74th OREGON LEGISLATIVE ASSEMBLY--2007 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 1890
Senate Bill 449
Sponsored by Senator METSGER
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
Removes tenancy in common or other undivided estate from
definition of 'security' when interests are owned by at least two
but not more than 35 owners and when management agreement for
rental real property subject to ownership interests contains
certain terms.
A BILL FOR AN ACT
Relating to real estate; creating new provisions; and amending
ORS 59.015 and 696.010.
Be It Enacted by the People of the State of Oregon:
SECTION 1. ORS 696.010 is amended to read:
696.010. As used in ORS 696.010 to 696.495, 696.600 to 696.785,
696.800 to 696.870, 696.990 and 696.995, unless the context
requires otherwise:
(1) 'Agency' means the Real Estate Agency.
(2) 'Associated with' means to be employed, engaged or
otherwise supervised by, with respect to the relationship between
a real estate broker and a principal real estate broker.
(3) 'Bank' includes any bank or trust company, savings bank,
mutual savings bank, savings and loan association or credit union
that maintains a head office or a branch in this state in the
capacity of a bank or trust company, savings bank, mutual savings
bank, savings and loan association or credit union.
(4)(a) 'Branch office' means a business location other than the
main office designated under ORS 696.200 (1), where professional
real estate activity is regularly conducted or which is
advertised to the public as a place where such business may be
regularly conducted.
(b) Model units or temporary structures used solely for the
dissemination of information and distribution of lawfully
required public reports shall not be considered branch offices. A
model unit means a permanent residential structure located in a
subdivision or development used for such distribution and
dissemination, so long as the unit is at all times available for
sale, lease, lease option or exchange.
(5) 'Commissioner' means the Real Estate Commissioner.
(6) 'Compensation' means any fee, commission, salary, money or
valuable consideration for services rendered or to be rendered as
well as the promise thereof and whether contingent or otherwise.
(7) 'Competitive market analysis' means a method or process
used by a real estate licensee in pursuing a listing agreement or
in formulating an offer to acquire real estate in a transaction
for the sale, lease, lease-option or exchange of real estate. The
objective of competitive market analysis is a recommended
listing, selling or purchase price or a lease or rental
consideration. A competitive market analysis may be expressed as
an opinion of the value of the real estate in a contemplated
transaction. Competitive market analysis may include but is not
limited to an analysis of market conditions, public records, past
transactions and current listings of real estate.
(8) 'Letter opinion' means a document that expresses a real
estate licensee's conclusion regarding a recommended listing,
selling or purchase price or a rental or lease consideration of
certain real estate and that results from the licensee's
competitive market analysis. The commissioner by rule shall
specify the minimum contents of a letter opinion, including but
not limited to the distinction between a letter opinion and a
real estate appraisal.
(9) 'Management of rental real estate' means:
(a) Representing the owner of real estate in the rental or
lease of the real estate and includes but is not limited to:
(A) Advertising the real estate for rent or lease;
(B) Procuring prospective tenants to rent or lease the real
estate;
(C) Negotiating with prospective tenants;
(D) Accepting deposits from prospective tenants;
(E) Checking the qualifications and creditworthiness of
prospective tenants;
(F) Charging and collecting rent or lease payments;
(G) Representing the owner in inspection or repair of the real
estate;
(H) Contracting for repair or remodeling of the real estate;
(I) Holding trust funds or property received in managing the
real estate and accounting to the owner for the funds or
property;
(J) Advising the owner regarding renting or leasing the real
estate;
(K) Providing staff and services to accommodate the tax
reporting and other financial or accounting needs of the real
estate;
(L) Providing copies of records of acts performed on behalf of
the owner of the real estate; and
(M) Offering or attempting to do any of the acts described in
this paragraph for the owner of the real estate; or
(b) Representing a tenant or prospective tenant when renting or
leasing real estate and includes but is not limited to:
(A) Consulting with tenants or prospective tenants about
renting or leasing real estate;
(B) Assisting prospective tenants in renting or leasing real
estate;
(C) Assisting prospective tenants in qualifying for renting or
leasing real estate;
(D) Accepting deposits or other funds from prospective tenants
for renting or leasing real estate and holding the funds in trust
for the prospective tenants;
(E) Representing tenants or prospective tenants renting or
leasing real estate; and
(F) Offering or attempting to do any of the acts described in
this paragraph for a tenant or prospective tenant.
(10) 'Principal real estate broker' means an individual who is
licensed as a principal real estate broker and who employs,
engages or supervises another real estate licensee.
