74th OREGON LEGISLATIVE ASSEMBLY--2007 Regular Session
SA to SB 482
LC 2060/SB 482-1
SENATE AMENDMENTS TO
SENATE BILL 482
By COMMITTEE ON BUSINESS, TRANSPORTATION AND WORKFORCE
DEVELOPMENT
March 26
On page 1 of the printed bill, line 2, after '696.026 ' delete
the rest of the line and insert ', 696.241, 696.290, 696.301,
696.505, 696.520, 696.582 and 696.840.'.
On page 2, after line 21, insert:
' { + SECTION 2. + } ORS 696.505 is amended to read:
' 696.505. As used in ORS 696.505 to 696.590, unless the
context requires otherwise:
' (1) 'Collection escrow' means an escrow in which the escrow
agent:
' (a) Receives:
' (A) Installment payments;
' (B) Instruments evidencing or securing an obligation; or
' (C) Instruments discharging the security interest; and
' (b) Disburses the payments or delivers the instruments upon
specified conditions pursuant to the written instructions of an
obligor and obligee.
' (2) 'Commissioner' means the Real Estate Commissioner. { +
' (3) '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. + }
' { - (3) - } { + (4) + } 'Escrow' means any transaction
wherein any written instrument, money, evidence of title to real
or personal property or other thing of value is delivered, for
the purpose of paying an obligation or effecting the sale,
transfer, encumbrance or lease of real or personal property, to a
person not otherwise having any right, title or interest therein,
to be held by that person as a neutral third party until the
happening of a specified event or the performance of a prescribed
condition, when it is then to be delivered by the neutral third
party to a grantee, grantor, promisee, promisor, obligee,
obligor, bailee, bailor or any agent or employee of any of them
pursuant to the written instructions of the principals to the
transaction.
' { - (4) - } { + (5) + } 'Escrow agent' means any person
who engages in the business of receiving escrows for deposit or
delivery and who receives or is promised any fee, commission,
salary or other valuable consideration, whether contingent or
otherwise, for or in anticipation of performance.
' { - (5) - } { + (6) + } 'Principal' means:
' (a) The buyer and seller, lessor and lessee and the
exchanging parties in an escrow transaction involving the sale,
lease, lease-option or exchange of real property or personal
property; and
' (b) The borrower in an escrow transaction involving the
refinancing of real or personal property, including but not
limited to the refinancing of an obligation secured by a land
sale contract requiring a deed to be delivered as part of such
refinancing.
' { - (6) - } { + (7) + } 'Real estate closing escrow' means
an escrow where the escrow fee is paid in whole or in part by the
principals to a real estate transaction and wherein the unpaid
purchase price is delivered to an escrow agent for disbursal
pursuant to the written instructions of the principals to the
transaction simultaneously on the transfer of specified title to
the real property.
' { - (7) - } { + (8) + } 'Subservicer' means an escrow
agent, a financial institution or a trust company, as those terms
are defined in ORS 706.008, or a collection agency registered
under ORS 697.015 when providing, pursuant to written
instructions, a portion of the escrow services for an escrow to
an escrow agent, or a person in the business of receiving escrows
under the laws of another state, that would otherwise provide the
escrow services directly to the principals.'.
In line 22, delete '2' and insert '3'.
On page 3, after line 15, insert:
' { + SECTION 4. + } ORS 696.241 is amended to read:
' 696.241. (1) Each sole practitioner and each principal real
estate broker shall maintain in this state one or more separate
bank accounts that shall be designated a Clients' Trust Account
in which all trust funds received or handled by the sole
practitioner or broker and the real estate licensees subject to
the supervision of the broker on behalf of any other person shall
be deposited unless, pursuant to written agreement of all parties
having an interest in the trust funds, the trust funds are
immediately placed in a neutral escrow depository in this state.
' (2) Each sole practitioner or principal real estate broker
shall file with the Real Estate Agency, on forms approved by the
Real Estate Commissioner, a statement identifying the name of the
bank or banks, account number or account numbers, and name of
account or accounts for each Clients' Trust Account maintained.
' (3) Each sole practitioner or principal real estate broker
shall authorize the agency, by a form approved by the
commissioner, to examine any Clients' Trust Account, by a duly
authorized representative of the agency. The examination shall be
made at such times as the commissioner may direct.
' (4) If a sole practitioner or principal real estate broker
maintains a separate Clients' Trust Account in a branch office, a
separate bookkeeping system shall be maintained in the branch
office, provided a copy of the records required by the provisions
of ORS 696.280 are maintained in the main office of the sole
practitioner or broker.
' (5) Trust funds received by a sole practitioner or principal
real estate broker may be placed by the sole practitioner or
broker in a federally insured interest-bearing bank account,
designated a Clients' Trust Account, but only with the prior
written approval of all parties having an interest in the trust
funds. The earnings of such interest-bearing account shall not
inure to the benefit of the sole practitioner or principal real
estate broker unless expressly approved in writing before deposit
of the trust funds by all parties having an interest in the trust
funds.
