PRIOR PRINTER'S NOS. 527, 959, 993, PRINTER'S NO. 1503
1313, 1362, 1441
No. 507 Session of 1979
Report of the Committee of Conference
To the Members of the Senate and House of Representatives:
We, the undersigned, Committee of Conference on the part of
the Senate and House of Representatives for the purpose of
considering Senate Bill No. 507, entitled:
"An act establishing the State Real Estate Commission and
providing for the licensing of real estate brokers and
salesmen."
respectfully submit the following bill as our report:
MICHAEL P. SCHAEFER
MICHAEL A. O'PAKE
CLARENCE D. BELL
(Committee on the part of the Senate.)
EUGENE GEESEY
ROOSEVELT I. POLITE
THOMAS J. MURPHY, JR.
(Committee on the part of the House of Representatives.)
AN ACT
1 Establishing the State Real Estate Commission and providing for
2 the licensing of real estate brokers and salesmen.
3 TABLE OF CONTENTS
4 Chapter 1. General Provisions
5 Section 101. Short title.
6 Chapter 2. Definitions
7 Section 201. Definitions.
8 Chapter 3. Application of the Act and Penalties
9 Section 301. Unlawful to conduct business without license.
10 Section 302. Civil suits.
11 Section 303. Criminal penalties.
12 Section 304. Exclusions.
13 Chapter 4. Powers and Duties of the State Real Estate
14 Commission - General
15 Section 401. Duty to issue licenses.
16 Section 402. Approval of schools.
17 Section 403. Authority to examine applicants.
18 Section 404. Power to promulgate regulations.
19 Section 405. Duty to keep records confidential.
20 Section 406. Administration and enforcement.
21 Chapter 5. Qualifications and Applications for Licenses
22 Subchapter A. General
23 Section 501. Reputation; inactive licensee.
24 Subchapter B. Broker's License
25 Section 511. Qualifications for license.
26 Section 512. Application for license.
27 Section 513. Corporations, partnerships and associations.
28 Subchapter C. Salesperson's License
29 Section 521. Qualifications for license.
1 Section 522. Application for license.
2 Subchapter D. Limited Broker's License
3 Section 531. Qualifications for license.
4 Section 532. Application for license.
5 Section 533. Corporations, partnerships, associations or
6 other entities.
7 Subchapter E. Limited Salesperson's License
8 Section 541. Qualifications for license.
9 Section 542. Application for license.
10 Subchapter F. Builder-Owner Salesperson's License
11 Section 551. Qualifications for license.
12 Section 552. Application for license.
13 Subchapter G. Rental Listing Referral Agent's License
14 Section 561. Qualifications for license.
15 Chapter 6. Duties of Licensees
16 Section 601. Duty of brokers and limited brokers to
17 maintain office.
18 Section 602. Nonresident licensees.
19 Section 603. Employment of associate brokers, salesperson.
20 Section 604. Prohibited acts.
21 Section 605. Out-of-state land sales; approval.
22 Chapter 7. Proceedings Before the Commission
23 Section 701. Hearings held by commission.
24 Section 702. Imputed knowledge, limitations.
25 Chapter 8. Real Estate Recovery Fund
26 Section 801. Establishment of the fund.
27 Section 802. Funding of the fund.
28 Section 803. Application for recovery from fund.
29 Chapter 9. Repealer and Effective Date
30 Section 901. Repealer.
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1 Section 902. Effective date.
2 The General Assembly of the Commonwealth of Pennsylvania
3 hereby enacts as follows:
4 CHAPTER 1
5 GENERAL PROVISIONS
6 Section 101. Short title.
7 This act shall be known and may be cited as the "Real Estate
8 Licensing Act."
9 CHAPTER 2
10 DEFINITIONS
11 Section 201. Definitions.
12 The following words and phrases when used in this act shall
13 have, unless the context clearly indicates otherwise, the
14 meanings given to them in this section:
15 "Associate broker." A broker employed by another broker.
16 "Broker." Any person who, for another and for a fee,
17 commission or other valuable consideration:
18 (1) negotiates with or aids any person in locating or
19 obtaining for purchase or lease any real estate;
20 (2) negotiates the listing, sale, purchase, exchange,
21 lease, financing or option for any real estate;
22 (3) manages or appraises any real estate;
23 (4) represents himself as a real estate consultant,
24 counsellor, house finder;
25 (5) undertakes to promote the sale, exchange, purchase
26 or rental of real estate: Provided, however, That this
27 provision shall not include any person whose main business is
28 that of advertising, promotion or public relations; or
29 (6) attempts to perform any of the above acts.
30 "Broker of record." A sole proprietor or principal
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1 individual broker of a licensed corporation, partnership or
2 association or other entity, foreign or domestic.
3 "Builder-owner salesperson." Any person who is a full-time
4 employee of a builder-owner of single and multifamily dwellings
5 located within the Commonwealth and as such employee shall be
6 authorized and empowered to list for sale, sell or offer for
7 sale, or to negotiate the sale or exchange of real estate, or to
8 lease or rent, or offer to lease, rent or place for rent, any
9 real estate owned by his builder-owner employer, or collect or
10 offer, or attempt to collect, rent for the use of real estate
11 owned by his builder-owner employer, for and on behalf of such
12 builder-owner employer.
