless such person is licensed as such a
26  broker, associate broker or salesperson in accordance with this act.
27    (b)  Directly or indirectly act or represent that such person acts as a
28  broker, associate broker or salesperson within this state unless such per-
29  son is licensed as such a broker, associate broker or salesperson in accor-
30  dance with this act.
31    (c)  Perform or offer, attempt or agree to perform any act described
32  in subsection (f) (e) of K.S.A. 58-3035 and amendments thereto, whether
33  as a part of a transaction or as an entire transaction, unless such person
34  is licensed pursuant to this act.
35    Sec. 6.  On and after October 1, 1997, K.S.A. 1996 Supp. 58-3037 is
36  hereby amended to read as follows: 58-3037. The provisions of this act
37  shall not apply to:
38    (a)  Any person, other than a person licensed under this act, who di-
39  rectly performs any of the acts within the scope of this act with reference
40  to such person's own property.
41    (b)  Any person who directly performs any of the acts within the scope
42  of this act with reference to property that such person is authorized to
43  transfer in any way by a power of attorney from the owner, provided that
HB 2264--Am.
                                     

 1  such person receives no commission or other compensation, direct or
 2  indirect, for performing any such act.
 3    (c)  Services rendered by an attorney licensed to practice in this state
 4  in performing such attorney's professional duties as an attorney.
 5    (d)  Any person acting as receiver, trustee in bankruptcy, administra-
 6  tor, executor or guardian, or while acting under a court order or under
 7  the authority of a will or a trust instrument or as a witness in any judicial
 8  proceeding or other proceeding conducted by the state or any govern-
 9  mental subdivision or agency.
10    (e)  Any officer or employee of the federal or state government, or
11  any political subdivision or agency thereof, when performing the official
12  duties of the officer or employee.
13    (f)  Any multiple listing service wholly owned by a nonprofit organi-
14  zation or association of brokers.
15    (g)  Any nonprofit referral system or organization of brokers formed
16  for the purpose of referral of prospects for the sale or listing of real estate.
17    (h)  Railroads or other public utilities regulated by the state of Kansas,
18  or their subsidiaries, affiliated corporations, officers or regular employees,
19  unless performance of any of the acts described in subsection (f) (e) of
20  K.S.A. 58-3035 and amendments thereto is in connection with the sale,
21  purchase, lease or other disposition of real estate or investment therein
22  unrelated to the principal business activity of such railroad or other public
23  utility or affiliated or subsidiary corporation thereof.
24    (i)  The sale or lease of real estate by an employee of a corporation
25  which owns or leases such real estate, if such employee owns not less
26  than 5% of the stock of such corporation.
27    (j)  The sale or lease of new homes by a person, partnership, associ-
28  ation or domestic corporation who constructed such homes, but the pro-
29  visions of this act shall apply to the sale or lease of any such homes by
30  any employee of such person, partnership or association or by any em-
31  ployee of such corporation who owns less than 5% of the stock of such
32  corporation.
33    (k)  The lease of real estate for agricultural purposes.
34    Sec. 7.  On and after October 1, 1997, K.S.A. 1996 Supp. 58-3039 is
35  hereby amended to read as follows: 58-3039. (a) Any person desiring to
36  act as a broker or salesperson must file a written application for a license
37  with the commission or, if required by the commission, with the testing
38  service designated by the commission. The application shall be in such
39  form and detail as the commission shall prescribe and shall be accom-
40  panied by the appropriate application and license fees prescribed by
41  K.S.A. 58-3063, and amendments thereto.
42    (b)  A license to engage in business as a broker or salesperson shall
43  be granted only to a person who is 18 or more years of age and who has
HB 2264--Am.
                                     

 1  a high school diploma or its equivalent.
 2    (c)  In addition to the requirements of subsection (b), except as pro-
 3  vided in subsection (d), each applicant for an original license as a broker
 4  shall have been:
 5    (1)  Licensed as a salesperson in this state or as a salesperson or broker
 6  in another state, and shall have been actively engaged in any of the activ-
 7  ities described in subsection (f) (e) of K.S.A. 58-3035 and amendments
 8  thereto for a period of at least two years during the five years immediately
 9  preceding the date of the application for a license; or
10    (2)  if an applicant resides in a county that according to the 1994
11  estimates of the U.S. bureau of the census has a population of 20,000 or
12  less, the commission may, upon a finding that such county suffers from
13  a shortage of brokers and upon compelling evidence of need, waive or
14  alter the requirements of this subsection. The commission shall adopt
15  rules and regulations to establish alternative licensing criteria for such
16  applicants.
17    (d)  The commission may accept proof of experience in the real estate
18  or a related business or a combination of such experience and education
19  which the commission believes qualifies the applicant to act as a broker
20  as being equivalent to all or part of the experience required by subsection
21    (c).
22    (d) (e)  Except as provided in K.S.A. 58-3040 and amendments
23  thereto, each applicant for an original license shall be required to pass a
24  written examination covering generally the matters confronting brokers
25  or salespersons, and no license shall be issued on the basis of such an
26  examination either or both sections of which were administered more
27  than four months prior to the date that the applicant's application is filed
28  with the commission. The examination may be given by the commission
29  or any person designated by the commission. Each person taking the
30  examination shall pay the examination fee prescribed pursuant to K.S.A.
31  58-3063 and amendments thereto, which fee the commission may require
32  to be paid to it or directly to the testing service designated by the com-
33  mission. The examination for a broker's license shall be different from or
34  in addition to that for a salesperson's license.
35    (f) (1)  On and after October 1, 1997, each applicant for an original
36  salesperson's license who meets the requirements of this act shall be issued
37  a temporary salesperson's license which shall expire six months after the
38  last calendar day of the month in which the license was issued, on the last
39  calendar day of that month.
40    (2)  No later than 10 days prior to the expiration date of a temporary
41  salesperson's license, the salesperson shall file an application on a form
42  provided by the commission. The application shall be accompanied by the
43  license fee prescribed by K.S.A. 58-3063 and amendments thereto and
HB 2264--Am.
                                     

 1  evidence of compliance with the requirements of subsection (f)(1) of K.S.A.
 2  58-3046a, and amendments thereto. The commission shall issue a sales-
 3  person's license to a person who complies with the provisions of this par-
 4  agraph. The issuance date of the salesperson's license shall be the day
 5  following the expiration date of the temporary license. The expiration date
 6  of the license shall be determined in accordance with a schedule estab-
 7  lished by rules and regulations of the commission.
 8    (3)  Failure to comply with the provisions of paragraph (2) shall au-
 9  tomatically cancel the temporary license on its expiration date.
10    (4)  A person whose temporary salesperson's license was canceled pur-
11  suant to paragraph (3) may apply for a salesperson's license provided
12  such application, the license fee prescribed by K.S.A. 58-3063 and amend-
13  ments thereto, and evidence of attendance of 30 hours of instruction re-
14  ceived after issuance of the temporary license pursuant to subsection (f)(1)
15  of K.S.A. 58-3046a, and amendments thereto are received by the com-
16  mission within three months after the expiration date of the temporary
17  license. The commission shall issue a salesperson's license to a person who
18  complies with the provisions of this paragraph. The expiration date of the
19  license shall be determined in accordance with a schedule established by
20  rules and regulations of the commission.
21    (e) (g)  The commission, prior to granting an original license, shall
22  require proof that the applicant has a good reputation for honesty, trust-
23  worthiness, integrity and competence to transact the business of broker
24  or salesperson in such manner as to safeguard the public interest.
25    (f) (h)  An application for an original license as a salesperson shall be
26  accompanied by the recommendation of the broker with whom the sa-
27  lesperson is to be associated, or by whom the salesperson is to be em-
28  ployed, certifying that the applicant is honest, trustworthy and of good
29  reputation.
30    Sec. 8.  On and after October 1, 1997, K.S.A. 1996 Supp. 58-3042 is
31  hereby amended to read as follows: 58-3042. (a) No real estate license
32  shall give authority to any person other than the person to whom the
33  license is issued.
34    (b)  No license shall be granted to a corporation, partnership, associ-
35  ation or limited liability company. Each person who is an officer of a
36  corporation or a member of a partnership, association or limited liability
37  company and who performs any act described in subsection (f) (e) of
38  K.S.A. 58-3035 and amendments thereto shall be a licensed broker, and
39  each person who is employed by or associated with a corporation, part-
40  nership, association or limited liability company and who performs any
41  act described in subsection (f) (e) of K.S.A. 58-3035 and amendments
42  thereto shall be a licensed broker or licensed salesperson.
43    Sec. 9.  On and after October 1, 1997, K.S.A. 58-3045 is hereby
HB 2264--Am.
                                     

 1  amended to read as follows: 58-3045. (a) Except for a temporary sales-
 2  person's license issued pursuant to subsection (f) of K.S.A. 58-3039, and
 3  amendments thereto, each license issued or renewed by the commission
 4  shall expire on a date determined in accordance with a schedule estab-
 5  lished by rules and regulations of the commission, which date shall be
 6  not more than two years from the date of issuance or renewal. Except as
 7  otherwise provided by this act, applicants for issuance or renewal of a
 8  license must satisfy all applicable requirements prior to issuance or re-
 9  newal of the license.
10    (b) (1)  Except for a temporary salesperson's license issued pursuant
11  to subsection (f) of K.S.A. 58-3039, and amendments thereto, each license
12  shall be renewable upon the filing, not less than 30 days prior to the
13  expiration date of the license, of a renewal application on or before the
14  renewal date, which is the last calendar day of the month preceding the
15  license expiration date. Such application shall be made on a form provided
16  by the commission and accompanied by (A) the required renewal fee
17  prescribed by K.S.A. 58-3063, and amendments thereto, and (B) evidence
18  of compliance with the requirements of K.S.A. 58-3046a and amend-
19  ments thereto. In each case in which a license is issued or renewed for a
20  period of other than one year, the commission shall compute to the near-
21  est whole month the required fee, based on annual renewal fee provided
22  for by K.S.A. 58-3063 and amendments thereto. or the licensee's license
23  with the licensee's request that the license be deactivated on the renewal
24  date pursuant to K.S.A. 58-3049, and amendments thereto.
25    (2)  Failure to remit the required fee when due comply with para-
26  graph (1) on or before the renewal date will automatically cancel the
27  license, except that any on the license expiration date unless the license is
28  renewed pursuant to subsection (c) prior to the expiration date.
29    (c)  Any licensee who fails to pay the required renewal fee when due
30  failed to comply with the requirements of subsection (b)(1), may have the
31  licensee's license reinstated and renewed by the payment of the required
32  renewal fee prescribed by K.S.A. 58-3063, and amendments thereto, and
33  a late fee of $50, if such fees are remitted to the commission not later
34  than six months following the expiration date of such license and accom-
35  panied by (1) an application for late renewal obtained from the commis-
36  sion, and (2) evidence of compliance with the requirements of K.S.A. 58-
37  3046a and amendments thereto or a written request that the licensee's
38  license be renewed on deactivated status pursuant to K.S.A. 58-3049 and
39  amendments thereto.
40    (c) (d)  An application for renewal filed in compliance with the
41  requirements of subsection (b) shall entitle the applicant to continue op-
42  erating under the applicant's existing license after its specified expiration
43  date, unless such license has been suspended or revoked and has not been
HB 2264--Am.
                                     

 1  reinstated or unless such license is restricted, until such time as the com-
 2  mission determines whether the application fulfills such requirements.
 3    Sec. 10.  On and after October 1, 1997, K.S.A. 1996 Supp. 58-3046a
 4  is hereby amended to read as follows: 58-3046a. (a) Except as provided
 5  in K.S.A. 58-3040 and amendments thereto, any person who applies for
 6  an original license in this state as a salesperson shall submit evidence,
 7  satisfactory to the commission, of attendance of a principles of real estate
 8  course, of not less than 30 hours of instruction, approved by the com-
 9  mission and received within the 12 months immediately preceding the
10  filing of application for salesperson's license. The commission may require
11  the evidence to be furnished to the commission with the original appli-
12  cation for license or it may require the applicant to furnish the evidence
13  to the testing service designated by the commission as a prerequisite to
14  taking the examination required by K.S.A. 58-3039 and amendments
15  thereto. If the evidence is furnished to the testing service, the instruction
16  shall have been received within 12 months immediately preceding the
17  date of the examination.
18    (b)  Except as provided in K.S.A. 58-3040 and amendments thereto,
19  any person who applies for an original license in this state as a broker
20  shall submit evidence, satisfactory to the commission, of attendance of 24
21  hours of instruction, approved by the commission and received within the
22  12 months immediately preceding the filing of application for broker's
23  license. Such hours shall be in addition to any hours of instruction used
24  to meet the requirements of subsection (c), (d) or, (e) or (f). The com-
25  mission may require the evidence to be furnished to the commission with
26  the original application for license, or it may require the applicant to
27  furnish the evidence to the testing service designated by the commission
28  as a prerequisite to taking the examination provided in K.S.A. 58-3039
29  and amendments thereto. If the evidence is furnished to the testing serv-
30  ice, the instruction shall have been received within 12 months immedi-
31  ately preceding the date of the examination.
32    (c)  Except as provided in subsections (d) and, (e) and (f), at or prior
33  to each renewal date established by the commission, any person who is
34  licensed in this state as a broker or as a salesperson shall submit evidence,
35  satisfactory to the commission, of attendance of not less than 12 hours of
36  additional instruction approved by the commission and received during
37  the renewal period.
38    (d)  Any person who obtained an original license in this state as a
39  salesperson after July 1, 1988, and before July 1, 1991, shall submit evi-
40  dence, satisfactory to the commission, of attendance of courses of instruc-
41  tion approved by the commission at or prior to each renewal date estab-
42  lished by the commission as follows:
43    (1)  At or prior to the first license renewal, 50 hours of instruction
HB 2264--Am.
                                     

 1  received after the date of licensure. Such evidence shall not be required
 2  until the second license renewal if the original license expires less than
 3  six months after issuance.
 4    (2)  At or prior to each license renewal thereafter, 12 hours of addi-
 5  tional instruction received during the renewal period.
 6    Any salesperson who obtains a broker's license in this state prior to
 7  completing the 50 hours of instruction required by this subsection shall
 8  submit the same evidence to renew the broker's license that would have
 9  been required to renew the salesperson's license.
10    (e)  Any person who obtains an original license in this state as a sa-
11  lesperson on or after July 1, 1991 and before October 1, 1997, shall submit
12  evidence, satisfactory to the commission, of attendance of courses of in-
13  struction approved by the commission at or prior to each renewal date
14  established by the commission as follows:
15    (1)  At or prior to the first license renewal, 30 hours of instruction
16  received after the date of licensure. Such evidence shall not be required
17  until the second license renewal if the original license expires less than
18  six months after issuance.
19    (2)  At or prior to each license renewal thereafter, 12 hours of addi-
20  tional instruction received during the renewal period.
21    Any salesperson who obtains a broker's license in this state prior to
22  completing the 30 hours of instruction required by this subsection shall
23  submit the same evidence to renew the broker's license that would have
24  been required to renew the salesperson's license.
25    (f)  The hours on record with the commission of any person who ac-
26  cumulated hours of instruction which were reported to the commission
27  by January 1, 1983, and who, on July 1, 1993, has more than 12 hours on
28  record shall be reduced by the commission to 12 hours. The 12 hours
29  which remain on the licensee's record on July 1, 1993, shall be used to
30  meet the requirement of subsection (c) at the licensee's next license re-
31  newal. Any person who obtains a temporary license in this state as a
32  salesperson on and after October 1, 1997, shall submit evidence, satisfac-
33  tory to the commission, of attendance of courses of instruction approved
34  by the commission as follows:
35    (1)  No later than ten days prior to the expiration date of the tempo-
36  rary license, 30 hours of instruction received after the date of licensure.
37    (2)  At or prior to the first renewal of a license issued pursuant to
38  subsection (f)(2) or (4) of K.S.A. 58-3039, and amendments thereto, 12
39  hours of additional instruction received during the renewal period. Such
40  evidence shall not be required until the second license renewal if the li-
41  cense expires less than six months after issuance.
42    (3)  At or prior to each license renewal thereafter, 12 hours of addi-
43  tional instruction received during the renewal period.
HB 2264--Am.
                                     

 1    (g)  Except for courses reviewed pursuant to subsection (j), on and
 2  after January 1, 1994, courses of instruction required by this section shall
 3  be courses approved by the commission and offered by:
 4    (1)  An institution which is accredited by the north central association
 5  of colleges and secondary schools accrediting agency;
 6    (2)  an area vocational or vocational-technical school as defined by
 7  K.S.A. 72-4412 and amendments thereto;
 8    (3)  a proprietary school which has been issued a certificate of ap-
 9  proval pursuant to the Kansas proprietary school act;
10    (4)  any agency of the state of Kansas; or
11    (5)  a similar institution, approved by the commission, in another state.
12    (h)  The commission shall adopt rules and regulations to: (1) Prescribe
13  minimum curricula and standards for all courses offered to fulfill edu-
14  cation requirements of this act, (2) designate a course of study to fulfill
15  any specific requirement, which may include requiring that licensees pass
16  a test as prescribed by the commission for any course designated by the
17  commission in rules and regulations as a mandatory core requirement,
18    (3) prescribe minimum qualifications for instructors of approved courses
19  and (4) establish standards and procedures for approval of courses and
20  instructors, monitoring courses, advertising, registration and maintenance
21  of records of courses, and withdrawal of approval of courses and instruc-
22  tors.
23    (i)  The commission may approve nontraditional courses consisting
24  solely or primarily of home study, videotaped or computer-assisted in-
25  struction. For the purpose of this section, attendance of one hour of
26  instruction shall mean 50 minutes of classroom instruction or the equiv-
27  alent thereof in nontraditional study as determined by the commission.
28    (j)  Courses of instruction required by this section shall be courses
29  approved by the commission either before or after their completion. The
30  commission may give credit toward the 12 hours of additional instruction
31  required by subsection (c),(d), (e) or (f) to any licensee who submits an
32  application for course review obtained from the commission and pays the
33  fee prescribed by K.S.A. 58-3063 and amendments thereto if, in the judg-
34  ment of the commission, the course meets the objectives of continuing
35  education.
36    (k)  The commission shall publish annually a list of educational insti-
37  tutions and entities and the courses offered by them in this state which
38  are approved by the commission.
39    (l)  No license shall be issued or renewed unless the applicable
40  requirements set forth in this section are met within the time prescribed.
41    Sec. 11.  On and after July 1, 1997, K.S.A. 1996 Supp. 58-3050 is
42  hereby revived to read as follows: 58-3050. (a) The license of any licensee
43  may be revoked, suspended or restricted or a licensee may be censured,
HB 2264--Am.
                                     

