CHAPTER 82 SENATE BILL No. 439 An  Act concerning real estate brokers and salespersons; relating to the licensure and reg-
ulation thereof; amending K.S.A. 58-3043 and 58-3047 and K.S.A. 2001 Supp. 58-3036,
58-3037, 58-3039, 58-3042, 58-3045, 58-3050 and 58-30,103 and repealing the existing
sections.
Be it enacted by the Legislature of the State of Kansas:

      Section  1. K.S.A. 2001 Supp. 58-3036 is hereby amended to read as
follows: 58-3036. Unless exempt from this act under K.S.A. 58-3037, and
amendments thereto, no person shall:

      (a) Directly or indirectly engage in or conduct or represent that such
person engages in or conducts the business of a broker, associate broker
or salesperson within this state unless such person is licensed as such a
broker, associate broker or salesperson in accordance with this act.

      (b) Directly or indirectly act or represent that such person acts as a
broker, associate broker or salesperson within this state unless such per-
son is licensed as such a broker, associate broker or salesperson in ac-
cordance with this act.

      (c) Perform or offer, attempt or agree to perform any act described
in subsection (e) (f) of K.S.A. 58-3035, and amendments thereto, whether
as a part of a transaction or as an entire transaction, unless such person
is licensed pursuant to this act.

      Sec.  2. K.S.A. 2001 Supp. 58-3037 is hereby amended to read as
follows: 58-3037. The provisions of this act shall not apply to:

      (a) Any person, other than a person licensed under this act, who di-
rectly performs any of the acts within the scope of this act with reference
to such person's own property.

      (b) Any person who directly performs any of the acts within the scope
of this act with reference to property that such person is authorized to
transfer in any way by a power of attorney from the owner, provided that
such person receives no commission or other compensation, direct or
indirect, for performing any such act.

      (c) Services rendered by an attorney licensed to practice in this state
in performing such attorney's professional duties as an attorney.

      (d) Any person acting as receiver, trustee in bankruptcy, administra-
tor, executor or guardian, or while acting under a court order or under
the authority of a will or a trust instrument or as a witness in any judicial
proceeding or other proceeding conducted by the state or any govern-
mental subdivision or agency.

      (e) Any officer or employee of the federal or state government, or
any political subdivision or agency thereof, when performing the official
duties of the officer or employee.

      (f) Any multiple listing service wholly owned by a nonprofit organi-
zation or association of brokers.

      (g) Any nonprofit referral system or organization of brokers formed
for the purpose of referral of prospects for the sale or listing of real estate.

      (h) Railroads or other public utilities regulated by the state of Kansas,
or their subsidiaries, affiliated corporations, officers or regular employees,
unless performance of any of the acts described in subsection (e) (f) of
K.S.A. 58-3035, and amendments thereto, is in connection with the sale,
purchase, lease or other disposition of real estate or investment therein
unrelated to the principal business activity of such railroad or other public
utility or affiliated or subsidiary corporation thereof.

      (i) The sale or lease of real estate by an employee of a corporation
which owns or leases such real estate, if such employee owns not less
than 5% of the stock of such corporation.

      (j) The sale or lease of new homes by a person, partnership, associ-
ation or domestic corporation who constructed such homes, but the pro-
visions of this act shall apply to the sale or lease of any such homes by
any employee of such person, partnership or association or by any em-
ployee of such corporation who owns less than 5% of the stock of such
corporation.

      (k) The lease of real estate for agricultural purposes.

      Sec.  3. K.S.A. 2001 Supp. 58-3039 is hereby amended to read as
follows: 58-3039. (a) Any person desiring to act as a broker or salesperson
must file a written application for a license with the commission or, if
required by the commission, with the testing service designated by the
commission. The application shall be in such form and detail as the com-
mission shall prescribe and shall be accompanied by application and li-
cense fees prescribed by K.S.A. 58-3063, and amendments thereto.

      (b) A license to engage in business as a broker or salesperson shall
be granted only to a person who is 18 or more years of age and who has
a high school diploma or its equivalent.