13 "Commission." The State Real Estate Commission.
14 "Commissioner." Commissioner of Professional and
15 Occupational Affairs.
16 "Department." The Department of State acting through the
17 Commissioner of Professional and Occupational Affairs.
18 "Employ, employed, employee, employment." The use of the
19 words employ, employed, employee or employment in this act shall
20 apply to the relationship of independent contractor as well as
21 to the relationship of employment, except as applied to builder-
22 owner salespersons.
23 "Limited broker." Any person, partnership, association or
24 corporation engaging in or carrying on the business or act in
25 the capacity of a broker within the Commonwealth exclusively
26 within the limited field or branch of business which applies to
27 cemetery lots, plots and mausoleum spaces or openings.
28 "Limited salesperson." Any person employed by a broker or
29 limited broker to perform duties as defined hereinunder limited
30 broker. No person employed by a broker to perform duties other
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1 than those activities as defined hereinunder limited broker
2 shall be required to be licensed as a limited salesperson.
3 "Person." Any individual, corporation, partnership,
4 association or other entity foreign or domestic.
5 "Real estate." Any interest or estate in land, whether
6 corporeal, incorporeal, freehold or nonfreehold, whether the
7 land is situated in this Commonwealth or elsewhere including
8 leasehold interests.
9 "Rental listing referral agent." Any person who owns or
10 manages a business which collects rental information for the
11 purpose of referring prospective tenants to rental units or
12 locations of such units. The term "rental listing referral
13 agent" shall not include any employee or official of any public
14 housing authority created pursuant to State or Federal law.
15 "Salesperson." Any person employed by a licensed real estate
16 broker to list for sale, sell or offer for sale, to buy or offer
17 to buy or to negotiate the purchase or sale or exchange of real
18 estate or to negotiate a loan on real estate or to lease or rent
19 or offer to lease, rent or place for rent any real estate or
20 collect or offer or attempt to collect rent for the use of real
21 estate for or in behalf of such real estate broker. No person
22 employed by a broker to perform duties other than those
23 activities as defined herein under "broker" shall be required to
24 be licensed as a salesperson.
25 "School." Any person, corporation, partnership, association
26 or other entity, foreign or domestic, which conducts classes in
27 real estate subjects, but which is not a college or university
28 duly accredited by the Middle States Association of Colleges and
29 Secondary Schools or equivalent accreditation.
30 CHAPTER 3
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1 APPLICATION OF THE ACT AND PENALTIES
2 Section 301. Unlawful to conduct business without license.
3 From and after the effective date of this act, it shall be
4 unlawful for any person, directly or indirectly, to engage in or
5 conduct, or to advertise or hold himself out as engaging in or
6 conducting the business, or acting in the capacity of a broker
7 or salesperson, limited broker, limited salesperson, builder-
8 owner salesperson, or rental listing referral agent within this
9 Commonwealth without first being licensed as such as provided in
10 this act, unless he is exempted from obtaining a license under
11 the provisions of section 304.
12 Section 302. Civil suits.
13 No action or suit shall be instituted, nor recovery be had,
14 in any court of this Commonwealth by any person for compensation
15 for any act done or service rendered, the doing or rendering of
16 which is prohibited under the provisions of this act by a person
17 other than a licensed broker, salesperson, limited broker,
18 limited salesperson, builder-owner salesperson or rental listing
19 referral agent, unless such person was duly licensed and
20 registered hereunder as broker or salesperson at the time of
21 offering to perform any such act or service or procuring any
22 promise or contract for the payment of compensation for any such
23 contemplated act or service.
24 Section 303. Criminal penalties.
25 Any person who shall, after the effective date of this act,
26 engage in or carry on the business, or act in the capacity of a
27 broker, salesperson, limited broker, limited salesperson,
28 builder-owner salesperson or rental listing referral agent,
29 within this Commonwealth, without a license, or shall carry on
30 or continue business after the suspension or revocation of any
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1 such license issued to him, or shall employ any person as a
2 salesperson or limited salesperson to whom a license has not
3 been issued, or whose license as such shall have been revoked or
4 suspended, shall be guilty of a summary offense and upon
5 conviction thereof for a first offense shall be sentenced to pay
6 a fine not exceeding $500 or suffer imprisonment, not exceeding
7 three months, or both and for a second or subsequent offense
8 shall be guilty of a felony of the third degree and upon
9 conviction thereof, shall be sentenced to pay a fine of not less
10 than $2,000 but not more than $5,000 or to imprisonment for not
11 less than one year but not more than two years, or both.
