Chapter 113
2011 -- H 5578 SUBSTITUTE A
Enacted 06/27/11
A N A C T
RELATING TO
BUSINESSES AND PROFESSIONS -- REAL ESTATE BROKERS AND SALESPERSONS
Introduced
By: Representatives
Date Introduced: March 03, 2011
It is enacted by the
General Assembly as follows:
SECTION 1. Sections 5-20.5-3, 5-20.5-4, 5-20.5-6, 5-20.5-7,
5-20.5-10, 5-20.5-11, 5-
20.5-12, 5-20.5-14,
5-20.5-15, 5-20.5-20, 5-20.5-26 and 5-20.5-27 of the General Laws in
Chapter 5-20.5 entitled
"Real Estate Brokers and Salespersons" are hereby amended to read as
follows:
5-20.5-3. Contents
of application -- Application fee -- Recommendations required. --
(a) Applicants applying for the first time for a
license to act as a real estate broker or real estate
salesperson shall file with the director an application for the
license upon a printed or electronic
form as determined furnished by the director
which, together with any additional information that
the director requires, contains a statement under oath by
the applicant giving his or her age,
residence, place of business, present occupation and
occupation for the past five (5) years and
whether or not he or she has been refused a real estate
broker's or salesperson's license in this or
in any other state or had any real estate license
suspended or revoked.
(b) All applicants for
a license to act as a real estate broker or real estate salesperson
shall accompany their applications with a fee of ten dollars
($10.00) to cover costs of processing
those applications.
(c) The application for
a broker's license shall be accompanied by the recommendation
names of at least three (3) citizens who are property
owners for at least three (3) years, Rhode
Island residents who have known the applicant for three (3) years, and are not related
to the
applicant, certifying
and will attest that the applicant bears a good reputation for honesty
and
trustworthiness, and who will recommend recommending that
a license be granted to the
applicant,. and the The applicant must be a citizen or legal resident of
the
least legal age of majority, if applicant for broker
license, or at least eighteen (18) years of age for
salesperson license. In the case of an applicant for a real
estate salesperson's license, he or she
must also file a statement under oath from the broker in
whose employ the applicant desires to
enter that in his or her opinion the applicant is competent
and trustworthy and is recommended as
a suitable person to be granted a salesperson's
license.
5-20.5-4.
Examination of applicants -- Examination fee -- Licensing without
examination. -- (a)
The director shall require any applicant for a real
estate broker's or
salesperson's license to submit to and pass a written examination
to show the applicant's
knowledge of the state statutes and the rules and regulations
relating to real property, deeds,
mortgages, leases, contracts, and agency. An applicant shall
not be required to take the uniform
portion of the
evidence that the applicant possesses an existing valid real
estate license from a state that has
similar statutes or regulations in effect which provide for
reciprocal waiver of the uniform portion
of the real estate licensing examination for persons
holding an existing valid
estate broker's or salesperson's license and the
applicant has been licensed for a period of not less
than two (2) consecutive years immediately prior to the
date of his or her application; and further
provided, that the applicant must be tested for the remainder
of the
licensing examination as administered by the department of
business regulation. An applicant for
a real estate broker's or salesperson's license, prior
to the taking of the examination, must pay an
examination fee, the cost of which is limited to the charge as
designated by the appropriate testing
service's contract with the department of business regulation.
(b) An applicant for a
real estate salesperson's license must submit satisfactory evidence
of completion of a minimum of forty-five (45) classroom
hours in a real estate course given by a
school as defined in section 5-20.5-19. The applicant for a
broker's license must also submit
satisfactory proof that he or she has been engaged full time as a
real estate salesperson for at least
one year two
(2) years immediately prior to the
date of application, except that the period is
waived if the applicant has received a baccalaureate degree
with a major in real estate, from an
accredited college or university; or has successfully completed
at least ninety (90) hours of
approved classroom study in a school as defined in section
5-20.5-19, or equivalent in a
correspondence course offered by an extension department of an
accredited college or university.
