COMMITTEE SUBSTITUTE
FOR
H. B. 2569
(By Delegates Collins, Proudfoot,
Staton and Kuhn)
(Originating in the Committee on the Judiciary)
[January 28, 1998]
A BILL to amend and reenact sections two, eleven and sixteen,
article twelve, chapter forty-seven of the code of West
Virginia, one thousand nine hundred thirty-one, as amended,
all relating to real estate brokers and salespersons;
excluding from the definition of "real estate broker"
noncommissioned clerical employees of real estate brokers
who perform certain administrative functions; setting forth
grounds for refusing, suspending or revoking licenses,
including the payment of a commission or other consideration
to another broker or salesperson in certain instances; and
setting forth criminal penalties.
Be it enacted by the Legislature of West Virginia:
That sections two, eleven and sixteen, article twelve,
chapter forty-seven of the code of West Virginia, one thousand
nine hundred thirty-one, as amended, be amended and reenacted, all to read as follows:
ARTICLE 12. REAL ESTATE COMMISSION, BROKERS AND SALESPERSONS.
§47-12-2. Definitions and exceptions.
(a) The term "real estate broker" within the meaning of this
article includes all persons, partnerships, associations and
corporations, foreign and domestic, who for a fee, commission or
other valuable consideration or who with the intention or
expectation of receiving or collecting the same, lists, sells,
purchases, exchanges, rents, manages, leases or auctions any real
estate or the improvements thereon, including options, or who
negotiates or attempts to negotiate any such activity; or who
advertises or holds himself, herself, itself or themselves out as
engaged in such activities; or who directs or assists in the
procuring of a purchaser or prospect calculated or intended to
result in a real estate transaction. The term "real estate
broker" shall also include any person, partnership, association
or corporation employed by or on behalf of the owner or owners of
lots, or other parcels of real estate, at a stated salary or upon
a fee, commission or otherwise to sell such the real estate, or
any parts thereof, in lots or other parcels, and who shall sell,
manage, exchange, lease, offer, attempt or agree to negotiate the
sale, exchange or lease of any such lot or parcel of real estate.
(b) The term "real estate" as used in this article includes
leaseholds as well as any and every interest or estate in land, whether corporeal or incorporeal, freehold or nonfreehold, and
whether said the property is situated in this state or elsewhere.
(c) The term "associate broker" means any person who for
compensation or other valuable consideration is employed by a
broker to perform all the functions authorized by a broker's
license only for and on behalf of such the employing broker
including, but not limited to, authority to supervise other
salespersons employed by a broker and manage an office on behalf
of a broker.
(d) The term "real estate salesperson" means and includes
any person employed or engaged by or on behalf of a licensed real
estate broker to do or deal in any activity as included in this
section, for compensation or otherwise.
(e) One act in consideration of or with the expectation or
intention of or upon the promise of receiving compensation by
fee, commission or otherwise, in the performance of any act or
activity contained in this section, constitutes such persons,
partnerships, association or corporation, a real estate broker
and make him or her, them or it subject to the provisions and
requirements of this article.
(f) The term "real estate broker" or "real estate
salesperson" shall does not include any person, partnership,
association or corporation who, as a bona fide owner or lessor,
performs any aforesaid act:
(1) With reference to property owned or leased by him or her
to the regular employees thereof, where such acts are performed
in the regular course of or as an incident to the management of,
such the property and the investment therein;
(2) Nor shall this article be construed to include
attorneys-at-law, except that attorneys-at-law shall be required
to submit to the written examination required under section seven
of this article in order to qualify for a broker's license:
Provided, That an attorney-at-law who is licensed as a real
estate broker prior to the effective date of this section is
exempt from the written examination required under section seven
of this article;
(3) Nor any person holding in good faith a duly executed
power of attorney from the owner authorizing the final
consummation and execution for the sale, purchase, lease or
exchange of real estate;
(4) Nor to the acts of any person while acting as a
receiver, trustee, administrator, executor, guardian or under the
order of any court or while acting under authority of a deed of
trust or will;
(5) Nor shall this article apply to public officers while
performing their duties as such;
(6) Nor shall this article apply to the acquisition or
disposition of coal, oil or gas leasehold or coal, oil or gas interests;
(7) Nor to persons properly licensed pursuant to the
provisions of article two-c, chapter nineteen of this code when
conducting an auction, any portion of which contains any
leasehold or estate in land, when such the person is retained to
conduct an auction by a receiver or trustee in bankruptcy, a
fiduciary acting under the authority of a deed of trust or will,
or a fiduciary of a decedent's estate;
(8) Nor does this article apply to any person employed by a
real estate broker in a noncommissioned clerical capacity who may
in the course of employment be required to:
(A) Disseminate brokerage preprinted and predetermined real
estate sales and rental information;
(B) Accept and process rental reservations or bookings for
a period not to exceed thirty consecutive days in a manner and
procedure predetermined by the broker;
(C) Collect predetermined rental fees for the rentals which
are to be promptly tendered to the broker; or
(D) Any combination thereof.
§47-12-11. Procedure and grounds for refusal, suspension or
revocation of license.