12 Section 304. Exclusions.
13 The provisions of this act shall not apply to an owner of
14 real estate with respect to property owned or leased by such
15 owner, provided that in the case of a partnership or
16 corporation, this exclusion shall not extend to more than five
17 of its partners or officers, respectively, but to no other
18 partnership or corporation personnel or employee, except the
19 employees of a public utility acting in the ordinary course of
20 utility related business under the provisions of Title 66 of the
21 Pennsylvania Consolidated Statutes (relating to public
22 utilities), with respect to negotiating the purchase, sale or
23 lease of property nor shall this act be construed to include in
24 any way the services rendered by an attorney in fact under a
25 duly executed and recorded power of attorney from the owner or
26 lessor (provided such power of attorney is not utilized to
27 circumvent the intent of this act); nor by an attorney at law,
28 nor shall it be held to include a person acting as receiver,
29 trustee in bankruptcy, administrator, executor, trustee or
30 guardian while acting under a court order or under the authority
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1 of a will or of a trust instrument, nor shall this act apply to
2 the duly elected officer of any banking institution or trust
3 company operating under Federal or State banking laws where real
4 estate of the banking institution or trust company only is
5 involved, nor shall they be held to include any officer or
6 employee of a cemetery company who, as incidental to his
7 principal duties and without renumeration therefor, shows lots
8 in such company's cemetery to persons for their use as a family
9 burial lot, and who accepts deposits on such lots for the
10 representatives of the cemetery company, legally authorized to
11 sell the same, nor shall it be held to include any properly
12 licensed auctioneer, under statutes of this State, while
13 performing authorized duties at any bona fide auction.
14 CHAPTER 4
15 POWERS AND DUTIES OF THE
16 STATE REAL ESTATE COMMISSION - GENERAL
17 Section 401. Duty to issue licenses.
18 It shall be the duty of the department to issue licenses to
19 individuals, copartnerships and corporations, who shall comply
20 with the provisions of this act.
21 Section 402. Approval of schools.
22 Any school which shall offer or conduct any course or courses
23 of study in real estate shall first obtain approval from, and
24 thereafter abide by the rules and regulations of the commission
25 covering such schools.
26 Section 403. Authority to examine applicants.
27 The commission is empowered to prescribe the subjects to be
28 tested. The department shall arrange for the services of
29 professional testing services to write and administer
30 examinations on behalf of the commission in accordance with
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1 commission guidance and approval.
2 Section 404. Power to promulgate regulations.
3 (a) The commission shall have the power to promulgate rules
4 or regulations in order to administer and effectuate the
5 purposes of this act. All existing rules or regulations adopted
6 pursuant to the act of May 1, 1929 (P.L.1216, No.427), known as
7 the "Real Estate Brokers License Act of one thousand nine
8 hundred and twenty-nine," shall remain in full force and effect
9 until modified by the commission. The proposed rules and
10 regulations shall be submitted to the Secretary of the Senate
11 and the Chief Clerk of the House of Representatives who shall
12 cause the rules or regulations to be printed and distributed
13 among all members of both chambers in the same manner as a
14 reorganization plan. If both bodies fail to act within 60 days
15 of receipt of such rules or regulations, or within ten
16 legislative days after receipt, whichever shall last occur,
17 rules or regulations adopted by the commission shall be
18 promulgated pursuant to the provisions of the act of July 31,
19 1968 (P.L.769, No.240), referred to as the Commonwealth
20 Documents Law and 45 Pa.C.S. Part II (relating to publication
21 and effectiveness of Commonwealth documents).
22 (b) If either chamber disapproves any rule or regulation,
23 such information shall be certified by the Speaker of the House
24 of Representatives or President pro tempore of the Senate to the
25 commission, any such rule or regulation shall not be promulgated
26 as a final rule or regulation.
27 Section 405. Duty to keep records confidential.
28 Neither the Commissioner of Professional and Occupational
29 Affairs, any member of the commission, nor any deputy,
30 secretary, representative, clerk or other employee of the
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1 Commonwealth, shall directly or indirectly, willfully, exhibit,
2 publish, divulge, or make known to any person or persons any
3 record, report, statement, letter, or any other matter, fact or
4 thing except in accordance with the laws of this Commonwealth
5 dealing with the public's right to access to Commonwealth
6 proceedings and records. A person violating the provisions of
7 this section shall be guilty of a misdemeanor and sentenced to
8 pay a fine not exceeding $1,000: Provided, however, That the
9 provisions of this section shall not apply to any ruling or
10 decision of the commission, with the record relative thereto,
11 and upon which the same was founded, which ruling or decision
12 shall have been duly made and entered under and in accordance
13 with the provisions of this act, after investigation and hearing
14 as hereinafter provided. All such records shall, immediately
15 upon the entry of such ruling or decision, become public records
16 of the department, subject to inspection by any person
17 interested.
18 Section 406. Administration and enforcement.
19 The commission shall have the power and its duty shall be to
20 administer and enforce the laws of the Commonwealth relating to
21 those activities involving real estate for which licensing is
22 required under this act and to instruct and require its agents
23 to bring prosecutions for unauthorized and unlawful practice.