The director, in his or her sole discretion, may require
any additional evidence or proof, as to the
honesty, trustworthiness, integrity, good reputation, and
competency of any applicant.
(c) The director
shall notify applicants of the result of the examination within thirty (30)
days of the date of the examination. Any successful applicant who fails to remit the
original
license fee as provided in section 5-20.5-11 within one year
of the date of that examination may
be required by the director to re-submit to and pass a
written examination as provided in
subsection (a) of this section.
(d) When an
attorney-at-law licensed by the supreme court of the state desires to have a
real estate broker's license or a real estate
salesperson's license, the attorney, by application, and
upon payment of the applicable fee as provided in section
5-20.5-11, shall be granted a license
without examination.
(e) A certificate of
licensure shall be issued by the real estate division of the department
of business regulation within thirty (30) days after it
is requested at a cost of not more than
twenty-five dollars ($25.00) for each certificate issued.
5-20.5-6. Duration
of licenses -- Rules and regulations -- Suspension or revocation of
licenses. -- (a)
If the director is satisfied that the applicant is competent and trustworthy
and is
reasonably familiar with the statutes and law relating to real
estate, he or she shall issue to the
applicant a license to act as a real estate broker or a real
estate salesperson. The director shall
promulgate rules and regulations mandating the term of license
for each category of license
issued pursuant to this chapter. No license shall remain in
force for a period in excess of three (3)
years. Any fee for the initial issuance of a license or for
renewal of a license issued pursuant to
this chapter is determined by multiplying the current
annual fee by the term of years of the license
or renewal. The fee for the total number of years of the
initial license or of the renewal shall be
paid in full prior to the issuance of the respective
license. The license shall be renewed upon
payment of the renewal fee, and proof of completion of any
continuing education requirements as
set forth in the rules and regulations issued by the
department of business regulation.
Any license
issued or renewed may be suspended or revoked by the
director, for cause, prior to the expiration
date. The director shall issue reasonable rules and
regulations with the consent of the majority of
the
salespersons, these rules and regulations shall be designed to
implement the laws and policies of
this state and to protect the interests of the public.
(b) Any rules or
regulations promulgated with regard to the requirement of continuing
education for the renewal of any real estate broker's and/or
salesperson's license whose
application for an initial broker's and/or salesperson's license
is approved within one hundred
eighty (180) days of the expiration date of his or her
initial license is not subject to the continuing
education requirement at the time of his or her first renewal.
The director, after a due and proper
hearing, may suspend, revoke, or refuse to renew any license
upon proof that it was obtained by
fraud or misrepresentation or that the holder of the
license has been guilty of fraud or
misrepresentation or criminal acts in the performance of his or her
functions, or upon proof that
the holder of the license has violated this statute or
any rule or regulation issued pursuant to this
statute.
(c) The director shall,
for licenses issued or renewed after July 1, 2004, require proof of,
reasonable familiarity with and knowledge of duties and responsibilities
established by the Lead
Poisoning Prevention Act, chapter 24.6 of title 23 of
the general laws, and the Lead Hazard
Mitigation Act, chapter 128.1 of
title 42 of the general laws.
Notwithstanding the provisions of
subsection (b) above, the requirements of this subsection shall
apply to first renewals when
licenses were initially issued before July 1, 2004. This
subsection shall be put into force and
effect by the director in the manner set forth in chapter
128.1 of title 42 and with the advice of the
5-20.5-7. Fixed office required -- Display of license -- Notice of
change of address
and employment. -- Each resident licensed real estate broker must maintain a fixed office
within
this state which is located to conform to zoning laws.
All business records relating to real estate
transactions and to the management of that office must be kept on
the premises of the fixed office
location. The
original license as real estate broker and the original license of each real
estate
salesperson in the employ of or under contract with that real
estate broker shall be prominently
displayed in the office. Any change of place of business of
a real estate broker and any change of
employment of any real estate salesperson shall be immediately
communicated to the director. A
real estate broker shall communicate any change of fixed
office location to the director, and a real
estate salesperson shall communicate any change of
employment or broker affiliation to the
director, immediately upon or prior to such change.
