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A03806
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
657
Session of
2023
INTRODUCED BY BULLOCK, CEPHAS, MADDEN, HILL-EVANS, DELLOSO,
SMITH-WADE-EL, SANCHEZ, ISAACSON, KENYATTA, KINSEY, KHAN,
SCHLOSSBERG, PARKER, D. WILLIAMS, CERRATO, KRAJEWSKI, GREEN
AND MULLINS, MARCH 21, 2023
AS REPORTED FROM COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT,
HOUSE OF REPRESENTATIVES, AS AMENDED, MARCH 18, 2024
AN ACT
Providing for transparency in realty agreements; requiring and
prohibiting certain provisions in realty agreements;
PROHIBITING UNFAIR REAL ESTATE SERVICE AGREEMENTS; providing
for certain transfers to Property Tax Relief Fund; and
imposing penalties.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Short title.
This act shall be known and may be cited as the Transparency
in Realty Agreements Homestead Protection Act.
Section 2. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Homestead property." An owner-occupied dwelling for which
an application for a reduction in real estate taxes has been
submitted and approved under 53 Pa.C.S. § 8584 (relating to
administration and procedure).
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"Real estate professional." A real estate broker,
salesperson, company or other person regularly engaged in the
trade or business of buying and selling real property, including
homestead properties.
"Realty agreement." A contract under which a real estate
professional agrees to provide realty services connected to the
purchase or sale of residential real a homestead property by a
homeowner.
"Security interest." A mortgage, lien or other encumbrance
on residential real a homestead property.
Section 3. Realty agreements.
(a) Requirements.--A realty agreement between a real estate
professional and a homeowner shall:
(1) Include a detailed list of the transactions covered
under the realty agreement.
(2) Identify the capacity in which the real estate
professional is involved in the transactions covered under
the realty agreement.
(3) Include a statement to be signed by the homeowner
acknowledging that the homeowner understands the nature and
extent of the transactions covered under the realty
agreement.
(b) Prohibitions.--A realty agreement between a real estate
professional and a homeowner may not:
(1) Provide for a service that will not be performed
within one year of the execution of the realty agreement,
including a one-time payment to the homeowner in exchange for
the exclusive opportunity to list the residential real
property on the realty market for a period in excess of one
year.
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(2) Provide a service without the notice or consent of
the homeowner.
(3) Purport to create a security interest in the
residential real property that is the subject of the realty
agreement.
Section 4. Prohibited action.
A real estate professional may not record, or cause to be
recorded, a security interest on real property covered under a
realty agreement prior to notifying the homeowner with the
details of the security interest and without the express written
consent of the homeowner or the assignee of the homeowner.
Section 5. Cancellation.
(a) Authorization.--A homeowner may cancel a realty
agreement at any time.
(b) Fees.--Cancellation fees specified in a realty agreement
shall be limited to not more than $500.
(c) Notice.--Notice of cancellation of a realty agreement
must be given in writing.
SECTION 6. UNFAIR REAL ESTATE SERVICE AGREEMENTS.
(A) ENFORCEABILITY.--AN UNFAIR REAL ESTATE SERVICE AGREEMENT
IS VOID AND UNENFORCEABLE AS A MATTER OF LAW.
(B) DECEPTIVE ACT.--AN UNFAIR REAL ESTATE SERVICE AGREEMENT
ENTERED INTO WITH A CONSUMER SHALL BE DEEMED A DECEPTIVE ACT
UNDER THE ACT OF DECEMBER 17, 1968 (P.L.1224, NO.387), KNOWN AS
THE UNFAIR TRADE PRACTICES AND CONSUMER PROTECTION LAW.
(C) RECORDING PROHIBITED.--
(1) A PERSON MAY NOT RECORD OR CAUSE TO BE RECORDED AN
UNFAIR REAL ESTATE SERVICE AGREEMENT OR NOTICE OR MEMORANDUM
OF AN UNFAIR REAL ESTATE SERVICE AGREEMENT IN THIS
COMMONWEALTH.