24 CHAPTER 5
25 QUALIFICATIONS AND APPLICATIONS FOR LICENSES
26 SUBCHAPTER A
27 GENERAL
28 Section 501. Reputation; inactive licensee.
29 (a) Licenses shall be granted only to persons who bear a
30 good reputation for honesty, trustworthiness, integrity and
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1 competence to transact the business of broker, salesperson,
2 limited broker, limited salesperson, builder-owner salesperson
3 or rental listing referral agent, in such manner as to safeguard
4 the interest of the public, and only after satisfactory proof of
5 such qualifications has been presented to the commission as it
6 shall by regulation require.
7 (b) Any person who remains inactive for a period of five
8 years without renewing his license shall, prior to having a
9 license reissued to him, submit to and pass an examination.
10 SUBCHAPTER B
11 BROKER'S LICENSE
12 Section 511. Qualifications for license.
13 The applicant for a broker's license, shall as a condition
14 precedent to obtaining a license, take the broker's license
15 examination and score a passing grade. Prior to taking the
16 examination:
17 (1) The applicant shall be at least 21 years of age.
18 (2) The applicant shall be a high school graduate or
19 shall produce proof satisfactory to the commission of an
20 education equivalent thereto.
21 (3) The applicant shall have completed 16 semester
22 credit hours of 15 hours each in real estate instruction in
23 areas of study prescribed by the rules of the commission.
24 (4) The applicant shall have been engaged full time as a
25 sales person for at least three years or possess educational
26 or experience qualifications which the commission deems to be
27 the equivalent thereof.
28 Section 512. Application for license.
29 (a) An application for a license as real estate broker shall
30 be made in writing, to the department, upon a form provided for
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1 the purpose by the department and shall contain such information
2 as to the applicant as the commission shall require.
3 (b) The application shall be accompanied by two photographs
4 of the applicant or in the case of a copartnership, association
5 or corporation of the applicant members or officers thereof.
6 (c) The application shall state the place of business for
7 which such license is desired.
8 (d) The application shall be received by the commission
9 within three years of the date upon which the applicant took the
10 examination.
11 Section 513. Corporations, partnerships and associations.
12 If the applicant for a broker's license is a corporation,
13 partnership or association, then the provisions of sections 511
14 and 512 shall apply to the individual designated as broker of
15 record. The employees of said corporation, partnership or
16 association actually engaging in or intending to engage in the
17 real estate business shall meet the provisions of sections 521
18 and 522.
19 SUBCHAPTER C
20 SALESPERSON'S LICENSE
21 Section 521. Qualifications for license.
22 Each applicant shall as a condition precedent to obtaining a
23 license, take the salesperson license examination and score a
24 passing grade. Prior to taking the examination:
25 (1) The applicant shall be at least 18 years of age.
26 (2) The applicant shall have completed four semester
27 credit hours of 15 hours each in real estate instruction in
28 areas of study prescribed by the rules of the commission.
29 Section 522. Application for license.
30 (a) An application for a license as salesperson shall be
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1 made, in writing to the department, upon a form provided for the
2 purpose by the department, and shall contain such information as
3 to the applicant, as the commission shall require.
4 (b) The applicant shall submit a sworn statement by the
5 broker with whom he desires to be affiliated certifying that the
6 broker will actively supervise and train the applicant.
7 (c) The application shall be received by the commission
8 within three years of the date upon which the applicant took the
9 examination.
10 SUBCHAPTER D
11 LIMITED BROKER'S LICENSE
12 Section 531. Qualifications for license.
13 Each applicant for a limited broker's license shall as a
14 condition to obtaining a license take the limited broker's
15 license examination and score a passing grade. Prior to taking
16 the examination:
17 (1) The applicant shall be at least 21 years of age.
18 (2) The applicant shall have been engaged full time as a
19 sales person or limited salesperson for at least three years
20 or possess educational or experience qualifications which the
21 commission deems to be the equivalent thereof.
22 Section 532. Application for license.
23 (a) An application for a license as a limited broker shall
24 be made, in writing, to the department, upon a form provided for
25 the purpose by the department and shall contain such information
26 as to the applicant, as the commission shall require.
27 (b) The applicant shall have completed four semester credit
28 hours of 15 hours each in real estate instruction in areas of
29 study prescribed by the rules of the commission.
30 (c) The application shall be received by the commission
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1 within three years of the date upon which the applicant took the
2 examination.
3 Section 533. Corporations, partnerships, associations
4 or other entities.
5 If the applicant for a limited broker's license is a
6 corporation, partnership, association, or other entity, foreign
7 or domestic, then the provisions of sections 531 and 532 shall
8 apply to the individual designated as Broker of Record, as well
9 as those members actually engaging in or intending to engage in
10 the real estate business.
11 SUBCHAPTER E
12 LIMITED SALESPERSON'S LICENSE
13 Section 541. Qualifications for license.
14 The applicant for a limited salesperson's license shall be at
15 least 18 years of age.
16 Section 542. Application for license.
17 (a) An application for a license as a limited salesperson
18 shall be made, in writing, to the department, upon a form
19 provided for the purpose by the department, and shall contain
20 such information as to the applicant, as the commission shall
21 require.