5-20.5-10.
Nonresident brokers -- Employment of unlicensed brokers restricted --
Nonresident salespersons -- Service of process. -- (a) A nonresident of this state may become a
real estate broker by conforming to all the provisions of
this chapter, except that a nonresident
real estate broker regularly engaged in the real estate
business as a vocation, and who maintains a
definite place of business and is licensed in some other
state, which offers the same privileges to
the licensed brokers of this state, is not required to
maintain a place of business within this state.
The director shall recognize the license issued to a
real estate broker by another state as
satisfactorily qualifying him or her for a license as a broker in
this state provided that the other
state permits licenses to be issued to licensed brokers in
this state, without examination and
provided that the licensing requirements set forth in section
5-20.5-4 have been met.
(b) It is unlawful for
any licensed real estate broker to employ or compensate directly or
indirectly any person for performing any of the acts regulated
by this chapter who is not a
licensed real estate broker or licensed real estate
salesperson; provided, that a licensed real estate
broker may pay a commission to a licensed real estate broker
of another state; provided, that the
nonresident real estate broker does not conduct in this state any
of the negotiations for which a
fee, compensation, or commission is paid.
(c) (1) A nonresident of this state may become a real estate
salesperson by conforming to
all the provisions of this chapter, including those
set forth in section 5-20.5-4 provided that the
nonresident real estate salesperson is regularly employed by a
real estate broker licensed to do
business within this state.
(2) The director shall
recognize the license issued to a real estate salesperson by another
state as satisfactorily qualifying him or her for a license
as a salesperson in this state and also that
the other state permits licenses to be issued to licensed
salespersons in this state, without
examination.
(d) No license shall be
issued to a nonresident until he or she has filed with the director a
power of attorney constituting and appointing the director
and his or her successor his or her true
and lawful attorney, upon whom all lawful processes in
any action or legal proceeding against
him or her may be served, and in the power of attorney
agrees that any lawful process against him
or her which may be served upon his or her attorney is
of the same force and validity as if served
on the nonresident, and that the authority continues
irrevocably in force as long as any liability of
the nonresident remains outstanding in the state. Service
of that process shall be made by leaving
duplicate copies of it in the hands or office of the director,
and the director shall immediately send
one of those copies by mail, postage prepaid, addressed
to the defendant at his or her last address
as appearing on the records of the commission. One of
the duplicates of that process, certified by
the director as having been served upon him or her is
deemed sufficient evidence of that service,
and service upon that attorney is deemed service upon the
principal.
5-20.5-11.
Fees and license renewals. -- (a) The following fees shall be charged by the
director:
(1) For each
application, a fee of ten dollars ($10.00);
(2) For each
examination a fee, the cost of which is limited to the charge as designated
by the appropriate testing service's contract with the
department of business regulation;
(3) For each original
broker's license issued, a fee of eighty-five dollars ($85.00) per
annum for the term of the license and for each annual
renewal of the license, a fee of eighty-five
dollars ($85.00) per annum for the term of renewal. The total
fees for the term of initial licensure
and of renewal are must be paid at the time
of application for the license;
(4) For each original
salesperson's license issued, a fee of sixty-five dollars ($65.00) per
annum for the term of the license and for each renewal of
the license, a fee of sixty-five dollars
($65.00) per annum for the term of
the license. The total fees for
the term of initial licensure and
of renewal are must be paid at the time of
application for the license.
(5) For each change
from one broker to another broker by a salesperson, or a broker, a
fee of twenty-five dollars ($25.00), to be paid by the
salesperson or the broker;
(6) For each duplicate
license, where a license is lost or destroyed and affidavit is made
of that fact, a fee of twenty-five dollars ($25.00);
(7) For each duplicate
pocket card, where the original pocket card is lost or destroyed
and affidavit is made of that fact, a fee of twenty-five
dollars ($25.00);
(8) For each broker's
license reinstated after its expiration date, a late fee of one hundred
dollars ($100), in addition to the required renewal fee;
(9) For each
salesperson's license reinstated after its expiration date, a late fee of one
hundred dollars ($100) in addition to the required renewal
fee.