      (c) In addition to the requirements of subsection (b), except as pro-
vided in subsection (d), each applicant for an original license as a broker
shall have been:

      (1) Licensed as a salesperson in this state or as a salesperson or broker
in another state, and shall have been actively engaged in any of the activ-
ities described in subsection (e) (f) of K.S.A. 58-3035, and amendments
thereto, for a period of at least two years during the five years immediately
preceding the date of the application for a license; or

      (2) if an applicant resides in a county that according to the 1994
estimates of the U.S. bureau of the census has a population of 20,000 or
less, the commission may, upon a finding that such county suffers from
a shortage of brokers and upon compelling evidence of need, waive or
alter the requirements of this subsection. The commission shall adopt
rules and regulations to establish alternative licensing criteria for such
applicants.

      (d) The commission may accept proof of experience in the real estate
or a related business or a combination of such experience and education
which the commission believes qualifies the applicant to act as a broker
as being equivalent to all or part of the experience required by subsection
(c).

      (e) Except as provided in K.S.A. 58-3040, and amendments thereto,
each applicant for an original license shall be required to pass a written
examination covering generally the matters confronting brokers or sales-
persons, and no license shall be issued on the basis of such an examination
either or both sections of which were administered more than four
months prior to the date that the applicant's application is filed with the
commission. The examination may be given by the commission or any
person designated by the commission. Each person taking the examina-
tion shall pay the examination fee prescribed pursuant to K.S.A. 58-3063,
and amendments thereto, which fee the commission may require to be
paid to it or directly to the testing service designated by the commission.
The examination for a broker's license shall be different from or in ad-
dition to that for a salesperson's license.

      (f)  (1) On and after October 1, 1997, Each applicant for an original
salesperson's license who meets the requirements of this act shall be
issued a temporary salesperson's license which shall expire six months
after the last calendar day of the month in which the license was issued,
on the last calendar day of that month.

      (2) No later than 10 days prior to the expiration date of a temporary
salesperson's license, the salesperson shall file an application on a form
provided by the commission. The application shall be accompanied by
the license fee prescribed by K.S.A. 58-3063, and amendments thereto,
and evidence of compliance with the requirements of subsection (f)(1) of
K.S.A. 58-3046a, and amendments thereto. The commission shall issue a
salesperson's license to a person who complies with the provisions of this
paragraph. The issuance date of the salesperson's license shall be the day
following the expiration date of the temporary license. The expiration date
of the license shall be determined in accordance with a schedule estab-
lished by rules and regulations of the commission.

      (3) Failure to comply with the provisions of paragraph (2) shall au-
tomatically cancel the temporary license on its expiration date.

      (4) A person whose temporary salesperson's license was canceled
pursuant to paragraph (3) may apply for a salesperson's license provided
such application, the license fee prescribed by K.S.A. 58-3063, and
amendments thereto, and evidence of attendance of 30 hours of instruc-
tion received after issuance of the temporary license pursuant to subsec-
tion (f)(1) of K.S.A. 58-3046a, and amendments thereto, are received by
the commission within three months after the expiration date of the tem-
porary license. The commission shall issue a salesperson's license to a
person who complies with the provisions of this paragraph. The expiration
date of the license shall be determined in accordance with a schedule
established by rules and regulations of the commission.

      (g) The commission, prior to granting an original license, shall require
proof that the applicant has a good reputation for honesty, trustworthi-
ness, integrity and competence to transact the business of broker or sa-
lesperson in such manner as to safeguard the public interest.

      (h) An application for an original license as a salesperson shall be
accompanied by the recommendation of the broker with whom the sa-
lesperson is to be associated, or by whom the salesperson is to be em-
ployed, certifying that the applicant is honest, trustworthy and of good
reputation.

      Sec.  4. K.S.A. 2001 Supp. 58-3042 is hereby amended to read as
follows: 58-3042. (a) No real estate license shall give authority to any
person other than the person to whom the license is issued.

      (b) No license shall be granted to a corporation, partnership, associ-
ation or limited liability company. Each person who is an officer of a
corporation or a member of a partnership, association or limited liability
company and who performs any act described in subsection (e) (f) of
K.S.A. 58-3035, and amendments thereto, and each person who is em-
ployed by or associated with a corporation, partnership, association or
limited liability company and who performs any act described in subsec-
tion (e) (f) of K.S.A. 58-3035, and amendments thereto, shall be a licensed
broker or licensed salesperson.