22 (b) The applicant for a license shall submit a sworn
23 affidavit by the broker or limited broker with whom he desires
24 to be affiliated certifying that the broker will actively
25 supervise and train the applicant and certifying the truth and
26 accuracy of the certification of the applicant.
27 SUBCHAPTER F
28 BUILDER - OWNER SALESPERSON'S LICENSE
29 Section 551. Qualifications for license.
30 Each applicant for a builder-owner salesperson's license,
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1 shall as a condition precedent to obtaining a license, take the
2 standard real estate salesperson's license examination and score
3 a passing grade. Prior to taking the examination:
4 (1) The applicant shall be 18 years of age.
5 (2) The applicant shall be employed by a builder-owner
6 possessing those qualifications as contained in section 501.
7 Section 552. Application for license.
8 (a) An application for a license as a builder-owner
9 salesperson shall be made, in writing to the department, upon a
10 form provided for the purpose by the department, and shall
11 contain such information as to the applicant as the commission
12 shall require.
13 (b) The applicant shall submit a sworn statement by the
14 builder-owner by whom he is employed certifying to such
15 employment.
16 (c) The application shall be received by the commission
17 within three years of the date upon which the applicant took the
18 examination.
19 SUBCHAPTER G
20 RENTAL LISTING REFERRAL AGENT'S LICENSE
21 Section 561. Qualifications for license.
22 The qualification for licensure as a rental listing referral
23 agent shall be the same as those set forth in sections 521 and
24 522 except that the applicant need not be affiliated with a
25 broker.
26 CHAPTER 6
27 DUTIES OF LICENSEES
28 Section 601. Duty of brokers and limited brokers
29 to maintain office.
30 (a) Each resident licensed broker (which term in this
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1 section shall include limited broker) shall maintain a fixed
2 office within this Commonwealth. The original license of a
3 broker and of each licensee employed by such broker shall be
4 prominently displayed in an office of the broker. The address of
5 the office shall be designated on the current renewal form. In
6 case of removal of a broker's office from the designated
7 location, all licensees registered at that location shall make
8 application to the commission before such removal or within ten
9 days thereafter, designating the new location of the office, and
10 shall pay the required fees, whereupon the commission shall
11 issue a renewal form at the new location for the unexpired
12 period, if the new location complies with the terms of this act.
13 Each licensed broker shall maintain a sign on the outside of his
14 office indicating the proper licensed brokerage name.
15 (b) If the applicant for a broker's license intends to
16 maintain more than one place of business within the
17 Commonwealth, he shall apply for and obtain an additional
18 license in his name at each branch office. Every such
19 application shall state the location of such branch office.
20 Effective 24 months after the effective date of this act, each
21 branch office shall be under the direction and supervision of a
22 manager who is either the broker of record or an associate
23 broker: Provided, however, That such broker of record or an
24 associate broker may direct and supervise more than one branch
25 office.
26 Section 602. Nonresident licensees.
27 (a) A nonresident of this Commonwealth may be licensed as a
28 broker or a salesperson, upon complying with all provisions and
29 conditions as promulgated by the commission.
30 (b) In connection with the application of a nonresident of
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1 this Commonwealth for a license as broker or salesperson, the
2 commission may accept, in lieu of the recommendations and
3 statements otherwise required to accompany the application for
4 such licensure, the license as broker or salesperson issued to
5 such applicant by the proper authority of the state of his
6 licensure. In such case the licensee need not maintain a place
7 of business within this Commonwealth. It is hereby expressly
8 stipulated, that the provisions of this subsection shall apply
9 to licensed brokers and salespersons of those states under the
10 laws of which similar recognition and courtesies are extended to
11 licensed brokers and salespersons of this Commonwealth.
12 Section 603. Employment of associate brokers, salesperson.
13 No associate broker or salesperson (which term in this
14 section shall include limited salesperson) shall be employed by
15 any other broker than is designated upon the renewal form issued
16 to said associate broker or said salesperson. Whenever a
17 licensed salesperson or associate broker desires to change his
18 employment from one licensed broker to another, he shall notify
19 the commission in writing at least ten days prior to the
20 intended date of change, pay the required fee, and return his
21 current renewal license. The commission, shall, upon receipt of
22 acknowledgement from the new broker, of the change of employment
23 forthwith issue a new renewal form and pocket card, but in the
24 interim at such time as the change in affiliation of the
25 salesperson or associate broker occurs, he shall maintain a copy
26 of the notification sent to the commissioner as his temporary
27 license pending receipt of his renewal form. It shall be the
28 duty of the applicant to notify the commission if a new renewal
29 form or other pertinent communication is not received from the
30 commission within 30 days.
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1 Section 604. Prohibited acts.
2 The commission may upon its own motion, and shall promptly
3 upon the verified complaint in writing of any person setting
4 forth a complaint under this section, ascertain the facts and,
5 if warranted, hold a hearing for the suspension or revocation of
6 a license or for the imposition of fines not exceeding $500. The
7 commission shall have power to refuse a license for cause or to
8 suspend or revoke a license or to levy fines up to $500 where
9 the said license has been obtained by false representation, or
10 by fraudulent act or conduct, or where a licensee, in performing
11 or attempting to perform any of the acts mentioned herein, is
12 found guilty of:
13 (1) Making any substantial misrepresentation.
