PROPOSED RULEMAKING
STATE REAL ESTATE COMMISSION
[49 PA. CODE CH. 35]
General Provisions
[29 Pa.B. 565] The State Real Estate Commission (Commission) proposes to amend Chapter 35 to read as set forth in Annex A.
The purpose of the proposal is to update the Commission's existing regulations to address issues of current importance in the real estate industry, and to better serve and protect the interest of consumers who use the services of a licensee in a real estate transaction.
Many of the Commission's regulations have not been updated since 1989, see 19 Pa. B. 781 (February 25, 1989). Other regulations which are proposed to be amended were last revised in 1994, see 24 Pa.B. 2904 (June 11, 1994). This proposed rulemaking is one of several the Commission will propose as part of its ongoing review of its regulations.
Compliance with Executive Order 1996-1, Regulatory Review and Promulgation
In compliance with Executive Order 1996-1, the Commission extended an invitation to the following boards and associations to preliminarily review and comment on the Commission's draft regulatory proposal: Pennsylvania Association of Realtors; Realtors Educational Institute; Institute of Real Estate Studies; Polley Associates; Cemetery Association of Pennsylvania; Pennsylvania Bar Association; Allegheny Highland Association; Greater Allegheny-Kiski Area Board; Allegheny Valley Board; Beaver County Association; Bradford-Sullivan County Association; Bucks County Board; Butler County Association; Cambria-Somerset Association; Carbon County Association; Carlisle Association; Central Montgomery County Association; Central Susquehanna Valley Board; Central Westmoreland Board; Centre County Association; Chester County Association; Clearfield-Jefferson Association; Delaware Valley Realtors Association; East Montgomery County Association; Elk-Cameron County Board; Greater Erie Board; Fayette County Board; Franklin County Association; Greenville Area Board; Hanover-Adams County Association; Greater Harrisburg Association; Greater Hazleton Association; Huntingdon County Board; Indiana County Board; Lancaster County Association; Lawrence County Board; Lebanon County Association; Lehigh Valley Association; McKean County Association; Greater Meadville Board; Greater Mercer County Board; Mifflin-Juniata County Board; Mon Yough Association; Monongahela Valley Board; Greater Philadelphia Association; North Central Penn Board; Pike/Wayne Association; Pocono Mountains Association; Reading-Berks Association; Realtors Association of Metropolitan Pittsburgh; Schuylkill County Board; Greater Scranton Association; Tri-State Commercial and Industrial Association; Warren County Board; Washington-Greene Association; West Branch Valley Association; Westmoreland West Association; Greater Wilkes-Barre Association; York County Association; The Pennsylvania Federation of Housing Counselors and Agencies; and The Real Estate Consumer Council.
In formulating this proposal, the Commission reviewed and considered all comments and suggestions received by these and other interested parties during the regulatory development process.
Description of Proposed Amendments:
§ 35.201. Definitions.
The Commission proposes to delete references to appraising from the definition of ''broker'' and ''salesperson.'' The proposed amendments will bring the definitions of ''broker'' and ''salesperson'' into conformity with the statutory change of the act of July 2, 1996 (P. L. 460, No. 71) (Act 71) which deleted the words ''or appraises'' from the Real Estate Licensing and Registration Act (act) (63 P. S. §§ 455.101--455.902).
§ 35.222. Licensure as broker.
Subsection (b):
The Commission proposes to amend subsection (b), relating to nonresident brokers, in an effort to facilitate licensure for nonresident brokers who desire to transact business in this Commonwealth, and to facilitate out-of-State licensure for Commonwealth brokers who desire to transact business in other states.
Under current regulations, an individual holding a broker's license issued by another jurisdiction who wants to obtain a Commonwealth broker's license must hold a broker's license issued by another jurisdiction that has been active for 5 years prior to the submission of a Commonwealth license application; have scored a passing grade on the Commonwealth portion of the broker's examination within 3 years prior to the submission of a license application; and satisfy requirements for education and experience under § 35.271 (relating to examination for broker's license).
The experience requirements under § 35.271 include 3 years as a licensed salesperson, with experience qualifications that the Commission considers adequate for practice as a broker, or at least 3 years of other experience, education, or both, that the Commission considers the equivalent of 3 years' experience as a licensed salesperson. The education requirements include 16 credits or 240 hours of instruction in professional real estate education as further delineated by the Commission under subsection (b).