' (6) With prior written notice to all parties who have an
interest in the trust funds, a sole practitioner or principal
real estate broker may place trust funds received by the sole
practitioner or principal real estate broker in a federally
insured interest-bearing bank account that is designated a
Clients' Trust Account and the earnings of which inure to the
benefit of a public benefit corporation, as defined in ORS
65.001, for distribution to organizations and individuals for
first-time homebuying assistance and for development of
affordable housing. The sole practitioner or principal real
estate broker shall select a qualified public benefit corporation
to receive the interest earnings.
' (7) A sole practitioner or principal real estate broker is
not entitled to any part of any interest earnings on trust funds
deposited under subsection (5) of this section or to any part of
the earnest money or other money paid to the sole practitioner or
broker in connection with any real estate transaction as part or
all of the sole practitioner's or broker's { - commission or
fee - } { + compensation + } until the transaction has been
completed or terminated. The question of the disposition of
forfeited earnest money shall be negotiated between the sole
practitioner or principal real estate broker and the seller at
the time of executing any listing agreement or earnest money
agreement. The result of such negotiation shall be filled in on
the agreement form at the time of signing by the seller and
either separately initialed by the seller or placed immediately
above the signature of the seller.
' (8) Clients' Trust Account funds are not subject to execution
or attachment on any claim against a sole practitioner or
principal real estate broker.
' (9) No person shall knowingly keep or cause to be kept any
funds or money in any bank under the heading of Clients' Trust
Account or any other name designating such funds or money as
belonging to the clients of any sole practitioner or principal
real estate broker, except actual trust funds deposited with the
sole practitioner or broker.
' (10) The agency by rule shall establish a procedure for
disbursal of disputed funds from a Clients' Trust Account to the
person who delivered the funds to the sole practitioner or
principal real estate broker. The procedure shall allow disbursal
not more than 20 days after a request is made for the disbursal.
Any disbursal pursuant to the procedure does not affect the claim
of any other person to the funds.
' (11) The agency may provide by rules for other records to be
maintained and for the manner in which trust funds are deposited,
held and disbursed.
' { + SECTION 5. + } ORS 696.290 is amended to read:
' 696.290. (1) A real estate licensee shall not offer, promise,
allow, give, pay or rebate, directly or indirectly, any part or
share of the licensee's { - commission or - } compensation
arising or accruing from any real estate transaction or pay a
finder's fee to any person who is not a real estate licensee
licensed under ORS 696.022. However, a real estate broker or
principal real estate broker may pay a finder's fee or a share of
the { - commission - } { + licensee's compensation + } on a
cooperative sale
{ - where such - } { + when the + } payment is made to a
licensed real estate broker in another state or country { + , + }
provided that the state or country in which that broker is
licensed has a law permitting real estate brokers to cooperate
with real estate brokers or principal real estate brokers in this
state and that such nonresident real estate broker does not
conduct in this state any acts constituting professional real
estate activity and for which compensation is paid. If a country
does not license real estate brokers, the payee must be a citizen
or resident of the country and represent that the payee is in the
business of real estate brokerage in the other country. A real
estate broker associated with a principal real estate broker
shall not accept compensation from any person other than the
principal real estate broker with whom the real estate broker is
associated at the time. A principal real estate broker shall not
make payment to the real estate broker of another principal real
estate broker except through the principal real estate broker
with whom the real estate broker is associated. Nothing in this
section prevents payment of { - a commission or fee - }
{ + compensation + } earned by a real estate broker or principal
real estate broker while licensed, because of change of
affiliation or inactivation of the broker's license.
' (2) Nothing in subsection (1) of this section is intended to
prohibit a real estate licensee who has a written property
management agreement with the owner of a residential building or
facility from authorizing the payment of a referral fee, rent
credit or other compensation to an existing tenant of the owner
or licensee, or a former tenant if the former tenant resided in
the building or facility within the previous six months, as
compensation for referring new tenants to the licensee.
' (3) Nothing in subsection (1) of this section is intended to
prevent an Oregon real estate broker or principal real estate
broker from sharing { - a commission - } { + compensation + }
on a cooperative nonresidential real estate transaction with a
person who holds an active real estate license in another state
or country, provided:
' (a) Before the out-of-state real estate licensee performs any
act in this state that constitutes professional real estate
activity, the licensee and the cooperating Oregon real estate
broker or principal real estate broker agree in writing that the
acts constituting professional real estate activity conducted in
this state will be under the supervision and control of the
cooperating Oregon broker and will comply with all applicable
Oregon laws;
' (b) The cooperating Oregon real estate broker or principal
real estate broker accompanies the out-of-state real estate
licensee and the client during any property showings or
negotiations conducted in this state; and
' (c) All property showings and negotiations regarding
nonresidential real estate located in this state are conducted
under the supervision and control of the cooperating Oregon real
estate broker or principal real estate broker.