14 (2) Making any false promise of a character likely to
15 influence, persuade or induce any person to enter into any
16 contract or agreement when he could not or did not intend to
17 keep such promise.
18 (3) Pursuing a continued and flagrant course of
19 misrepresentation or making of false promises through
20 salesperson, associate broker, other persons, or any medium
21 of advertising, or otherwise.
22 (4) Any misleading or untruthful advertising, or using
23 any other trade name or insignia or membership in any real
24 estate association or organization, of which the licensee is
25 not a member.
26 (5) Failure to comply with the following requirements:
27 (i) all deposits or other moneys accepted by every
28 person, holding a real estate broker license under the
29 provisions of this act, shall be retained by such real
30 estate broker pending consummation or termination of the
19790S0507B1503 - 18 -
1 transaction involved, and shall be accounted for in the
2 full amount thereof at the time of the consummation or
3 termination;
4 (ii) every salesperson and associate broker promptly
5 on receipt by him of a deposit or other moneys on any
6 transaction in which he is engaged on behalf of his
7 broker-employer, shall pay over the deposit to the
8 broker;
9 (iii) a broker shall not commingle the money or
10 other property of his principal with his own;
11 (iv) every broker shall immediately deposit such
12 moneys, of whatever kind or nature, belonging to others,
13 in a separate custodial or trust fund account maintained
14 by the broker with some bank or recognized depository
15 until the transaction involved is consummated or
16 terminated, at which time the broker shall account for
17 the full amount received. Under no circumstances shall a
18 broker permit any advance payment of funds belonging to
19 others to be deposited in the broker's business or
20 personal account, or to be commingled with any funds he
21 may have on deposit; or
22 (v) every broker shall keep records of all funds
23 deposited therein, which records shall indicate clearly
24 the date and from whom he received money, the date
25 deposited, the dates of withdrawals, and other pertinent
26 information concerning the transaction, and shall show
27 clearly for whose account the money is deposited and to
28 whom the money belongs. All such records and funds shall
29 be subject to inspection by the commission. Such separate
30 custodial or trust fund account shall designate the
19790S0507B1503 - 19 -
1 broker, as trustee, and such account must provide for
2 withdrawal of funds without previous notice. All such
3 records shall be available to the commission, or its
4 representatives, immediately after proper demand or after
5 written notice given, or upon written notice given to the
6 depository.
7 (6) Failing to preserve for three years following its
8 consummation records relating to any real estate transaction.
9 (7) Acting for more than one party in a transaction
10 without the knowledge and consent in writing of all parties
11 for whom he acts.
12 (8) Placing a "for sale" or "for rent" sign on any
13 property without the written consent of the owner, or his
14 authorized agent.
15 (9) Failing to voluntarily furnish a copy of any
16 listing, sale, lease, or other contract relevant to a real
17 estate transaction to all signatories thereof at the time of
18 execution.
19 (10) Failing to specify a definite termination date that
20 is not subject to prior notice, in any listing contract.
21 (11) Inducing any party to a contract, sale or lease to
22 break such contract for the purpose of substitution in lieu
23 thereof of a new contract, where such substitution is
24 motivated by the personal gain of the licensee.
25 (12) Accepting a commission or any valuable
26 consideration by a salesperson or associate broker for the
27 performance of any acts specified in this act, from any
28 person, except the licensed real estate broker with whom he
29 is affiliated.
30 (13) Failing to disclose to an owner in writing his
19790S0507B1503 - 20 -
1 intention or true position if he directly or indirectly
2 through a third party, purchased for himself or acquires or
3 intends to acquire any interest in or any option to purchase
4 property which has been listed with his office to sell or
5 lease.
6 (14) Being convicted in a court of competent
7 jurisdiction of this or any other state, or Federal court, of
8 forgery, embezzlement, obtaining money under false pretenses,
9 bribery, larceny, extortion, conspiracy to defraud, or any
10 similar offense or offenses, or pleading guilty or nolo
11 contendere to any such offense or offenses.
12 (15) Violating any rule or regulation promulgated by the
13 commission in the interest of the public and consistent with
14 the provisions of this act.
15 (16) In the case of a broker licensee, failing to
16 exercise adequate supervision over the activities of his
17 licensed salespersons or associate brokers within the scope
18 of this act.
19 (17) Failing, within a reasonable time as defined by the
20 commission, to provide information requested by the
21 commission as the result of a formal or informal complaint to
22 the commission, which would indicate a violation of this act.
23 (18) Soliciting, selling or offering for sale real
24 property by offering free lots, or conducting lotteries or
25 contests or offering prizes for the purpose of influencing by
26 deceptive conduct any purchaser or prospective purchaser of
27 real property. The commission shall promulgate necessary
28 rules and regulations to provide standards for nondeception
29 conduct under this paragraph.