The Commission, in conjunction with regional and National state licensing law groups, is working toward the common goal of removing licensure restrictions which hamper the ability of licensees to practice from state to state. The eventual goal is to achieve uniform licensure requirements with our neighboring states with an eye toward elimination of a separate State licensing examination for nonresidents who wish to practice in this Commonwealth. This would be consistent with the position advocated at the National level by the National Association of Realtors (NAR) and the Association of Real Estate License Law Officials (ARELLO). Both organizations are committed to eliminating additional examination requirements for licensees who wish to be licensed in more than one jurisdiction.
In studying this issue, the Commission discovered that section 602 of the act (63 P. S. § 455.602) does not require that a nonresident be licensed in another jurisdiction for 5 years prior to being eligible to hold a Commonwealth license. Similarly, the act does not require that a nonresident satisfy equivalent educational requirements as a prerequisite for licensure in this Commonwealth. The act requires only that nonresidents meet equivalent experience requirements ''and other standards and qualifications as the Commission shall by rule provide. . . .''
In the Commission's view, qualified brokers and salespersons from other states should be permitted to practice in this Commonwealth based upon their acquisition and possession of a current license in another state with a minimum of restriction. This belief is based, in part, upon the Commission's underlying recognition that over the years an increasing number of real estate transactions are having some aspect of interstate character. Recognizing another state's license as establishing the prerequisite knowledge and experience in real estate transactions enables the public to take advantage of a wider range of services and enhances competition. The Commission therefore proposes to amend subsection (b) by granting a broker's license to an individual holding a broker's license issued by another jurisdiction who meets substantially equivalent experience requirements of § 35.271(a)(3), and who satisfies the requirements of paragraphs (1)--(3).
As proposed, paragraph (1) would require applicants to have scored a passing grade on the Pennsylvania portion of the broker's examination within 3 years prior to submission of a properly completed license application. The Commission wishes to eliminate this requirement eventually but believes that until licensure requirements are substantially uniform among the states, Commonwealth consumers will be better served by licensees who can demonstrate their competency of the Commonwealth's law and regulations.
Paragraph (2) would require applicants to possess either a current broker's or associate broker's license issued by another jurisdiction prior to submission of a properly completed application. Consistent with the Commission's view that qualified brokers and salespersons from other states should be permitted to practice in this Commonwealth based upon their acquisition and possession of a current license in another state with a minimum of restriction, the current requirement that an applicant possess the license for 5 years would be eliminated.
Paragraph (3)(i) would require the applicant to submit a completed license application to the Commission containing a signed affidavit attesting that the individual has received a copy of the act and regulations of the Commission and has read, understands and agrees to comply with all provisions of the act and regulations while performing real estate activities in this Commonwealth. It is anticipated that this provision, in time, will replace the requirement that an applicant score a passing grade on the Pennsylvania portion of the broker's examination. In the interim, the requirement will help to ensure that licensees from other states who practice in this Commonwealth are familiar with and understand the laws and regulations governing real estate activities in this Commonwealth.
Subparagraph (ii) would refer the applicant to the requirement under § 35.221(3) (relating to general requirements) that the applicant sign a written consent to service of process. Subparagraph (iii) would require the individual to sign an affidavit agreeing to cooperate with any investigation and to provide information requested by the Commission or any of its authorized agents as a result of a formal or informal complaint to the Commission indicating a violation of the act. This requirement is consistent with section 604(a)(17) of the act (63 P. S. § 455.604(a)(17)).
Under subparagraph (iv), an applicant would be required to submit a certification from the real estate licensing authority of the other jurisdiction containing: the applicant's license number and confirmation that the applicant obtained initial licensure by written examination; confirmation that the applicant's license is current and in good standing; a description of any past disciplinary action taken by the licensing authority against the applicant; and, the applicant's office address. If the applicant is an associate broker, the name and address of the applicant's employer would be required. With the exception of the 5 year licensure requirement, this language is similar to what appears in the current regulations under paragraph (4).
Finally, subsection (c) would require that an applicant for an associate broker's license satisfy the requirements of subsection (b) and submit a sworn statement from a licensed Commonwealth broker with whom the applicant will be affiliated, certifying that he will actively supervise the applicant.
§ 35.223. Licensure as salesperson.
Subsection (b):
The Commission proposes amendments to § 35.223(b) similar to those proposed to § 35.222(b). Neither the act nor the regulations of the Commission require an applicant for a salesperson's license to acquire experience prior to licensure. Therefore, the primary difference between proposed § 35.223(b) and proposed § 35.222(b) is the requirement that a nonresident who desires to hold a Commonwealth salesperson's license meet substantially equivalent education requirements of § 35.272 (relating to examination for salesperson's license) and satisfy the requirements of paragraphs (1)--(3).
