Letter from Executive Director Gary Isom July 14, 2011
Dear Principal Brokers and Designated Executive Brokers:
Listed below are summaries for four new acts that change the Arkansas Real Estate License Law. The effective date of these acts is July 27, 2011. AREC will update the real estate license law booklet as soon as the updates are made to the Arkansas Code. Until then, you are advised to obtain copies of each of the Acts at the Arkansas Legislative website located at http://www.arkleg.state.ar.us/. If you are unable to obtain a copy of the Acts from the internet, you are invited to send a written request for copies to the Real Estate Commission at the address shown above.
Initiated by the Arkansas Realtors Association, Act 762 further establishes that the Real Estate Commission has jurisdiction over real estate licensees who prepare and issue Broker Price Opinions (BPOs). The act provides clarifying language explaining the circumstances and conditions under which a BPO can and cannot be performed by a real estate licensee. Act 762 states that: A broker’s price opinion or market analysis issued by a real estate licensee shall not contain the terms "market value", "appraised value", or "appraisal".
This act clarifies that any person who brokers the sale of a business located in the state of Arkansas that includes real estate must hold an active Arkansas real estate license. In the section of the law that sets out the requirements for holding a real estate license, a provision was added which states "Real estate includes without limitation a leasehold, time-share interval, or an interest in real property that is purchased or sold in connection with the purchase or sale of all or part of the assets, stock, or other ownership interest of a business or other organization".
This act also allows the Real Estate Commission to conduct a hearing in accordance with the Arkansas Administrative Procedure Act and impose civil penalties against unlicensed persons who practice real estate in Arkansas. The law provides authority for the Real Estate Commission to impose a civil penalty of no more than five thousand dollars ($5,000) and assess costs against a person the Real Estate Commission finds has engaged in unlicensed real estate activity in the state of Arkansas. The law further allows the Real Estate Commission to require the person engaged in unlicensed real estate activity to reimburse any compensation, fees, or other remuneration collected during the unlicensed real estate activity.
This act clarifies agency duties for real estate licensees and provides for a waiver of certain agency duties by sellers and buyers who choose to do business with brokers who operate business models that provide fewer services than the traditional full-service broker. Four new sections in the license law set out: (1) agency duties required of all real estate licensees; (2) agency duties that sellers may choose to waive; (3) agency duties that buyers may choose to waive; and (4) the process and form that licensees will be required to follow to enable consumers to waive the duties that may be waived. The required form must include the following provision:
"By signing below, I agree that the real estate licensee who represents me will not perform the duties that are initialed above. I also understand that in a proposed real estate transaction, no other real estate licensee will perform the waived duties, and I realize that I may need to hire other professionals such as an attorney."
Furthermore, the new law requires a listing licensee to inform other licensees of: (1) when moneys such as earnest moneys, advance fees, or security deposits are not to be transmitted to or maintained by the listing licensee; and (2) when representatives of the buyer are expected to present offers, etc. directly to the seller, etc.
This act clarifies exemptions from licensure for officers of certain business entities that own real estate. The revised law also extends the licensure exemption to employees of large corporations or banks who work primarily on a salaried or hourly wage basis as long as the employee works only with property owned or acquired by the employer and does so for only one employer whose primary business activity is not ownership or acquisition of real estate.
Gary C. Isom, Executive Director