(11) 'Professional real estate activity' means any of the
following actions, when engaged in for another and for
compensation or with the intention or in the expectation or upon
the promise of receiving or collecting compensation, by any
person who:
(a) Sells, exchanges, purchases, rents or leases real estate.
(b) Offers to sell, exchange, purchase, rent or lease real
estate.
(c) Negotiates, offers, attempts or agrees to negotiate the
sale, exchange, purchase, rental or leasing of real estate.
(d) Lists, offers, attempts or agrees to list real estate for
sale.
(e) Offers, attempts or agrees to perform or provide a
competitive market analysis or letter opinion, to represent a
taxpayer under ORS 305.230 or 309.100 or to give an opinion in
any administrative or judicial proceeding regarding the value of
real estate for taxation. Such activity performed by a state
certified appraiser or state licensed appraiser is not
professional real estate activity.
(f) Auctions, offers, attempts or agrees to auction real
estate.
(g) Buys, sells, offers to buy or sell or otherwise deals in
options on real estate.
(h) Engages in management of rental real estate.
(i) Purports to be engaged in the business of buying, selling,
exchanging, renting or leasing real estate.
(j) Assists or directs in the procuring of prospects,
calculated to result in the sale, exchange, leasing or rental of
real estate.
(k) Assists or directs in the negotiation or closing of any
transaction calculated or intended to result in the sale,
exchange, leasing or rental of real estate.
(L) Except as otherwise provided in ORS 696.030 (1)(L),
advises, counsels, consults or analyzes in connection with real
estate values, sales or dispositions, including dispositions
through eminent domain procedures.
(m) Advises, counsels, consults or analyzes in connection with
the acquisition or sale of real estate by an entity if the
purpose of the entity is investment in real estate.
(n) Performs real estate marketing activity as described in ORS
696.600.
(12) 'Real estate' { - includes - } { + means:
(a) + } Leaseholds and licenses to use including, but not
limited to, timeshare estates and timeshare licenses as defined
in ORS 94.803 { - , as well as any and every - } { + ;
(b) An ownership interest in real property when:
(A) The interest is a tenancy in common or other undivided
estate, including but not limited to a fee or life estate;
(B) Interests in the real property are owned by at least two
but not more than 35 owners; and
(C) An agreement, if any, for the management of rental real
property subject to the interests, including an agreement for the
management of a master lease that governs leases or subleases,
permits a majority of owners of the interests not to renew the
agreement at the end of the term of the agreement or to terminate
the agreement after giving 180 days' notice of termination; and
(c) Any other + } interest or estate in real property, whether
corporeal or incorporeal, whether freehold or nonfreehold,
whether held separately or in common with others and whether the
real property is situated in this state or elsewhere.
(13) 'Real estate broker' means a person who engages in
professional real estate activity and who is licensed as a real
estate broker.
(14) 'Real estate licensee' means a real estate broker,
principal real estate broker or real estate property manager.
(15) 'Real estate property manager' means a real estate
licensee who is authorized to engage in management of rental real
estate.
(16) 'Registered business name' means a name registered with
the Real Estate Agency under which the person registering the
name engages in professional real estate activity.
(17) 'Sole practitioner' means a real estate broker conducting
professional real estate activity not in conjunction with other
real estate brokers or principal real estate brokers.
SECTION 2. ORS 59.015 is amended to read:
59.015. As used in the Oregon Securities Law, unless the
context otherwise requires:
(1) 'Broker-dealer' means a person who engages, all or part of
the time, in effecting transactions in securities for the account
of others or for the person's own account. ' Broker-dealer' does
not include:
(a) An issuer effecting sales in its own securities;
(b) The following institutions:
(A) A financial institution or trust company, as defined in ORS
706.008; or
(B) A financial holding company or a bank holding company, as
defined in ORS 706.008, holding an institution described in
subparagraph (A) of this paragraph; a savings and loan holding
company as defined in section 408 of the National Housing Act, 12
U.S.C. section 1730a, holding an association described in
subparagraph (A) of this paragraph; the subsidiaries and
affiliates of the financial holding company, bank holding company
or savings and loan holding company; or subsidiaries and
affiliates of institutions described in subparagraph (A) of this
paragraph, if the appropriate statutory regulatory authority is
exercising control over, or is regulating or supervising the
person in the sale of securities in accord with the purposes of
the Oregon Securities Law;
(c) A person who has no place of business in this state
effecting transactions in this state exclusively with
broker-dealers;
(d) A person effecting sales exempted by ORS 59.035;
(e) A salesperson;
(f) A person effecting sales of securities owned by the person
registered for sale pursuant to ORS 59.065;
(g) A person effecting sales of securities exempted by ORS
59.025 (7);
(h) A person licensed as a mortgage banker or a mortgage broker
under ORS 59.840 to 59.980 when effecting sales of securities
involving real estate paper registered for sale pursuant to ORS
59.065; or
(i) A person designated by rule or order by the director.