With one exception, the requirements of paragraphs (1)--(3) parallel the requirements proposed under § 35.222(b). The major difference in these two proposals is found in paragraph (3)(ii) and (iii). As proposed, paragraph (3)(ii) would require a nonresident salesperson or broker to include with his license application a sworn statement from a licensed Commonwealth broker with whom the applicant will be affiliated attesting to the applicant's good reputation for honesty, trustworthiness, integrity and competence, and certifying that he will actively supervise and train the applicant. Paragraph (3)(iii) would also require that the license application include official transcripts evidencing the acquisition of degrees or course credits required by § 35.272(a)(2).
§ 35.245. Display of licenses in office.
Currently, § 35.245 requires the display of a license in a conspicuous place at the office out of which the licensee works. The Commission proposes to amend this section to conform with industry practice and to ensure compliance with section 601 of the act (63 P. S. § 455.601). In the first instance, licenses would be required to be on file and readily available for inspection in the main office or an office designated by the broker within this Commonwealth. In the second instance, a photocopy of the license would be displayed in a conspicuous place in the main or branch office out of which the licensee works. As amended, the regulation will ensure that anyone, that is, a consumer or an inspector, will have access to information to verify the licensure status of a licensee.
§ 35.271. Examination for broker's license.
Subsection (b)(2):
Under current regulations, at least eight of the required 16 credits of real estate instruction shall be in four or more of the Commission-developed courses listed in paragraph (2). The remaining eight credits must be in real estate courses, but, licensees are free to elect the course topics.
The Commission proposes to amend subsection (b)(2) to require that two of the required 16 education credits shall be in a Commission-developed or approved real estate office management course and that two of the required 16 credits be in a Commission-developed or approved law course.
Brokers are responsible for the overall operation of a real estate office and have the legal responsibility to supervise the activities of their licensed salespersons or associate brokers. Yet, there is no requirement that an individual receive office management or supervisory training prior to obtaining a broker's license. Moreover, many consumer complaints which are filed against brokers relate to poor office policies or management, or both, and to issues associated with changes in the law--for example, seller disclosure, lead-based paint disclosure and agency. With this proposal, the Commission hopes to impart office management skills on newly licensed brokers and to ensure that newly licensed brokers are aware of new laws as they develop in today's practice.
Editorial changes are proposed to subsection (b)(2)(vii), (ix) and (x) consistent with the amendments to subsection (b)(2). The Commission also proposes to remove courses currently entitled ''Appraisal of Residential Property'' and ''Appraisal of Income-Producing Property'' in subparagraphs (ix) and (x), respectively. These courses would be re-titled ''Valuation of Residential Property'' and ''Valuation of Income Producing Property.'' Under Act 71, effective September 3, 1998, all real estate appraisal activities will be under the jurisdiction of the State Board of Certified Real Estate Appraisers. Since brokers will continue to be able to perform comparative market analyses, the new course titles will more accurately reflect the subject matter content of these courses.
Subsections (b)(3)(iii) and (iv):
Under subsection (b)(3)(iii), a real estate course offered by a real estate school outside this Commonwealth that has been approved by the real estate licensing authority of the jurisdiction where the school is located may be counted toward satisfying the education requirement. The Commission proposes to add language to this provision to require that the course transcript or certificate of completion provided by schools outside this Commonwealth state that the course is approved by the licensing authority of the jurisdiction where the school is located. This will shorten administrative review and speed the issuance of licenses.
The Commission also proposes to amend subsection (b)(3)(iv) to allow a real estate course which is offered by an industry organization outside of this Commonwealth to be counted toward satisfying the education requirement if the course is approved by the licensing jurisdiction of another state. As proposed, language would also be added to require the course transcript or certificate of completion to state that the course is approved by the licensing jurisdiction which has approved it. Under current regulations, the course would only be acceptable towards satisfying the education requirement if the course was also offered by a real estate school in this Commonwealth. The Commission has determined that the regulation as written unduly limits some very suitable and appropriate courses that otherwise would not be available in this Commonwealth. As long as the course is an acceptable real estate course which is approved by the licensing jurisdiction of another state, it should not matter whether the course is also offered by a real estate school in this Commonwealth.
Subsection (b)(4):
Under Act 71, effective September 3, 1998, all real estate appraisal activity will be transferred to the jurisdiction of the State Board of Certified Real Estate Appraisers. The Commission therefore proposes to delete from subsection (b)(4), language that allowed a maximum of six credits for courses in real estate appraisal under subsection (b)(2).
§ 35.281. Putting contracts, commitments and agreements in writing.
Editorial amendments are proposed to subsections (a) and (b). The Commission proposes to delete reference to an oral open listing agreement in subsection (b) because the reference is contradictory to the requirement in subsection (a) that agreements in connection with a real estate transaction be in writing.
