Brief ⁽¹⁾

The bill would amend the Real Estate Brokers' and Salespersons' License Act by creating an exception to the general prohibition against licensees offering prizes, gifts, or gratuities in certain circumstances. The bill also would enact a new statute that would prohibit licensees from soliciting referral fees under certain circumstances.

In regard to the offering of prizes and gifts, the Act would be amended to specifically exempt from the general prohibition any products or services given or offered in connection with the licensees' duties under the law.

In regard to solicitation of referral fees, the new statute (Sec. 5 of the bill) would allow such solicitation:

• If an actual introduction of business had been made;
• When a contractual referral fee relationship exists; or
• When a contractual cooperative brokerage relationship exists.

The new law also would prohibit licensees or persons acting on behalf of a licensee licensed in this or any other state from:

• Threatening to reduce or withhold employee relocation benefits or taking other action adverse to the interest of a client or customer of a real estate licensee; or
• Counsel a client or customer of another real estate licensee regarding how to terminate or amend an existing agency agreement or sales contract.

Communicating corporate relocation policies or benefits to a transferring employee would not be considered a violation of the Act as long as the communication does not involve advice or encouragement on how to terminate or amend an existing agency contract.

Background

The bill was requested for introduction by the Kansas Association of REALTORS^®. In testimony supporting the bill at the House Federal and State Affairs Committee's hearing on the bill, a representative of the Association informed the Committee that the amendment to existing law was requested in response to Attorney General Opinion No. 98-53. According to the testimony, that opinion essentially is that if a person does not need a real estate license to offer the services or products in question, the broker making the offer is in violation of existing law.

The second part of the bill was offered as a solution to a problem that arises when employees who are being transferred to another location by their employer secure the services of a real estate agent other than one with whom the employer has a referral fee arrangement. In those instances the employee's agent may be asked after the fact to pay the employer's agent a referral fee.

The House Committee made technical amendments to the bill.

Testimony in support of the bill was presented to the House Committee by the Johnson County Board of REALTORS^®, the Greater Topeka REALTORS^®, and several real estate licensees. The Kansas Real Estate Commission presented testimony in support of the new law proposed in the bill, but stated that the Commission had not reached a consensus on the "inducement" legislation.

The Division of the Budget's fiscal note for the bill stated that the Kansas Real Estate Commission indicated no fiscal impact was anticipated as a result of enactment of the bill.

1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/bill_search.html