      Sec.  5. K.S.A. 58-3043 is hereby amended to read as follows: 58-
3043. (a) In determining whether to grant or renew a license the com-
mission shall consider:

      (1) Any revocation or suspension of a prior real estate license;

      (2) whether an applicant has committed any of the practices enu-
merated in K.S.A. 58-3062, and amendments thereto, or has violated this
act or rules and regulations adopted hereunder during the term of any
prior license;

      (3) any plea of guilty or nolo contendere to, or any conviction of: (A)
Forgery, embezzlement, obtaining money under false pretenses, larceny,
extortion, conspiracy to defraud or any other similar offense; (B) a crime
involving moral turpitude; or (C) any felony charge; and

      (4) such other matters as the commission deems pertinent.

      In its consideration of any such prior revocation, conduct or conviction,
the commission shall take into account the nature of the offense; any
aggravating or extenuating circumstances; the time elapsed since such
revocation, conduct or conviction; the rehabilitation or restitution per-
formed by the applicant; and such other factors as the commission deems
relevant.

      (b) The commission may deny a license to any person who, without
a license, has engaged in a real estate activity for which a license was
required.

      (c) When an applicant has made a false statement of material fact on
the application, such false statement may be sufficient reason for refusal
of a license.

      Sec.  6. K.S.A. 2001 Supp. 58-3050 is hereby amended to read as
follows: 58-3050. (a) The commission may refuse to grant or renew a
license and the license of any licensee may be revoked, suspended, con-
ditioned or restricted or a licensee may be censured, if:

      (1) The commission finds that the license has been obtained by false
or fraudulent representation or that the licensee has committed a viola-
tion of this act or rules and regulations adopted hereunder, or the bro-
kerage relationships in real estate transactions act or rules and regulations
adopted thereunder, whether the licensee acted as an agent or a principal
in the real estate transaction;

      (2) the licensee has entered a plea of guilty or nolo contendere to, or
has been convicted of: (A) Forgery, embezzlement, obtaining money un-
der false pretenses, larceny, extortion, conspiracy to defraud or any other
similar offense; (B) a crime involving moral turpitude; or (C) any felony
charge; or

      (3) the licensee has been finally adjudicated and found to be guilty
of violation of the federal fair housing act (42 U.S.C. 3601 et seq.) or
K.S.A. 44-1015 through 44-1029, and amendments thereto.;

      (4) the licensee has obtained a license by false or fraudulent repre-
sentation; or

      (5) the licensee has violated any lawful order or directive of the com-
mission.

      (b) In addition to or in lieu of any other administrative, civil or crim-
inal remedy provided by law, the commission, in accordance with the
Kansas administrative procedure act and upon a finding that a licensee
has violated a provision of this act or rules and regulations adopted here-
under, or the brokerage relationships in real estate transactions act or
rules and regulations adopted thereunder, may impose on such licensee
a civil fine not exceeding $500 for each violation.

      (c) If a broker or salesperson has been declared disabled by a court
of competent jurisdiction, the commission shall suspend the broker's or
salesperson's license for the period of disability.

      (d)  (1) Except as provided by paragraph (2) of this subsection, no
complaint alleging violation of this act or rules and regulations adopted
hereunder, or the brokerage relationships in real estate transactions act
or rules and regulations adopted thereunder, shall be commenced more
than three years from the date of the occurrence which is the subject of
the complaint.

      (2) Unless the violation is not reasonably ascertainable, complaints
alleging violation of subsection (a)(4) or (a)(5) shall be commenced within
three years from the date of the occurrence of the violation. If the violation
is not reasonably ascertainable, complaints alleging violation of subsection
(a)(4) or (a)(5) shall be commenced within three years from the date of
violation is ascertained by the commission.

      (e) All administrative proceedings pursuant to this section shall be
conducted in accordance with the Kansas administrative procedure act.

      (f) Notwithstanding any provision of this act or the brokerage rela-
tionships in real estate transactions act to the contrary, the commission
may use emergency adjudicative proceedings, as provided by K.S.A. 77-
536, and amendments thereto, to summarily suspend the license of any
licensee if the commission has reasonable cause to believe that the li-
censee's trust account is in unsound condition or that the licensee is mis-
appropriating funds belonging to other persons.