§ 35.287. Supervised property management assistance by salespersons.
The Commission proposes to delete language under subsection (a) that allows a salesperson to assist in the preparation of an appraisal by the employing broker or an associate broker. Effective September 3, 1998, all real estate appraisal activities now fall under the jurisdiction of the State Board of Certified Real Estate Appraisers.
§ 35.304. Disclosure of licensure when advertising own real estate.
Amendments are proposed to § 35.304 to require that any licensee who sells or leases his own real estate shall disclose his licensure status in advertisements for the property. As currently written, the regulation applies only to brokers who sell or lease their own property. The current language is inconsistent with § 35.288(a) (relating to duties when selling or leasing own real estate). As proposed, the amendment will clarify that disclosure is required of all licensees. The proposed amendment will also ensure that consumers who independently negotiate with a licensee will be on notice that they are dealing with an individual who has more training and experience on real estate issues than the average consumer.
§ 35.305. Business name on advertisements.
Several amendments are proposed to § 35.305. The amendments to subsection (a) are editorial in nature. This subsection would advise brokerage companies, cemetery companies and rental listing referral agencies of their responsibility to advertise or otherwise hold themselves out to the public only under the business name designated on their license.
Subsection (b), as proposed, would permit licensees other than brokerage companies, cemetery companies and rental listing referral agencies, to use and advertise nicknames, that is, Jack v. John or Margaret v. Peggy if the names are included on their licensure applications or biennial renewal applications, or both. The inclusion of this information on application materials will enable the Commission to readily identify the individual on its computer tracking system if inquiry is made by the public about the licensure status of the individual. Currently, individuals are tracked only by the names appearing on their application and licensure documents. Nicknames are not included.
The proposed amendments to subsection (c) would delete the requirement that the telephone number of the employing broker be given greater prominence in an advertisement than the telephone number of the employe. Although the employing broker's telephone number must appear in the advertisement, as long as the name of the employing broker is given greater prominence in the advertisement than the name of the employe, the Commission is of the view that the telephone number of the broker need only appear in a size equal to the telephone number of the employe. The purpose of the regulation is to ensure that a consumer will know the name and telephone number of the broker who, by law, is responsible for the activities of the employe. The proposed amendment should accomplish this objective without imposing additional advertising costs on the employe.
§ 35.308. Relationship with educational institution.
The proposed amendments to § 35.308 would delete the prohibition against a real estate company, franchise or network promoting, endorsing or advertising its association, affiliation or connection with a real estate school, college, university or institute of higher learning regarding its offering of real estate instruction. If the association, affiliation or connection includes an ownership interest, the proposed amendments would require full disclosure of the interest in all promotions, endorsements or advertisements. As proposed, an ownership interest would be defined to include proprietary or beneficial interests through which the real estate company, franchise or network earns or has the potential to earn income, or which produces a direct or indirect economic interest.
§ 35.321. Duty to deposit money belonging to another into escrow account.
The Commission's regulations relating to escrow requirements are in need of substantial amendments to better serve consumers and the regulated community.
As proposed, subsection (a) would be amended to provide an exception to the requirement that a broker deposit all moneys received by him into an escrow account to be held pending consummation of a transaction. The exception is set forth in the proposed amendments to § 35.322 (relating to transfer of escrow funds).
The proposed amendments to subsection (e) would allow a broker to transfer a security deposit that he receives belonging to another from the broker's escrow account to the escrow account of the lessor or the lessor's broker in the event of a sale of the leased property or a change in the property management agreement during the term of the tenancy. The transfer would be conditional upon the broker providing notification in writing to each tenant from whom the broker received such a deposit of the name and address of the banking institution in which the deposits will be held, and the amount of the deposits. The existing regulation fails to contemplate a sale of the leased premises or a change in the property management agreement during the term of a tenancy. As currently written, the regulation requires that the original broker continue to hold the deposits until the tenancy ends, regardless of whether the new lessor wants to continue to use that broker's services, to manage the property himself or to use the services of another broker.
§ 35.322. Transfer of escrow funds.
The proposed amendments to § 35.322 would permit the buyer and the seller or the lessor and the lessee, at any time, by separate written agreement, to direct the broker to transfer escrow funds being held by the broker to either the buyer or the seller, the lessor or the lessee or a bona fide escrow agent, for example, an attorney, a title company or a real estate brokerage company. Under current regulations, a broker's escrow duty may not be altered by agreement between the parties to the transaction. Therefore, the moment that a broker deposits funds belonging to another into escrow, the principals to the transaction lose their right to agree to a subsequent transfer of these funds. The Commission has found that this regulation unduly infringes upon the contractual rights of the parties and has proved to be cumbersome not only for consumers of real estate services, but, for licensees as well.