(2) 'Control' means the possession, directly or indirectly, of
the power to direct or cause the direction of the management and
policies of a person, whether through the ownership of voting
securities, by contract, or otherwise.
(3) 'Director' means the Director of the Department of Consumer
and Business Services.
(4) 'Federal covered investment adviser' means a person who is
registered as an investment adviser pursuant to section 203 of
the Investment Advisers Act of 1940, as amended.
(5) 'Federal covered security' means any security that is a
covered security under section 18 of the Securities Act of 1933,
as amended, and for which such Act provides that the director may
require filing of a notice and payment of a fee.
(6) 'Fraud,' 'deceit' and 'defraud' are not limited to
common-law deceit.
(7) 'Guaranteed' means guaranteed as to payment of principal,
interest or dividends.
(8)(a) 'Investment adviser representative' means any partner,
officer, director or person occupying a similar status or
performing a similar function, or other individual, except
clerical or ministerial personnel, who is employed by or
associated with:
(A) A state investment adviser that is licensed or required to
be licensed in this state and who does any of the following:
(i) Makes any recommendations or otherwise renders advice
regarding securities;
(ii) Manages accounts or portfolios of clients;
(iii) Determines which recommendation or advice regarding
securities should be given;
(iv) Solicits, offers or negotiates for the sale of or sells
investment advisory services; or
(v) Supervises employees acting under this subparagraph; or
(B) A federal covered investment adviser, subject to the
limitations of section 203A of the Investment Advisers Act of
1940, as amended, as the director may designate by rule or order.
(b) 'Investment adviser representative' does not include a
person designated by rule or order of the director.
(9) 'Issuer' means a person who issues, proposes to issue or
has issued a security and includes an issuer to be formed. With
respect to certificates of deposit, voting-trust certificates or
collateral-trust certificates, or with respect to certificates of
interest or shares in an unincorporated investment trust not
having a board of directors or persons performing similar
functions or of the fixed, restricted management or unit type,
the ' issuer' is the person or persons performing the acts and
assuming the duties of depositor or manager pursuant to the
provisions of the trust or other instrument or agreement under
which the security is issued.
(10) 'License' means a license as provided under the Oregon
Securities Law.
(11) 'Mortgage banker' means a mortgage banker as defined in
ORS 59.840.
(12) 'Mortgage broker' means a mortgage broker as defined in
ORS 59.840.
(13) 'Offer' or 'offer to sell' includes every attempt or offer
to dispose of, or solicitation of an offer to buy, a security or
interest in a security for value. Every sale or offer of a
warrant or right to purchase or subscribe to another security of
the same or another issuer, as well as every sale or offer of a
security which gives the holder a present or future right or
privilege to convert into another security of the same or another
issuer, is considered to include an offer of the other security.
(14) 'Person' includes an individual, a joint venture, a
partnership, a cooperative, a limited liability company, an
association, a joint stock company, a corporation, a trust, an
unincorporated organization or a government or political
subdivision of a government.
(15) 'Real estate paper' means any obligation secured or
purportedly secured by an interest in real property. Real estate
paper includes, but is not limited to, mortgage-backed
securities, collateralized mortgage obligations, and real estate
mortgage investment conduits.
(16) 'Registered' means registered as provided in the Oregon
Securities Law.
(17)(a) 'Sale' or 'sell' includes every contract of sale of,
contract to sell, or disposition of, a security or interest in a
security for value. Any security given or delivered with, or as a
bonus on account of, a purchase of securities or any other thing
shall constitute a part of the subject of the purchase and shall
have been offered and sold for value. A gift of assessable stock
by or for any issuer or promoter shall constitute a sale.
(b) For purposes of the authority of the director under ORS
59.245 and 59.255, the terms 'sale' and 'sell' include the terms
'offer' and 'offer to sell. '
(c) 'Sale' and 'sell' do not include:
(A) A bona fide pledge or loan of securities;
(B) A bona fide security dividend, whether the corporation
distributing the dividend is the issuer of the security or not,
if nothing of value is given by the recipients for the dividend
other than payments in connection with the elimination of
fractional shares; or
(C) An act incident to a judicially approved reorganization in
which a security is issued in exchange for one or more
outstanding securities, claims or property interests, or partly
in such exchange and partly for cash.