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(2) A PERSON WHO VIOLATES PARAGRAPH (1) SHALL BE GUILTY
OF A MISDEMEANOR OF THE THIRD DEGREE.
(3) A COUNTY RECORDER OF DEEDS MAY REFUSE TO ACCEPT FOR
RECORDATION AN UNFAIR REAL ESTATE SERVICE AGREEMENT.
(4) IF AN UNFAIR REAL ESTATE SERVICE AGREEMENT IS
RECORDED IN THIS COMMONWEALTH, IT SHALL NOT PROVIDE ACTUAL OR
CONSTRUCTIVE NOTICE AGAINST AN OTHERWISE BONA FIDE PURCHASER
OR CREDITOR.
(D) RECORDING OF COURT ORDER.--IF AN UNFAIR REAL ESTATE
SERVICE AGREEMENT OR A NOTICE OR MEMORANDUM OF AN UNFAIR REAL
ESTATE SERVICE AGREEMENT IS RECORDED IN THIS COMMONWEALTH, A
PARTY WITH AN INTEREST IN THE REAL PROPERTY THAT IS THE SUBJECT
OF THE AGREEMENT MAY APPLY TO THE COURT OF JURISDICTION IN THE
COUNTY WHERE THE RECORDING EXISTS TO RECORD A COURT ORDER
DECLARING THE AGREEMENT UNENFORCEABLE.
(E) RIGHT OF RECOVERY.--
(1) A CONSUMER WITH AN INTEREST IN REAL PROPERTY THAT IS
THE SUBJECT OF AN UNFAIR REAL ESTATE SERVICE AGREEMENT,
WHETHER OR NOT ANY LIEN OR OTHER NOTICE IS FILED AGAINST THE
PROPERTY IN THE OFFICE OF THE COUNTY RECORDER OF DEEDS, MAY
BRING A CIVIL ACTION AGAINST THE REAL ESTATE SERVICE
PROVIDER. RELIEF SHALL INCLUDED, BUT NOT BE LIMITED TO:
(I) PRELIMINARY AND OTHER EQUITABLE OR DECLARATORY
RELIEF AS MAY BE APPROPRIATE.
(II) AN ORDER THAT THE CONSUMER IS NOT REQUIRED TO
REPAY OR REIMBURSE ANY MONEY PAID TO THE CONSUMER BY THE
REAL ESTATE SERVICES PROVIDER.
(III) ACTUAL DAMAGES SUFFERED BY THE CONSUMER, AS
FOLLOWS:
(A) EXCEPT AS PROVIDED UNDER CLAUSE (B), DAMAGES
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SHALL EQUAL THE AMOUNT OF DAMAGES SUFFERED BY THE
CONSUMER OR $5,000, WHICHEVER AMOUNT IS GREATER.
(B) IF THE CONSUMER IS 60 YEARS OF AGE OR OLDER,
DAMAGES SHALL EQUAL THE AMOUNT OF DAMAGES SUFFERED BY
THE CONSUMER OR $15,000, WHICHEVER AMOUNT IS GREATER.
(IV) REASONABLE ATTORNEY FEES AND OTHER LITIGATION
COSTS REASONABLY INCURRED.
(2) THIS SECTION SHALL NOT REPLACE OR SUPERSEDE ANY
OTHER REMEDY AT LAW OR EQUITY THAT THE CONSUMER MAY HAVE.
(F) RELATIONSHIP TO OTHER LAWS.--NOTHING IN THIS SECTION
SHALL ALTER OR AMEND ANY PART OF THE ACT OF FEBRUARY 19, 1980
(P.L.15, NO.9), KNOWN AS THE REAL ESTATE LICENSING AND
REGISTRATION ACT.
(G) DEFINITIONS.--AS USED IN THIS SECTION, THE FOLLOWING
WORDS AND PHRASES SHALL HAVE THE MEANINGS GIVEN TO THEM IN THIS
SUBSECTION UNLESS THE CONTEXT CLEARLY INDICATES OTHERWISE:
"ASSOCIATION." AS DEFINED UNDER 15 PA.C.S. § 102 (RELATING
TO DEFINITIONS).