§ 35.327. Procedure when entitlement to money held in escrow is disputed.
The proposed amendments to § 35.327 are intended to establish a fair and equitable procedure for the return of escrow money when entitlement to the money is disputed.
Currently, if the parties to a real estate sales or lease transaction dispute entitlement to escrow funds, § 35.327 compels the broker to hold the money in escrow until the dispute is resolved. Sometimes, the parties take no action to resolve the dispute. Nonetheless, the broker must continue to hold that money in escrow regardless of whether the payor-buyer has abandoned any claim to the earnest money deposit, or whether the payor-buyer's entitlement to the money is clear (for example, a contingency in the purchase agreement has not been met). Although current regulations allow a broker, following 30 days' notice to the parties, to petition the county court having jurisdiction in the matter to interplead the rival claimants, this procedure is only available when a civil action has been commenced by one of the parties against the other. When a case is not already before the court and there are no ''rival claimants,'' a broker cannot petition the court to interplead the rival claimants. Moreover, frequently the dollar amount of the escrow deposit does not justify litigation costs.
The new proposal attempts to address these issues. As proposed, § 35.327 would be divided into three subsections, (a) through (c). Proposed subsection (a) would still require a broker to retain an earnest money deposit in escrow until either a written release is obtained from all parties consenting to its disposition, or a civil action is filed by one of the parties to determine its disposition. If a civil action is filed, the broker may petition the county court having jurisdiction in the matter to interplead the rival claimants and may, with written notice to the parties, deduct the costs incurred by the broker to interplead the claimants from the funds being held in escrow. The Commission believes that in the case of a dispute the parties should bear the cost of its resolution.
Proposed subsection (b) addresses the situation when there is a dispute between the parties over entitlement to moneys being held in escrow, but, no written release is signed and no civil action is filed to determine its disposition. In this instance, a broker would be permitted, after written notice to the parties and after the passage of 180 calendar days from the date of the proposed settlement, to either return the earnest money deposit to the payor-buyer, when the broker in good faith believes that a contingency in the purchase agreement has not been met, or pay out the deposit to a seller when the broker in good faith believes that the payor-buyer has abandoned any claim to the deposit. Although the broker could still stand subject to a civil action being filed against him by a disgruntled seller or the payor-buyer, under proposed subsection (c), the broker would not stand subject to disciplinary action by the Commission for paying out the deposit under these conditions.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on January 20, 1999, the Commission submitted a copy of these proposed amendments to the Independent Regulatory Review Commission (IRRC) and the Chairpersons of the House Committee on Professional Licensure and the Senate Committee on Consumer Protection and Professional Licensure. In addition to submitting the proposed amendments, the Commission has provided IRRC and the Committees with a copy of a detailed regulatory analysis form prepared by the Commission in compliance with Executive Order 1996-1. A copy of this material is available to the public upon request.
Under section 5(g) of the Regulatory Review Act, if IRRC has objections to any portion of the proposed amendments, it will notify the Commission within 10 days of the close of the Committees' review period. The notification shall specify the regulatory review criteria which have not been met by that portion. The Regulatory Review Act specifies detailed procedures for the Commission, the Governor and the General Assembly to review these objections before final publication of the proposed amendments.
Fiscal Impact and Paperwork Requirements
The proposed amendments should have no fiscal impact on the Commonwealth, its political subdivisions or the public, that is, the regulated community. Likewise, the proposed amendments should not necessitate any legal, accounting, reporting or other paperwork requirements on the regulated community.
Statutory Authority
The amendments are proposed under the authority of sections 404 and 602 of the act (63 P. S. §§ 455.404 and 455.602).
Public Comment
Interested persons are invited to submit written comments, suggestions or objections regarding the proposed amendments to Judith Pachter Schulder, Counsel, State Real Estate Commission, 116 Pine Street, P. O. Box 2649, Harrisburg, PA 17105-2649, within 30 days of publication of this proposed rulemaking.
HARVEY M. LEVIN,
ChairpersonFiscal Note: 16A-560. No fiscal impact; (8) recommends adoption.
Annex A
TITLE 49. PROFESSIONAL AND VOCATIONAL STANDARDS
PART I. DEPARTMENT OF STATE
Subpart A. PROFESSIONAL AND OCCUPATIONAL AFFAIRS
CHAPTER 35. STATE REAL ESTATE COMMISSION
Subchapter B. GENERAL PROVISIONS § 35.201. Definitions.
The following words and terms, when used in this chapter, have the following meanings, unless the context clearly indicates otherwise:
* * * * * Broker--An individual or entity that, for another and for a fee, commission or other valuable consideration, does one or more of the following:
* * * * * (iii) Manages [or appraises] real estate.