 1  if:
 2    (1)  The commission finds that the license has been obtained by false
 3  or fraudulent representation or that the licensee has committed a viola-
 4  tion of this act or rules and regulations adopted hereunder, or the bro-
 5  kerage relationships in real estate transactions act or rules and regulations
 6  adopted thereunder as such act governs the sale or lease of real estate
 7  that is one to four residential units, whether the licensee acted as an agent
 8  or a principal in the real estate transaction;
 9    (2)  the licensee has entered a plea of guilty or nolo contendere to, or
10  has been convicted of: (A) Forgery, embezzlement, obtaining money un-
11  der false pretenses, larceny, extortion, conspiracy to defraud or any other
12  similar offense; (B) a crime involving moral turpitude; or (C) any felony
13  charge; or
14    (3)  the licensee has been finally adjudicated and found to be guilty
15  of violation of the federal fair housing act (42 U.S.C. 3601 et seq.) or
16  K.S.A. 44-1015 through 44-1029, and amendments thereto.
17    (b)  In addition to or in lieu of any other administrative, civil or crim-
18  inal remedy provided by law, the commission, in accordance with the
19  Kansas administrative procedure act and upon a finding that a licensee
20  has violated a provision of this act or rules and regulations adopted here-
21  under, or the brokerage relationships in real estate transactions act or
22  rules and regulations adopted thereunder as such act governs the sale or
23  lease of real estate that is one to four residential units, may impose on
24  such licensee a civil fine not exceeding $500 for each violation.
25    (c)  If a broker or salesperson has been declared disabled by a court
26  of competent jurisdiction, the commission shall suspend the broker's or
27  salesperson's license for the period of disability.
28    (d)  No complaint alleging violation of this act or rules and regulations
29  adopted hereunder, or the brokerage relationships in real estate trans-
30  actions act or rules and regulations adopted thereunder as such act gov-
31  erns the sale or lease of real estate that is one to four residential units,
32  shall be commenced more than three years from the date of the occur-
33  rence which is the subject of the complaint.
34    (e)  All administrative proceedings pursuant to this section shall be
35  conducted in accordance with the Kansas administrative procedure act.
36    (f)  Notwithstanding any provision of this act or the brokerage rela-
37  tionships in real estate transactions act, as such act governs the sale or
38  lease of real estate that is one to four residential units, to the contrary,
39  the commission may use emergency adjudicative proceedings, as provided
40  by K.S.A. 77-536 and amendments thereto, to summarily suspend the
41  license of any licensee if the commission has reasonable cause to believe
42  that the licensee's trust account is in unsound condition or that the li-
43  censee is misappropriating funds belonging to other persons.
HB 2264--Am.
                                     

 1    (g)  If a licensee has entered a plea of guilty or nolo contendere to, or
 2  has been convicted of, any felony charge, the commission may use emer-
 3  gency adjudicative proceedings, as provided by K.S.A. 77-536 and amend-
 4  ments thereto to suspend, revoke or restrict the licensee's license.
 5    (h)  When the real estate license of an individual is revoked and that
 6  individual's name is included in the trade or business name of a real estate
 7  brokerage business, the commission may deny continued use of the trade
 8  or business name if, in the opinion of the commission, it would be con-
 9  fusing or misleading to the public.
10    If the revocation of the individual's license is appealed to district court
11  and a stay of the commission's order is granted by the court, the com-
12  mission may not deny continued use of the trade or business name until
13  such time as the district court upholds the order of the commission.
14    Sec. 12.  On and after October 1, 1997, K.S.A. 1996 Supp. 58-3050,
15  as revived by section 11 of this act, is hereby amended to read as follows:
16  58-3050. (a) The license of any licensee may be revoked, suspended or
17  restricted or a licensee may be censured, if:
18    (1)  The commission finds that the license has been obtained by false
19  or fraudulent representation or that the licensee has committed a viola-
20  tion of this act or rules and regulations adopted hereunder, or the bro-
21  kerage relationships in real estate transactions act or rules and regulations
22  adopted thereunder as such act governs the sale or lease of real estate
23  that is one to four residential units, whether the licensee acted as an agent
24  or a principal in the real estate transaction;
25    (2)  the licensee has entered a plea of guilty or nolo contendere to, or
26  has been convicted of: (A) Forgery, embezzlement, obtaining money un-
27  der false pretenses, larceny, extortion, conspiracy to defraud or any other
28  similar offense; (B) a crime involving moral turpitude; or (C) any felony
29  charge; or
30    (3)  the licensee has been finally adjudicated and found to be guilty
31  of violation of the federal fair housing act (42 U.S.C. 3601 et seq.) or
32  K.S.A. 44-1015 through 44-1029, and amendments thereto.
33    (b)  In addition to or in lieu of any other administrative, civil or crim-
34  inal remedy provided by law, the commission, in accordance with the
35  Kansas administrative procedure act and upon a finding that a licensee
36  has violated a provision of this act or rules and regulations adopted here-
37  under, or the brokerage relationships in real estate transactions act or
38  rules and regulations adopted thereunder as such act governs the sale or
39  lease of real estate that is one to four residential units, may impose on
40  such licensee a civil fine not exceeding $500 for each violation.
41    (c)  If a broker or salesperson has been declared disabled by a court
42  of competent jurisdiction, the commission shall suspend the broker's or
43  salesperson's license for the period of disability.
HB 2264--Am.
                                     

 1    (d)  No complaint alleging violation of this act or rules and regulations
 2  adopted hereunder, or the brokerage relationships in real estate trans-
 3  actions act or rules and regulations adopted thereunder as such act gov-
 4  erns the sale or lease of real estate that is one to four residential units,
 5  shall be commenced more than three years from the date of the occur-
 6  rence which is the subject of the complaint.
 7    (e)  All administrative proceedings pursuant to this section shall be
 8  conducted in accordance with the Kansas administrative procedure act.
 9    (f)  Notwithstanding any provision of this act or the brokerage rela-
10  tionships in real estate transactions act, as such act governs the sale or
11  lease of real estate that is one to four residential units, to the contrary,
12  the commission may use emergency adjudicative proceedings, as provided
13  by K.S.A. 77-536 and amendments thereto, to summarily suspend the
14  license of any licensee if the commission has reasonable cause to believe
15  that the licensee's trust account is in unsound condition or that the li-
16  censee is misappropriating funds belonging to other persons.
17    (g)  If a licensee has entered a plea of guilty or nolo contendere to, or
18  has been convicted of, any felony charge, the commission may use emer-
19  gency adjudicative proceedings, as provided by K.S.A. 77-536 and amend-
20  ments thereto to suspend, revoke or restrict the licensee's license.
21    (h)  When the real estate license of an individual is revoked and that
22  individual's name is included in the trade or business name of a real estate
23  brokerage business, the commission may deny continued use of the trade
24  or business name if, in the opinion of the commission, it would be con-
25  fusing or misleading to the public.
26    If the revocation of the individual's license is appealed to district court
27  and a stay of the commission's order is granted by the court, the com-
28  mission may not deny continued use of the trade or business name until
29  such time as the district court upholds the order of the commission.
30    Sec. 13.  On and after July 1, 1997, K.S.A. 1996 Supp. 58-3062 is
31  hereby revived to read as follows: 58-3062. (a) No licensee, whether acting
32  as an agent or a principal, shall:
33    (1)  Intentionally use advertising that is misleading or inaccurate in
34  any material particular or that in any way misrepresents any property,
35  terms, values, policies or services of the business conducted, or uses the
36  trade name, collective membership mark, service mark or logo of any
37  organization owning such name, mark or logo without being authorized
38  to do so.
39    (2)  Fail to account for and remit any money which comes into the
40  licensee's possession and which belongs to others.
41    (3)  Misappropriate moneys required to be deposited in a trust ac-
42  count pursuant to K.S.A. 58-3061 and amendments thereto, convert such
43  moneys to the licensee's personal use or commingle the money or other
HB 2264--Am.
                                     

 1  property of the licensee's principals with the licensee's own money or
 2  property, except that nothing herein shall prohibit a broker from having
 3  funds in an amount not to exceed $100 in the broker's trust account to
 4  pay expenses for the use and maintenance of such account.
 5    (4)  Accept, give or charge any rebate or undisclosed commission.
 6    (5)  Pay a referral fee to a person who is properly licensed as a broker
 7  or salesperson in another jurisdiction or who holds a corporate real estate
 8  license in another jurisdiction if the licensee knows that the payment of
 9  the referral fee will result in the payment of a rebate by the out-of-state
10  licensee.
11    (6)  Represent or attempt to represent a broker without the broker's
12  express knowledge and consent.
13    (7)  Act in a dual capacity of agent and undisclosed principal in any
14  transaction regarding the sale or lease of commercial or investment real
15  estate property.
16    (8)  Guarantee or authorize any person to guarantee future profits that
17  may result from the resale of real property.
18    (9)  Place a sign on any property offering it for sale or lease without
19  the written consent of the owner or the owner's authorized agent.
20    (10)  Offer real estate for sale or lease without the knowledge and
21  consent of the owner or the owner's authorized agent or on terms other
22  than those authorized by the owner or the owner's authorized agent.
23    (11)  Induce any party to break any agency agreement or contract of
24  sale or lease.
25    (12)  Solicit a listing or negotiate a sale, exchange or lease of com-
26  mercial or investment real estate property directly with an owner or lessor
27  if the licensee knows that such owner or lessor has, with regard to the
28  property, a written agency agreement granting an exclusive right to sell
29  or lease to another broker.
30    (13)  Solicit an agency agreement or negotiate a sale, exchange or lease
31  of commercial or investment real estate property directly with a buyer or
32  lessee if the licensee knows that such buyer or lessee has a written agency
33  agreement granting exclusive representation to another broker.
34    (14)  Except for a commercial or investment real estate property or
35  any property owned by any agency of the federal government, fail to
36  obtain a written agency agreement, including a fixed date of expiration,
37  signed by the party to be represented and by the licensee or fail to furnish
38  a copy of the agreement to the principal within a reasonable time. The
39  licensee shall not assign, sell or otherwise transfer a written agency agree-
40  ment to another broker without the express written consent of all parties
41  to the original listing agreement.
42    (15)  In any transaction regarding the sale of commercial or invest-
43  ment real estate property if the licensee represents the seller, fail to dis-
HB 2264--Am.
                                     

 1  close to a prospective buyer that: (A) The licensee is or will be acting as
 2  agent of the seller with the duty to represent the seller's interest; (B) the
 3  licensee will not be the agent of the prospective buyer; and (C) infor-
 4  mation given to the licensee will be disclosed to the seller. The disclosure
 5  shall be made orally or in writing when the licensee agrees to assist the
 6  prospective buyer to locate and inspect property and shall be made in any
 7  contract for sale and in any lot reservation agreement.
 8    (16)  In any transaction regarding the sale of commercial or invest-
 9  ment real estate property if the licensee represents the buyer, fail to
10  disclose to a prospective seller or seller's agent that: (A) The licensee is
11  or will be acting as agent of the buyer with the duty to represent the
12  buyer's interest; (B) the licensee will not be the agent of the seller; and
13  (C) information given to the licensee will be disclosed to the buyer. The
14  disclosure shall be made orally or in writing no later than the first showing
15  of the property and shall be made in any contract for sale and in any lot
16  reservation agreement.
17    (17)  In any transaction regarding the sale of commercial or invest-
18  ment real estate property if the licensee represents both the buyer and
19  seller, the licensee shall immediately disclose in writing: (A) That the
20  licensee is acting as agent for both buyer and seller; and (B) the com-
21  pensation arrangement. The disclosure shall be signed by both the buyer
22  and the seller. If the exclusive right to sell agreement and the buyer's
23  agency agreement include the disclosure of the possibility of dual agency,
24  the written disclosure, for each specific transaction, shall be signed by the
25  buyer no later than the first showing of the property and by the seller no
26  later than the presentation of the offer to purchase. In addition, the dis-
27  closure of the agency relationship between all licensees involved and the
28  principals shall be included in any contract for sale and in any lot reser-
29  vation agreement.
30    (18)  Offer or give prizes, gifts or gratuities which are contingent upon
31  an agency agreement or the sale, purchase or lease of real estate.
32    (19)  Enter into a listing agreement on commercial or investment real
33  estate property in which the broker's commission is based upon the dif-
34  ference between the gross sales price and the net proceeds to the owner.
35    (20)  Fail to see that financial obligations and commitments between
36  the parties to an agreement to sell, exchange or lease real estate are in
37  writing, expressing the exact agreement of the parties or to provide, within
38  a reasonable time, copies thereof to all parties involved.
39    (21)  Procure a signature to a purchase contract which has no definite
40  purchase price, method of payment, description of property or method
41  of determining the closing date.
42    (22)  Include in any agency agreement an authorization to sign or
43  initial any document on behalf of the licensee's principal in a commercial
HB 2264--Am.
                                     

 1  or investment real estate property transaction or authorization to act as
 2  attorney-in-fact for the principal.
 3    (23)  Engage in fraud or make any substantial misrepresentation.
 4    (24)  Represent to any lender, guaranteeing agency or any other in-
 5  terested party, either verbally or through the preparation of false docu-
 6  ments, an amount in excess of the true and actual sale price of the real
 7  estate or terms differing from those actually agreed upon.
 8    (25)  Fail to make known to any purchaser or lessee any interest the
 9  licensee has in the real estate the licensee is selling or leasing or to make
10  known to any seller or lessor any interest the licensee will have in the real
11  estate the licensee is purchasing or leasing.
12    (26)  Fail to inform both the buyer, at the time an offer is made, and
13  the seller, at the time an offer is presented, that certain closing costs must
14  be paid and the approximate amount of such costs.
15    (27)  Fail without just cause to surrender any document or instrument
16  to the rightful owner.
17    (28)  Accept anything other than cash as earnest money unless that
18  fact is communicated to the owner prior to the owner's acceptance of the
19  offer to purchase, and such fact is shown in the purchase agreement.
20    (29)  Fail to deposit any check or cash received as an earnest money
21  deposit or as a deposit on the purchase of a lot within five business days
22  after the purchase agreement or lot reservation agreement is signed by
23  all parties, unless otherwise specifically provided by written agreement of
24  all parties to the purchase agreement or lot reservation agreement, in
25  which case the licensee shall deposit the check or cash received on the
26  date provided by such written agreement.
27    (30)  Fail in response to a request by the commission or the director
28  to produce any document, book or record in the licensee's possession or
29  under the licensee's control that concerns, directly or indirectly, any real
30  estate transaction or the licensee's real estate business.
31    (31)  In any transaction regarding the sale of commercial or invest-
32  ment real estate property if the licensee represents the seller, fail to
33  promptly submit any written offer to the licensee's principal when such
34  offer is received prior to the closing of the sale or fail to promptly submit
35  to the prospective buyer or buyer's agent any counteroffer made by the
36  seller, including any back-up offers properly identified as such.
37    (32)  In any transaction regarding the sale of commercial or invest-
38  ment real estate property if the licensee represents the buyer, fail to
39  promptly submit any written offer to the seller or seller's agent or fail to
40  promptly submit to the licensee's principal any counteroffer made by the
41  seller, including any back-up offers properly identified as such.
42    (33)  Refuse to appear or testify under oath at any hearing held by
43  the commission.
HB 2264--Am.
                                     

 1    (34)  Demonstrate incompetency to act as a broker, associate broker
 2  or salesperson.
 3    (35)  In any transaction regarding the sale or lease of commercial or
 4  investment real estate property fail to disclose, or ascertain and disclose,
 5  to any person with whom the licensee is dealing, any material information
 6  which relates to the property with which the licensee is dealing and which
 7  such licensee knew or should have known.
 8    (36)  Knowingly receive or accept, directly or indirectly, any rebate,
 9  reduction or abatement of any charge, or any special favor or advantage
10  or any monetary consideration or inducement, involving the issuance of
11  a title insurance policy or contract concerning which the licensee is di-
12  rectly or indirectly connected, from a title insurance company or title
13  insurance agent, or any officer, employee, attorney, agent or solicitor
14  thereof.
15    (37)  Engage in the purchase of one-, two-, three- or four-family
16  dwellings, including condominiums and cooperatives, or the acquisition
17  of any right, title or interest therein, including any equity or redemption
18  interests, if:
19    (A) (i)  At the time of such purchase, the dwellings are subject to a
20  right of redemption pursuant to foreclosure of a mortgage on such dwell-
21  ings; (ii) the licensee fails to give written notice of the purchase, within
22  20 days thereafter, to the mortgage holder or judgment creditor who held
23  such mortgage; and (iii) the licensee, unless otherwise required by law or
24  court order, fails to apply any rent proceeds from the dwellings to the
25  judgment lien arising from the foreclosure of such mortgage, as payments
26  become due under the loan, regardless of whether the licensee is obli-
27  gated to do so;
28    (B) (i)  the dwellings are subject to a loan which is secured by a mort-
29  gage and which is in default at the time of such purchase or in default
30  within one year after such purchase; (ii) the licensee fails to give written
31  notice of the purchase, within 20 days thereafter, to the mortgage holder;
32  and (iii) the licensee, unless otherwise required by law or court order,
33  fails to apply any rent proceeds from the dwellings to the mortgage as the
34  payments come due, regardless of whether the licensee is obligated on
35  the loan; or
36    (C)  the licensee fails to notify, at the time of rental, any person rent-
37  ing any such dwelling of the extent and nature of the licensee's interest
38  in such dwelling and the probable time until possession will be taken by
39  the mortgage holder or judgment creditor.
40    (38)  Commit forgery or, unless authorized to do so by a duly executed
41  power of attorney, sign or initial any contractual agreement on behalf of
42  another person in a real estate transaction.
43    (b)  In any transaction regarding the sale or lease of commercial or
HB 2264--Am.
                                     