      (g) If a licensee has entered a plea of guilty or nolo contendere to, or
has been convicted of, any felony charge, the commission may use emer-
gency adjudicative proceedings, as provided by K.S.A. 77-536, and
amendments thereto, to suspend, revoke, condition or restrict the li-
censee's license.

      (h) When the real estate license of an individual is revoked and that
individual's name is included in the trade or business name of a real estate
brokerage business, the commission may deny continued use of the trade
or business name if, in the opinion of the commission, it would be con-
fusing or misleading to the public.

      If the revocation of the individual's license is appealed to district court
and a stay of the commission's order is granted by the court, the com-
mission may not deny continued use of the trade or business name until
such time as the district court upholds the order of the commission.

      Sec.  7. K.S.A. 2001 Supp. 58-30,103 is hereby amended to read as
follows: 58-30,103. (a) Except when acting as a transaction broker or
solely as a seller, buyer, landlord or tenant, a broker shall act only as a
statutory agent in any real estate transaction. A licensee shall not act as
an undisclosed a dual agent or in a dual capacity of agent and undisclosed
principal in any transaction.

      (b) A broker may work with a single party in separate transactions
pursuant to different relationships, including, but not limited to, selling
one property as a seller's agent and working with that seller in buying
another property as a buyer's agent if the broker complies with this act
in establishing the relationships for each transaction. A broker who has
been working with a seller, landlord, buyer or tenant as a transaction
broker may act as an agent for the seller, landlord, buyer or tenant if the
broker complies with this act in establishing the agency relationship.

      (c) A broker may be engaged as a transaction broker by oral or written
agreement with the seller, landlord, buyer or tenant. A broker shall be
considered a transaction broker unless:

      (1) An agency relationship between the broker and the party to be
represented is established pursuant to this section; or

      (2) a broker works with a buyer or tenant as a subagent of the seller
or landlord by accepting an offer of subagency.

      (d)  (1) Except as provided in subsection (d)(2), a broker intending
to establish an agency relationship with a seller or landlord shall enter
into a written agency agreement with the party to be represented prior
to the licensee's engaging in any of the activities enumerated in subsection
(e) (f) of K.S.A. 58-3035, and amendments thereto, as an employee of, or
on behalf of, the seller or landlord.

      (2) If the real estate which is to be offered for sale is owned by any
agency of the federal government, a broker may, on behalf of the owner,
engage in activities enumerated in subsection (e) (f) of K.S.A. 58-3035,
and amendments thereto, after obtaining verbal authorization from the
federal agency for which services are to be performed.

      (e) To establish an agency relationship with a buyer or tenant, a bro-
ker shall enter into a written agency agreement with the party to be
represented no later than the signing of an offer to purchase or lease.

      (f) An agency agreement shall set forth the terms and conditions of
the relationship, including a fixed date of expiration, any limitation on the
duty of confidentiality and the terms of compensation, and shall refer to
the duties and obligations pursuant to K.S.A. 2001 Supp. 58-30,106 or
58-30,107, and amendments thereto. The agreement shall be signed by
the party to be represented and by the broker or a licensee affiliated with
the broker. A copy of the agreement shall be furnished to the client at
the time the client signs the agreement. If, at the time the client signs
the agreement, the agreement is not signed by the broker or a licensee
affiliated with the broker, the broker or a licensee affiliated with the
broker shall furnish a copy of the agreement to the client within a rea-
sonable time after the agreement is signed by the broker or a licensee
affiliated with the broker.

      (g) An agency agreement with a seller or landlord shall include any
potential:

      (1) for the seller's agent or landlord's agent to act as a transaction
broker;

      (2) for an affiliated licensee to act as a designated agent for the buyer
and the designated agent's supervising broker or branch broker, and an
affiliated licensee if applicable, to act as a transaction broker; or

      (3) for the broker to designate an affiliated licensee to act as the
designated agent for the seller on the broker's personal listing pursuant
to subsection (b)(2) of K.S.A. 58-30,109 and amendments thereto.

      (h) An agency agreement with a buyer or tenant shall include any
potential:

      (1) For the buyer's agent or tenant's agent to act as a transaction
broker; or

      (2) For an affiliated licensee to act as a designated agent for the seller
and the designated agent's supervising broker or branch broker, and an
affiliated licensee if applicable, to act as a transaction broker.