* * * * * Salesperson--An individual who is employed by a broker to do one or more of the following:
* * * * * (vii) Assist a broker in managing [or appraising] property.
* * * * *
Subchapter C. LICENSURE
LICENSURE REQUIREMENTS § 35.222. Licensure as broker.
* * * * * (b) [An individual holding a broker's license issued by another jurisdiction who wants to obtain a Pennsylvania broker's license either shall comply with subsection (a) or shall:
(1) Possess a broker's license issued by another jurisdiction that has been active within 5 years prior to the submission of a properly completed license application.
(2) Have scored a passing grade on the Pennsylvania portion of the broker's examination within 3 years prior to the submission of a properly completed license application. See § 35.271.
(3) Comply with §§ 35.241 and 35.242.
(4) Submit a completed license application to the Commission with a certification from the real estate licensing authority of the other jurisdiction containing the following information:
(i) The applicant's license number, the date of issuance of the license and confirmation that the applicant obtained initial licensure by written examination.
(ii) Whether the license has been active within the past 5 years.
(iii) A description of past disciplinary action taken by the licensing authority against the applicant.
(iv) The applicant's office address and the name of the applicant's employer.]
The Commission will grant a broker's license to an individual holding a broker's license issued by another jurisdiction who meets substan- tially equivalent experience requirements of § 35.271(a)(3), and who satisfies the following requirements:
(1) Has scored a passing grade on the Pennsylvania portion of the broker's examination within 3 years prior to the submission of a properly completed license application.
(2) Possesses a current broker's or associate broker's license issued by another jurisdiction prior to the submission of a properly completed license application.
(3) Submits a completed license application to the Commission containing:
(i) A signed affidavit attesting that the individual has received a copy of the act and this chapter and has read, understands and agrees to comply with the act and this chapter while performing real estate activities in this Commonwealth.
(ii) A signed written consent to service of process as required under section § 35.221(3) (relating to general requirements).
(iii) A signed affidavit agreeing to cooperate with any investigation and to provide information requested by the Commission or any of its authorized agents as a result of a formal or informal complaint to the Commission indicating a violation of the act.
(iv) A certification from the real estate licensing authority of the other jurisdiction containing:
(A) The applicant's license number, the date of issuance of the license and confirmation that the applicant obtained initial licensure by written examination.
(B) Confirmation that the applicant's license is current and in good standing.
(C) A description of any past disciplinary action taken by the licensing authority against the applicant.
(D) The applicant's office address and, if an associate broker, the name of the applicant's employer.
(c) An applicant for an associate broker's license shall satisfy the requirements of subsection (b) and submit an affidavit from a licensed Pennsylvania broker with whom the applicant will be affiliated:
(1) Attesting to the applicant's good reputation for honesty, trustworthiness, integrity and competence.
(2) Certifying that he will actively supervise the applicant.
[(c)] (d) * * *
* * * * * § 35.223. Licensure as salesperson.
* * * * * (b) [An individual holding a broker's or salesperson's license issued by another jurisdiction who wants to obtain a Pennsylvania salesperson's license shall comply with subsection (a) or shall:
(1) Possess a broker's or salesperson's license issued by another jurisdiction that has been active within 5 years prior to the submission of a properly completed license application.
(2) Have scored a passing grade on the Pennsylvania portion of the salesperson's examination within 3 years prior to the submission of a properly completed license application. See § 35.272.
(3) Submit a completed license application to the Commission with a certification from the real estate licensing authority of the other jurisdiction containing the following information:
(i) The applicant's license number, the date of issuance of the license and confirmation that the applicant obtained initial licensure by written examination.
(ii) An indication of whether the license has been active within the past 5 years.
(iii) A description of past disciplinary action taken by the licensing authority against the applicant.
(iv) The applicant's office address and name of the applicant's employer.]
The Commission will grant a salesperson's license to an individual holding a broker's or salesperson's license issued by another jurisdiction who meets substantially equivalent education requirements of § 35.272, and satisfies the following requirements:
(1) Has scored a passing grade on the Pennsylvania portion of the salesperson's examination within 3 years prior to the submission of a properly completed license application.
(2) Possesses a current broker's or salesperson's license issued by another jurisdiction prior to the submission of a properly completed license application.
(3) Submits a completed license application to the Commission containing:
(i) A signed affidavit attesting that the individual has received a copy of the act and the regulations of the Commission and has read, understands and agrees to comply with the act and this chapter while performing real estate activities in this Commonwealth.