 1  investment real estate property failure to comply with any requirement
 2  of subsection (a)(14), (15), (16) or (17) or their corollary rules and regu-
 3  lations shall not by itself render any agreement void or voidable nor shall
 4  it constitute a defense to any action to enforce such agreement or any
 5  action for breach of such agreement.
 6    (c)  The commission may provide suggested forms of agency disclo-
 7  sure and agency agreements and, by rules and regulations, provide such
 8  other prohibitions, limitations and conditions relating thereto as the com-
 9  mission may prescribe for transactions regarding the sale or lease of com-
10  mercial or investment real estate property.
11    (d)  No salesperson or associate broker shall:
12    (1)  Accept a commission or other valuable consideration from anyone
13  other than the salesperson's or associate broker's employing broker or the
14  broker with whom the salesperson or associate broker is associated.
15    (2)  Fail to place, as soon after receipt as practicable, any deposit
16  money or other funds entrusted to the salesperson or associate broker in
17  the custody of the broker whom the salesperson or associate broker rep-
18  resents.
19    (e)  No broker shall:
20    (1)  Pay a commission or compensation to any person for performing
21  the services of an associate broker or salesperson unless such person is
22  licensed under this act and employed by or associated with the broker,
23  except that nothing herein shall prohibit the payment of a referral fee to
24  a person who is properly licensed as a broker or salesperson in another
25  jurisdiction relating to a transaction regarding the sale or lease of com-
26  mercial or investment real estate property.
27    (2)  Fail to deliver to the seller in every real estate transaction, at the
28  time the transaction is closed, a complete, detailed closing statement
29  showing all of the receipts and disbursements handled by the broker for
30  the seller, or fail to deliver to the buyer a complete statement showing
31  all money received in the transaction from such buyer and how and for
32  what the same was disbursed, or fail to retain true copies of such state-
33  ments in the broker's files, except that the furnishing of such statements
34  to the seller and buyer by an escrow agent shall relieve the broker's re-
35  sponsibility to the seller and the buyer.
36    (3)  Fail to properly supervise the activities of an associated or em-
37  ployed salesperson or associate broker.
38    (4)  Lend the broker's license to a salesperson, or permit a salesperson
39  to operate as a broker.
40    (5)  Fail to provide to the principal a written report every 30 days,
41  along with a final report, itemizing disbursements made by the broker
42  from advance listing fees.
43    (f)  If a purchase agreement provides that the earnest money be held
HB 2264--Am.
                                     

 1  by an escrow agent other than a real estate broker, unless otherwise spe-
 2  cifically provided by written agreement of all parties to the purchase
 3  agreement, no listing broker shall:
 4    (1)  Fail to deliver the purchase agreement and earnest money deposit
 5  to the escrow agent named in the purchase agreement within five business
 6  days after the purchase agreement is signed by all parties; or
 7    (2)  fail to obtain and keep in the transaction file a receipt from the
 8  escrow agent showing date of delivery of the purchase agreement and
 9  earnest money deposit.
10    (g)  Nothing in this section shall be construed to grant any person a
11  private right of action for damages or to eliminate any right of action
12  pursuant to other statutes or common law.
13    Sec. 14.  On and after October 1, 1997, K.S.A. 1996 Supp. 58-3062,
14  as revived by section 13 of this act, is hereby amended to read as follows:
15  58-3062. (a) No licensee, whether acting as an agent or a principal, shall:
16    (1)  Intentionally use advertising that is misleading or inaccurate in
17  any material particular or that in any way misrepresents any property,
18  terms, values, policies or services of the business conducted, or uses the
19  trade name, collective membership mark, service mark or logo of any
20  organization owning such name, mark or logo without being authorized
21  to do so.
22    (2)  Fail to account for and remit any money which comes into the
23  licensee's possession and which belongs to others.
24    (3)  Misappropriate moneys required to be deposited in a trust ac-
25  count pursuant to K.S.A. 58-3061 and amendments thereto, convert such
26  moneys to the licensee's personal use or commingle the money or other
27  property of the licensee's principals with the licensee's own money or
28  property, except that nothing herein shall prohibit a broker from having
29  funds in an amount not to exceed $100 in the broker's trust account to
30  pay expenses for the use and maintenance of such account.
31    (4)  Accept, give or charge any rebate or undisclosed commission.
32    (5)  Pay a referral fee to a person who is properly licensed as a broker
33  or salesperson in another jurisdiction or who holds a corporate real estate
34  license in another jurisdiction if the licensee knows that the payment of
35  the referral fee will result in the payment of a rebate by the out-of-state
36  licensee.
37    (6)  Represent or attempt to represent a broker without the broker's
38  express knowledge and consent.
39    (7)  Act in a dual capacity of agent and undisclosed principal in any
40  transaction regarding the sale or lease of commercial or investment real
41  estate property.
42    (8)  Guarantee or authorize any person to guarantee future profits that
43  may result from the resale of real property.
HB 2264--Am.
                                     

 1    (9) (8)  Place a sign on any property offering it for sale or lease without
 2  the written consent of the owner or the owner's authorized agent.
 3    (10) (9)  Offer real estate for sale or lease without the knowledge and
 4  consent of the owner or the owner's authorized agent or on terms other
 5  than those authorized by the owner or the owner's authorized agent.
 6    (11) (10)  Induce any party to break any agency agreement or contract
 7  of sale or lease.
 8    (12)  Solicit a listing or negotiate a sale, exchange or lease of com-
 9  mercial or investment real estate property directly with an owner or lessor
10  if the licensee knows that such owner or lessor has, with regard to the
11  property, a written agency agreement granting an exclusive right to sell
12  or lease to another broker.
13    (13)  Solicit an agency agreement or negotiate a sale, exchange or lease
14  of commercial or investment real estate property directly with a buyer or
15  lessee if the licensee knows that such buyer or lessee has a written agency
16  agreement granting exclusive representation to another broker.
17    (14)  Except for a commercial or investment real estate property or
18  any property owned by any agency of the federal government, fail to
19  obtain a written agency agreement, including a fixed date of expiration,
20  signed by the party to be represented and by the licensee or fail to furnish
21  a copy of the agreement to the principal within a reasonable time. The
22  licensee shall not assign, sell or otherwise transfer a written agency agree-
23  ment to another broker without the express written consent of all parties
24  to the original listing agreement.
25    (15)  In any transaction regarding the sale of commercial or invest-
26  ment real estate property if the licensee represents the seller, fail to dis-
27  close to a prospective buyer that: (A) The licensee is or will be acting as
28  agent of the seller with the duty to represent the seller's interest; (B) the
29  licensee will not be the agent of the prospective buyer; and (C) infor-
30  mation given to the licensee will be disclosed to the seller. The disclosure
31  shall be made orally or in writing when the licensee agrees to assist the
32  prospective buyer to locate and inspect property and shall be made in any
33  contract for sale and in any lot reservation agreement.
34    (16)  In any transaction regarding the sale of commercial or invest-
35  ment real estate property if the licensee represents the buyer, fail to
36  disclose to a prospective seller or seller's agent that: (A) The licensee is
37  or will be acting as agent of the buyer with the duty to represent the
38  buyer's interest; (B) the licensee will not be the agent of the seller; and
39  (C) information given to the licensee will be disclosed to the buyer. The
40  disclosure shall be made orally or in writing no later than the first showing
41  of the property and shall be made in any contract for sale and in any lot
42  reservation agreement.
43    (17)  In any transaction regarding the sale of commercial or invest-
HB 2264--Am.
                                     

 1  ment real estate property if the licensee represents both the buyer and
 2  seller, the licensee shall immediately disclose in writing: (A) That the
 3  licensee is acting as agent for both buyer and seller; and (B) the com-
 4  pensation arrangement. The disclosure shall be signed by both the buyer
 5  and the seller. If the exclusive right to sell agreement and the buyer's
 6  agency agreement include the disclosure of the possibility of dual agency,
 7  the written disclosure, for each specific transaction, shall be signed by the
 8  buyer no later than the first showing of the property and by the seller no
 9  later than the presentation of the offer to purchase. In addition, the dis-
10  closure of the agency relationship between all licensees involved and the
11  principals shall be included in any contract for sale and in any lot reser-
12  vation agreement.
13    (18) (11)  Offer or give prizes, gifts or gratuities which are contingent
14  upon an agency agreement or the sale, purchase or lease of real estate.
15    (19)  Enter into a listing agreement on commercial or investment real
16  estate property in which the broker's commission is based upon the dif-
17  ference between the gross sales price and the net proceeds to the owner.
18    (20) (12)  Fail to see that financial obligations and commitments be-
19  tween the parties to an agreement to sell, exchange or lease real estate
20  are in writing, expressing the exact agreement of the parties or to provide,
21  within a reasonable time, copies thereof to all parties involved.
22    (21) (13)  Procure a signature to a purchase contract which has no
23  definite purchase price, method of payment, description of property or
24  method of determining the closing date.
25    (22)  Include in any agency agreement an authorization to sign or
26  initial any document on behalf of the licensee's principal in a commercial
27  or investment real estate property transaction or authorization to act as
28  attorney-in-fact for the principal.
29    (23) (14)  Engage in fraud or make any substantial misrepresentation.
30    (24) (15)  Represent to any lender, guaranteeing agency or any other
31  interested party, either verbally or through the preparation of false doc-
32  uments, an amount in excess of the true and actual sale price of the real
33  estate or terms differing from those actually agreed upon.
34    (25) (16)  Fail to make known to any purchaser or lessee any interest
35  the licensee has in the real estate the licensee is selling or leasing or to
36  make known to any seller or lessor any interest the licensee will have in
37  the real estate the licensee is purchasing or leasing.
38    (26) (17)  Fail to inform both the buyer, at the time an offer is made,
39  and the seller, at the time an offer is presented, that certain closing costs
40  must be paid and the approximate amount of such costs.
41    (27) (18)  Fail without just cause to surrender any document or in-
42  strument to the rightful owner.
43    (28) (19)  Accept anything other than cash as earnest money unless
HB 2264--Am.
                                     

 1  that fact is communicated to the owner prior to the owner's acceptance
 2  of the offer to purchase, and such fact is shown in the purchase agree-
 3  ment.
 4    (29) (20)  Fail to deposit any check or cash received as an earnest
 5  money deposit or as a deposit on the purchase of a lot within five business
 6  days after the purchase agreement or lot reservation agreement is signed
 7  by all parties, unless otherwise specifically provided by written agreement
 8  of all parties to the purchase agreement or lot reservation agreement, in
 9  which case the licensee shall deposit the check or cash received on the
10  date provided by such written agreement.
11    (30) (21)  Fail in response to a request by the commission or the di-
12  rector to produce any document, book or record in the licensee's posses-
13  sion or under the licensee's control that concerns, directly or indirectly,
14  any real estate transaction or the licensee's real estate business.
15    (31)  In any transaction regarding the sale of commercial or invest-
16  ment real estate property if the licensee represents the seller, fail to
17  promptly submit any written offer to the licensee's principal when such
18  offer is received prior to the closing of the sale or fail to promptly submit
19  to the prospective buyer or buyer's agent any counteroffer made by the
20  seller, including any back-up offers properly identified as such.
21    (32)  In any transaction regarding the sale of commercial or invest-
22  ment real estate property if the licensee represents the buyer, fail to
23  promptly submit any written offer to the seller or seller's agent or fail to
24  promptly submit to the licensee's principal any counteroffer made by the
25  seller, including any back-up offers properly identified as such.
26    (33) (22)  Refuse to appear or testify under oath at any hearing held
27  by the commission.
28    (34) (23)  Demonstrate incompetency to act as a broker, associate bro-
29  ker or salesperson.
30    (35)  In any transaction regarding the sale or lease of commercial or
31  investment real estate property fail to disclose, or ascertain and disclose,
32  to any person with whom the licensee is dealing, any material information
33  which relates to the property with which the licensee is dealing and which
34  such licensee knew or should have known.
35    (36) (24)  Knowingly receive or accept, directly or indirectly, any re-
36  bate, reduction or abatement of any charge, or any special favor or ad-
37  vantage or any monetary consideration or inducement, involving the is-
38  suance of a title insurance policy or contract concerning which the
39  licensee is directly or indirectly connected, from a title insurance company
40  or title insurance agent, or any officer, employee, attorney, agent or so-
41  licitor thereof.
42    (37) (25)  Engage in the purchase of one-, two-, three- or four-family
43  dwellings, including condominiums and cooperatives, or the acquisition
HB 2264--Am.
                                     

 1  of any right, title or interest therein, including any equity or redemption
 2  interests, if:
 3    (A) (i)  At the time of such purchase, the dwellings are subject to a
 4  right of redemption pursuant to foreclosure of a mortgage on such dwell-
 5  ings; (ii) the licensee fails to give written notice of the purchase, within
 6  20 days thereafter, to the mortgage holder or judgment creditor who held
 7  such mortgage; and (iii) the licensee, unless otherwise required by law or
 8  court order, fails to apply any rent proceeds from the dwellings to the
 9  judgment lien arising from the foreclosure of such mortgage, as payments
10  become due under the loan, regardless of whether the licensee is obli-
11  gated to do so;
12    (B) (i)  the dwellings are subject to a loan which is secured by a mort-
13  gage and which is in default at the time of such purchase or in default
14  within one year after such purchase; (ii) the licensee fails to give written
15  notice of the purchase, within 20 days thereafter, to the mortgage holder;
16  and (iii) the licensee, unless otherwise required by law or court order,
17  fails to apply any rent proceeds from the dwellings to the mortgage as the
18  payments come due, regardless of whether the licensee is obligated on
19  the loan; or
20    (C)  the licensee fails to notify, at the time of rental, any person rent-
21  ing any such dwelling of the extent and nature of the licensee's interest
22  in such dwelling and the probable time until possession will be taken by
23  the mortgage holder or judgment creditor.
24    (38) (26)  Commit forgery or, unless authorized to do so by a duly
25  executed power of attorney, sign or initial any contractual agreement on
26  behalf of another person in a real estate transaction.
27    (b)  In any transaction regarding the sale or lease of commercial or
28  investment real estate property failure to comply with any requirement
29  of subsection (a)(14), (15), (16) or (17) or their corollary rules and regu-
30  lations shall not by itself render any agreement void or voidable nor shall
31  it constitute a defense to any action to enforce such agreement or any
32  action for breach of such agreement.
33    (c)  The commission may provide suggested forms of agency disclo-
34  sure and agency agreements and, by rules and regulations, provide such
35  other prohibitions, limitations and conditions relating thereto as the com-
36  mission may prescribe for transactions regarding the sale or lease of com-
37  mercial or investment real estate property.
38    (d)  No salesperson or associate broker shall:
39     (1)  Except as provided in paragraph (A) or (B), accept a commission
40  or other valuable consideration from anyone other than the salesperson's
41  or associate broker's employing broker or the broker with whom the sa-
42  lesperson or associate broker is associated. broker by whom the licensee
43  is employed or with whom the licensee is associated as an independent
HB 2264--Am.
                                     

 1  contractor.
 2    (A)  A salesperson or associate broker may accept a commission or
 3  other valuable consideration from a licensee who employs the salesperson
 4  or associate broker as a personal assistant provided that: (i) the licensee
 5  and the salesperson or associate broker who is employed as a personal
 6  assistant are licensed under the supervision of the same broker, and (ii)
 7  the supervising broker agrees in writing that the personal assistant may
 8  be paid by the licensee.
 9    (B)  If a salesperson or associate broker has (i) organized as a profes-
10  sional corporation pursuant to K.S.A. 17-2706 et seq., and amendments
11  thereto, (ii) incorporated under the Kansas general corporation code con-
12  tained in K.S.A. 17-6001 et seq., and amendments thereto, (iii) organized
13  under the Kansas limited liability company act contained in K.S.A. 17-
14  7601 et seq., and amendments thereto, or (iv) has organized as a registered
15  limited liability partnership as defined in K.S.A. 56-302 and amendments
16  thereto, the commission or other valuable consideration may be paid by
17  the licensee's broker to such professional corporation, corporation, limited
18  liability company or limited liability partnership. This provision shall not
19  alter any other provisions of this act.
20    (2)  Fail to place, as soon after receipt as practicable, any deposit
21  money or other funds entrusted to the salesperson or associate broker in
22  the custody of the broker whom the salesperson or associate broker rep-
23  resents.
24    (e) (c)  No broker shall:
25    (1)  Pay a commission or compensation to any person for performing
26  the services of an associate broker or salesperson unless such person is
27  licensed under this act and employed by or associated with the broker,
28  except that nothing herein shall prohibit the payment of a referral fee to
29  a person who is properly licensed as a broker or salesperson in another
30  jurisdiction relating to a transaction regarding the sale or lease of com-
31  mercial or investment real estate property.
32    (2)  Fail to deliver to the seller in every real estate transaction, at the
33  time the transaction is closed, a complete, detailed closing statement
34  showing all of the receipts and disbursements handled by the broker for
35  the seller, or fail to deliver to the buyer a complete statement showing
36  all money received in the transaction from such buyer and how and for
37  what the same was disbursed, or fail to retain true copies of such state-
38  ments in the broker's files, except that the furnishing of such statements
39  to the seller and buyer by an escrow agent shall relieve the broker's re-
40  sponsibility to the seller and the buyer.
41    (3)  Fail to properly supervise the activities of an associated or em-
42  ployed salesperson or associate broker.
43    (4)  Lend the broker's license to a salesperson, or permit a salesperson
HB 2264--Am.
                                     