      (i) An agency agreement shall not contain an authorization for the
broker to sign or initial any document on behalf of the broker's client in
a real estate transaction or authorization for the broker to act as attorney-
in-fact for the client.

      (j) An agency agreement with a seller shall not provide that the bro-
ker's commission be based on the difference between the gross sales price
and the net proceeds to the owner.

      (k) The broker shall not assign, sell or otherwise transfer a written
agency agreement to another broker without the express written consent
of all parties to the original agreement.

      (l) A licensee shall not solicit an agency agreement from a seller or
landlord if the licensee knows that the seller or landlord has, with regard
to the property, an agency agreement granting an exclusive right to sell
or exclusive agency to another broker.

      (m) A licensee shall not solicit an agency agreement from a buyer or
tenant if the licensee knows that the buyer or tenant has a written agency
agreement granting exclusive representation to another broker.

      (n) A licensee shall not induce any party to break any agency agree-
ment.

      (o) If a licensee knows that a buyer or tenant has an agency agreement
granting exclusive representation to another broker, the licensee shall not
contact the buyer or tenant and shall not initiate negotiations for the sale,
exchange or lease of real estate with the buyer or tenant. The licensee
may negotiate the sale, exchange or lease of real estate directly with the
buyer or tenant with the informed consent of the buyer or tenant. The
informed consent shall be evidenced by a consent agreement signed by
the buyer or tenant prior to any such direct negotiation. The consent
agreement shall acknowledge the buyer or tenant agency agreement and
that the buyer or tenant may be liable for compensation under the terms
of the agency agreement. The commission, by rules and regulations, shall
adopt a consent agreement to be used by licensees pursuant to this sub-
section.

      (p) A licensee shall not contact the seller or landlord or negotiate a
sale, exchange or lease of real estate directly with a seller or landlord if
the licensee knows that the seller or landlord has an agency agreement
granting an exclusive right to sell or exclusive agency to another broker.
A buyer's or tenant's agent or a subagent may present an offer to the
seller or landlord if the seller's or landlord's agent is present.

      Sec.  8. K.S.A. 2001 Supp. 58-3045 is hereby amended to read as
follows: 58-3045. (a) Except for a temporary salesperson's license issued
pursuant to subsection (f) of K.S.A. 58-3039, and amendments thereto,
each license issued or renewed by the commission shall expire on a date
determined in accordance with a schedule established by rules and reg-
ulations of the commission, which date shall be not more than two years
from the date of issuance or renewal. Except as otherwise provided by
this act, applicants for issuance or renewal of a license must satisfy all
applicable requirements prior to issuance or renewal of the license.

      (b)  (1) Except for a temporary salesperson's license issued pursuant
to subsection (f) of K.S.A. 58-3039, and amendments thereto, each license
shall be renewable upon the filing of a renewal application on or before
the renewal date, which is the last calendar day of the month preceding
the license expiration date. Such application shall be made on a form
provided by the commission and accompanied by (A) the renewal fee
prescribed by K.S.A. 58-3063, and amendments thereto, and (B) evidence
of compliance with the requirements of K.S.A. 58-3046a and amend-
ments thereto or the licensee's license with the licensee's request that
the license be deactivated on the renewal date pursuant to K.S.A. 58-
3049, and amendments thereto.

      (2) Failure to comply with paragraph (1) on or before the renewal
date will automatically cancel the license on the license expiration date
unless the license is renewed pursuant to subsection (c) prior to the ex-
piration date.

      (c) Any licensee who failed to comply with the requirements of sub-
section (b)(1), may have the licensee's license reinstated and renewed by
the payment of the renewal fee prescribed by K.S.A. 58-3063, and amend-
ments thereto, and a late fee of $50, if such fees are remitted to the
commission not later than six months following the expiration date of such
license and accompanied by (1) an application for late renewal obtained
from the commission, and (2) evidence of compliance with the require-
ments of K.S.A. 58-3046a and amendments thereto or a written request
that the licensee's license be renewed on deactivated status pursuant to
K.S.A. 58-3049 and amendments thereto.

