(Reprinted with amendments adopted on April 21, 2003)

 

Senate Bill No. 139–Senator Townsend

 

February 18, 2003

____________

 

Referred to Committee on Commerce and Labor

 

SUMMARY—Makes various changes to provisions governing certain real estate practices. (BDR 54‑663)

 

FISCAL NOTE:  Effect on Local Government: No.

                           Effect on the State: No.

 

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EXPLANATION – Matter in bolded italics is new; matter between brackets [omitted material] is material to be omitted.

 

AN ACT relating to real estate; making various changes to provisions governing certain real estate practices; revising provisions governing property management agreements; revising provisions which require real estate broker-salesmen and real estate salesmen to disclose in certain advertisements the name of the brokerage with whom they are associated; revising provisions relating to brokerage agreements which provide for exclusive agency representation; and providing other matters properly relating thereto.

 

THE PEOPLE OF THE STATE OF NEVADA, REPRESENTED IN

SENATE AND ASSEMBLY, DO ENACT AS FOLLOWS:

 

1-1  Section 1. Chapter 645 of NRS is hereby amended by adding

1-2  thereto a new section to read as follows:

1-3  “Property management agreement” means a written contract

1-4  between a client and a broker in which the broker agrees to accept

1-5  valuable consideration from the client or another person for

1-6  providing property management for the client.

1-7  Sec. 2.  NRS 645.0005 is hereby amended to read as follows:

1-8  645.0005  As used in this chapter, unless the context otherwise

1-9  requires, the words and terms defined in NRS 645.001 to 645.040,

1-10  inclusive, and section 1 of this act have the meanings ascribed to

1-11  them in those sections.

 

2-1  Sec. 3. NRS 645.005 is hereby amended to read as follows:

2-2  645.005  “Brokerage agreement” means an oral or written

2-3  contract between a client and a [licensee] broker in which the

2-4  [licensee] broker agrees to accept valuable consideration from

2-5  the client or another person for assisting, soliciting or negotiating

2-6  the sale, purchase, option, rental or lease of real property. The term

2-7  does not include a property management agreement.

2-8  Sec. 4.  NRS 645.009 is hereby amended to read as follows:

2-9  645.009  “Client” means a person who has entered into a

2-10  brokerage agreement with a [licensee.] broker or a property

2-11  management agreement with a broker.

2-12      Sec. 5.  NRS 645.019 is hereby amended to read as follows:

2-13      645.019  “Property management” means the physical,

2-14  administrative or financial maintenance and management of real

2-15  property, or the supervision of such activities for a fee, commission

2-16  or other compensation or valuable consideration, pursuant to a

2-17  [brokerage] property management agreement.

2-18      Sec. 6.  NRS 645.315 is hereby amended to read as follows:

2-19      645.315  1.  In any advertisement through which a licensee

2-20  offers to perform services for which a license is required pursuant to

2-21  this chapter, the licensee shall:

2-22      (a) If [he] the licensee is a real estate broker, disclose the name

2-23  of any brokerage under which [he] the licensee does business; or

2-24      (b) If [he] the licensee is a real estate broker-salesman or real

2-25  estate salesman, disclose the name of the [broker] brokerage with

2-26  whom [he] the licensee is associated.

2-27      2.  [A] If a licensee is a real estate broker-salesman or real

2-28  estate salesman , the licensee shall not advertise solely under [his]

2-29  the licensee’s own name when acting in the capacity as a broker-

2-30  salesman or salesman. All such advertising must be done under the

2-31  direct supervision of and in the name of the [broker] brokerage with

2-32  whom the [broker-salesman or salesman] licensee is associated.

2-33      Sec. 7.  NRS 645.320 is hereby amended to read as follows:

2-34      645.320  Every brokerage agreement which includes a

2-35  provision for an exclusive [listing] agency representation must:

2-36      1.  Be in writing.

2-37      2.  Have set forth in its terms a definite, specified and complete

2-38  termination.

2-39      3.  Contain no provision which requires the client who signs the

2-40  brokerage agreement to notify the real estate broker of his intention

2-41  to cancel the exclusive features of [that listing] the brokerage

2-42  agreement after the termination of the [listing.] brokerage

2-43  agreement.

3-1  4.  Be signed by both the client or his authorized representative

3-2  and the [listing agent] broker or his authorized representative in

3-3  order to be enforceable.

