Trial Engrossment of Amendment A05182 to Senate Bill 1173 P.N. 1672, Regular Session 2023-2024

A05182

THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

No.

1173

Session of

2024

INTRODUCED BY STEFANO, ROTHMAN, BOSCOLA, BAKER, FONTANA, MILLER,

BREWSTER, CULVER AND VOGEL, APRIL 22, 2024

AS AMENDED ON THIRD CONSIDERATION, JUNE 3, 2024

AN ACT

Amending the act of February 19, 1980 (P.L.15, No.9), entitled

"An act establishing the State Real Estate Commission and

providing for the licensing of real estate brokers and

salesmen," in definitions, further providing for definitions;

in application of the act and penalties, further providing

for exclusions; and, in duties of licensees, providing for

right to cancel sales agreements or sales contracts for

wholesale transactions.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. The definitions of "broker" and "salesperson" in

section 201 of the act of February 19, 1980 (P.L.15, No.9),

known as the Real Estate Licensing and Registration Act, are

amended and the section is amended by adding definitions to

read:

Section 201. Definitions.

The following words and phrases when used in this act shall

have, unless the context clearly indicates otherwise, the

meanings given to them in this section:

* * *

"Broker." Any of the following:

(1) Any person who, for another and for a fee,

commission or other valuable consideration:

[(1)] (i) negotiates with or aids any person in

locating or obtaining for purchase, lease or an

acquisition of interest in any real estate;

[(2)] (ii) negotiates the listing, sale, purchase,

exchange, lease, time share and similarly designated

interests, financing or option for any real estate;

[(3)] (iii) manages any real estate;

[(4)] (iv) represents himself to be a real estate

consultant, counsellor, agent or finder;

[(5)] (v) undertakes to promote the sale, exchange,

purchase or rental of real estate: Provided, however,

That this provision shall not include any person whose

main business is that of advertising, promotion or public

relations;

[(5.1] (vi) undertakes to perform a comparative

market analysis; or

[(6)] (vii) attempts to perform any of the above

acts.

(2) Any person who, whether for the person or for

another engages or attempts to engage in a wholesale

transaction.

* * *

"Residential property." Real property located within this

Commonwealth that consists of not less than one and not more

than four residential dwelling units.

"Salesperson." Any person employed by a licensed real estate

broker to perform comparative market analyses or to list for

sale, sell or offer for sale, to buy or offer to buy or to

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negotiate the purchase or sale or exchange of real estate or to

negotiate a loan on real estate or to lease or rent or offer to

lease, rent or place for rent any real estate or collect or

offer or attempt to collect rent for the use of real estate or

engage or attempt to engage in a wholesale transaction for or in

behalf of such real estate broker. No person employed by a

broker to perform duties other than those activities as defined

herein under "broker" shall be required to be licensed as a

salesperson.

* * *

"Wholesale transaction." The Undertaking to promote the

sale, exchange or purchase of an equitable interest or other

interest in residential property with the intent to assign, sell

or otherwise transfer the interest for a fee, commission or

other valuable MONETARY consideration without having taken title

as the owner of record of the interest.

Section 2. Section 304(1) of the act is amended to read:

Section 304. Exclusions.

Except as otherwise provided in this act, the provisions of

this act shall not apply to the following:

(1) An owner of real estate with respect to property

owned or leased by such owner. In the case of a partnership

or corporation, this exclusion shall not extend to more than

five of its partners or officers, respectively, nor to other

partnership or corporation personnel or employees. This

exclusion shall not apply to a wholesale transaction.

* * *

Section 3. The act is amended by adding a section to read:

Section 610. Right to cancel sales agreements or sales

contracts for wholesale transactions.

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(a) A consumer who is party to a wholesale transaction shall

have the right to cancel a sales agreement or sales contract

that contains the information required under subsection (e)

until midnight of the 30th day after the date when the consumer

executed the agreement or contract, or until conveyance,

whichever occurs first. A sales agreement or sales contract for

a wholesale transaction that does not contain the information

required under subsection (e) may be canceled at any time prior

to conveyance. The right of cancellation TO CANCEL THE SALES

AGREEMENT OR SALES CONTRACT shall not be waivable.

(b) Notice of cancellation shall be given by certified

return receipt mail or by any other bona fide means of delivery,

including electronic delivery or personal delivery, provided

that the consumer obtains a receipt. A notice of cancellation

given by a bona fide means of delivery shall be effective on the

date postmarked , THE DATE OF ELECTRONIC TRANSMISSION or on the

date of deposit of the notice with any bona fide means of

delivery.

of cancellation, all payments of any kind made by the consumer

shall be refunded to the consumer and an acknowledgment that the

sales agreement or sales contract is void shall be sent BY THE

BROKER OR SALESPERSON to the consumer. In the event of a

cancellation under this section, any promotional prizes, gifts

and premiums issued to the consumer shall remain the property of

the consumer.

(d) A consumer who exercises the right of cancellation shall

not be liable for any damages as a result of the exercise of

that right.

(e) A sales agreement or sales contract for a wholesale

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transaction shall prominently include the following information

which shall be disclosed in the manner and method that the

commission shall establish by regulation:

(1) A statement that the agreement or contract is for a

wholesale transaction in which the licensee intends to

assign, sell or otherwise transfer the interest for a fee,

commission or other valuable MONETARY consideration without

having taken title as the owner of record of the interest.

(2) A statement that the consumer has the right to

obtain an appraisal of the property from a real estate

appraiser certified under section 3 of the act of July 10,

1990 (P.L.404, No.98), known as the "Real Estate Appraisers

Certification Act," to consult with a licensee not affiliated

with the licensee's broker or to seek legal counsel before or

after entering into the agreement or contract.

(3) A statement that the consumer has the right to

cancel the agreement or contract until midnight of the 30th

day after the date when the consumer executed the agreement

or contract, or until conveyance, whichever occurs first, by

certified return receipt mail or by any other bona fide means

of delivery, including electronic delivery or personal

delivery, provided that the consumer obtains a receipt.

(4) A statement that within ten business days after the

receipt of a notice of cancellation, all payments of any kind

made by the consumer shall be refunded to the consumer.

Section 4. This act shall take effect in 180 days.

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