' (4) Nothing in subsection (1) of this section is intended to
prohibit a real estate licensee from directly compensating a
licensed personal assistant if permitted by the terms, conditions
and requirements of a licensed personal assistant agreement under
ORS 696.028.
' (5) As used in subsection (3) of this section, '
nonresidential real estate' means any real property that is
improved or available for improvement by commercial structures or
five or more residential dwelling units.
' { + SECTION 6. + } ORS 696.301 is amended to read:
' 696.301. Subject to ORS 696.396, the Real Estate Commissioner
may suspend or revoke the real estate license of any real estate
licensee, reprimand any licensee or deny the issuance or renewal
of a license to an applicant who has done any of the following:
' (1) Created a reasonable probability of damage or injury to a
person by making one or more material misrepresentations or false
promises in a matter related to professional real estate
activity.
' (2) Represented, attempted to represent or accepted { - a
commission or other - } compensation from a principal real
estate broker other than the principal real estate broker with
whom the real estate broker is associated.
' (3) Disregarded or violated any provision of ORS 659A.421,
696.010 to 696.495, 696.600 to 696.785 and 696.800 to 696.870 or
any rule of the Real Estate Agency.
' (4) Knowingly or recklessly published materially misleading
or untruthful advertising.
' (5) Acted as an agent and an undisclosed principal in any
transaction.
' (6) Intentionally interfered with the contractual relations
of others concerning real estate or professional real estate
activity.
' (7) Intentionally interfered with the exclusive
representation or exclusive brokerage relationship of another
licensee.
' (8) Accepted employment or compensation for the preparation
of a competitive market analysis or letter opinion that is
contingent upon reporting a predetermined value or for real
estate in which the licensee had an undisclosed interest.
' (9) Represented a taxpayer as described in ORS 305.230 or
309.100, contingent upon reporting a predetermined value or for
real estate in which the licensee had an undisclosed interest.
' (10) Failed to ensure, in any real estate transaction in
which the licensee performed the closing, that the buyer and
seller received a complete detailed closing statement showing the
amount and purpose of all receipts, adjustments and
disbursements.
' (11) Has been convicted of a felony or misdemeanor
substantially related to the licensee's trustworthiness or
competence to engage in professional real estate activity.
' (12) Demonstrated incompetence or untrustworthiness in
performing any act for which the licensee is required to hold a
license.
' (13) Violated a term, condition, restriction or limitation
contained in an order issued by the commissioner.
' (14) Committed an act of fraud or engaged in dishonest
conduct substantially related to the fitness of the applicant or
licensee to conduct professional real estate activity, without
regard to whether the act or conduct occurred in the course of
professional real estate activity.
' (15) Engaged in any conduct that is below the standard of
care for the practice of professional real estate activity in
Oregon as established by the community of persons engaged in the
practice of professional real estate activity in Oregon.
' { + SECTION 7. + } ORS 696.520 is amended to read:
' 696.520. The provisions of ORS 696.505 to 696.590 do not
apply to and the term 'escrow agent' does not include:
' (1) Any person doing business under the laws of this state or
the United States relating to banks, mutual savings banks, trust
companies, savings and loan associations, consumer finance
companies, or insurance companies except to the extent that the
person provides real estate closing escrow services other than
those permitted under subsection (3) of this section.
' (2) An attorney at law rendering services in the performance
of duties as attorney at law.
' (3) Any firm or corporation lending money on real or personal
property and which firm or corporation is subject to licensing,
supervision or auditing by a federal or state agency but only to
the extent of closing a loan transaction between such firm or
corporation and a borrower, and seller, if a fee for escrow
services is not charged to the seller.
' (4) Any person doing any of the acts specified in ORS 696.505
{ - (3) - } { + (4) + } under order of any court.
' (5) Any real estate broker or principal real estate broker
licensed under ORS 696.022 who performs the closing for the
principals in a real estate transaction handled by the broker, if
the principals are not charged a separate fee for escrow
services.
' (6) Any collection agency registered under ORS 697.015 that
is engaged in any collection or billing activity without holding
documents relating to the debt.
' { + SECTION 8. + } ORS 696.840 is amended to read:
' 696.840. The payment of compensation or the obligation to pay
compensation to a real estate licensee by the seller or the buyer
is not necessarily determinative of a particular agency
relationship between a real estate licensee and the seller or the
buyer. After full disclosure of agency relationships, a listing
agent, a selling agent or a real estate licensee or any
combination of the three may agree to share any compensation
{ - or commission - } paid, or any right to any compensation
{ - or commission - } for which an obligation arises as the
result of a real property transaction, and the terms of the
agreement shall not necessarily be determinative of a particular
relationship. Nothing in this section shall prevent the parties
from selecting a relationship not specifically prohibited by ORS
696.301, 696.392, 696.600 to 696.785, 696.800 to 696.870 and
696.995.'.
----------