(b) Every licensed real
estate broker and salesperson who desires to renew a license for
the succeeding year term shall apply for the renewal of
the license upon a form furnished by the
director and containing information that is required by the
director. Any renewal of a license is
subject to the same provisions covering issuance, suspension,
and revocation of any license
originally issued. At no time shall any license be renewed
without examination if the license has
expired beyond a period of one year.
5-20.5-12.
Commission -- Creation -- Composition -- Appointment, terms, and
compensation of members -- Officers -- Deputy directors -- Seal.
-- (a) (1) Within the
department of business regulation there is created the
subsequently referred to as "commission", to consist of
nine (9) persons at least one from each
county to be appointed by the governor, each of whom has
been a citizen of this state for at least
ten (10) years prior to the date of appointment, three
(3) of whom have been engaged as a
licensed broker in this state for at least ten (10) years
prior to the date of appointment, four (4) of
whom are members of the general public, at least one of
whom has substantial academic
experience in real estate and at least one who has been active
in citizen groups concerned with
real estate practices and activities. Two (2) members
appointed for one year; two (2) members
shall be appointed for two (2) years; one member for three
(3) years; one member for four (4)
years; and one member for five (5) years; beginning on
December 31, 1973. Successors of all
members shall be appointed by the governor for terms of five
(5) years each and until their
successors are appointed and qualify by subscribing to the
constitutional oath of office, which
shall be filed with the secretary of state. Members to fill
vacancies shall be appointed for the
unexpired term. No member shall be appointed to succeed himself or herself for more than one
full term. There are two (2) ex-officio members of the
commission and they are the attorney
general or his or her designee and the director of the
department or his or her designee. All ex-
officio members have full voting powers and serve without
compensation. Upon qualification of
the members appointed, the commission shall organize by
selecting from its members a
chairperson.
(2) The commission
shall adopt reasonable rules and regulations to carry out its
purposes. The division of professional department of
business regulation with the assistance of
the commission shall implement a recertification
program on or before January 1, 1982, and
establish any reasonable rules and regulations that are
appropriate for that program to insure that
education and practice requirements of license holders meet the
public interest.
(b) The director shall
employ a deputy director and any other employees that he or she
deems necessary and proper to discharge the duties imposed
by this chapter, and shall determine
and prescribe their duties and fix their compensation,
subject to the general laws of the state.
(c) No member of the
commission shall receive compensation for his or her official
duties but shall be reimbursed for his or her actual and
necessary expenses incurred in the
performance of his or her official duties.
(d) The commission
shall adopt a seal of any design that it prescribes. Copies of all
records and papers in the office of the commission, duly
certified and authenticated by its seal,
shall be received in evidence in all courts with like
effect as the original. All records of the
commission are open to public inspection under any reasonable
rules and regulations that it
prescribes.
(e) The commission
shall have a policy-making role in the preparation and composition
of the examinations to be administered by the division
of professional regulation. Subsequent to
the administration of the examination, the commission
shall review the examinations to evaluate
their effectiveness. The commission shall supervise the
operations of the division in an advisory
capacity in promulgating any policy that is necessary to
improve the operations of the division in
their areas of expertise. The promulgation of that policy
is subject to the approval of the director
of the department of business regulation.
5-20.5-14.
Revocation, suspension of license -- Probationary period -- Penalties.