 1  to operate as a broker.
 2    (5)  Fail to provide to the principal a written report every 30 days,
 3  along with a final report, itemizing disbursements made by the broker
 4  from advance listing fees.
 5    (f) (d) (1)  If a purchase agreement provides that the earnest money
 6  be held by an escrow agent other than a real estate broker, unless oth-
 7  erwise specifically provided by written agreement of all parties to the
 8  purchase agreement, no listing broker shall:
 9    (1) (A)  Fail to deliver the purchase agreement and earnest money
10  deposit to the escrow agent named in the purchase agreement within five
11  business days after the purchase agreement is signed by all parties unless
12  otherwise specifically provided by written agreement of all parties to the
13  purchase agreement, in which case the broker shall deliver the purchase
14  agreement and earnest money deposit to the escrow agent named in the
15  purchase agreement on the date provided by such written agreement; or
16    (2) (B)  fail to obtain and keep in the transaction file a receipt from
17  the escrow agent showing date of delivery of the purchase agreement and
18  earnest money deposit.
19    (2)  If a purchase agreement provides that the earnest money be held
20  by an escrow agent other than a real estate broker and the property was
21  not listed with a broker, no broker for the buyer shall:
22    (A)  Fail to deliver the purchase agreement and earnest money deposit
23  to the escrow agent named in the purchase agreement within five business
24  days after the purchase agreement is signed by all parties unless otherwise
25  specifically provided by written agreement of all parties to the purchase
26  agreement, in which case the broker shall deliver the purchase agreement
27  and earnest money deposit to the escrow agent named in the purchase
28  agreement on the date provided by such written agreement; or
29    (B)  fail to obtain and keep in the transaction file a receipt from the
30  escrow agent showing date of delivery of the purchase agreement and
31  earnest money deposit.
32    (3)  If a purchase agreement provides that the earnest money be held
33  by an escrow agent other than a real estate broker and neither the seller
34  not nor buyer is represented by a broker, no transaction broker shall:
35    (A)  Fail to deliver the purchase agreement and earnest money deposit
36  to the escrow agent named in the purchase agreement within five business
37  days after the purchase agreement is signed by all parties unless otherwise
38  specifically provided by written agreement of all parties to the purchase
39  agreement, in which case the broker shall deliver the purchase agreement
40  and earnest money deposit to the escrow agent named in the purchase
41  agreement on the date provided by such written agreement; or
42    (B)  fail to obtain and keep in the transaction file a receipt from the
43  escrow agent showing date of delivery of the purchase agreement and
HB 2264--Am.
                                     

 1  earnest money deposit.
 2    The commission may adopt rules and regulations to require that any
 3  such purchase agreement which provides that the earnest money be held
 4  by an escrow agent other than a real estate broker include: (1) notification
 5  of whether or not the escrow agent named in the purchase agreement
 6  maintains a surety bond, and (2) notification that rules and regulations
 7  statutes governing the disbursement of earnest money held in trust ac-
 8  counts of real estate brokers do not apply to earnest money deposited with
 9  the escrow agent named in the purchase agreement.
10    (g) (e)  Nothing in this section shall be construed to grant any person
11  a private right of action for damages or to eliminate any right of action
12  pursuant to other statutes or common law.
13    Sec. 15.  On and after October 1, 1997, K.S.A. 58-3063 is hereby
14  amended to read as follows: 58-3063. (a) The commission shall adopt rules
15  and regulations fixing the amounts of the fees provided for by this act,
16  subject to the following:
17    (1)  For any examination required for licensure, a fee in an amount
18  equal to the actual cost of the examination and the administration thereof.
19    (2)  For submission of an application for an original salesperson's li-
20  cense, an amount not exceeding $25.
21    (3)  for submission of an application for an original broker's license,
22  an amount not exceeding $50.
23    (4)  For an original salesperson's license, a prorated fee based on an
24  annual a two-year amount not exceeding $50 $100.
25    (5)  For an original broker's license, a prorated fee based on an annual
26  a two-year amount not exceeding $75 $150.
27    (6)  For renewal of a salesperson's license, a fee based on an annual
28  a two-year amount not exceeding $50 $100.
29    (7)  For renewal of a broker's license, a fee based on an annual a two-
30  year amount not exceeding $75 $150.
31    (8)  For reinstatement of a license which has been deactivated or
32  which has been canceled pursuant to subsection (d) of K.S.A. 58-3047
33  and amendments thereto, or by reason of termination of a salesperson,
34  an amount not exceeding $15.
35    (9)  For reinstatement of all licenses canceled pursuant to subsection
36    (e) of K.S.A. 58-3047 and amendments thereto, an amount not exceeding
37  $7.50 for each license canceled.
38    (10)  For issuance of a duplicate license, an amount not exceeding
39  $10.
40    (11)  For certification of licensure to another jurisdiction, an amount
41  not exceeding $10.
42    (12)  For approval of a course of instruction submitted by a course
43  provider pursuant to K.S.A. 58-3046a and amendments thereto, an
HB 2264--Am.
                                     

 1  amount not exceeding $75.
 2    (13)  For renewal of an approved course of instruction pursuant to
 3  K.S.A. 58-3046a and amendments thereto, an amount not exceeding $15.
 4    (14)  For approval of a course of instruction submitted by any licensee
 5  for credit toward the 12 hours of additional instruction required by K.S.A.
 6  58-3046a and amendments thereto, an amount not less than $10 nor more
 7  than $20, as determined by the commission.
 8    (15)  For a temporary salesperson's license, an amount not exceeding
 9  $25.
10    (b)  For each prorated fee, the commission shall establish a monthly
11  amount, rounded off to the nearest dollar, and shall compute the fee from
12  the last calendar day of the month in which the license is issued to the
13  expiration date of the license.
14    (b) (c)  Subject to the limitations of this section, the commission shall
15  fix the fees provided for by this section in the amounts necessary to ad-
16  minister and enforce this act.
17    (c) (d)  The fees provided for by this section shall be applicable re-
18  gardless of the type of license.
19    Sec. 16.  On and after July 1, 1997, K.S.A. 1996 Supp. 58-3064 is
20  hereby revived to read as follows: 58-3064. Whenever any person has
21  engaged in any act or practice that constitutes a violation of this act or
22  rules and regulations adopted hereunder or the brokerage relationships
23  in real estate transactions act or rules and regulations adopted thereunder
24  as such act governs the sale or lease of real estate that is one to four
25  residential units, the commission may institute an action in the district
26  court of the county in which the person resides or in the district court in
27  the county in which such act or practice occurred for an injunction to
28  enforce compliance with the act or rules and regulations. The commission
29  shall not be required to give any bond or pay any filing fee for initiating
30  such action. Upon a showing that the person has engaged in any act or
31  practice in violation of the act or rules and regulations, the court may
32  enjoin all such acts or practices and may make any orders necessary to
33  conserve, protect and disburse any funds involved.
34    Sec. 17.  On and after October 1, 1997, K.S.A. 1996 Supp. 58-3064,
35  as revived by section 16 of this act, is hereby amended to read as follows:
36  58-3064. Whenever any person has engaged in any act or practice that
37  constitutes a violation of this act or rules and regulations adopted here-
38  under or the brokerage relationships in real estate transactions act or rules
39  and regulations adopted thereunder as such act governs the sale or lease
40  of real estate that is one to four residential units, the commission may
41  institute an action in the district court of the county in which the person
42  resides or in the district court in the county in which such act or practice
43  occurred for an injunction to enforce compliance with the act or rules
HB 2264--Am.
                                     

 1  and regulations. The commission shall not be required to give any bond
 2  or pay any filing fee for initiating such action. Upon a showing that the
 3  person has engaged in any act or practice in violation of the act or rules
 4  and regulations, the court may enjoin all such acts or practices and may
 5  make any orders necessary to conserve, protect and disburse any funds
 6  involved.
 7    Sec. 18.  On and after July 1, 1997, K.S.A. 1996 Supp. 58-3065 is
 8  hereby revived to read as follows: 58-3065. (a) Willful violation of any
 9  provision of this act or the brokerage relationships in real estate trans-
10  actions act, as such act governs the sale or lease of real estate that is one
11  to four residential units, is a misdemeanor punishable by imprisonment
12  for not more than 12 months or a fine of not less than $100 or more than
13  $1,000, or both, for the first offense and imprisonment for not more than
14  12 months or a fine of not less than $1,000 or more than $10,000, or
15  both, for a second or subsequent offense.
16    (b)  Nothing in this act or the brokerage relationships in real estate
17  transactions act, as such act governs the sale or lease of real estate that is
18  one to four residential units, shall be construed as requiring the commis-
19  sion or the director to report minor violations of the acts for criminal
20  prosecution whenever the commission or the director believes that the
21  public interest will be adequately served by other administrative action.
22    Sec. 19.  On and after October 1, 1997, K.S.A. 1996 Supp. 58-3065,
23  as revived by section 18 of this act, is hereby amended to read as follows:
24  58-3065. (a) Willful violation of any provision of this act or the brokerage
25  relationships in real estate transactions act, as such act governs the sale
26  or lease of real estate that is one to four residential units, is a misdemeanor
27  punishable by imprisonment for not more than 12 months or a fine of
28  not less than $100 or more than $1,000, or both, for the first offense and
29  imprisonment for not more than 12 months or a fine of not less than
30  $1,000 or more than $10,000, or both, for a second or subsequent offense.
31    (b)  Nothing in this act or the brokerage relationships in real estate
32  transactions act, as such act governs the sale or lease of real estate that is
33  one to four residential units, shall be construed as requiring the commis-
34  sion or the director to report minor violations of the acts for criminal
35  prosecution whenever the commission or the director believes that the
36  public interest will be adequately served by other administrative action.
37    Sec. 20.  On and after July 1, 1997, K.S.A. 1996 Supp. 58-3068 is
38  hereby revived to read as follows: 58-3068. (a) Moneys in the real estate
39  recovery revolving fund shall be used in the manner provided by this act
40  to reimburse persons who suffer monetary damages by reason of any of
41  the following acts committed in connection with any transaction involving
42  the sale of real estate in this state by any broker or salesperson who was
43  licensed under the laws of this state at the time the act was committed
HB 2264--Am.
                                     

 1  or by any unlicensed employee of such broker or salesperson:
 2    (1)  Violation of any of the following provisions of this act:
 3    (A)  K.S.A. 58-3061 and amendments thereto; or
 4    (B)  subsection (a)(2), (3), (23), (28) or (29) or subsection (d)(2) of
 5  K.S.A. 58-3062 and amendments thereto; or
 6    (2)  violation of any provision of the brokerage relationships in real
 7  estate transactions act, as such act governs the sale or lease of real estate
 8  that is one to four residential units; or
 9    (3)  obtaining money or property by any act which would constitute
10  any crime defined by K.S.A. 21-3701, 21-3704, 21-3705, 21-3706, 21-
11  3707, 21-3710, 21-3711 or 21-3712, and amendments thereto.
12    (b)  Any person may seek recovery from the real estate recovery re-
13  volving fund under the following conditions:
14    (1)  Such person has received final judgment in a court of competent
15  jurisdiction of this state in any action wherein the cause of action was
16  based on any of the acts described in subsection (a);
17    (2)  the claim is made within two years after the date that final judg-
18  ment is entered;
19    (3)  such person has caused to be issued a writ of execution upon such
20  judgment, and the officer executing the same has made a return showing
21  that no personal or real property of the judgment debtor liable to be
22  levied upon in satisfaction of the judgment could be found, or that the
23  amount realized on the sale of the judgment debtor's property pursuant
24  to such execution was insufficient to satisfy the judgment;
25    (4)  such person has made all reasonable searches and inquiries to
26  ascertain whether the judgment debtor is possessed of real or personal
27  property or other assets, subject to being sold or applied in satisfaction
28  of the judgment, and by such search such person has discovered no such
29  property or assets, or that such person has discovered such property and
30  assets and that such person has taken all necessary action and proceedings
31  for the application thereof to the judgment and that the amount thereby
32  realized was insufficient to satisfy the judgment;
33    (5)  any amounts recovered by such person from the judgment debtor,
34  or from any other source, has been applied to the damages awarded by
35  the court; and
36    (6)  such person is not a person who is precluded by subsection (c)
37  from making a claim for recovery.
38    (c)  A person shall not be qualified to make a claim for recovery from
39  the real estate recovery revolving fund, if:
40    (1)  The person is the spouse of the judgment debtor or a personal
41  representative of such spouse;
42    (2)  the person acted as principal or agent in the real estate transaction
43  which is the subject of the claim and is a licensed broker or salesperson
HB 2264--Am.
                                     

 1  or is a partnership, association, limited liability company or corporation
 2  whose partners, members, officers and employees are licensed as pro-
 3  vided by subsection (b) of K.S.A. 58-3042 and amendments thereto; or
 4    (3)  such person's claim is based upon a real estate transaction in
 5  which the licensed broker or salesperson was acting on the broker's or
 6  salesperson's own behalf with respect to property owned or controlled by
 7  such broker or salesperson.
 8    Sec. 21.  On and after October 1, 1997, K.S.A. 1996 Supp. 58-3068,
 9  as revived by section 20 of this act, is hereby amended to read as follows:
10  58-3068. (a) Moneys in the real estate recovery revolving fund shall be
11  used in the manner provided by this act to reimburse persons who suffer
12  monetary damages by reason of any of the following acts committed in
13  connection with any transaction involving the sale of real estate in this
14  state by any broker or salesperson who was licensed under the laws of
15  this state at the time the act was committed or by any unlicensed em-
16  ployee of such broker or salesperson:
17    (1)  Violation of any of the following provisions of this act:
18    (A)  K.S.A. 58-3061 and amendments thereto; or
19    (B)  subsection (a)(2), (3), (23), (28) or (29) (14), (19) or (20) or sub-
20  section (d)(2) (b)(2) of K.S.A. 58-3062 and amendments thereto; or
21    (2)  violation of any provision of the brokerage relationships in real
22  estate transactions act, as such act governs the sale or lease of real estate
23  that is one to four residential units; or
24    (3)  obtaining money or property by any act which would constitute
25  any crime defined by K.S.A. 21-3701, 21-3704, 21-3705, 21-3706, 21-
26  3707, 21-3710, 21-3711 or 21-3712, and amendments thereto.
27    (b)  Any person may seek recovery from the real estate recovery re-
28  volving fund under the following conditions:
29    (1)  Such person has received final judgment in a court of competent
30  jurisdiction of this state in any action wherein the cause of action was
31  based on any of the acts described in subsection (a);
32    (2)  the claim is made within two years after the date that final judg-
33  ment is entered;
34    (3)  such person has caused to be issued a writ of execution upon such
35  judgment, and the officer executing the same has made a return showing
36  that no personal or real property of the judgment debtor liable to be
37  levied upon in satisfaction of the judgment could be found, or that the
38  amount realized on the sale of the judgment debtor's property pursuant
39  to such execution was insufficient to satisfy the judgment;
40    (4)  such person has made all reasonable searches and inquiries to
41  ascertain whether the judgment debtor is possessed of real or personal
42  property or other assets, subject to being sold or applied in satisfaction
43  of the judgment, and by such search such person has discovered no such
HB 2264--Am.
                                     

 1  property or assets, or that such person has discovered such property and
 2  assets and that such person has taken all necessary action and proceedings
 3  for the application thereof to the judgment and that the amount thereby
 4  realized was insufficient to satisfy the judgment;
 5    (5)  any amounts recovered by such person from the judgment debtor,
 6  or from any other source, has been applied to the damages awarded by
 7  the court; and
 8    (6)  such person is not a person who is precluded by subsection (c)
 9  from making a claim for recovery.
10    (c)  A person shall not be qualified to make a claim for recovery from
11  the real estate recovery revolving fund, if:
12    (1)  The person is the spouse of the judgment debtor or a personal
13  representative of such spouse;
14    (2)  the person acted as principal or agent in the real estate transaction
15  which is the subject of the claim and is a licensed broker or salesperson
16  or is a partnership, association, limited liability company or corporation
17  whose partners, members, officers and employees are licensed as pro-
18  vided by subsection (b) of K.S.A. 58-3042 and amendments thereto; or
19    (3)  such person's claim is based upon a real estate transaction in
20  which the licensed broker or salesperson was acting on the broker's or
21  salesperson's own behalf with respect to property owned or controlled by
22  such broker or salesperson.
23    Sec. 22.  On and after July 1, 1997, K.S.A. 1996 Supp. 58-30,101 is
24  hereby revived and amended to read as follows: 58-30,101. (a) K.S.A.
25  1996 Supp. 58-30,101 through 58-30,112 shall be known and may be cited
26  as the brokerage relationships in real estate transactions act.
27    (b)  Any application of this act to transactions regarding the sale or
28  lease of commercial or investment real estate property shall be suspended
29  and shall not be enforceable on and after the effective date of this act.
30  Commercial or investment real estate property means any real estate for
31  which the present or intended use is other than one to four residential
32  units.
33    (c)  The provisions of K.S.A. 1996 Supp. 58-30,101 through 58-30,112
34  shall be and hereby are abolished on July 1, 1997.
35    Sec. 23.  On and after October 1, 1997, K.S.A. 1996 Supp. 58-30,101,
36  as revived and amended by section 22 of this act, is hereby amended to
37  read as follows: 58-30,101. (a) K.S.A. 1996 Supp. 58-30,101 through 58-
38  30,112 This act shall be known and may be cited as the brokerage rela-
39  tionships in real estate transactions act.
40    (b)  Any application of this act to transactions regarding the sale or
41  lease of commercial or investment real estate property shall be suspended
42  and shall not be enforceable on and after the effective date of this act.
43  Commercial or investment real estate property means any real estate for
HB 2264--Am.
                                     