"CONSUMER." A PERSON WHO IS THE RECIPIENT OR ANTICIPATED
RECIPIENT OF A REAL ESTATE SERVICE.
"PERSON." A NATURAL PERSON, CORPORATION, CORPORATE
FIDUCIARY, PARTNERSHIP, LIMITED PARTNERSHIP, LIMITED LIABILITY
COMPANY, JOINT VENTURE OR ASSOCIATION. The term includes an
individual who owns a homestead property.
"REAL ESTATE SERVICE." AS DEFINED UNDER SECTION 201 OF THE
REAL ESTATE LICENSING AND REGISTRATION ACT.
"REAL ESTATE SERVICE AGREEMENT." A CONTRACT UNDER WHICH A
REAL ESTATE SERVICE PROVIDER AGREES TO PROVIDE A REAL ESTATE
SERVICE TO A CONSUMER.
"REAL ESTATE SERVICE PROVIDER." A PERSON PROVIDING OR WHO IS
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ANTICIPATED TO PROVIDE A REAL ESTATE SERVICE TO A CONSUMER
PURSUANT TO A REAL ESTATE SERVICE AGREEMENT.
"RECORDING." PRESENTING A DOCUMENT TO A COUNTY RECORDER OF
DEEDS FOR OFFICIAL PLACEMENT IN THE PUBLIC LAND RECORDS.
"RESIDENTIAL REAL ESTATE." AN INTEREST IN REAL PROPERTY
LOCATED WITHIN THIS COMMONWEALTH THAT CONSISTS OF NOT LESS THAN
ONE AND NOT MORE THAN FOUR RESIDENTIAL DWELLING UNITS. The term
includes a homestead property.
"UNFAIR REAL ESTATE SERVICE AGREEMENT." A REAL ESTATE
SERVICE AGREEMENT THAT:
(1) PURPORTS TO RUN WITH THE LAND OR TO BE BINDING ON
FUTURE OWNERS OF INTERESTS IN THE REAL PROPERTY;
(2) PURPORTS TO CREATE OR ALLOW A LIEN, ENCUMBRANCE OR
OTHER SECURITY INTEREST IN THE PROPERTY; OR
(3) ALLOWS FOR THE AGREEMENT TO BE ASSIGNED WITHOUT
TIMELY NOTIFICATION TO THE OWNER OF THE PROPERTY.
Section 6 7. Penalties.
(a) Unenforceability and violation of other State law.--If a
violation of section 3 or 4 occurs, the realty agreement shall
be deemed unenforceable and the violation shall constitute an
unfair method of competition and an unfair or deceptive act or
practice under the act of December 17, 1968 (P.L.1224, No.387),
known as the Unfair Trade Practices and Consumer Protection Law.
(a) Unenforceability and violation of other State law.--
(1) If a violation of section 3 or 4 occurs, the realty
agreement shall be deemed unenforceable and the violation
shall constitute an unfair method of competition and an
unfair or deceptive act or practice under the act of December
17, 1968 (P.L.1224, No.387), known as the Unfair Trade
Practices and Consumer Protection Law.
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(2) Any civil penalty levied under section 8 of the
Unfair Trade Practices and Consumer Protection Law as a
result of a violation under this subsection shall be
deposited into the Property Tax Relief Fund.
(b) Damages.--In addition to the penalties specified under
the Unfair Trade Practices and Consumer Protection Law, a real
estate professional found to be in violation of this act shall
be subject to actual damages incurred by any person with an
interest in the residential real property that is the subject of
the unenforceable realty agreement, including reasonable costs
and attorney fees.
Section 8. Transfers to Property Tax Relief Fund.
In addition to any other transfer required by law, 1.75% of
the amount collected monthly under Article II of the act of
March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of
1971, shall be deposited into the Property Tax Relief Fund by
the 20th day of each month for the preceding month. Amounts
deposited under this section shall be used for distribution for
homestead property tax relief under the act of June 27, 2006
(1st Sp.Sess., P.L.1873, No.1), known as the Taxpayer Relief
Act.
Section 7 8 9. Effective date.
This act shall take effect in 60 days.
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