-- (a)
The director may upon his or her own motion, and
shall, upon the receipt of the written verified
complaint, in writing,
of any person initiating a cause under this section, ascertain the facts and,
if
warranted, hold a hearing for the suspension or revocation of a
license. The director has power to
refuse a license for cause or to suspend or revoke a license
or place a licensee on probation for a
period not to exceed one year where it has been obtained by
false representation, or by fraudulent
act or conduct, or where a licensee, in performing or
attempting to perform any of the acts
mentioned in this chapter, is found guilty of to have
committed any of the following acts or
practices:
(1) Making any
substantial misrepresentation;
(2) Making any false
promise of a character likely to influence, persuade or induce any
person to enter into any contract or agreement when he or
she could not or did not intend to keep
that promise;
(3) Pursuing a
continued and flagrant course of misrepresentation or making of false
promises through salespersons, other persons, or any medium of
advertising, or otherwise;
(4) Any misleading or
untruthful advertising;
(5) Failing to deposit
money or other customers' funds received by a broker or
salesperson into an escrow account maintained by the broker
which complies with the
requirements set forth in section 5-20.5-6, upon execution of a purchase and sales agreement;
(6) Failing to preserve
for three (3) years following its consummation records relating to
any real estate transaction as described in the
regulations issued by the department;
(7) Acting for more
than one party in a transaction without the knowledge and consent,
in writing, of all parties for whom he or she acts;
(8) Placing a "for
sale" or "for rent" sign on any property without the written
consent of
the owner, or his or her authorized agent;
(9) Failing to furnish
a copy of any listing, sale, lease or other contract relevant to a real
estate transaction to all signatories of the contract at the
time of execution;
(10) Failing to specify
a definite termination date that is not subject to prior notice, in
any listing contract;
(11) Inducing any party
to a contract, sale, or lease to break that contract for the purpose
of substitution in lieu of that contract a new contract,
where that substitution is motivated by the
personal gain of the licensee;
(12) Accepting a
commission or any valuable consideration by a salesperson for the
performance of any acts specified in this chapter, from any
person, except the licensed real estate
broker with whom he or she is affiliated;
(13) Failing to
disclose to an owner his or her intention or true position if he or she
directly or indirectly through a third party, purchases for
him or herself or acquires or intends to
acquire any interest in or any option to purchase property
which has been listed with his or her
office to sell or lease;
(14)
Being convicted in a court of competent jurisdiction of this or any other
state, or
federal court, of forgery, embezzlement, obtaining money
under false pretenses, bribery, larceny,
extortion, conspiracy to defraud, or any similar offense or
offenses, or pleading guilty or nolo
contendere to any such offense or offenses Being convicted of any criminal felony in a court
of
competent jurisdiction of this or any other state or federal
court, involving dishonesty, breach of
trust, forgery, embezzlement, obtaining money under false
pretenses, bribery, larceny,
extortion, conspiracy to defraud, fraud, false dealing or any
similar offense(s) or by pleading
guilty or nolo contendere
to any such criminal offense or offenses;
(15) Violating any rule
or regulation promulgated by the commission or the department
in the interest of the public and consistent with the
provisions of this chapter;
(16) In the case of a
broker licensee, failing to exercise adequate supervision over the
activities of his or her licensed salesperson within the scope
of this chapter if the broker has
knowledge of any misdeeds of his or her sales staff;
(17) Failing or
refusing, within a reasonable time, to provide information requested
by
the commission or director as the result of a
formal or informal complaint to the commission or
director which would indicate a violation of this chapter;
(18) Soliciting,
selling, or offering for sale real property by offering free lots, or
conducting lotteries or contests or offering prizes for the
purpose of influencing a purchaser or
prospective purchaser of real property;
(19) Paying or
accepting, giving or charging any undisclosed commission, rebate,
compensation, or profit or expenditures for a principal, or in
violation of this chapter;
(20) Any conduct in a
real estate transaction, which demonstrates bad faith, dishonesty,
untrustworthiness, or incompetency incompetence;
(21) Failing to have
all listing agreements in writing, properly identifying the property
and containing all of the terms and conditions of the
sale, including the commission to be paid,
the signatures of all parties concerned, and a definite
expiration date in that contract, which shall
not require an owner to notify a broker of his or her
intention to terminate. An exclusive agency
listing or exclusive right to sell listing shall be clearly