 1  which the present or intended use is other than one to four residential
 2  units. The provisions of the brokerage relationships in real estate trans-
 3  actions act shall supersede the duties and responsibilities of the parties
 4  under the common law, including fiduciary responsibilities of an agent to
 5  a principal.
 6    (c)  Failure to comply with any requirement of K.S.A. 58-30,103 or
 7  K.S.A. 58-30,110, and amendments thereto, or rules and regulations
 8  adopted thereunder, shall not by itself render any agreement void or void-
 9  able nor shall it constitute a defense to any action to enforce such agree-
10  ment or any action for breach of such agreement.
11    Sec. 24.  On and after July 1, 1997, K.S.A. 1996 Supp. 58-30,102 is
12  hereby revived to read as follows: 58-30,102. As used in the brokerage
13  relationships in real estate transactions act, unless the context otherwise
14  requires:
15    (a)  ``Affiliated licensee'' means any individual licensed as a salesper-
16  son or broker under the Kansas real estate brokers' and salespersons'
17  license act who is employed by a broker or affiliated with a broker as an
18  independent contractor.
19    (b)  ``Agency'' means every relationship in which a broker acts for or
20  represents another, by the latter's express written authority, in a real es-
21  tate transaction. ``Agency'' also means the relationship in which a broker,
22  by verbal authorization pursuant to subsection (d)(2) of K.S.A. 1996 Supp.
23  58-30,103, acts for or represents any agency of the federal government
24  in the sale of property owned by the federal agency.
25    (c)  ``Agency agreement'' means a written agreement setting forth the
26  terms and conditions of the relationship between a broker and the brok-
27  er's client.
28    (d)  ``Broker'' means: (1) An individual who is licensed as a broker
29  under the Kansas real estate brokers' and salespersons' license act and
30  who has an agency with a seller, buyer, landlord or tenant; or (2) a cor-
31  poration, partnership, association or limited liability company, of which
32  the officers and members, or persons employed by or associated with the
33  corporation, partnership, association or limited liability company, are li-
34  censed pursuant to K.S.A. 58-3042 and amendments thereto and which
35  has an agency with a seller, buyer, landlord or tenant. The term ``broker''
36  includes the broker's affiliated licensees except where the context would
37  otherwise indicate. If an individual broker is indicated by the context, the
38  term ``broker'' means the supervising broker as defined by K.S.A. 58-
39  3035 and amendments thereto.
40    (e)  ``Brokerage firm'' means the business entity of a broker, whether
41  a proprietorship, partnership, corporation, association or limited liability
42  company.
43    (f)  ``Buyer's agent'' means a broker who has an agency with a buyer.
HB 2264--Am.
                                     

 1  The term includes the broker's affiliated licensees.
 2    (g)  ``Client'' means a seller, landlord, buyer or tenant who has an
 3  agency with a broker.
 4    (h)  ``Commission'' means the Kansas real estate commission.
 5    (i)  ``Confidential information'' means information made confidential
 6  by statute, rule, regulation or instructions from the client unless the in-
 7  formation is made public or becomes public by the words or conduct of
 8  the client to whom the information pertains or from a source other than
 9  the licensee.
10    (j)  ``Customer'' means a seller, landlord, buyer or tenant in a real
11  estate transaction in which a broker is involved but who has not entered
12  into an agency with the broker.
13    (k)  ``Designated agent'' means a licensee affiliated with a broker who
14  has been designated by the broker, or the broker's duly authorized rep-
15  resentative, to act as the agent of a broker's buyer client to the exclusion
16  of all other affiliated licensees.
17    (l)  ``Disclosed dual agent'' means a broker who, with the written in-
18  formed consent of all parties to a contemplated real estate transaction,
19  has entered into an agency with and therefore represents both the seller
20  and buyer or both the landlord and tenant. The term includes the broker's
21  affiliated licensees.
22    (m)  ``Landlord's agent'' means a broker who has entered into an
23  agency with a landlord. The term includes the broker's affiliated licensees.
24    (n)  ``Licensee'' means any person licensed under the Kansas real es-
25  tate brokers' and salespersons' license act as a broker or salesperson.
26    (o)  ``Seller's agent'' means a broker who has an agency with a seller.
27  The term includes the broker's affiliated licensees and subagents of the
28  broker.
29    (p)  ``Statutory agent'' means a broker who is a seller's agent, a buyer's
30  agent, a landlord's agent, a tenant's agent or a disclosed dual agent in a
31  real estate transaction.
32    (q)  ``Tenant's agent'' means a broker who has an agency with a pro-
33  spective tenant. The term includes the broker's affiliated licensees.
34    Sec. 25.  On and after October 1, 1997, K.S.A. 1996 Supp. 58-30,102,
35  as revived by section 24 of this act, is hereby amended to read as follows:
36  58-30,102. As used in the brokerage relationships in real estate transac-
37  tions act, unless the context otherwise requires:
38    (a)  ``Affiliated licensee'' means any individual licensed as a salesper-
39  son or broker under the Kansas real estate brokers' and salespersons'
40  license act who is employed by a broker or affiliated with a broker as an
41  independent contractor.
42    (b)  ``Agency'' means every relationship in which a broker acts for or
43  represents another, by the latter's express written authority, in a real es-
HB 2264--Am.
                                     

 1  tate transaction. ``Agency'' also means the relationship in which a broker,
 2  by verbal authorization pursuant to subsection (d)(2) of K.S.A. 1996 Supp.
 3  58-30,103, and amendments thereto, acts for or represents any agency of
 4  the federal government in the sale of property owned by the federal
 5  agency.
 6    (c)  ``Agency agreement'' means a written agreement setting forth the
 7  terms and conditions of the relationship between a broker and the brok-
 8  er's client.
 9    (d)  ``Broker'' means: (1) An individual who is licensed as a broker
10  under the Kansas real estate brokers' and salespersons' license act and
11  who has an agency with a seller, buyer, landlord or tenant or acts as a
12  transaction broker; or (2) a corporation, partnership, association or lim-
13  ited liability company, of which the officers and members, or persons
14  employed by or associated with the corporation, partnership, association
15  or limited liability company, are licensed pursuant to K.S.A. 58-3042 and
16  amendments thereto and which has an agency with a seller, buyer, land-
17  lord or tenant or acts as a transaction broker. The term ``broker'' in-
18  cludes the broker's affiliated licensees except where the context would
19  otherwise indicate. If an individual broker is indicated by the context, the
20  term ``broker'' means the supervising broker as defined by K.S.A. 58-
21  3035 and amendments thereto.
22    (e)  ``Brokerage firm'' means the business entity of a broker, whether
23  a proprietorship, partnership, corporation, association or limited liability
24  company.
25    (f)  ``Buyer's agent'' means a broker who has an agency with a buyer.
26  The term includes the broker's affiliated licensees.
27    (g)  ``Client'' means a seller, landlord, buyer or tenant who has an
28  agency with a broker.
29    (h)  ``Commission'' means the Kansas real estate commission.
30    (i)  ``Confidential information'' means information made confidential
31  by statute, rule, regulation or instructions from the client or personal
32  information about the client which might place the other party at an
33  advantage over the client unless the information is made public or be-
34  comes public by the words or conduct of the client to whom the infor-
35  mation pertains or from a source other than the licensee.
36    (j)  ``Customer'' means a seller, landlord, buyer or tenant in a real
37  estate transaction in which a broker is involved but who has not entered
38  into an agency with the broker.
39    (k)  ``Designated agent'' means a licensee affiliated with a broker who
40  has been designated by the broker, or the broker's duly authorized rep-
41  resentative, to act as the agent of a broker's buyer or seller client to the
42  exclusion of all other affiliated licensees.
43    (l)  ``Disclosed dual agent'' means a broker who, with the written in-
HB 2264--Am.
                                     

 1  formed consent of all parties to a contemplated real estate transaction,
 2  has entered into an agency with and therefore represents both the seller
 3  and buyer or both the landlord and tenant. The term includes the broker's
 4  affiliated licensees.
 5    (m)  ``Landlord's agent'' means a broker who has entered into an
 6  agency with a landlord. The term includes the broker's affiliated licensees.
 7    (n) (m)  ``Licensee'' means any person licensed under the Kansas real
 8  estate brokers' and salespersons' license act as a broker or salesperson.
 9    (n)  ``Ministerial acts'' means those acts that a licensee may perform
10  for a person that are informative in nature and do not rise to the level of
11  active representation on behalf of a person. Examples of these acts include,
12  but are not limited to:
13    (1)  Responding to telephone inquiries by consumers as to the avail-
14  ability and pricing of brokerage services;
15    (2)  responding to telephone inquiries from a person concerning the
16  price or location of property;
17    (3)  attending an open house and responding to questions about the
18  property from a consumer;
19    (4)  setting an appointment to view property;
20    (5)  responding to questions of consumers walking into a licensee's
21  office concerning brokerage services offered on particular properties;
22    (6)  accompanying an appraiser, inspector, contractor or similar third
23  party on a visit to a property;
24    (7)  describing a property or the property's condition in response to a
25  person's inquiry; or
26    (8)  referral to another broker or service provider.
27    (o)  ``Seller's agent'' means a broker who has an agency with a seller.
28  The term includes the broker's affiliated licensees and subagents of the
29  broker.
30    (p)  ``Qualified third party'' means a federal, state or local govern-
31  mental agency or any person whom the broker, the affiliated licensee or
32  a party to the real estate transaction reasonably believes has the expertise
33  necessary to meet the industry standards of practice for the type of in-
34  spection or investigation that has been conducted by the third party in
35  order to prepare a written report.
36    (q)``Statutory agent'' means a broker who is a seller's agent, a buyer's
37  agent, a landlord's agent, a tenant's agent or a disclosed dual designated
38  agent in a real estate transaction.
39    (q) (r)  ``Tenant's agent'' means a broker who has an agency with a
40  prospective tenant. The term includes the broker's affiliated licensees.
41    (s)  ``Transaction broker'' means a broker who assists one or more
42  parties with a real estate transaction without being an agent or advocate
43  for the interests of any party to such transaction. The term includes the
HB 2264--Am.
                                     

 1  broker's affiliated licensees.
 2    Sec. 26.  On and after July 1, 1997, K.S.A. 1996 Supp. 58-30,103 is
 3  hereby revived to read as follows: 58-30,103. (a) A broker shall act only
 4  as a statutory agent in any real estate transaction. A licensee may act as a
 5  disclosed dual agent but shall not act as an undisclosed dual agent or in
 6  a dual capacity of agent and undisclosed principal in any transaction.
 7    (b)  A broker may work with a single party in separate transactions
 8  pursuant to different relationships, including, but not limited to, selling
 9  one property as a seller's agent and working with that seller in buying
10  another property as a buyer's agent if the broker complies with this act
11  in establishing the relationships for each transaction.
12    (c)  Before an agency agreement is signed, the broker or an affiliated
13  licensee shall advise the prospective buyer or seller of alternative agency
14  relationships pursuant to K.S.A. 1996 Supp. 58-30,110.
15    (d) (1)  Except as provided in subsection (d)(2), an agency agreement
16  with a seller or landlord shall be signed prior to the licensee's engaging
17  in any of the activities enumerated in subsection (e) of K.S.A. 58-3035
18  58-3035a and amendments thereto as an employee of, or on behalf of,
19  the seller or landlord.
20    (2)  If the real estate which is to be offered for sale is owned by any
21  agency of the federal government, a broker may, on behalf of the owner,
22  engage in activities enumerated in subsection (e) of K.S.A. 58-3035 58-
23  3035a and amendments thereto after obtaining verbal authorization from
24  the federal agency for which services are to be performed.
25    (e)  An agency agreement with a buyer or tenant shall be signed at or
26  prior to the first showing of a property if the licensee is acting in the
27  capacity of a buyer's agent. If the first showing is an open house and the
28  buyer seeks representation from the licensee holding the open house:
29    (1)  The licensee may obtain a written agency agreement with the
30  buyer and act as a disclosed dual agent pursuant to K.S.A. 1996 Supp.
31  58-30,108; or
32    (2)  if the property was not listed by the licensee holding the open
33  house, the licensee may obtain a written agency agreement with the buyer
34  and act as a designated agent pursuant to K.S.A. 1996 Supp. 58-30,109.
35    (f)  An agency agreement shall set forth the terms and conditions of
36  the relationship, including a fixed date of expiration, and shall specify the
37  duties and obligations pursuant to K.S.A. 1996 Supp. 58-30,106 or 58-
38  30,107, including, but not limited to, any duty of confidentiality and the
39  terms of compensation. The agreement shall be signed by the party to be
40  represented and by the broker or a licensee affiliated with the broker. A
41  copy of the agreement shall be furnished to the client at the time the
42  client signs the agreement. If, at the time the client signs the agreement,
43  the agreement is not signed by the broker or a licensee affiliated with the
HB 2264--Am.
                                     

 1  broker, the broker or a licensee affiliated with the broker shall furnish a
 2  copy of the agreement to the client within a reasonable time after the
 3  agreement is signed by the broker or a licensee affiliated with the broker.
 4    (g)  An agency agreement with a seller or landlord shall include any
 5  potential for the seller's agent or landlord's agent to act as a disclosed
 6  dual agent.
 7    (h)  An agency agreement with a buyer or tenant shall include any
 8  potential for the buyer's agent or tenant's agent to act as a disclosed dual
 9  agent or for an affiliated licensee to act as a designated agent.
10    (i)  An agency agreement shall not contain an authorization for the
11  broker to sign or initial any document on behalf of the broker's client in
12  a real estate transaction or authorization for the broker to act as attorney-
13  in-fact for the client.
14    (j)  An agency agreement with a seller shall not provide that the brok-
15  er's commission be based on the difference between the gross sales price
16  and the net proceeds to the owner.
17    (k)  The broker shall not assign, sell or otherwise transfer a written
18  agency agreement to another broker without the express written consent
19  of all parties to the original agreement.
20    (l)  A licensee shall not solicit an agency agreement from a seller or
21  landlord if the licensee knows that the seller or landlord has, with regard
22  to the property, an agency agreement granting an exclusive right to sell
23  or exclusive agency to another broker.
24    (m)  A licensee shall not solicit an agency agreement from a buyer or
25  tenant if the licensee knows that the buyer or tenant has a written agency
26  agreement granting exclusive representation to another broker.
27    (n)  A licensee shall not induce any party to break any agency agree-
28  ment.
29    (o)  A licensee shall not negotiate a sale, exchange or lease of real
30  estate directly with a buyer or tenant if the licensee knows that the buyer
31  or tenant has an agency agreement granting exclusive representation to
32  another broker.
33    (p)  A licensee shall not negotiate a sale, exchange or lease of real
34  estate directly with a seller or landlord if the licensee knows that the seller
35  or landlord has an agency agreement granting an exclusive right to sell or
36  exclusive agency to another broker.
37    Sec. 27.  On and after October 1, 1997, K.S.A. 1996 Supp. 58-30,103,
38  as revived by section 26 of this act, is hereby amended to read as follows:
39  58-30,103. (a) Except when acting as a transaction broker or solely as a
40  seller, buyer, landlord or tenant, a broker shall act only as a statutory
41  agent in any real estate transaction. A licensee may act as a disclosed dual
42  agent but shall not act as an undisclosed dual agent or in a dual capacity
43  of agent and undisclosed principal in any transaction.
HB 2264--Am.
                                     

 1    (b)  A broker may work with a single party in separate transactions
 2  pursuant to different relationships, including, but not limited to, selling
 3  one property as a seller's agent and working with that seller in buying
 4  another property as a buyer's agent if the broker complies with this act
 5  in establishing the relationships for each transaction. A broker who has
 6  been working with a seller, landlord, buyer or tenant as a transaction
 7  broker may act as an agent for the seller, landlord, buyer or tenant if the
 8  broker complies with this act in establishing the agency relationship.
 9    (c)  Before an agency agreement is signed, the broker or an affiliated
10  licensee shall advise the prospective buyer or seller of alternative agency
11  relationships pursuant to K.S.A. 1996 Supp. 58-30,110. A broker may be
12  engaged as a transaction broker by oral or written agreement with the
13  seller, landlord, buyer or tenant. A broker shall be considered a transac-
14  tion broker unless:
15    (1)  An agency relationship between the broker and the party to be
16  represented is established pursuant to this section; or
17    (2)  a broker works with a buyer or tenant as a subagent of the seller
18  or landlord by accepting an offer of subagency.
19    (d) (1)  Except as provided in subsection (d)(2), an agency agreement
20  with a seller or landlord shall be signed a broker intending to establish
21  an agency relationship with a seller or landlord shall enter into a written
22  agency agreement with the party to be represented prior to the licensee's
23  engaging in any of the activities enumerated in subsection (e) of K.S.A.
24  58-3035 and amendments thereto as an employee of, or on behalf of, the
25  seller or landlord.
26    (2)  If the real estate which is to be offered for sale is owned by any
27  agency of the federal government, a broker may, on behalf of the owner,
28  engage in activities enumerated in subsection (e) of K.S.A. 58-3035 and
29  amendments thereto after obtaining verbal authorization from the federal
30  agency for which services are to be performed.
31    (e)  An agency agreement with a buyer or tenant shall be signed at or
32  prior to the first showing of a property if the licensee is acting in the
33  capacity of a buyer's agent. If the first showing is an open house and the
34  buyer seeks representation from the licensee holding the open house:
35    (1)  The licensee may obtain a written agency agreement with the
36  buyer and act as a disclosed dual agent pursuant to K.S.A. 1996 Supp.
37  58-30,108; or
38    (2)  if the property was not listed by the licensee holding the open
39  house, the licensee may obtain a written agency agreement with the buyer
40  and act as a designated agent pursuant to K.S.A. 1996 Supp. 58-30,109.
41  To establish an agency relationship with a buyer or tenant, a broker shall
42  enter into a written agency agreement with the party to be represented
43  no later than the signing of an offer to purchase or lease.
HB 2264--Am.
                                     

 1    (f)  An agency agreement shall set forth the terms and conditions of
 2  the relationship, including a fixed date of expiration, any limitation on the
 3  duty of confidentiality and the terms of compensation, and shall specify
 4  refer to the duties and obligations pursuant to K.S.A. 1996 Supp. 58-
 5  30,106 or 58-30,107, including, but not limited to, any duty of confiden-
 6  tiality and the terms of compensation and amendments thereto. The
 7  agreement shall be signed by the party to be represented and by the
 8  broker or a licensee affiliated with the broker. A copy of the agreement
 9  shall be furnished to the client at the time the client signs the agreement.
10  If, at the time the client signs the agreement, the agreement is not signed
11  by the broker or a licensee affiliated with the broker, the broker or a
12  licensee affiliated with the broker shall furnish a copy of the agreement
13  to the client within a reasonable time after the agreement is signed by
14  the broker or a licensee affiliated with the broker.
15    (g)  An agency agreement with a seller or landlord shall include any
16  potential:
17    (1)  for the seller's agent or landlord's agent to act as a disclosed dual
18  agent transaction broker;
19    (2)  for an affiliated licensee to act as a designated agent for the buyer
20  and the designated agent's supervising broker or branch broker, and an
21  affiliated licensee if applicable, to act as a transaction broker; or
22    (3)  for the broker to designate an affiliated licensee to act as the des-
23  ignated agent for the seller on the broker's personal listing pursuant to
24  subsection (b)(2) of K.S.A. 58-30,109 and amendments thereto.
25    (h)  An agency agreement with a buyer or tenant shall include any
26  potential:
27    (1)  For the buyer's agent or tenant's agent to act as a disclosed dual
28  agent transaction broker; or
29    (2)  For an affiliated licensee to act as a designated agent for the seller
30  and the designated agent's supervising broker or branch broker, and an
31  affiliated licensee if applicable, to act as a transaction broker.
32    (i)  An agency agreement shall not contain an authorization for the
33  broker to sign or initial any document on behalf of the broker's client in
34  a real estate transaction or authorization for the broker to act as attorney-
35  in-fact for the client.
36    (j)  An agency agreement with a seller shall not provide that the brok-
37  er's commission be based on the difference between the gross sales price
38  and the net proceeds to the owner.
39    (k)  The broker shall not assign, sell or otherwise transfer a written
40  agency agreement to another broker without the express written consent
41  of all parties to the original agreement.
42    (l)  A licensee shall not solicit an agency agreement from a seller or
43  landlord if the licensee knows that the seller or landlord has, with regard
HB 2264--Am.
                                     