(18)(a) 'Salesperson' means a person, other than a
broker-dealer, who represents or purports to represent a
broker-dealer, issuer or owner of securities in effecting or
attempting to effect in any manner transactions in securities.
(b) 'Salesperson' does not include:
(A) A person who represents an issuer in effecting sales in a
security exempted by ORS 59.025;
(B) A person who represents an issuer in effecting sales
exempted by ORS 59.035;
(C) A person who represents an issuer in effecting sales with
existing partners or directors of the issuer, if no commission or
other remuneration is paid or given directly or indirectly for
soliciting any person in this state;
(D) An employee of an institution or organization described in
subsection (1)(b) of this section to the extent the employee is
not a dual employee of the institution and a broker-dealer;
(E) A person effecting transactions in this state limited to
those transactions described in section 15(h)(2) and (3) of the
Securities Exchange Act of 1934, as amended; or
(F) A person designated by rule or order by the director.
(c) A person who is a partner, director or officer of a
broker-dealer, issuer or owner of securities, or a person who
occupies a similar status or performing similar functions, is a '
salesperson' only if the person otherwise comes within this
definition.
(19)(a) 'Security' means a note, stock, treasury stock, bond,
debenture, evidence of indebtedness, certificate of interest or
participation in a pension plan or profit-sharing agreement,
collateral-trust certificate, preorganization certificate or
subscription, transferable share, investment contract,
voting-trust certificate, certificate of deposit for a security,
certificate of interest or participation in an oil, gas, or
mining title or lease or in payments out of production under such
title or lease, real estate paper sold by a broker-dealer,
mortgage banker, mortgage broker or a person described in
subsection (1)(b) of this section to persons other than persons
enumerated in ORS 59.035 (4), or, in general, any interest or
instrument commonly known as a 'security,' or any certificate of
interest or participation in, temporary or interim certificates
for, receipt for, guarantee of, or warrant or right to subscribe
to or purchase any of the foregoing.
(b) 'Security' does not include:
(A) An insurance or endowment policy or annuity contract under
which an insurance company promises to pay a fixed or variable
sum of money either in a lump sum or periodically for life or
some other specified period;
(B) A beneficial interest in a voluntary inter vivos trust
unless the trust is created solely for the purpose of voting or
is part of an attempt to evade the provisions of ORS 59.005 to
59.451; { - or - }
(C) A beneficial interest in a testamentary trust { - . - }
{ + ; or + }
{ + (D) Real estate as defined in ORS 696.010 (12)(b). + }
(20)(a) 'State investment adviser' means a person who, for
compensation:
(A) Engages all or part of the time of the person, in this
state, in the business of advising others, either directly or by
mail or through publication or writing, as to the value of
securities or as to the advisability of investing in, purchasing
or selling securities;
(B) Engages all or part of the time of the person, in this
state, in the business of managing an investment or trading
account in securities for other persons; or
(C) Issues or promulgates, as part of a regular business in
this state, analyses or reports concerning securities.
(b) 'State investment adviser' does not include:
(A) An investment adviser representative;
(B) An institution or organization described in subsection
(1)(b) of this section;
(C) A licensed broker-dealer whose performance of investment
advisory services is solely incidental to the conduct of business
as a broker-dealer and who receives no special compensation for
such services;
(D) A salesperson licensed to a broker-dealer whose performance
of investment advisory services is solely incidental to that
person's activities as a salesperson and who receives no special
compensation for such services;
(E) A publisher of or contributor to a bona fide newspaper,
newsmagazine, investment manual or service, or business or
financial publication of general, regular and paid circulation;
(F) A person whose only clients are federal covered investment
advisers, state investment advisers, broker-dealers, mortgage
bankers, mortgage brokers, banks, savings institutions or trust
companies, insurance companies, investment companies as defined
in the Investment Company Act of 1940, as amended, pension or
profit-sharing trusts, or other financial institutions or
institutional buyers, whether acting for themselves or as
trustees;
(G) A duly licensed lawyer, engineer or accountant whose
performance of investment advisory services is solely incidental
to the practice of the profession;
(H) A person whose advice, analyses or reports relate only to
securities exempted by ORS 59.025 (1);
(I) A federal covered investment adviser in compliance with ORS
59.165 (7);
(J) A person, advising others, that has no place of business in
this state and during the preceding 12-month period has had fewer
than six clients, other than those persons included in
subparagraph (F) of this paragraph, who are residents of this
state; or
(K) Such other persons as the director may by rule or order
designate.
SECTION 3. { + The amendments to ORS 59.015 and 696.010 by
sections 1 and 2 of this 2007 Act apply to real estate offered
for sale or sold before, on or after the effective date of this
2007 Act. + }
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