(ii) A sworn statement from a licensed Pennsylvania broker with whom the applicant will be affiliated:
(A) Attesting to the applicant's good reputation for honesty, trustworthiness, integrity and competence.
(B) Certifying that he will actively supervise and train the applicant.
(iii) Official transcripts evidencing the acquisition of degrees or course credits required by § 35.272(a)(2).
(iv) A certification from the real estate licensing authority of the other jurisdiction containing:
(A) The applicant's license number, the date of issuance of the license and confirmation that the applicant obtained initial licensure by written examination.
(B) Confirmation that the applicant's license is current and in good standing.
(C) A description of any past disciplinary action taken by the licensing authority against the applicant.
(v) The applicant's office address and name of the applicant's employer.
(vi) A written consent to service of process as required under § 35.221(3) (relating to general requirements).
(vii) An affidavit agreeing to cooperate with any investigation and to provide information requested by the Commission or any of its authorized agents as a result of a formal or informal complaint to the Commission indicating a violation of the act.
OFFICES § 35.245. Display of licenses in office.
* * * * * (b) The current license of an associate broker, salesperson, associate cemetery broker or cemetery salesperson shall be [displayed in a conspicuous place at the office out of which the licensee works] on file and readily available for inspection in the main office or an office designated by the broker within this Commonwealth. A photocopy of the license shall be displayed in a conspicuous place in the main or branch office out of which the licensee works.
* * * * *
Subchapter D. LICENSING EXAMINATIONS § 35.271. Examination for broker's license.
* * * * * (b) The Commission will apply the following standards in determining whether an examination candidate has met the education requirement of subsection (a)(4):
* * * * * (2) Except as provided in paragraph (6), [at least eight] two of the required 16 credits shall be in [real estate courses in four] a Commission-developed or approved real estate office management course and two of the required 16 credits shall be in a Commission-developed or approved law course. At least six of the remaining 12 credits shall be in three or more of the Commission-developed courses listed in this paragraph. The remaining [eight] six credits shall be in real estate courses but not necessarily those listed in this paragraph. A candidate may not apply credits used to qualify for the salesperson's examination toward fulfillment of the broker education requirement.
* * * * * (vii) [Real Estate Brokerage and Office Management.
(viii)] Residential Construction.
[(ix) Appraisal] (viii) Valuation of Residential Property.
[(x) Appraisal] (ix) Valuation of Income-Producing Property.
(3) To be counted toward the education requirement, a real estate course shall have been offered by:
* * * * * (iii) A real estate school outside this Commonwealth that has been approved by the real estate licensing authority of the jurisdiction where the school is located. The course transcript or certificate of completion shall state that the course is approved by the licensing authority of the jurisdiction where the school is located.
(iv) A real estate industry organization outside this Commonwealth, if the course is [also offered by a real estate school in this Commonwealth approved by the Commission] approved by the licensing jurisdiction of another state. The course transcript or certificate of completion shall state that the course is approved by the licensing jurisdiction which has approved it.
(4) A maximum of four credits will be allowed for each real estate course. A maximum of four credits will be allowed for each area of real estate study listed in paragraph (2) [, except that a maximum of six credits will be allowed for courses in Real Estate Appraisal].
* * * * *
Subchapter E. STANDARDS OF CONDUCT AND PRACTICE
GENERAL ETHICAL RESPONSIBILITIES § 35.281. Putting contracts, commitments and agreements in writing.
(a) A licensee who acts in a representative capacity [in connection with a real estate transaction] shall ensure that sale or lease contracts, commitments and agreements [regarding the] in connection with a real estate transaction that he has knowledge of, or that he reasonably should be expected to have knowledge of, are in writing.
(b) A licensee who enters into an [oral] open listing agreement shall provide the seller or lessor with a written memorandum stating the terms of the agreement.
* * * * * § 35.287. Supervised [appraisal and] property management assistance by salespersons.
[(a) A salesperson may assist in the preparation of an appraisal by the employing broker or an associate broker, if the employing broker or associate broker:
(1) Directly supervises and controls the salesperson's work, assuming total responsibility for the contents of the appraisal documents and value conclusions. The salesperson may not arrive at an independent determination of value.
(2) Personally makes a physical inspection of the interior and exterior of the subject property.
(3) Signs the appraisal document as ''appraiser'' and has the salesperson sign as ''assistant to the appraiser.''
(b)] A salesperson may assist in the management of real estate if the salesperson's work is directly supervised and controlled by the employing broker. The salesperson may not independently negotiate the terms of a lease nor execute a lease on behalf of the lessor.
ADVERTISING AND SOLICITATION § 35.304. Disclosure of licensure when advertising own real estate.