 1  to the property, an agency agreement granting an exclusive right to sell
 2  or exclusive agency to another broker.
 3    (m)  A licensee shall not solicit an agency agreement from a buyer or
 4  tenant if the licensee knows that the buyer or tenant has a written agency
 5  agreement granting exclusive representation to another broker.
 6    (n)  A licensee shall not induce any party to break any agency agree-
 7  ment.
 8    (o)  A licensee shall not negotiate a sale, exchange or lease of real
 9  estate directly with a buyer or tenant if the licensee knows that the buyer
10  or tenant has an agency agreement granting exclusive representation to
11  another broker. If a licensee knows that a buyer or tenant has an agency
12  agreement granting exclusive representation to another broker, the li-
13  censee shall not contact the buyer or tenant and shall not initiate nego-
14  tiations for the sale, exchange or lease of real estate with the buyer or
15  tenant. The licensee may negotiate the sale, exchange or lease of real estate
16  directly with the buyer or tenant with the informed consent of the buyer
17  or tenant. The informed consent shall be evidenced by a consent agree-
18  ment signed by the buyer or tenant prior to any such direct negotiation.
19  The consent agreement shall acknowledge the buyer or tenant agency
20  agreement and that the buyer or tenant may be liable for compensation
21  under the terms of the agency agreement. The commission, by rules and
22  regulations, shall adopt a consent agreement to be used by licensees pur-
23  suant to this subsection.
24    (p)  A licensee shall not negotiate a sale, exchange or lease of real
25  estate directly with a seller or landlord if the licensee knows that the seller
26  or landlord has an agency agreement granting an exclusive right to sell or
27  exclusive agency to another broker. A buyer's or tenant's agent or a sub-
28  agent may present an offer to the seller or landlord if the seller's or lan-
29  dlord's agent is present.
30    Sec. 28.  On or after July 1, 1997, K.S.A. 1996 Supp. 58-30,104 is
31  hereby revived to read as follows: 58-30,104. (a) The relationships set
32  forth in K.S.A. 1996 Supp. 58-30,103 shall commence at the time that
33  the client engages the broker, and shall continue until:
34    (1)  A transaction is closed according to the agreement of the parties;
35  or
36    (2)  if a transaction is not closed according to the agreement of the
37  parties, the earlier of:
38    (A)  Any date of expiration agreed upon by the parties in the agency
39  agreement or in any amendments thereto; or
40    (B)  any authorized termination of the relationship.
41    (b)  Except as otherwise agreed in writing, a broker owes no further
42  duties to the client after termination, expiration, or the closing of a trans-
43  action according to the agreement of the parties, except:
HB 2264--Am.
                                     

 1    (1)  To account for all moneys and property relating to the engage-
 2  ment; and
 3    (2)  to keep confidential all information received during the course of
 4  the engagement which was made confidential by request or instructions
 5  from the client, unless:
 6    (A)  The client permits the disclosure by subsequent word or conduct;
 7    (B)  such disclosure is required by law; or
 8    (C)  the information becomes public from a source other than the
 9  broker.
10    Sec. 29.  On and after October 1, 1997, K.S.A. 1996 Supp. 58-30,104,
11  as revived by section 28 of this act, is hereby amended to read as follows:
12  58-30,104. (a) (1) The agency relationships set forth in K.S.A. 1996 Supp.
13  58-30,103, and amendments thereto, shall commence at the time that the
14  client engages the broker, and shall continue until:
15    (1)  (A)  A transaction is closed according to the agreement of the
16  parties; or
17    (2) (B)  if a transaction is not closed according to the agreement of
18  the parties, the earlier of:
19    (A) (i)  Any date of expiration agreed upon by the parties in the agency
20  agreement or in any amendments thereto; or
21    (B) (ii)  any authorized termination of the relationship.
22    (b) (2)  Except as otherwise agreed in writing, a broker owes no fur-
23  ther duties to the client after termination, expiration, or the closing of a
24  transaction according to the agreement of the parties, except:
25    (1) (A)  To account for all moneys and property relating to the en-
26  gagement; and
27    (2) (B)  to keep confidential all confidential information received dur-
28  ing the course of the engagement which was made confidential by request
29  or instructions from the client, unless:
30    (A) (i)  The client permits the disclosure by subsequent word or con-
31  duct;
32    (B) (ii)  such disclosure is required by law; or
33    (C) (iii)  the information becomes public from a source other than the
34  broker.
35    (b) (1)  The relationship between a transaction broker and a seller,
36  landlord, buyer or tenant shall terminate when:
37    (A)  A transaction is closed according to the agreement of the parties;
38  or
39    (B)  if a transaction is not closed according to the agreement of the
40  parties, the earlier of:
41    (i)  Any date of expiration agreed upon by the parties; or
42    (ii)  any authorized termination of the relationship.
43    (2)  Except as otherwise agreed in writing, a transaction broker owes
HB 2264--Am.
                                     

 1  no further duties to any party to the transaction after termination, expi-
 2  ration or the closing of a transaction according to the agreement of the
 3  parties, except:
 4    (A)  To account for all moneys and property relating to the engage-
 5  ment; and
 6    (B)  to keep confidential all information received during the course of
 7  the engagement which was made confidential by request of any party to
 8  the transaction, unless:
 9    (i)  The party permits the disclosure by subsequent word or conduct;
10    (ii)  such disclosure is required by law; or
11    (iii)  the information becomes public from a source other than the
12  transaction broker.
13    Sec. 30.  On and after July 1, 1997, K.S.A. 1996 Supp. 58-30,105 is
14  hereby revived to read as follows: 58-30,105. (a) Compensation is pre-
15  sumed to come from the transaction and shall be determined by agency
16  agreements entered into pursuant to K.S.A. 1996 Supp. 58-30,103.
17    (b)  Payment of compensation by itself shall not establish an agency
18  between the party who paid the compensation and the broker or any
19  affiliated licensee.
20    (c)  In any transaction, the broker's compensation may be paid by the
21  seller, the landlord, the buyer or the tenant. A broker may be compen-
22  sated by more than one party for services in a transaction if the parties
23  consent in writing to the multiple payments at or before the time of
24  entering into a contract to buy, sell or lease.
25    (d)  A broker may:
26    (1)  Pay a commission or compensation to any licensee affiliated with
27  the broker for performing services under this act;
28    (2)  with the written agreement of the seller or landlord, share a com-
29  mission with another broker who acted as subagent of the seller or land-
30  lord;
31    (3)  with the written agreement of the seller or landlord, share a com-
32  mission with a buyer's broker or a tenant's broker; and
33    (4)  pay a referral fee to a person who is licensed as a broker under
34  the real estate brokers' and salespersons' license act or under the law of
35  another jurisdiction, provided that written disclosure is made to the client
36  of any financial interest that the broker has in the brokerage firm receiving
37  the referral fee.
38    Sec. 31.  On and after October 1, 1997, K.S.A. 1996 Supp. 58-30,105,
39  as revived by section 30 of this act, is hereby amended to read as follows:
40  58-30,105. (a) Compensation is presumed to come from the transaction
41  and shall be determined by agency or transaction broker agreements en-
42  tered into pursuant to K.S.A. 1996 Supp. 58-30,103, and amendments
43  thereto.
HB 2264--Am.
                                     

 1    (b)  Payment of compensation by itself shall not establish an agency
 2  between the party who paid the compensation and the broker or any
 3  affiliated licensee.
 4    (c)  In any transaction, the broker's compensation may be paid by the
 5  seller, the landlord, the buyer or the tenant. A broker may be compen-
 6  sated by more than one party for services in a transaction if the parties
 7  consent in writing to the multiple payments at or before the time of
 8  entering into a contract to buy, sell or lease.
 9    (d)  A broker may:
10    (1)  Pay a commission or compensation to any licensee affiliated with
11  the broker for performing services under this act;
12    (2)  with the written agreement of the seller or, landlord, buyer or
13  tenant share a commission with another broker who acted as subagent of
14  the seller or landlord; a transaction broker, a subagent or an agent of the
15  other party; and
16    (3)  with the written agreement of the seller or landlord, share a com-
17  mission with a buyer's broker or a tenant's broker; and
18    (4)  pay a referral fee to a person who is licensed as a broker under
19  the real estate brokers' and salespersons' license act or under the law of
20  another jurisdiction, provided that written disclosure is made to the client
21  of any financial interest that the broker has in the brokerage firm receiving
22  the referral fee.
23    Sec. 32.  On and after July 1, 1997, K.S.A. 1996 Supp. 58-30,106 is
24  hereby revived to read as follows: 58-30,106. (a) A seller's agent or a
25  landlord's agent shall be a statutory agent with the duty and obligation
26  to:
27    (1)  Perform the terms of the written agreement made with the client;
28    (2)  exercise reasonable skill and care for the client;
29    (3)  promote the interests of the client with the utmost good faith,
30  loyalty and fidelity, including:
31    (A)  Seeking a price and terms which are acceptable to the client,
32  except that an agency agreement with a seller may provide that the broker
33  shall not be obligated to continue to market the property after an offer
34  has been accepted by the seller;
35    (B)  presenting, in a timely manner, all written offers, counteroffers
36  and back-up offers to and from the client when such offer is received
37  prior to the closing of the sale unless the seller instructs the broker in the
38  agency agreement not to submit offers after an offer has been accepted
39  by the seller;
40    (C)  disclosing to the client all adverse material facts actually known
41  by the licensee about the buyer or tenant; and
42    (D)  advising the client to obtain expert advice as to material matters
43  about which the licensee knows but the specifics of which are beyond the
HB 2264--Am.
                                     

 1  expertise of the licensee;
 2    (4)  account in a timely manner for all money and property received;
 3    (5)  comply with all requirements of this act and rules and regulations
 4  adopted hereunder; and
 5    (6)  comply with any applicable federal, state and local laws, rules and
 6  regulations and ordinances, including fair housing and civil rights statutes
 7  and rules and regulations.
 8    (b)  If pursuant to subsection (a)(3)(D), the licensee advised the client
 9  to obtain expert advice as to material matters about which the licensee
10  knows but the specifics of which are beyond the expertise of the licensee,
11  no cause of action for any person shall arise against the licensee pertaining
12  to such material matters.
13    (c)  A seller's or landlord's agent shall not disclose any confidential
14  information about the client unless disclosure is required by statute or
15  rule and regulation or failure to disclose the information would constitute
16  fraudulent misrepresentation. No cause of action for any person shall arise
17  against a licensee acting as a seller's or landlord's agent for making any
18  required or permitted disclosure.
19    (d) (1)  A seller's or landlord's agent owes no duty or obligation to a
20  customer, except that a licensee shall disclose to any customer all adverse
21  material facts actually known by the licensee, including but not limited
22  to:
23    (A)  Any environmental hazards affecting the property which are re-
24  quired by law to be disclosed;
25    (B)  the physical condition of the property;
26    (C)  any material defects in the property;
27    (D)  any material defects in the title to the property; or
28    (E)  any material limitation on the client's ability to perform under
29  the terms of the contract.
30    (2)  A seller's or landlord's agent owes no duty to conduct an inde-
31  pendent inspection of the property for the benefit of the customer and
32  owes no duty to independently verify the accuracy or completeness of
33  any statement made by the client or any qualified third party.
34    (3)  Except as provided in subsection (d)(4), a seller's or landlord's
35  agent is not required to disclose to a client or customer information re-
36  lating to the physical condition of the property if a written report regard-
37  ing the physical condition of the property has been prepared by a qualified
38  third party and provided to the client or customer.
39    (4)  A licensee shall disclose to the client or customer any facts known
40  by the licensee that contradict any information included in a written re-
41  port described in subsection (d)(3).
42    (5)  In performing an investigation or inspection and in making a dis-
43  closure in connection with a real estate transaction, a licensee shall ex-
HB 2264--Am.
                                     

 1  ercise the degree of care expected to be exercised by a reasonably prudent
 2  person who has the knowledge, skills and training required for licensure
 3  as a broker or salesperson.
 4    For purpose of this subsection, ``qualified third party'' means a federal,
 5  state or local governmental agency or any person whom the broker, af-
 6  filiated licensee or a party to the real estate transaction reasonably be-
 7  lieves has the expertise necessary to meet the industry standards of prac-
 8  tice for the type of inspection or investigation that has been conducted
 9  by the third party in order to prepare the written report.
10    (e)  A seller's or landlord's agent may show alternative properties not
11  owned by the client to prospective buyers or tenants and may list com-
12  peting properties for sale or lease without breaching any duty or obliga-
13  tion to the client.
14    (f)  A seller or landlord may agree in writing with a seller's or lan-
15  dlord's agent that the broker may offer subagency and pay compensation
16  to other brokers.
17    (g)  A seller or landlord may agree in writing with a seller's or lan-
18  dlord's agent that the broker may offer to cooperate with a buyer's or
19  tenant's agent or to cooperate with and pay compensation to a buyer's or
20  tenant's agent.
21    (h)  If the seller or landlord has authorized the broker to offer coop-
22  eration with other licensees pursuant to subsection (f) or (g), the broker
23  shall not refuse permission to another licensee to show, or to present an
24  offer to purchase, a listed property unless specifically instructed by the
25  seller in writing. The broker shall provide a copy of the written instruc-
26  tions to another licensee upon request.
27    (i)  A seller's or landlord's agent shall not be liable for punitive or
28  exemplary damages for the licensee's failure to perform any of the duties
29  set forth in this section, unless such failure is shown by clear and con-
30  vincing evidence that the licensee acted toward the plaintiff with willful
31  conduct, wanton conduct, fraud or malice.
32    Sec. 33.  On and after October 1, 1997, K.S.A. 1996 Supp. 58-30,106,
33  as revived by section 32 of this act, is hereby amended to read as follows:
34  58-30,106. (a) A seller's agent or a landlord's agent shall be a statutory
35  agent with the duty and obligation to:
36    (1)  Perform the terms of the written agreement made with the client;
37    (2)  exercise reasonable skill and care for the client;
38    (3)  promote the interests of the client with the utmost good faith,
39  loyalty and fidelity, including:
40    (A)  Seeking a price and terms which are acceptable to the client,
41  except that an agency agreement with a seller may provide that the broker
42  shall not be obligated to continue to market the property after an offer
43  has been accepted by the seller;
HB 2264--Am.
                                     

 1    (B)  presenting, in a timely manner, all written offers, counteroffers
 2  and back-up offers to and from the client when such offer is received
 3  prior to the closing of the sale unless the seller instructs the broker in the
 4  agency agreement not to submit offers after an offer has been accepted
 5  by the seller, even when the property is subject to a contract sale when
 6  such offer is received prior to the closing of the sale unless the
 7  seller instructs the broker in the agency agreement not to submit
 8  offers after an offer has been accepted by the seller;
 9    (C) (B)  disclosing to the client all adverse material facts actually
10  known by the licensee about the buyer or tenant; and
11    (D) (C)  advising the client to obtain expert advice as to material mat-
12  ters about which the licensee knows but the specifics of which are beyond
13  the expertise of the licensee;
14    (4) (3)  account in a timely manner for all money and property re-
15  ceived;
16    (5) (4)  comply with all requirements of this act and rules and regu-
17  lations adopted hereunder; and
18    (6) (5)  comply with any applicable federal, state and local laws, rules
19  and regulations and ordinances, including fair housing and civil rights
20  statutes and rules and regulations.
21    (b)  If pursuant to subsection (a)(3)(D) (a)(2)(C), the licensee advised
22  the client to obtain expert advice as to material matters about which the
23  licensee knows but the specifics of which are beyond the expertise of the
24  licensee, no cause of action for any person shall arise against the licensee
25  pertaining to such material matters.
26    (c)  A seller's or landlord's agent shall not disclose any confidential
27  information about the client unless disclosure is required by statute or
28  rule and regulation or failure to disclose the information would constitute
29  fraudulent misrepresentation. No cause of action for any person shall arise
30  against a licensee acting as a seller's or landlord's agent for making any
31  required or permitted disclosure.
32    (d) (1)  A seller's or landlord's agent owes no duty or obligation to a
33  customer, except that a licensee shall disclose to any customer all adverse
34  material facts actually known by the licensee, including but not limited
35  to:
36    (A)  Any environmental hazards affecting the property which are re-
37  quired by law to be disclosed;
38    (B)  the physical condition of the property;
39    (C)  any material defects in the property;
40    (D)  any material defects in the title to the property; or
41    (E)  any material limitation on the client's ability to perform under
42  the terms of the contract.
43    (2)  A seller's or landlord's agent owes no duty to conduct an inde-
HB 2264--Am.
                                     