30 (19) Paying or accepting, giving or charging any
19790S0507B1503 - 21 -
1 undisclosed commission, rebate, compensation or profit or
2 expenditures for a principal, or in violation of this act.
3 (20) Any conduct in a real estate transaction which
4 demonstrates bad faith, dishonesty, untrustworthiness, or
5 incompetency.
6 (21) Performing any act for which an appropriate real
7 estate license is required and is not currently in effect.
8 (22) Violating any provision of the act of October 27,
9 1955 (P.L.744, No.222), known as the "Pennsylvania Human
10 Relations Act," or any order or consent decree of the
11 Pennsylvania Human Relations Commission issued pursuant to
12 such act if such order or consent decree resulted from a
13 complaint of discrimination in the area of activities
14 authorized by virtue of this act. Such activities include but
15 are not limited to:
16 (i) Accepting listings on the understanding that
17 illegal discrimination in the sale or rental of housing
18 is to be practiced due to race, color, religious creed,
19 sex, ancestry, national origin, physical handicap,
20 disability or use of a guide dog because of blindness of
21 user of a prospective lessee or purchaser.
22 (ii) Giving false information for purposes of
23 discrimination in the rental or sale of housing due to
24 race, color, religious creed, sex, ancestry, national
25 origin, physical handicap, disability or use of a guide
26 dog because of blindness of user of a prospective lessee
27 or purchaser.
28 (iii) Making distinctions in locations of housing or
29 dates of availability of housing for purposes of
30 discrimination in the rental or sale of such housing due
19790S0507B1503 - 22 -
1 to race, color, religious creed, sex, ancestry, national
2 origin, physical handicap, disability or use of a guide
3 dog because of blindness of user of the prospective
4 lessee or purchaser.
5 Nothing contained in paragraph (22) is intended to preclude
6 the State Real Estate Commission from conducting its own
7 investigation and maintaining its own file on any complaint of
8 discrimination. The intent hereunder is to allow the
9 Pennsylvania Human Relations Commission a reasonable period of
10 time to conduct its own investigations, hold hearings, render
11 its decisions and inform the Pennsylvania Real Estate Commission
12 of its findings prior to the State Real Estate Commission taking
13 action against any broker, salesperson or sales associate
14 charged with a violation of paragraph (22).
15 If in the event the Pennsylvania Human Relations Commission
16 does not act on a discrimination complaint within 90 days after
17 it is filed with the Pennsylvania Human Relations Commission
18 then the State Real Estate Commission may proceed with action
19 against such licensee.
20 The 90-day waiting period delaying State Real Estate
21 Commission action against licensee accused of discrimination
22 applies only in initial complaints against such licensee, second
23 or subsequent complaints may be brought by individuals or the
24 Pennsylvania Human Relations Commission directly to the State
25 Real Estate Commission.
26 Section 605. Out-of-state land sales; approval.
27 Any person who proposes to engage in sales of a promotional
28 nature in this Commonwealth for a property located outside of
29 this Commonwealth, shall first apply to the commission for its
30 approval before so doing, and they and their salesmen shall
19790S0507B1503 - 23 -
1 comply with such rules, regulations, restrictions and conditions
2 pertaining thereto as the commission may impose as well as all
3 those provisions set forth in this act.
4 CHAPTER 7
5 PROCEEDINGS BEFORE THE COMMISSION
6 Section 701. Hearings held by commission.
7 (a) The said hearings may be held by the commission or any
8 members thereof, or by any of its duly authorized
9 representatives, or by any other person duly authorized by the
10 commission for such purpose in any particular case.
11 (b) The commission may adopt the findings in the report or
12 may, with or without additional testimony, either return the
13 matter to the representative for such further consideration as
14 the commission deems necessary or make additional or other
15 findings of fact on the basis of all the legally probative
16 evidence in the record and enter its conclusions of law and
17 order in accordance with the requirements for the issuance of an
18 adjudication under Title 2 of the Pennsylvania Consolidated
19 Statutes (relating to administrative law and procedure).
20 (c) Proceedings before the commission shall be conducted in
21 accordance with Title 1, Part 2 of the Pennsylvania Code.
22 Section 702. Imputed knowledge, limitations.
23 No violation of any of the provisions of this act on the part
24 of any salesperson, associate broker, or other employee of any
25 licensed broker, shall be grounds for the revocation or
26 suspension of the license of the employer of such salesperson,
27 associate broker, or employee, unless it shall appear upon the
28 hearings held, that such employer had actual knowledge of such
29 violation. A course of dealing shown to have been followed by
30 such employee shall constitute prima facie evidence of such
19790S0507B1503 - 24 -
1 knowledge upon the part of his employer.
2 CHAPTER 8
3 REAL ESTATE RECOVERY FUND
4 Section 801. Establishment of the fund.
5 There is hereby established the Real Estate Recovery Fund for
6 the purposes hereinafter set forth in this act.