3-4  Sec. 8.  NRS 645.6056 is hereby amended to read as follows:

3-5  645.6056  1.  A real estate broker who holds a permit to

3-6  engage in property management shall not act as a property manager

3-7  unless the broker has first obtained a [written brokerage] property

3-8  management agreement signed by the broker and the client for

3-9  whom the broker will manage the property.

3-10      2.  A [brokerage agreement for] property management

3-11  agreement must include, without limitation:

3-12      (a) The term of the agreement [;] and, if the agreement is

3-13  subject to renewal, provisions clearly setting forth the

3-14  circumstances under which the agreement may be renewed and

3-15  the term of each such renewal;

3-16      (b) A provision for the retention and disposition of deposits of

3-17  the tenants of the property during the term of the agreement [;] and,

3-18  if the agreement is subject to renewal, during the term of each

3-19  such renewal;

3-20      (c) The fee or compensation to be paid to the broker; [and]

3-21      (d) The extent to which the broker may act as the agent of the

3-22  client [.] ; and

3-23      (e) If the agreement is subject to cancellation, provisions

3-24  clearly setting forth the circumstances under which the agreement

3-25  may be cancelled. The agreement may authorize the broker or the

3-26  client, or both, to cancel the agreement with cause or without

3-27  cause, or both, under the circumstances set forth in the

3-28  agreement.

3-29      Sec. 9.  NRS 645.630 is hereby amended to read as follows:

3-30      645.630  The Commission may require a licensee, property

3-31  manager or owner-developer to pay an administrative fine of not

3-32  more than $5,000 for each violation he commits or suspend, revoke,

3-33  deny the renewal of or place conditions upon his license, permit or

3-34  registration, or impose any combination of those actions, at any time

3-35  if the licensee, property-manager or owner-developer has, by false

3-36  or fraudulent representation, obtained a license, permit or

3-37  registration, or the licensee, property manager or owner-developer,

3-38  whether or not acting as such, is found guilty of:

3-39      1.  Making any material misrepresentation.

3-40      2.  Making any false promises of a character likely to influence,

3-41  persuade or induce.

3-42      3.  Accepting a commission or valuable consideration as a real

3-43  estate broker-salesman or salesman for the performance of any of

3-44  the acts specified in this chapter or chapter 119 or 119A of NRS

4-1  from any person except the licensed real estate broker with whom he

4-2  is associated or the owner-developer by whom he is employed.

4-3  4.  Representing or attempting to represent a real estate broker

4-4  other than the broker with whom he is associated, without the

4-5  express knowledge and consent of the broker with whom he is

4-6  associated.

4-7  5.  Failing to maintain, for review and audit by the Division,

4-8  each brokerage agreement and property management agreement

4-9  governed by the provisions of this chapter and entered into by the

4-10  licensee.

4-11      6.  Failing, within a reasonable time, to account for or to remit

4-12  any money which comes into his possession and which belongs to

4-13  others.

4-14      7.  If he is required to maintain a trust account:

4-15      (a) Failing to balance the trust account at least monthly; and

4-16      (b) Failing to submit to the Division an annual accounting of the

4-17  trust account as required in NRS 645.310.

4-18      8.  Commingling the money or other property of his clients with

4-19  his own or converting the money of others to his own use.

4-20      9.  In the case of a broker-salesman or salesman, failing to place

4-21  in the custody of his licensed broker or owner-developer, as soon as

4-22  possible, any deposit or other money or consideration entrusted to

4-23  him by any person dealing with him as the representative of his

4-24  licensed broker.

4-25      10.  Accepting other than cash as earnest money unless that fact

4-26  is communicated to the owner before his acceptance of the offer to

4-27  purchase and that fact is shown in the receipt for the earnest money.

4-28      11.  Upon acceptance of an agreement, in the case of a broker,

4-29  failing to deposit any check or cash received as earnest money

4-30  before the end of the next banking day unless otherwise provided in

4-31  the purchase agreement.

4-32      12.  Inducing any party to a brokerage agreement, property

4-33  management agreement, agreement of sale or lease to break it in

4-34  order to substitute a new brokerage agreement, property

4-35  management agreement, agreement of sale or lease with the same

4-36  or another party if the inducement to make the substitution is offered

4-37  to secure personal gain to the licensee or owner-developer.

4-38  If discipline is imposed pursuant to this section, the costs of the

4-39  proceeding, including investigative costs and attorney’s fees, may

4-40  be recovered by the [Board.] Division.