      (c) The commission may reinstate and renew the license of a licensee
who has failed to comply with the requirements of subsection (b)(1) if
within six months following the date of the expiration of the license, the
licensee submits to the commission an application for late renewal. Such
application shall be made on a form provided by the commission and shall
be signed by the licensee. Except for late renewal of a license on deacti-
vated status pursuant to K.S.A. 58-3849, and amendments thereto, such
application also shall be signed by the licensee's supervising broker or
branch broker, if applicable. Such application shall be accompanied by
(1) evidence of compliance with K.S.A. 58-3046a, and amendments
thereto, or a written request that such license be renewed on deactivated
status pursuant to K.S.A. 58-3849, and amendments thereto, and (2) pay-
ment of the renewal fee prescribed by K.S.A. 58-3063, and amendments
thereto, plus a late fee of $50.

      (d) An application for renewal filed in compliance with the require-
ments of subsection (b) shall entitle the applicant to continue operating
under the applicant's existing license after its specified expiration date,
unless such license has been suspended or revoked and has not been
reinstated or unless such license is restricted, until such time as the com-
mission determines whether the application fulfills such requirements.

      Sec.  9. K.S.A. 58-3047 is hereby amended to read as follows: 58-
3047. (a) The commission shall issue a license as broker or salesperson
to each applicant who is qualified under and complies with all provisions
of this act and rules and regulations adopted hereunder. The form of
license shall be prescribed by the commission.

      (b) A salesperson's or associate broker's license shall be delivered or
mailed to the supervising broker or branch broker, if applicable, and shall
be kept in the custody and control of such broker until canceled or until
the salesperson or associate broker leaves employment by or association
with the broker.

      (c) Immediately upon the termination of a salesperson or associate
broker from employment by or association with a broker, the supervising
broker or branch broker, if applicable, shall return such salesperson's or
associate broker's license to the commission for cancellation. A license
canceled but not suspended or revoked may be reinstated at any time
during the period for which it was issued upon receipt of the fee for
reinstatement prescribed by K.S.A. 58-3063 and amendments thereto and
an application therefor in a form prescribed by the commission. Such
application shall be made on a form provided by the commission and shall
be signed by the licensee and the licensee's supervising broker or branch
broker, if applicable.

      (d) Except as provided in subsection (e), upon a change in the name
under which a broker is licensed or a change in the location of a broker's
office, the broker shall, within 10 days, return to the commission, for
cancellation and reinstatement under the new name or location of the
broker, the broker's license, together with the reinstatement fee pre-
scribed by K.S.A. 58-3063 and amendments thereto.

      (e) Upon a change in the name under which a supervising broker is
licensed or a change in the location of a supervising broker's office, the
supervising broker shall, within 10 days, return to the commission to-
gether with the reinstatement fee prescribed by K.S.A. 58-3063 and
amendments thereto, for cancellation and reinstatement under the new
name or location of the supervising broker: (1) The license of the super-
vising broker; (2) the license of any other broker who is associated with
the supervising broker and whose license requires reinstatement under
the new name or location; and (3) the licenses of all salespersons and
associate brokers employed by or associated with the supervising broker.
Upon a change in the name under which a branch broker is licensed or
a change in the location of a branch broker's office, the branch broker
shall, within 10 days, return to the commission, for cancellation and re-
instatement under the new name or location of the branch broker, the
license of the branch broker and the licenses of all salespersons and as-
sociate brokers assigned to the branch office, together with the reinstate-
ment fee prescribed by K.S.A. 58-3063 and amendments thereto. Upon
a change in the broker designated as the branch broker or supervising
broker of an office, the supervising broker shall, within 10 days, return
to the commission, for cancellation, the licenses of the brokers who are
affected by the change, together with the reinstatement fee prescribed
by K.S.A. 58-3063 and amendments thereto.

      (f) When any salesperson or associate broker is discharged for a vi-
olation of any of the provisions of this act, a certified written statement
of the facts with reference thereto shall be filed forthwith with the com-
mission by the supervising broker. 
Sec.  10. K.S.A. 58-3043 and 58-3047 and K.S.A. 2001 Supp. 58-3036,
58-3037, 58-3039, 58-3042, 58-3045, 58-3050 and 58-30,103 are hereby
repealed.
 Sec.  11. This act shall take effect and be in force from and after its
publication in the statute book.

Approved April 23, 2002.
__________