(a) The commission may upon its own motion and shall, upon
the verified complaint in writing of any person setting forth a
cause of action under this section, ascertain the facts and if warranted hold a hearing for the suspension or revocation of a
license. The commission shall have full power to refuse a
license for reasonable cause or to revoke or suspend a license if
the licensee:
(1) Obtains, renews or attempts to obtain or renew a license
through the submission of any application or other writing that
contains false or fraudulent information;
(2) Makes any substantial misrepresentation;
(3) Makes any false promises or representations of character
likely to influence, persuade or induce a person involved in a
real estate transaction;
(4) Pursues a continued or flagrant course of
misrepresentation or makes false promises or representations
through agents or salespersons or any medium of advertising or
otherwise;
(5) Uses misleading or false advertising or uses any trade
name or insignia of membership in any real estate organization,
in which the licensee is not a member;
(6) Acts for more than one party in a transaction without
the knowledge of all parties for whom he or she acts;
(7) Fails, within a reasonable time, to account for or to
remit any moneys coming into his or her possession belonging to
others, or commingles moneys belonging to others with his or her
own funds;
(8) Displays a "for sale" or "for rent" sign on any property
without an agency therefor or without the owner's consent;
(9) Fails to disclose in writing to all parties to a real
estate transaction, on the form promulgated by the commission,
whether the licensee is representing the seller, the buyer or
both;
(10) Fails to voluntarily furnish copies of a notice of
agency disclosure, and all listing agreements, sales contracts,
and lease agreements to all parties executing the same;
(11) Pays or receives any rebate, profit, compensation or
commission as a result of a real estate transaction from any
person other than his or her principal;
(12) Induces any party to a contract, sale or lease to enter
into another contract, in lieu thereof, for the personal gain of
the licensee;
(13) Accepts a commission or other valuable consideration as
a real estate salesperson for the performance of any of the acts
specified in this article, from any person, other than his or her
employer, who must be a licensed real estate broker;
(14) Pays a commission or other valuable consideration to
any person for acts or services performed either in violation of
this article or the real estate licensure laws of any other
state;
(15) Pays a commission or other valuable consideration to another real estate broker or salesperson, knowing that the other
real estate broker or salesperson will pay a portion or all of
that which is received in a manner that would constitute a
violation of this article if it were paid directly by a licensee
of this state;
(15) (16) Engages in the unlawful or unauthorized practice
of law as defined by the supreme court of appeals of West
Virginia;
(16) (17) Procures an attorney for any customer or solicits
legal business for any attorney at law;
(17) (18) Engages in any act or conduct which constitutes or
demonstrates bad faith, incompetency or untrustworthiness, or
dishonest, fraudulent or improper dealing;
(18) (19) Has been convicted in a court of competent
jurisdiction in this or in any other state of forgery,
embezzlement, obtaining money under false pretense, extortion,
conspiracy to defraud or of any other like offense; or
(19) (20) Has been convicted in a court of competent
jurisdiction in this or any other state of a felony.
(b) As used in this section:
(1) The words "convicted in a court of competent
jurisdiction" mean a plea of guilty or nolo contendere entered by
a person or a verdict of guilt returned against a person at the
conclusion of a trial;
(2) A certified copy of a guilty verdict or plea conviction
order entered in such court is sufficient evidence to demonstrate
a person has been convicted in a court of competent jurisdiction.
§47-12-16. Penalties for violations.
Any person violating a provision of this article shall is
guilty of a misdemeanor and, upon conviction of a first violation
thereof, if a person an individual, be punished by a fine of
shall be fined not less than one hundred thousand dollars nor
more than five hundred two thousand dollars, or by imprisonment
imprisoned in the county or regional jail for a term not to
exceed not more than ninety days, or both fined and imprisoned;
and if a corporation, be punished by a fine of shall be fined not
more less than one two thousand dollars nor more than five
thousand dollars. Upon conviction of a second or subsequent
violation, any person so convicted, if a person an individual,
shall be punished by a fine of fined not less than five hundred
two thousand dollars nor more than one five thousand dollars, or
by imprisonment imprisoned in the county or regional jail
for a
term not to exceed one year, or both fined and imprisoned
; and if
a corporation, be punished by a fine of shall be fined not less
than two five thousand dollars nor more than five ten thousand
dollars. Any officer or agent of a corporation, or any member or
agent of a partnership or association, shall be subject to the
penalties herein prescribed for individuals.
NOTE: The purpose of this bill is to allow a real estate
broker to hire unlicensed persons to perform routine office
procedures, including disseminating and distributing preprinted,
predetermined information to prospective clientele; receiving
rental reservations; checking in vacation or short term renters
and collecting predetermined fees for lodging establishments.
The bill would also prohibit a licensed real estate broker from
agreeing to pay a portion of his or her earned commission to an
other broker (usually an out-of-state broker) who will in turn
rebate only part of the fee to the customer. Finally, the bill
would increase criminal penalties for violations of the article.
Strike-throughs indicate language that would be stricken
from the present law, and underscoring indicates new language
that would be added.