A [broker] licensee who sells or leases his own real estate shall disclose that he is a real estate [broker] licensee in advertisements for the property. This requirement does not apply if the property is listed with a real estate company.
§ 35.305. Business name on advertisements.
(a) [A broker, cemetery broker or rental listing referral agent] Brokerage companies, including sole proprietorships, cemetery companies and rental listing referral agencies shall advertise or otherwise hold [himself] themselves out to the public only under the business name designated on [the] their license.
(b) Individual brokers of record, associate brokers, salespersons, cemetery associate brokers, cemetery salespersons and rental listing referral agents who wish to use and advertise nicknames (for example, Jack v. John or Margaret v. Peggy), shall include the names on their licensure applications or their biennial renewal applications, or both.
[(b)] (c) An advertisement by an associate broker, salesperson, cemetery associate broker or cemetery salesperson shall contain the business name and telephone number of the employing broker. The name [and telephone number] of the employing broker shall be given greater prominence in the advertisement than the name [and telephone number] of the employe. The telephone number of the employing broker shall be at least equal in size in the advertisement to the telephone number of the employe.
§ 35.308. Relationship with educational institution.
A real estate company, franchise or network may [not] promote, endorse or advertise its association, affiliation or connection with a real estate school or with a college, university or institute of higher learning regarding its offering of real estate instruction. [This prohibition does not apply to individual licensees.] An association, affiliation or connection which includes an ownership interest shall be disclosed in promotions, endorsements or advertisements. For purposes of this section, an ownership interest will be considered by the Commission to include proprietary or beneficial interests through which the real estate company, franchise or network earns or has the potential to earn income, or which produces a direct or indirect economic benefit.
ESCROW REQUIREMENTS § 35.321. Duty to deposit money belonging to another into escrow account.
(a) Except as provided in subsection (b) and § 35.322 (relating to transfer of escrow funds), a broker shall deposit money that he receives belonging to another into an escrow account in a Federally or State-insured bank or depository to be held pending consummation of the transaction, or a prior termination thereof that does not involve a dispute between the parties to the transaction, at which time the broker shall pay over the full amount to the party entitled to receive it. If a broker is a partnership, association or corporation, its broker of record shall be responsible for ensuring that the escrow duty is performed.
* * * * * (e) If a broker receives a security deposit belonging to another under a lease agreement, the broker's duty to pay over the deposit, for purposes of subsection (a), shall arise when the tenancy ends. If a sale of the leased premises or a change in a property management contract occurs during the term of the tenancy, the broker may transfer the security deposit from the broker's escrow account to the escrow account of the lessor or the lessor's broker upon notification in writing to each tenant from whom the broker received such a deposit of the name and address of the banking institution in which the deposits will be held, and the amount of the deposits.
§ 35.322. [Nonwaiver of escrow duty] Transfer of escrow funds.
[A broker's escrow duty may not be waived or altered by an agreement between the parties to the transaction, between the broker and the parties, or between the broker and other brokers who may be involved in the transaction.] The buyer and the seller or the lessor and the lessee may, at any time, by separate written agreement, direct the broker to transfer escrow funds to either the buyer or the seller, the lessor or the lessee or a bona fide escrow agent--for example, an attorney, a title company or a real estate brokerage company.
§ 35.327. Procedure when entitlement to money held in escrow is disputed.
[If a dispute arises between the parties to a real estate transaction over entitlement to money that is being held in escrow by a broker, the broker shall retain the money in escrow until the dispute is resolved. If resolution of the dispute appears remote without legal action, the broker may, following 30 days' notice to the parties, petition the county court having jurisdiction in the matter to interplead the rival claimants.]
(a) In the event of a dispute over the return or forfeiture of any earnest money deposit held by a broker, the broker shall continue to hold the deposit in escrow until a written release is obtained from all parties consenting to its disposition or until a civil action is filed to determine its disposition, at which time the broker may petition the county court having jurisdiction in the matter to interplead the rival claimants. The costs incurred by the broker to interplead the rival claimants may, with written notice to the parties, be deducted from the funds being held in escrow.
(b) If the parties have not released the broker and a civil action has not been filed 180 days after the settlement date, the broker may, after written notice to the parties, do one of the following:
(1) Return the earnest money to the payor-buyer when the broker in good faith believes that the payor-buyer is entitled to it because a contingency in the purchase agreement has not been met.
(2) Pay out the earnest money to the seller when the broker in good faith believes that the payor-buyer has abandoned any claim to it.
(c) A broker will not be subject to disciplinary action by the Commission for returning the earnest money to either party under subsection (b).
[Pa.B. Doc. No. 99-157. Filed for public inspection January 29, 1999, 9:00 a.m.]
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