 1  pendent inspection of the property for the benefit of the customer and
 2  owes no duty to independently verify the accuracy or completeness of
 3  any statement made by the client or any qualified third party.
 4    (3)  Except as provided in subsection (d)(4), a seller's or landlord's
 5  agent is not required to disclose to a client or customer information re-
 6  lating to the physical condition of the property if a written report regard-
 7  ing the physical condition of the property has been prepared by a qualified
 8  third party and provided to the client or customer.
 9    (4)  A licensee seller's or landlord's agent shall disclose to the client
10  or customer any facts actually known by the licensee that were omitted
11  from or contradict any information included in a written report described
12  in subsection (d)(3).
13    (5)  In performing an investigation or inspection and in making a dis-
14  closure in connection with a real estate transaction, a licensee shall ex-
15  ercise the degree of care expected to be exercised by a reasonably prudent
16  person who has the knowledge, skills and training required for licensure
17  as a broker or salesperson.
18    For purpose of this subsection, ``qualified third party'' means a federal,
19  state or local governmental agency or any person whom the broker, af-
20  filiated licensee or a party to the real estate transaction reasonably be-
21  lieves has the expertise necessary to meet the industry standards of prac-
22  tice for the type of inspection or investigation that has been conducted
23  by the third party in order to prepare the written report.
24    (e)  A seller's or landlord's agent may provide assistance to the cus-
25  tomer by performing ministerial acts. Performing ministerial acts for the
26  customer shall not be construed as violating the brokerage firm's agency
27  with the seller or landlord and shall not be construed as forming an agency
28  with the customer.
29    (f)  A seller's or landlord's agent may show alternative properties not
30  owned by the client to prospective buyers or tenants and may list com-
31  peting properties for sale or lease without breaching any duty or obliga-
32  tion to the client.
33    (f) (g)  A seller or landlord may agree in writing with a seller's or
34  landlord's agent that the broker may offer subagency and pay compen-
35  sation to other brokers.
36    (g) (h)  A seller or landlord may agree in writing with a seller's or
37  landlord's agent that the broker may offer to cooperate with a buyer's or
38  tenant's agent or to cooperate with and pay compensation to a buyer's or
39  tenant's agent.
40    (i)  A seller or landlord may agree in writing with a seller's or lan-
41  dlord's agent that the broker may offer to cooperate with a transaction
42  broker or to cooperate with and pay compensation to a transaction broker.
43    (h) (j)  If the seller or landlord has authorized the broker to offer
HB 2264--Am.
                                     

 1  cooperation with other licensees pursuant to subsection (f) or (g), (h) or
 2    (i) the broker shall not refuse permission to another licensee to show, or
 3  to present an offer to purchase, a listed property unless a listed property
 4  or refuse to receive and transmit to the seller or landlord a written offer
 5  or a listed property from another licensee specifically instructed by the
 6  seller in writing. The broker shall provide a copy of the written instruc-
 7  tions to another licensee upon request.
 8    (i) (k)  A seller's or landlord's agent shall not be liable for punitive or
 9  exemplary damages for the licensee's failure to perform any of the duties
10  set forth in this section, unless such failure is shown by clear and con-
11  vincing evidence that the licensee acted toward the plaintiff with willful
12  conduct, wanton conduct, fraud or malice.
13    Sec. 34.  On and after July 1, 1997, K.S.A. 1996 Supp. 58-30,107 is
14  hereby revived to read as follows: 58-30,107. (a) A buyer's or a tenant's
15  agent shall be a statutory agent with the following duty and obligation to:
16    (1)  Perform the terms of the written agreement made with the client;
17    (2)  exercise reasonable skill and care for the client;
18    (3)  promote the interests of the client with the utmost good faith,
19  loyalty and fidelity, including:
20    (A)  Seeking a price and terms which are acceptable to the client,
21  except that an agency agreement may provide that the licensee shall not
22  be obligated to seek other properties after the client enters into a pur-
23  chase contract;
24    (B)  presenting, in a timely manner, all written offers, counteroffers
25  and back-up offers to and from the client when such offer is received
26  prior to the closing of the sale unless the buyer instructs the broker in
27  the agency agreement not to submit offers after the client enters into a
28  purchase contract;
29    (C)  disclosing to the client all adverse material facts actually known
30  by the licensee; and
31    (D)  advising the client to obtain expert advice as to material matters
32  about which the licensee knows but the specifics of which are beyond the
33  expertise of the licensee;
34    (4)  account in a timely manner for all money and property received;
35    (5)  comply with all requirements of this act and rules and regulations
36  adopted hereunder; and
37    (6)  comply with any applicable federal, state and local laws, rules and
38  regulations and ordinances, including fair housing and civil rights statutes
39  or rules and regulations.
40    (b)  If pursuant to subsection (a)(3)(D), the licensee advised the client
41  to obtain expert advice as to material matters about which the licensee
42  knows but the specifics of which are beyond the expertise of the licensee,
43  no cause of action for any person shall arise against the licensee pertaining
HB 2264--Am.
                                     

 1  to such material matters.
 2    (c)  A buyer's or tenant's agent shall not disclose any confidential in-
 3  formation about the client unless disclosure is required by statute or rule
 4  and regulation or failure to disclose the information would constitute
 5  fraudulent misrepresentation. No cause of action for any person shall arise
 6  against a licensee acting as a buyer's or tenant's agent for making any
 7  required or permitted disclosure.
 8    (d) (1)  A buyer's or tenant's agent owes no duty or obligation to a
 9  customer, except that the licensee shall disclose to any customer all ad-
10  verse material facts actually known by the licensee, including but not
11  limited to material facts concerning the client's financial ability to perform
12  the terms of the transaction.
13    (2)  A buyer's or tenant's agent owes no duty to conduct an inde-
14  pendent investigation of the client's financial condition for the benefit of
15  the customer and owes no duty to independently verify the accuracy or
16  completeness of statements made by the client or any qualified third
17  party.
18    (3)  Except as provided in subsection (d)(4), a buyer's or tenant's agent
19  is not required to disclose to a client or customer information relating to
20  the physical condition of the property if a written report regarding the
21  physical condition of the property has been prepared by a qualified third
22  party and provided to the client or customer.
23    (4)  A licensee shall disclose to the client or customer any facts known
24  by the licensee that contradict any information included in a written re-
25  port described in subsection (d)(3).
26    (5)  In performing an investigation or inspection and in making a dis-
27  closure in connection with a real estate transaction, a licensee shall ex-
28  ercise the degree of care expected to be exercised by a reasonably prudent
29  person who has the knowledge, skills and training required for licensure
30  as a broker or salesperson.
31    For purpose of this subsection, ``qualified third party'' means a federal,
32  state or local governmental agency or any person whom the broker, the
33  affiliated licensee or a party to the real estate transaction reasonably be-
34  lieves has the expertise necessary to meet the industry standards of prac-
35  tice for the type of inspection or investigation that has been conducted
36  by the third party in order to prepare the written report.
37    (e)  A buyer's or tenant's agent may show properties in which the
38  client is interested to other prospective buyers or tenants without breach-
39  ing any duty or obligation to the client. This subsection is intended to
40  allow a buyer's or tenant's agent to show competing buyers or tenants the
41  same property and to assist competing buyers or tenants in attempting to
42  purchase or lease a particular property.
43    (f)  Except as provided in subsection (e) of K.S.A. 1996 Supp. 58-
HB 2264--Am.
                                     

 1  30,103, a licensee may not act as a buyer's agent on any property shown
 2  to the buyer while the licensee was acting as an agent or subagent of the
 3  seller without the written agreement of the seller. If the licensee has
 4  knowledge that another licensee affiliated with the broker showed the
 5  property to the buyer while acting as an agent or subagent of the seller,
 6  the licensee shall obtain the written agreement of the seller before acting
 7  as the buyer's agent.
 8    (g)  A buyer or tenant may agree in writing with a buyer's or tenant's
 9  agent that the agent may receive compensation from a seller's or lan-
10  dlord's agent.
11    (h)  A buyer's or tenant's agent shall not be liable for punitive or ex-
12  emplary damages for the licensee's failure to perform any of the duties
13  set forth in this section, unless such failure is shown by clear and con-
14  vincing evidence that the licensee acted toward the plaintiff with willful
15  conduct, wanton conduct, fraud or malice.
16    Sec. 35.  On and after October 1, 1997, K.S.A. 1996 Supp. 58-30,107,
17  as revived by section 34 of this act, is hereby amended to read as follows:
18  58-30,107. (a) A buyer's or a tenant's agent shall be a statutory agent with
19  the following duty and obligation to:
20    (1)  Perform the terms of the written agreement made with the client;
21    (2)  exercise reasonable skill and care for the client;
22    (3)  promote the interests of the client with the utmost good faith,
23  loyalty and fidelity, including:
24    (A)  Seeking a price and terms which are acceptable to the client,
25  except that an agency agreement may provide that the licensee shall not
26  be obligated to seek other properties after the client enters into a pur-
27  chase contract;
28    (B)  Presenting, in a timely manner, all written offers, counteroffers
29  and back-up offers to and from the client when such offer is received
30  prior to the closing of the sale unless the buyer instructs the broker in
31  the agency agreement not to submit offers after the client enters into a
32  purchase contract when such offer is received prior to the closing of
33  the sale unless the buyer instructs the broker in the agency agree-
34  ment not to submit offers after the client enters into a purchase
35  contract;
36    (C) (B)  disclosing to the client all adverse material facts actually
37  known by the licensee; and
38    (D) (C)  advising the client to obtain expert advice as to material mat-
39  ters about which the licensee knows but the specifics of which are beyond
40  the expertise of the licensee;
41    (4) (3)  account in a timely manner for all money and property re-
42  ceived;
43    (5) (4)  comply with all requirements of this act and rules and regu-
HB 2264--Am.
                                     

 1  lations adopted hereunder; and
 2    (6) (5)  comply with any applicable federal, state and local laws, rules
 3  and regulations and ordinances, including fair housing and civil rights
 4  statutes or rules and regulations.
 5    (b)  If pursuant to subsection (a)(3)(D) (a)(2)(C), the licensee advised
 6  the client to obtain expert advice as to material matters about which the
 7  licensee knows but the specifics of which are beyond the expertise of the
 8  licensee, no cause of action for any person shall arise against the licensee
 9  pertaining to such material matters.
10    (c)  A buyer's or tenant's agent shall not disclose any confidential in-
11  formation about the client unless disclosure is required by statute or rule
12  and regulation or failure to disclose the information would constitute
13  fraudulent misrepresentation. No cause of action for any person shall arise
14  against a licensee acting as a buyer's or tenant's agent for making any
15  required or permitted disclosure.
16    (d) (1)  A buyer's or tenant's agent owes no duty or obligation to a
17  customer, except that the licensee shall disclose to any customer all ad-
18  verse material facts actually known by the licensee, including but not
19  limited to material facts concerning the client's financial ability to perform
20  the terms of the transaction.
21    (2)  A buyer's or tenant's agent owes no duty to conduct an inde-
22  pendent investigation of the client's financial condition for the benefit of
23  the customer and owes no duty to independently verify the accuracy or
24  completeness of statements made by the client or any qualified third
25  party.
26    (3)  Except as provided in subsection (d)(4), a buyer's or tenant's agent
27  is not required to disclose to a client or customer information relating to
28  the physical condition of the property if a written report regarding the
29  physical condition of the property has been prepared by a qualified third
30  party and provided to the client or customer.
31    (4)  A licensee buyer's or tenant's agent shall disclose to the client or
32  customer any facts actually known by the licensee that were omitted from
33  or contradict any information included in a written report described in
34  subsection (d)(3).
35    (5)  In performing an investigation or inspection and in making a dis-
36  closure in connection with a real estate transaction, a licensee shall ex-
37  ercise the degree of care expected to be exercised by a reasonably prudent
38  person who has the knowledge, skills and training required for licensure
39  as a broker or salesperson.
40    For purpose of this subsection, ``qualified third party'' means a federal,
41  state or local governmental agency or any person whom the broker, the
42  affiliated licensee or a party to the real estate transaction reasonably be-
43  lieves has the expertise necessary to meet the industry standards of prac-
HB 2264--Am.
                                     

 1  tice for the type of inspection or investigation that has been conducted
 2  by the third party in order to prepare the written report.
 3    (e)  A buyer's or tenant's agent may provide assistance to the seller or
 4  landlord by performing ministerial acts. Performing ministerial acts for
 5  the seller or landlord shall not be construed as violating the brokerage
 6  firm's agency with the buyer or tenant and shall not be construed as
 7  forming an agency with the seller or landlord.
 8    (f)  A buyer's or tenant's agent may show properties in which the client
 9  is interested to other prospective buyers or tenants without breaching any
10  duty or obligation to the client. This subsection is intended to allow a
11  buyer's or tenant's agent to show competing buyers or tenants the same
12  property and to assist competing buyers or tenants in attempting to pur-
13  chase or lease a particular property.
14    (f)  Except as provided in subsection (e) of K.S.A. 1996 Supp. 58-
15  30,103, a licensee may not act as a buyer's agent on any property shown
16  to the buyer while the licensee was acting as an agent or subagent of the
17  seller without the written agreement of the seller. If the licensee has
18  knowledge that another licensee affiliated with the broker showed the
19  property to the buyer while acting as an agent or subagent of the seller,
20  the licensee shall obtain the written agreement of the seller before acting
21  as the buyer's agent.
22    (g)  A buyer or tenant may agree in writing with a buyer's or tenant's
23  agent that the agent may receive compensation from a seller's or lan-
24  dlord's agent or from a transaction broker.
25    (h)  A buyer's or tenant's agent shall not be liable for punitive or ex-
26  emplary damages for the licensee's failure to perform any of the duties
27  set forth in this section, unless such failure is shown by clear and con-
28  vincing evidence that the licensee acted toward the plaintiff with willful
29  conduct, wanton conduct, fraud or malice.
30    Sec. 36.  On and after July 1, 1997, K.S.A. 1996 Supp. 58-30,108 is
31  hereby revived to read as follows: 58-30,108. (a) (1) A licensee may act
32  as a dual agent only with the informed consent of all parties to the trans-
33  action. The informed consent shall be evidenced by a dual agency consent
34  agreement which shall include, at a minimum, the duties and obligations
35  included in this section.
36    (2)  If, pursuant to subsections (g) and (h) of K.S.A. 1996 Supp. 58-
37  30,103, the agency agreements include a potential for the seller's or lan-
38  dlord's agent and the buyer's or tenant's agent to act as a disclosed dual
39  agent, the dual agency consent agreement shall be signed by the buyer
40  or the tenant no later than the first showing of the property and by the
41  seller or the landlord no later than the presentation of the offer to pur-
42  chase or lease. If the agency agreements did not include a potential for
43  the seller's or landlord's agent and the buyer's or tenant's agent to act as
HB 2264--Am.
                                     

 1  a disclosed dual agent, the dual agency consent agreement shall be signed
 2  by the buyer and seller or the tenant and landlord prior to the first show-
 3  ing of the property.
 4    (b)  A disclosed dual agent shall be a statutory agent for both the seller
 5  and buyer or the landlord and tenant.
 6    (c)  A disclosed dual agent shall not represent the interest of either
 7  the buyer or the seller or the tenant or the landlord to the detriment of
 8  the other. The buyer and seller or the tenant and landlord shall have the
 9  responsibility of determining the price they will pay or accept, and they
10  may rely on information provided by the disclosed dual agent. The broker
11  shall cease to serve as either seller's or buyer's or landlord's or tenant's
12  sole and exclusive agent.
13    (d)  The following information shall not be disclosed by a disclosed
14  dual agent without the informed consent of the client to whom the in-
15  formation pertains:
16    (A)  That a buyer or tenant is willing to pay more than the purchase
17  price or lease rate offered for the property;
18    (B)  that a seller or landlord is willing to accept less than the asking
19  price or lease rate for the property;
20    (C)  what the motivating factors are for any client's buying, selling or
21  leasing the property; or
22    (D)  that a client will agree to financing terms other than those of-
23  fered.
24    (e)  A disclosed dual agent shall not disclose to one client any confi-
25  dential information or personal confidences about the other client which
26  might place one party at an advantage over the other party unless the
27  disclosure is required by statute or rule and regulation or failure to dis-
28  close the information would constitute fraudulent misrepresentation.
29    (f)  No cause of action for any person shall arise against a disclosed
30  dual agent for making any required or permitted disclosure.
31    (g)  By making any required or permitted disclosure, a disclosed dual
32  agent does not terminate the dual agency relationship.
33    (h)  In a dual agency relationship, there shall be no imputation of
34  knowledge or information between any client and the disclosed dual agent
35  or among licensees within the brokerage firm engaged as a dual agent.
36    (i)  In any transaction, a broker may without liability withdraw from
37  representing a client if either client does not consent to a disclosed dual
38  agency. Such withdrawal shall not prejudice the ability of the broker to
39  continue to represent the other client in the transaction, nor limit the
40  broker from representing the client in other transactions not involving a
41  dual agency. Such withdrawal shall not limit the ability of the broker to
42  receive a referral fee for referring a client to a broker of a different bro-
43  kerage firm.
HB 2264--Am.
                                     

 1    Sec. 37.  On and after July 1, 1997, K.S.A. 1996 Supp. 58-30,109 is
 2  hereby revived to read as follows: 58-30,109. (a) A broker may personally,
 3  or through the broker's duly authorized licensed representative, specifi-
 4  cally designate, in a written buyer agency agreement obtained pursuant
 5  to K.S.A. 1996 Supp. 58-30,103, an affiliated licensee who will be acting
 6  as legal agent of the buyer client to the exclusion of all other affiliated
 7  licensees. After verbal notice has been given to the buyer client, another
 8  affiliated licensee may be temporarily appointed as a designated agent.
 9    (b)  With the exception of a property listed by the designated agent,
10  a designated agent shall not act as an agent of any owner of property listed
11  with the broker when representing a specific buyer client.
12    (c)  If a designated agent also acts as agent of the seller of property
13  listed by the designated agent, the agent and the broker shall be disclosed
14  dual agents pursuant to K.S.A. 1996 Supp. 58-30,108.
15    (d)  If the broker performs any duty or obligation set forth in subsec-
16  tion (a)(3) of K.S.A. 1996 Supp. 58-30,106, the broker and the designated
17  agent or agents shall be disclosed dual agents pursuant to K.S.A. 1996
18  Supp. 58-30,108.
19    (e)  The broker shall not be considered to be acting for more than
20  one party in the transaction provided that the broker is not a disclosed
21  dual agent pursuant to subsection (c) or (d).
22    (f)  Unless acting as a disclosed dual agent pursuant to subsection (c)
23  or (d), a designated agent shall not be considered a dual agent nor shall
24  the licensee be liable for acting as an undisclosed dual agent merely by
25  performing licensed services in accordance with the provisions of this
26  section.
27    Sec. 38.  On and after October 1, 1997, K.S.A. 1996 Supp. 58-30,109,
28  as revived by section 37 of this act, is hereby amended to read as follows:
29  58-30,109. (a) In the absence of designated agents appointed pursuant to
30  subsection (b), a brokerage firm may act as a transaction broker pursuant
31  to section 1, and amendments thereto, on an in-house transaction with
32  the informed consent of the seller client and the buyer client. The informed
33  consent shall be evidenced by a transaction broker addendum to the
34  agency agreements and shall be signed by the buyer prior to writing the
35  offer and by the seller prior to signing the contract.
36    (b) (1)   A broker may personally, or through the broker's duly au-
37  thorized licensed representative, specifically designate, in a written buyer
38  agency agreement obtained pursuant to K.S.A. 1996 Supp. 58-30,103, an
39  affiliated licensee and amendments thereto, one or more affiliated licens-
40  ees who will be acting as legal agent of the buyer client or seller client to
41  the exclusion of all other affiliated licensees. After verbal notice has been
42  given to the buyer client, another affiliated licensee may be temporarily
43  appointed as a designated agent.
HB 2264--Am.
                                     