indicated in the listing agreement;
(22) Accepting a
listing based on "net price". In cases where the owner wishes to list
in
this manner, the agreed-upon commission is added and
listings made in the usual manner;
(23) Negotiating or
attempting to negotiate the sale, exchange, or lease of any real
property directly with an owner or lessor
knowing that the owner or lessor has an outstanding
exclusive listing contract with another licensee covering the
same property, except when the real
estate broker or salesperson is contacted by the client of
another broker regarding a real estate
service, and the broker or salesperson has not directly or
indirectly initiated those discussions,
they may discuss the terms which they might enter into
future agency agreement or they may
enter into an agency agreement which becomes effective upon
termination of any existing
exclusive agreement; or they may enter into an agreement for
other real estate service not covered
by an existing agency relationship;
(24) Accepting an
exclusive right to sell or lease or an exclusive agency and
subsequently failing to make a diligent effort to sell or lease
the listed property;
(25) Advising against
the use of the services of an attorney in any real estate transaction;
(26) Representing to
any lender or any other party in interest, either verbally or through
the preparation of a false sales contract, an amount in
excess of other than the true and actual
sales price;
(27) Submitting to an
owner a written offer to purchase or lease unless that offer contains
the essential terms and conditions of the offer including
the manner in which the purchase price is
to be paid, and if that offer is contingent upon certain
conditions, those conditions shall be clearly
stated in the offer, or unless the offer is conditioned upon
the later execution of a complete
agreement for sale;
(28) Wrongfully
failing to refund to the buyer any sums of money paid by the buyer and
held by the broker when the seller wrongfully fails or is
unable to consummate a transaction and
the buyer is ready, willing, and able to do so; Paying any sums of money being held in an escrow
account to any person, or converting such sums of money for
his or her own use, in the event of a
failed real estate transaction, without having complied with
the department’s rules and regulations
relative to the transfer of disputed deposit funds to the
office of the general treasurer;
(29) Advertising to
sell, buy, exchange, rent, or lease the property of another in a manner
indicating that the offer to sell, buy, exchange, rent, or lease
that property is being made by a
private party not engaged in the real estate business, nor
insert advertisements in any publication
containing only a post office or other box number, telephone
number, or street address. No
salesperson shall advertise the property of another under his or
her own name;
(30) As a licensed
salesperson, failing Failing upon
termination of his or her
employment or affiliation with a real estate broker and
upon demand by the broker to
immediately turn over to the broker any and all information,
and records or other materials
obtained during his or her employment whether the information
or records were originally given
to him or her by his or her employer the
broker or copies copied from the records of that
employing broker or affiliation or acquired by the
salesperson during his or her employment;
(31) Offering,
promising, giving or paying directly or indirectly, any part or share of his
or her commission or compensation arising or accruing
from any real estate transaction to any
person who is not licensed as a real estate broker, but who
by law should be licensed, or who is
not a real estate salesperson employed by that licensee;
(32) Soliciting the
sale, lease, or the listing for sale or lease, of residential property on
the ground of loss of value due to the present or
prospective entry in the neighborhood of a person
or persons of another race, religion, or ethnic origin,
nor shall he or she distribute or cause to be
distributed material or make statements designed to induce a
residential property owner to sell or
lease his or her property due to the change in
neighborhood such factors;
(33) Failure of the employing
broker to notify the director, in writing, within ten (10)
days of the termination of a salesperson's employment of
contractual relationship, or failure of a
salesperson to notify the director, in writing, within ten (10)
days of any change in his/her broker
affiliation;
(34) Failure to report
all written offers to the owner prior to the signing of a purchase and
sale agreement by the owner; or
(35) Failure of agents
to provide buyers and sellers of real property with disclosure
regarding real estate agency relationships as specified in
chapter 20.6 of this title; or
(36) Failure of an
associate broker to inform the public of associate broker status by not
listing associate broker on business cards and correspondence
or by informing the public that his
or her status in the real estate firm is that of broker.
(b) The director is
authorized to levy an administrative penalty not exceeding one
thousand dollars ($1,000) for any violation under this section
or the rules and regulations of the
department of business regulation.
5-20.5-15.