4-41      Sec. 10.  NRS 645.633 is hereby amended to read as follows:

4-42      645.633  1.  The Commission may take action pursuant to

4-43  NRS 645.630 against any person subject to that section who is

4-44  guilty of:

5-1  (a) Willfully using any trade name, service mark or insigne of

5-2  membership in any real estate organization of which the licensee is

5-3  not a member, without the legal right to do so.

5-4  (b) Violating any order of the Commission, any agreement with

5-5  the Division, any of the provisions of this chapter, chapter 116, 119,

5-6  119A, 119B, 645A or 645C of NRS or any regulation adopted

5-7  [thereunder.] pursuant thereto.

5-8  (c) Paying a commission, compensation or a finder’s fee to any

5-9  person for performing the services of a broker, broker-salesman or

5-10  salesman who has not secured his license pursuant to this chapter.

5-11  This subsection does not apply to payments to a broker who is

5-12  licensed in his state of residence.

5-13      (d) A felony, or has entered a plea of guilty, guilty but mentally

5-14  ill or nolo contendere to a charge of felony or any crime involving

5-15  fraud, deceit, misrepresentation or moral turpitude.

5-16      (e) Guaranteeing, or having authorized or permitted any person

5-17  to guarantee, future profits which may result from the resale of real

5-18  property.

5-19      (f) Failure to include a fixed date of expiration in any written

5-20  brokerage agreement or failure to leave a copy of [the] such a

5-21  brokerage agreement or any property management agreement with

5-22  the client.

5-23      (g) Accepting, giving or charging any undisclosed commission,

5-24  rebate or direct profit on expenditures made for a client.

5-25      (h) Gross negligence or incompetence in performing any act for

5-26  which he is required to hold a license pursuant to this chapter,

5-27  chapter 119, 119A or 119B of NRS.

5-28      (i) Any other conduct which constitutes deceitful, fraudulent or

5-29  dishonest dealing.

5-30      (j) Any conduct which took place before he became licensed,

5-31  which was in fact unknown to the Division and which would have

5-32  been grounds for denial of a license had the Division been aware of

5-33  the conduct.

5-34      (k) Knowingly permitting any person whose license has been

5-35  revoked or suspended to act as a real estate broker, broker-salesman

5-36  or salesman, with or on behalf of the licensee.

5-37      (l) Recording or causing to be recorded a claim pursuant to the

5-38  provisions of NRS 645.8701 to 645.8811, inclusive, that is

5-39  determined by a district court to be frivolous and made without

5-40  reasonable cause pursuant to NRS 645.8791.

5-41      2.  The Commission may take action pursuant to NRS 645.630

5-42  against a person who is subject to that section for the suspension or

5-43  revocation of a real estate broker’s, broker-salesman’s or salesman’s

5-44  license issued to him by any other jurisdiction.

6-1  3.  The Commission may take action pursuant to NRS 645.630

6-2  against any person who:

6-3  (a) Holds a permit to engage in property management issued

6-4  pursuant to NRS 645.6052; and

6-5  (b) In connection with any property for which the person has

6-6  obtained a [written brokerage agreement to manage the] property

6-7  management agreement pursuant to NRS 645.6056:

6-8       (1) Is convicted of violating any of the provisions of NRS

6-9  202.470;

6-10          (2) Has been notified in writing by the appropriate

6-11  governmental agency of a potential violation of NRS 244.360,

6-12  244.3603 or 268.4124, and has failed to inform the owner of the

6-13  property of such notification; or

6-14          (3) Has been directed in writing by the owner of the property

6-15  to correct a potential violation of NRS 244.360, 244.3603 or

6-16  268.4124, and has failed to correct the potential violation, if such

6-17  corrective action is within the scope of the person’s duties pursuant

6-18  to the [written brokerage] property management agreement.

6-19      4.  The Division shall maintain a log of any complaints that it

6-20  receives relating to activities for which the Commission may take

6-21  action against a person holding a permit to engage in property

6-22  management pursuant to subsection 3.

6-23      5.  On or before February 1 of each odd-numbered year, the

6-24  Division shall submit to the Director of the Legislative Counsel

6-25  Bureau a written report setting forth, for the previous biennium:

6-26      (a) Any complaints included in the log maintained by the

6-27  Division pursuant to subsection 4; and

6-28      (b) Any disciplinary actions taken by the Commission pursuant

6-29  to subsection 3.

 

6-30  H