 1    (b)  With the exception of a property listed by the designated agent,
 2  a designated agent shall not act as an agent of any owner of property listed
 3  with the broker when representing a specific buyer client.
 4    (c)  If a designated agent also acts as agent of the seller of property
 5  listed by the designated agent, the agent and the broker shall be disclosed
 6  dual agents pursuant to K.S.A. 1996 Supp. 58-30,108.
 7    (d)  If the broker performs any duty or obligation set forth in subsec-
 8  tion (a)(3) of K.S.A. 1996 Supp. 58-30,106, the broker and the designated
 9  agent or agents shall be disclosed dual agents pursuant to K.S.A. 1996
10  Supp. 58-30,108.
11    (e)  The broker shall not be considered to be acting for more than
12  one party in the transaction provided that the broker is not a disclosed
13  dual agent pursuant to subsection (c) or (d).
14    (f)  Unless acting as a disclosed dual agent pursuant to subsection (c)
15  or (d), a designated agent shall not be considered a dual agent nor shall
16  the licensee be liable for acting as an undisclosed dual agent merely by
17  performing licensed services in accordance with the provisions of this
18  section.
19    (2)  If a buyer client of a designated agent wants to see a property
20  which was personally listed by the broker, the broker, with the written
21  consent of the seller, may specifically designate an affiliated licensee who
22  will act as legal agent of the seller client to the exclusion of all other
23  affiliated licensees. The written consent of the seller shall contain the name
24  of the prospective buyer and shall acknowledge that the broker shall act
25  as a transaction broker regarding any transaction with the buyer. The
26  written consent of the seller shall be signed prior to presentation of any
27  offer.
28    (3)  A designated agent of a seller client shall have the duties and
29  obligations set forth in K.S.A. 58-30,106, and amendments thereto. A des-
30  ignated agent of a buyer client shall have the duties and obligations set
31  forth in K.S.A. 58-30,107, and amendments thereto.
32    (4)  In any transaction involving a designated agent, the supervising
33  broker of the designated agent shall act as a transaction broker pursuant
34  to section 1, and amendments thereto, unless both buyer and seller are
35  represented by designated agents and the designated agents are super-
36  vised by the same branch broker. In that case, the branch broker shall
37  act as a transaction broker pursuant to section 1, and amendments
38  thereto. The supervising broker, or branch broker if applicable, may ap-
39  point an affiliated licensee to act in the transaction as a transaction broker
40  pursuant to section 1, and amendments thereto.
41    (5)  A designated agent may disclose to the designated agent's super-
42  vising broker, or branch broker if applicable, and to an affiliated licensee
43  appointed as a transaction broker pursuant to paragraph (4), confidential
HB 2264--Am.
                                     

 1  information of a client for the purpose of seeking advice or assistance for
 2  the benefit of the client in regard to a transaction.
 3    (6)  If a buyer client of a designated agent wants to see a property
 4  owned by a seller client of the designated agent, the designated agent may
 5  act as a transaction broker pursuant to section 1, and amendments
 6  thereto, with the informed consent of the seller client and buyer client.
 7  The informed consent shall be evidenced by a transaction broker adden-
 8  dum to the agency agreements and shall be signed by the buyer prior to
 9  writing the offer and by the seller prior to signing the contract.
10    (c)  The commission, by rules and regulations, shall adopt a transac-
11  tion broker addendum form to be used by licensees pursuant to this sec-
12  tion.
13    Sec. 39.  On and after July 1, 1997, K.S.A. 1996 Supp. 58-30,110 is
14  hereby revived to read as follows: 58-30,110. (a) (1) The commission shall
15  adopt a rule and regulation prescribing the language which shall be in-
16  cluded in a form entitled ``Disclosure of alternative agency relationships''.
17    (2)  At the discretion of the broker, the disclosure of alternative
18  agency relationships form may be either a separate document or may be
19  contained in the agency agreement with the client.
20    (3)  Except as provided in subsection (a)(4), a licensee shall furnish a
21  prospective buyer or seller with a copy of the disclosure of alternative
22  agency relationships form at the first occurrence of either of the following
23  events regarding real estate transactions:
24    (A)  A face-to-face meeting with the prospective buyer or seller; or
25    (B)  a written communication from the licensee.
26    The licensee shall note the furnishing of a copy of the disclosure on
27  the contract.
28    (4)  A licensee is not required to provide a copy of the form to a
29  prospective buyer or seller in the following instances:
30    (A)  The licensee is acting solely as a principal and not as an agent for
31  another;
32    (B)  the written communication from the licensee is a solicitation of
33  business;
34    (C)  the face-to-face meeting occurs at an open house and there is no
35  substantive discussion regarding a transaction; or
36    (D)  the face-to-face meeting is a mere solicitation of business and
37  there is no substantive discussion regarding a transaction.
38    (b) (1)  Except for instances when a licensee is providing information
39  through an advertisement or other form of public notice of the licensee's
40  representation of a client, a licensee representing a client in a proposed
41  real estate transaction shall disclose the representation at the time of
42  every contact with another licensee representing the other party. The
43  disclosure may be made orally or in writing.
HB 2264--Am.
                                     

 1    (2)  Each time a licensee is contacted by another licensee who re-
 2  quests permission to show property to a prospective buyer, the licensee
 3  shall inquire whether or not the licensee represents the buyer.
 4    (c)  The disclosure of the agency relationship between all licensees
 5  involved and the seller and buyer shall be included in any contract for
 6  sale and in any lot reservation agreement.
 7    Sec. 40.  On and after October 1, 1997, K.S.A. 1996 Supp. 58-30,110,
 8  as revived by section 39 of this act, is hereby amended to read as follows:
 9  58-30,110. (a) (1) The commission shall adopt a rule and regulation pre-
10  scribing the language which shall be included in a form entitled ``Disclo-
11  sure of alternative agency relationships'' describes a seller's agent, a buy-
12  er's agent and a transaction broker for inclusion in a brochure entitled
13  ``real estate brokerage relationships''.
14    (2)  At the discretion of the broker, the disclosure of alternative
15  agency relationships form may be either a separate document or may be
16  contained in the agency agreement with the client.
17    (3)  Except as provided in subsection (a)(4) (a)(3), a licensee shall
18  furnish a prospective buyer or seller with a copy of the disclosure of
19  alternative agency relationships form at the first occurrence of either of
20  the following events regarding real estate transactions:
21    (A)  A face-to-face meeting with the prospective buyer or seller; or
22    (B)  a written communication from the licensee.
23    The licensee shall note the furnishing of a copy of the disclosure on
24  the contract the brochure at the first practical opportunity.
25    (4) (3)  A licensee is not required to provide a copy of the form bro-
26  chure to a prospective buyer or seller in the following instances:
27    (A)  The licensee is acting solely as a principal and not as an agent for
28  another;
29    (B)  the written communication from the licensee is a solicitation of
30  business;
31    (C)  the face-to-face meeting occurs at an open house and there is no
32  substantive discussion regarding a transaction; or transaction is regarding
33  the sale or lease of commercial property or the sale of residential property
34  of more than four units;
35    (D)  the face-to-face meeting is a mere solicitation of business and
36  there is no substantive discussion regarding a transaction. transaction is
37  regarding the sale of property by public auction;
38    (E)  the licensee is only performing ministerial acts; or
39    (F)  the customer or client has already received the brochure from the
40  licensee's brokerage firm.
41    (4)  Acknowledgment of receipt of the brochure by the seller and buyer
42  shall be included in any contract for sale.
43    (b) (1)  Except for instances when a licensee is providing information
HB 2264--Am.
                                     

 1  through an advertisement or other form of public notice of the licensee's
 2  representation of a client, a licensee representing a client in a proposed
 3  real estate transaction shall disclose the representation at the time of
 4  every the initial contact with another licensee representing the other
 5  party. The disclosure may be made orally or in writing.
 6    (2)  Each time a licensee is contacted by another licensee who re-
 7  quests permission to show property to a prospective buyer, the licensee
 8  shall inquire whether or not the licensee represents the buyer.
 9    (c)  The disclosure of the agency brokerage relationship between all
10  licensees involved and the seller and buyer shall be included in any con-
11  tract for sale and in any lot reservation agreement.
12    Sec. 41.  On and after July 1, 1997, K.S.A. 1996 Supp. 58-30,111 is
13  hereby revived to read as follows: 58-30,111. (a) A client shall not be
14  liable for a misrepresentation of the client's statutory agent arising out of
15  the agency agreement unless the client knew of the misrepresentation.
16    (b)  A statutory agent shall not be liable for a misrepresentation of the
17  agent's client arising out of the agency agreement unless the licensee
18  knew of the misrepresentation.
19    (c)  A statutory agent shall not be liable for an innocent misrepresen-
20  tation in information provided to the seller or landlord or to the buyer or
21  tenant if the licensee does not have personal knowledge of the error,
22  inaccuracy or omission that is the basis for the misrepresentation.
23    Sec. 42.  On and after October 1, 1997, K.S.A. 1996 Supp. 58-30,111,
24  as revived by section 41 of this act, is hereby amended to read as follows:
25  58-30,111. (a) A client or customer shall not be liable for a misrepresen-
26  tation of or omission by  the client's statutory agent or the transaction
27  broker arising out of the agency or transaction broker agreement unless
28  the client or customer knew of the misrepresentation or omission.
29    (b)  A statutory agent or transmission transaction broker shall not be
30  liable for a misrepresentation of or omission by the agent's client or the
31  transaction broker's customer arising out of the agency or transaction
32  broker agreement unless the licensee knew of the misrepresentation or
33  omission.
34    (c)  A statutory agent or transaction broker shall not be liable for an
35  innocent or negligent misrepresentation in information provided to the
36  seller or landlord or to the buyer or tenant if the licensee does not have
37  personal knowledge of the error, inaccuracy or omission that is the basis
38  for the claim of misrepresentation.
39    Sec. 43.  On and after July 1, 1997, K.S.A. 1996 Supp. 58-30,112 is
40  hereby revived to read as follows: 58-30,112. The commission shall pro-
41  vide suggested forms of agency agreements and, by rules and regulations,
42  provide such other prohibitions, limitations and conditions relating
43  thereto as the commission may prescribe.
HB 2264--Am.
                                     

 1    Sec. 44.  On and after October 1, 1997, K.S.A. 1996 Supp. 58-30,112,
 2  as revived by section 43 of this act, is hereby amended to read as follows:
 3  58-30,112. The commission shall provide suggested sample forms of
 4  agency agreements and, by rules and regulations, provide such other pro-
 5  hibitions, limitations and conditions relating thereto as the commission
 6  may prescribe.
 7    Sec. 45.  On and after July 1, 1997, K.S.A. 1996 Supp. 74-4202 is
 8  hereby revived to read as follows: 74-4202. (a) Within 30 days after the
 9  appointment of the members to be regularly appointed within any year,
10  the commission shall meet in the city of Topeka for the purpose of or-
11  ganizing by selecting from its membership a chairperson and such other
12  officers as the commission may deem necessary and appropriate. A ma-
13  jority of the members of the commission shall constitute a quorum for
14  the exercise of the powers or authority conferred upon it.
15    (b)  The commission shall receive applications for, and issue licenses
16  to, brokers and salespersons, as provided in this act and shall administer
17  the provisions of this act and the brokerage relationships in real estate
18  transactions act, as such act governs the sale or lease of real estate that is
19  one to four residential units. The commission may do all things necessary
20  and convenient for carrying into effect the provisions of the acts and may
21  adopt rules and regulations not inconsistent with the acts. For the purpose
22  of the acts, the commission shall make all necessary investigations, and
23  every licensee shall furnish to the commission such evidence as the li-
24  censee may have as to any violation the acts or any rules and regulations
25  adopted under the acts. The commission may enforce any order by an
26  action in the district court of the county where the alleged violator resides
27  or where the violation allegedly occurred.
28    (c)  Each member of the commission shall be paid compensation, sub-
29  sistence allowances, mileage and other expenses as provided in K.S.A. 75-
30  3223 and amendments thereto.
31    (d)  The commission shall hold meetings and hearings in the city of
32  Topeka or at such places as it shall determine at such times as it may
33  designate and on request of two or more of its members.
34    (e)  The commission shall maintain an office in the city of Topeka,
35  and all files, records and property of the commission shall at all times be
36  and remain therein.
37    (f)  The commission shall adopt a seal by which it shall attest its pro-
38  ceedings. Copies of all records and papers required by law or the com-
39  mission to be filed in the office of the commission, when duly certified
40  by the director, assistant director or chairperson of the commission and
41  attested by the seal of the commission, shall be received in evidence in
42  all courts of the state of Kansas equally and with like effect as the originals.
43    Sec. 46.  On and after October 1, 1997, K.S.A. 1996 Supp. 74-4202,
HB 2264--Am.
                                     

 1  as revived by section 45 of this act, is hereby amended to read as follows:
 2  74-4202. (a) Within 30 days after the appointment of the members to be
 3  regularly appointed within any year, the commission shall meet in the city
 4  of Topeka for the purpose of organizing by selecting from its membership
 5  a chairperson and such other officers as the commission may deem nec-
 6  essary and appropriate. A majority of the members of the commission
 7  shall constitute a quorum for the exercise of the powers or authority
 8  conferred upon it.
 9    (b)  The commission shall receive applications for, and issue licenses
10  to, brokers and salespersons, as provided in this act and shall administer
11  the provisions of this act and the brokerage relationships in real estate
12  transactions act, as such act governs the sale or lease of real estate that is
13  one to four residential units. The commission may do all things necessary
14  and convenient for carrying into effect the provisions of the acts and may
15  adopt rules and regulations not inconsistent with the acts. For the purpose
16  of the acts, the commission shall make all necessary investigations, and
17  every licensee shall furnish to the commission such evidence as the li-
18  censee may have as to any violation the acts or any rules and regulations
19  adopted under the acts. The commission may enforce any order by an
20  action in the district court of the county where the alleged violator resides
21  or where the violation allegedly occurred.
22    (c)  Each member of the commission shall be paid compensation, sub-
23  sistence allowances, mileage and other expenses as provided in K.S.A. 75-
24  3223 and amendments thereto.
25    (d)  The commission shall hold meetings and hearings in the city of
26  Topeka or at such places as it shall determine at such times as it may
27  designate and on request of two or more of its members.
28    (e)  The commission shall maintain an office in the city of Topeka,
29  and all files, records and property of the commission shall at all times be
30  and remain therein.
31    (f)  The commission shall adopt a seal by which it shall attest its pro-
32  ceedings. Copies of all records and papers required by law or the com-
33  mission to be filed in the office of the commission, when duly certified
34  by the director, assistant director or chairperson of the commission and
35  attested by the seal of the commission, shall be received in evidence in
36  all courts of the state of Kansas equally and with like effect as the originals.
37    Sec. 47.  On and after July 1, 1997, K.S.A. 1995 Supp. 58-3035, as
38  amended by section 20 of chapter 212 of the 1996 Session Laws of Kansas,
39  58-3050, as amended by section 12 of chapter 212 of the 1996 Session
40  Laws of Kansas, 58-3062, as amended by section 13 of chapter 212 of the
41  1996 Session Laws of Kansas, 58-3064, as amended by section 14 of chap-
42  ter 212 of the 1996 Session Laws of Kansas, 58-3065, as amended by
43  section 15 of chapter 212 of the 1996 Session Laws of Kansas, 58-3068,
HB 2264--Am.
                                     

 1  as amended by section 16 of chapter 212 of the 1996 Session Laws of
 2  Kansas, 74-4202, as amended by section 17 of chapter 212 of the 1996
 3  Session Laws of Kansas, and K.S.A. 1996 Supp. 58-30,101, as revived
 4  by section 22 of this act, and 74-4209 are hereby repealed.
 5    Sec. 48.  On and after October 1, 1997, K.S.A. 17-2707, 58-3045 and
 6  58-3063 and K.S.A. 1996 Supp. 58-3035, as revived by section 3 of this
 7  act, 58-3036, 58-3037, 58-3039, 58-3042, 58-3046a, 58-3050, as revived
 8  by section 11 of this act, 58-3062, as revived by section 13 of this act, 58-
 9  3064, as revived by section 16 of this act, 58-3065, as revived by section
10  18 of this act, 58-3068, as revived by section 20 of this act, 58-30,101, as
11  revived amended by section 22 of this act, 58-30,102, as revived by sec-
12  tion 24 of this act, 58-30,103, as revived by section 26 of this act, 58-
13  30,104, as revived by section 28 of this act, 58-30,105, as revived by sec-
14  tion 30 of this act, 58-30,106, as revived by section 32 of this act,
15  58-30,107, as revived by section 34 of this act, 58-30,108, as revived by
16  section 36 of this act, 58-30,109, as revived by section 37 of this act, 58-
17  30,110, as revived by section 39 of this act, 58-30,111, as revived by sec-
18  tion 41 of this act, 58-30,112, as revived by section 43 of this act, and 74-
19  4202, as revived by section 45 of this act, are hereby repealed.
20    Sec. 49.  This act shall take effect and be in force from and after its
21  publication in the statute book.