Hearings before revocation or suspension of license. --
(a) (1) Before
refusing to issue a license or suspending or revoking a
license on its own motion, the division of
professional regulation shall notify the applicant or licensee of
its intended action and the grounds
for the action. The applicant or licensee may, within
twenty (20) days file with the division, in
triplicate, a request for a hearing stating his or her answer to
the grounds specified in the
notification. The division shall consider the answer and set a
date for a hearing, notifying the
applicant or licensee of the date at least twenty (20) days
prior to the hearing date.
(2) Before refusing to
issue a license or suspending or revoking an existing license upon
the verified written complaint of any person stating a
cause of action under section 5-20.5-17, the
department of business regulation shall, in writing, notify the
accused applicant or licensee of its
receipt of the complaint, enclosing a copy of the complaint.
The accused applicant or licensee
shall within twenty (20) days, file with the department, in
quadruplicate, his or her answer to the
complainant or complainants.
(3) The division shall
transmit a copy of the answer to the complainant or complainants
and set a time and place for a hearing, which is at least
twenty (20) days prior to the hearing date.
(4) All notices and
answers required or authorized to be made or filed under this section
may be served or filed personally, or by certified mail
to the last known business address of the
addressee. If served personally, the time runs from the date of
service; if by registered mail, from
the postmarked date of the letter enclosing the document.
(5) At the
discretion of the division, hearings Hearings
are open to the public, and are
conducted in accordance with the provisions of title 42,
chapter 35 relating to Administrative
Procedures, and the department’s rules of procedure
for administrative hearings, and the
applicant
or licensee has an opportunity to be heard in person or
by counsel. The division A hearing
officer
appointed by the director shall render a decision on any application or complaint within sixty
(60)
days after the final hearing in the matter and shall
immediately notify the parties to the
proceedings, in writing, its ruling, order or decision. In the
event the matter contained in the
complaint has been filed or made a part of a case pending in
any court in this state, the division
may then withhold its decision until the court action has
been concluded. Hearings shall be held
in accordance with rules promulgated by the division in
conformity with law.
(b) Any unlawful act or
violation of any of the provisions of this chapter by any
salesperson is not cause for the suspension or revocation of the
license of the broker with whom
he or she is affiliated unless it appears to the
satisfaction of the division of professional regulation
that the broker had knowledge of the unlawful act or
violation.
(c) The division of
professional regulation is authorized and empowered to issue
subpoenas for the attendance of witnesses and the production of
records or documents. The
process issued by the division may extend to all parts of the
state, and the process may be served
by any person designated by the division. The person
serving that process shall receive any
compensation that is allowed by the division, not to exceed the
fee prescribed by law for similar
services. All witnesses subpoenaed who appear in any
proceedings before the division shall
receive the same fees and mileage allowances allowed by law,
and all those fees and allowances
are taxed as part of the cost of the proceedings.
(d) Where, in any
proceeding before the division of professional regulation, any witness
fails or refuses to attend upon subpoena issued by the
division, or refuses to testify, or refuses to
produce any records or documents the production of which is
called for by the subpoena, the
attendance of the witness and the giving of his or her testimony
and the production of the
documents and records shall be enforced by any court of
competent jurisdiction of this state in the
same manner as are enforced the attendance, testimony of
witnesses, and production of records in
civil cases in the courts of this state.
5-20.5-20. Real
estate school permit -- Fees -- Penalty for operation without permit
prohibited. -- (a)
It is unlawful for any school to offer courses or to conduct classes of
instruction
in real estate subjects without first procuring a
permit; or having obtained a permit, to represent
that its students are assured of passing examinations given
by the division of professional
regulation, or to represent that the issuance of a permit is a
recommendation or endorsement of
the school to which it is issued, or of any course of
instruction given by it.
(b) The application of
each school shall be accompanied by a first year license fee of two
hundred fifty dollars ($250) and a further fee of one hundred
dollars ($100) multiplied by the
remaining term of licensure. If issued, the license is
renewable on the payment of a renewal fee
assessed at the rate of one hundred fifty dollars ($150) per
annum. The total fee for the entire
term of initial licensure and renewal shall be paid at the
time of application.
