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1999 SESSION

995236312
HOUSE BILL NO. 2609
Offered January 21, 1999
A BILL to amend and reenact § 54.1-2138 of the Code of Virginia, relating to the duties of real estate brokers and salespersons; disclosure of affiliated business relationship.
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Patrons-- Bennett, Armstrong, Barlow, Day, Jones, J.C. and Keating; Senators: Edwards, Lucas, Mims, Reynolds and Stolle
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Referred to Committee on General Laws
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Be it enacted by the General Assembly of Virginia:

1. That § 54.1-2138 of the Code of Virginia is amended and reenacted as follows:

§ 54.1-2138. Disclosure of brokerage relationship; disclosure of affiliated business relationship.

A. Upon having a substantive discussion about a specific property or properties with an actual or prospective buyer or seller who is not the client of the licensee and who is not represented by another licensee, a licensee shall disclose any (i) broker relationship the licensee has with another party to the transaction and (ii) affiliate relationship with, or any direct or beneficial interest that the licensee or an associate of the licensee has in an affiliated settlement service provider. Further, except as provided in § 54.1-2139, such disclosure shall be made in writing at the earliest practical time, but in no event later than the time when specific real estate assistance is first provided. Such disclosure may be given in combination with other disclosures or provided with other information, but if so, the disclosure must be conspicuous, printed in bold lettering, all capitals, underlined, or within a separate box. Any disclosure which complies substantially in effect with the following shall be deemed in compliance with this disclosure requirement:

DISCLOSURE OF BROKERAGE RELATIONSHIP The undersigned do hereby acknowledge disclosure that: The licensee.............................. Name of Firm represents the following party in a real estate transaction: ........ Seller(s) or ........ Buyer(s) ........ Landlord(s) or ........ Tenant(s) .................... .................... Date Name .................... .................... Date NameDISCLOSURE OF AFFILIATED BUSINESS RELATIONSHIPTo: .....................................Property: ..............................From: ..................................Date: ..................................This is to give you notice that...................(name of licensee or his associate) has an ownership or beneficial interest as follows: ...................(type of interest)in the following settlement service provider(s)...................(name of provider).Set forth below is the estimated charge or range of charges by..............................(name of provider)for the following settlement services: Estimated charge Type of Service$................... ........................$................... ........................$................... ........................YOU ARE NOT REQUIRED TO USE ..............................(NAME OF PROVIDER) AS A CONDITION FOR SETTLEMENT OF YOUR LOAN, PURCHASE OR SALE OF THE SUBJECT PROPERTY. YOU MAY BE ABLE TO GET THESE SERVICES AT A LOWER RATE BY SHOPPING WITH OTHER SETTLEMENT SERVICE PROVIDERS.A lender may require the use of any attorney, credit reporting agency or real estate appraiser to represent the lender’s interest......................... ...................... Client Date........................ ....................... Client Date

B. A licensee shall disclose to an actual or prospective landlord or tenant, who is not the client of the licensee and who is not represented by another licensee, that the licensee has a brokerage relationship with another party or parties to the transaction. Such disclosure shall be in writing and included in all applications for lease or in the lease itself, whichever occurs first. If the terms of the lease do not provide for such disclosure, disclosure shall be made in writing no later than the signing of the lease. Such disclosure requirement shall not apply to lessors or lessees in single or multifamily residential units for lease terms of less than two months.

C. If a licensee's relationship to a client or customer changes, the licensee shall disclose that fact in writing to all clients and customers already involved in the specific contemplated transaction.

D. Copies of any disclosures relative to fully executed purchase contracts shall be kept by the licensee for a period of three years as proof of having made such disclosure, whether or not such disclosure is acknowledged in writing by the party to whom such disclosure was shown or given.

E. As used in this section, “settlement services” and “client” mean the same as those terms are defined in the Real Estate Settlement Procedures Act of 1974 (RESPA), 12 U.S.C. § 2601, et seq., as amended, and the regulations thereunder.