7 Section 802. Funding of the fund.
8 Each licensee entitled to renew his license on or after
9 February 28, 1980, shall, when so renewing his license pay in
10 addition to the applicable license fee a further fee of $10,
11 which shall be paid and credited to the Real Estate Recovery
12 Fund, thereafter any person upon receiving his initial real
13 estate license, shall, in addition to all fees, pay into the
14 Real Estate Recovery Fund a sum of $10. If at the commencement
15 of any biennial renewal period beginning in 1982 and thereafter,
16 the balance of the fund is less than $300,000, the commission
17 may assess an additional fee, in addition to the renewal fee,
18 against each licensee in an amount not to exceed $10 which will
19 yield revenues sufficient to bring the balance of the fund to
20 $500,000. All said fees shall be paid into the State Treasury
21 and credited to the Real Estate Recovery Fund, and said deposits
22 shall be allocated solely for the purposes of the fund as
23 provided in this act. The fund shall be invested and
24 interest/dividends shall accrue to the fund.
25 Section 803. Application for recovery from fund.
26 (a) When any aggrieved person obtains a final judgment in
27 any court of competent jurisdiction against any person licensed
28 under this act, upon grounds of fraud, misrepresentation or
29 deceit with reference to any transaction for which a license is
30 required under this act and which cause of action occurred on or
19790S0507B1503 - 25 -
1 after the effective date of this act, the aggrieved person may,
2 upon termination of all proceedings, including reviews and
3 appeals, file an application in the court in which the judgment
4 was entered for an order directing payment out of the Real
5 Estate Recovery Fund of the amount unpaid upon the judgment.
6 (b) The aggrieved person shall be required to show:
7 (1) That he is not a spouse of the debtor, or the
8 personal representative of said spouse.
9 (2) That he has obtained a final judgment as set out in
10 this section.
11 (3) That all reasonable personal acts, rights of
12 discovery and such other remedies at law and in equity as
13 exist have been exhausted in the collection thereof.
14 (4) That he is making said application no more than one
15 year after the termination of the proceedings, including
16 reviews and appeals in connection with the judgment.
17 (c) The commission shall have the right to answer actions
18 provided for under this section, and subject to court approval,
19 it may compromise a claim based upon the application of the
20 aggrieved party.
21 (d) When there is an order of the court to make payment or a
22 claim is otherwise to be levied against the fund, such amount
23 shall be paid to the claimant in accordance with the limitations
24 contained in this section. Notwithstanding any other provisions
25 of this section, the liability of that portion of the fund
26 allocated for the purpose of this act shall not exceed $20,000
27 for any one judgment. If the $20,000 liability of the Real
28 Estate Recovery Fund as provided herein is insufficient to pay
29 in full claims adjudicated valid of all aggrieved persons
30 against any one licensee, such $20,000 shall be distributed
19790S0507B1503 - 26 -
1 among them in such ratio that the respective claims of the
2 aggrieved applicants bear to the aggregate of such claims held
3 valid. If, at any time, the money deposited in the Real Estate
4 Recovery Fund is insufficient to satisfy any duly authorized
5 claim or portion thereof, the commission shall, when sufficient
6 money has been deposited in the fund, satisfy such unpaid claims
7 or portions thereof, in the order that such claims or portions
8 thereof were originally filed, plus accumulated interest at the
9 rate of 6% a year.
10 (e) Upon petition of the commission the court may require
11 all claimants and prospective claimants against one licensee to
12 be joined in one action, to the end that the respective rights
13 of all such claimants to the Real Estate Recovery Fund may be
14 equitably adjudicated and settled.
15 (f) Should the commission pay from the Real Estate Recovery
16 Fund any amount in settlement of a claim as provided for in this
17 act against a licensee, the license of that person shall
18 automatically suspend upon the effective date of the payment
19 thereof by the commission. No such licensee shall be granted
20 reinstatement until he has repaid in full plus interest at the
21 rate of 6% a year, the amount paid from the Real Estate Recovery
22 Fund.
23 CHAPTER 9
24 REPEALER AND EFFECTIVE DATE
25 Section 901. Repealer.
26 The act of May 1, 1929 (P.L.1216, No.427), known as the "Real
27 Estate Brokers License Act of one thousand nine hundred and
28 twenty-nine," is repealed to the following conditions:
29 (1) All valid licenses issued prior to the effective
30 date of this act under the provisions of said 1929 act shall
19790S0507B1503 - 27 -
1 continue with full force and validity during the period for
2 which issued. For the subsequent license period, and each
3 license period thereafter, the commission shall renew such
4 licenses without requiring any license examination to be
5 taken: Provided, however, That applicants for renewal or
6 holders of such licenses shall be subject to all other
7 provisions of this act.
8 (2) All proceedings in progress on the effective date
9 shall continue to proceed under the terms of the act under
10 which they were brought.
11 (3) All offenses alleged to have occurred prior to the
12 effective date of this act shall be processed under the act
13 of May 1, 1929 (P.L.1216, No.427).
14 Section 902. Effective date.
15 Section 561 shall take effect September 1, 1980 and the
16 remaining provisions of this act shall take effect immediately.
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