(c) In the event that
any person is found guilty of violating this section in the operation
of a school, or any rule or regulation adopted pursuant
to this section, or attempts to continue to
operate as a school after the revocation or during a period
of suspension of a permit, he or she is
guilty of a misdemeanor.
(d) The department of
business regulation shall promulgate rules and regulations
mandating the term of license and the term of renewal of each
permit issued. No license shall
remain in force for a period in excess of three (3) years.
5-20.5-26.
Escrows. -- (a) Escrow.
(1) Escrow accounts.
(i)
Each real estate firm shall maintain an escrow account under the supervision of
the
broker qualified to do business in the name and on behalf of
the corporate, partnership or
association licensee. All those funds paid to a salesperson or
paid directly to a broker shall be
segregated on the broker's books and deposited in an account in
a recognized federally insured
financial institution in
broker. A broker or salesperson shall not commingle deposit
money or other customers' funds and
his or her own funds, use a customer's funds as his or
her own, or fail to keep an escrow or trustee
account of funds deposited with him or her relating to a real
estate transaction, for a period of
three (3) years, showing to whom the money belongs, date
deposited, date of withdrawal, to
whom paid, and any other pertinent information that the
commission requires. Those records are
to be available to the commission and the department or
their representatives, on demand, or upon
written notice given to the depository. Each broker/office
supervisor shall maintain a monthly
report as to the status of that office's escrow account, and
is responsible for its accuracy.
(ii) A multi-office
firm may either have an escrow account for each office or one central
escrow account for the firm.
(iii) Funds held in
escrow may be applied to the commission when earned by the listing
company.
(iv)
Remaining escrow funds shall be brought to the closing for disbursement
by the
closing officer.
(v)(iv) Whenever the ownership of any deposit monies
received by a broker or
salesperson pursuant to this section is in dispute by the parties
to a real estate transaction, the
broker or salesperson shall deposit the monies with the
general treasurer within one hundred
eighty (180) days of the date of the original deposit, those
monies to be held in trust by the
general treasurer until the dispute is mediated, arbitrated,
litigated, or otherwise resolved by the
parties. The parties to a real estate transaction may agree
in writing to extend the time period by
which the monies must be deposited with the general
treasurer in accordance with regulations
promulgated by the department of business regulation.
(vi)(v)
The department of business regulation shall have the authority to promulgate
rules and regulations with respect to such escrow accounts
and the deposit of monies with the
general treasurer.
(2) Escrow agents. -
Funds or deposits placed in escrow may be held by any person or
entity legally authorized to hold funds in that capacity,
e.g., the real estate broker or attorney.
(b) Dual activities. - In
all real estate transactions in which a broker holds more than one
title, e.g., builder, contractor, or insurance agent, all
deposit monies received must be placed in
the brokers real estate escrow account, unless there is a
contractual agreement between the
principals to the contrary.
(c) Unlawful
appropriation. - Pursuant to section 11-41-11.1, any licensee to whom any
money or other property is entrusted as escrow funds, who
intentionally appropriates to the
licensee's own use that money or property, or transfers the
funds from an escrow account to a
company or personal account prior to a closing, is guilty of
unlawful appropriation.
5-20.5-27. License
required for ownership. -- No person, firm or corporation shall have
an ownership interest in a real estate brokerage firm
nor participate in the operation of the real
estate brokerage firm if unless the person,
firm or corporation's corporation holds a valid real
estate broker's license, issued pursuant to the provisions
of this chapter, has been revoked.
SECTION 2. Section 5-20.5-24 of the General Laws in Chapter
5-20.5 entitled "Real
Estate Brokers and
Salespersons" is hereby repealed.
5-20.5-24.
Name change. -- Wherever in this
chapter there appear the words "salesman"
or "salesmen", they shall be substituted with
the words "salesperson" or "salespersons".
SECTION 3. This act shall take effect upon passage.
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LC01312/SUB A
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