The act states that, with certain exceptions, a broker engagement contract for the sale of a residential premises must not:
- Purport to be a covenant running with the land or to be binding on future owners of interests in the real property;
- Allow for assignment of the right to provide service without notice and agreement of the owner of the residential premises; or
- Purport to create a recordable lien, encumbrance, or other real property security interest. Any such lien, encumbrance, or other real property security interest is void and unenforceable.
The act defines a "broker engagement contract" as a written contract in which a seller, buyer, landlord, or tenant of a residential premises becomes the client of a broker or agrees to retain the services of a broker in the future and promises to pay the broker a valuable consideration or agrees that the broker may receive a valuable consideration from another person in exchange for the broker producing a seller, buyer, tenant, or landlord ready, able, and willing to sell, buy, or rent the residential premises or for performing other services.
A person that offers to a consumer a broker engagement contract that includes a prohibited provision commits an unfair or deceptive trade practice.
APPROVED by Governor April 3, 2023
EFFECTIVE August 7, 2023
NOTE: This act was passed without a safety clause and takes effect 90 days after sine die.
(Note: This summary applies to this bill as enacted.)