FIRST REGULAR SESSION
[TRULY AGREED TO AND FINALLY PASSED]
SENATE COMMITTEE SUBSTITUTE FOR
95TH GENERAL ASSEMBLY
AN ACT
To repeal sections 339.503 and 339.710, RSMo, and to enact in lieu thereof two new sections relating to real estate.
Be it enacted by the General Assembly of the state of Missouri, as follows:
Section A. Sections 339.503 and 339.710, RSMo, are repealed and two new sections enacted in lieu thereof, to be known as sections 339.503 and 339.710, to read as follows:
339.503. As used in sections 339.500 to 339.549, the following words and phrases mean, unless the context clearly indicates otherwise:
(1) "Appraisal" or "real estate appraisal", an objective analysis, evaluation, opinion, or conclusion relating to the nature, quality, value or utility of specified interests in, or aspects of, identified real estate. An appraisal may be classified by subject matter into either a valuation or an analysis;
(2) "Appraisal assignment", an engagement for which a person is employed or retained to act as a disinterested third party in rendering an objective appraisal;
(3) "Appraisal foundation", the organization of the same name that was incorporated as an Illinois not-for-profit corporation on November 20, 1987, whose operative boards are the appraisal standards board and the appraiser qualifications board;
(4) "Appraisal report", any communication, written or oral, of an appraisal. The purpose of an appraisal is immaterial, therefore valuation reports, real estate counseling reports, real estate tax counseling reports, real estate offering memoranda, mortgage banking offers, highest and best use studies, market demand and economic feasibility studies and all other reports communicating an appraisal analysis, opinion or conclusion are "appraisal reports", regardless of title;
(5) "Appraisal standards board (ASB)", the independent board of the appraisal foundation which promulgates the generally accepted standards of the appraisal profession and the uniform standards of professional appraisal practices;
(6) "Appraiser qualifications board (AQB)", the independent board of the appraisal foundation which establishes minimum experience, education and examination criteria for state licensing of appraisers;
(7) "Boat dock", a structure for loading and unloading boats and connecting real property to water, public or private. A boat dock is real property and has riparian rights, provided:
(a) The lender includes the boat dock as a fixture both in the lender's deed of trust and a uniform commercial code fixture filing under section 400.9-502, RSMo;
(b) The boat dock is attached to the real property by steel cable, bar, or chain that is permanently imbedded in concrete or rock, and otherwise securely attached to the dock; and
(c) The owner of the dock has riparian rights by means of real estate rights bordering the body of water, including such rights by license, grant, or other means allowing access to the body of water, which access may be seasonal because the water may be reduced for electric power production or flood control;
(8) "Broker price opinion", an opinion of value, prepared by a real estate licensee for a fee, that includes, but is not limited to, analysis of competing properties, comparable sold properties, recommended repairs and costs or suggested marketing techniques. A broker price opinion is not an appraisal and shall specifically state it is not an appraisal;
[(8)] (9) "Certificate", the document issued by the Missouri real estate appraisers commission evidencing that the person named therein has satisfied the requirements for certification as a state-certified real estate appraiser and bearing a certificate number assigned by the commission;
[(9)] (10) "Certificate holder", a person certified by the commission pursuant to the provisions of sections 339.500 to 339.549;
[(10)] (11) "Certified appraisal report", an appraisal prepared or signed by a state-certified real estate appraiser. A certified appraisal report represents to the public that it meets the appraisal standards defined in sections 339.500 to 339.549;
[(11)] (12) "Commission", the Missouri real estate appraisers commission, created in section 339.507;
[(12)] (13) "Comparative market analysis", the analysis of sales of similar recently sold properties in order to derive an indication of the probable sales price of a particular property undertaken by a licensed real estate broker or agent, for his or her principal. A comparative market analysis is not an appraisal and shall specifically state it is not an appraisal;
[(13)] (14) "Disinterested third party" shall not exclude any state-certified real estate appraiser or state-licensed real estate appraiser employed or retained by any bank, savings association, credit union, mortgage banker or other lender to perform appraisal assignments, provided that the appraisal assignments are rendered with respect to loans to be extended by the bank, savings association, credit union, mortgage banker or other lender, and provided further that the state-certified real estate appraiser or state-licensed real estate appraiser is not requested or required to report a predetermined analysis or opinion of value;
[(14)] (15) "License" or "licensure", a license or licensure issued pursuant to the provisions of sections 339.500 to 339.549 evidencing that the person named therein has satisfied the requirements for licensure as a state-licensed real estate appraiser and bearing a license number assigned by the commission;
[(15)] (16) "Real estate", an identified parcel or tract of land, including improvements, if any;
[(16)] (17) "Real estate appraiser" or "appraiser", a person who for a fee or valuable consideration develops and communicates real estate appraisals or otherwise gives an opinion of the value of real estate or any interest therein;
[(17)] (18) "Real estate appraising", the practice of developing and communicating real estate appraisals;
[(18)] (19) "Real property", the interests, benefits and rights inherent in the ownership of real estate;
[(19)] (20) "Residential real estate", any parcel of real estate, improved or unimproved, that is primarily residential in nature and that includes or is intended to include a residential structure containing not more than four dwelling units and no other improvements except those which are typical residential improvements that support the residential use for the location and property type. A residential unit is a condominium, town house or cooperative complex, or a planned unit development is considered to be residential real estate. Subdivisions are not considered residential real estate. Individual parcels of property located within a residential subdivision shall be considered residential property;
[(20)] (21) "Specialized appraisal services", appraisal services which do not fall within the definition of appraisal assignment. The term "specialized services" may include valuation work and analysis work. Regardless of the intention of the client or employer, if the appraiser is acting as a disinterested third party in rendering an unbiased analysis, opinion or conclusion, the work is classified as an appraisal assignment and not specialized services;
[(21)] (22) "State-certified general real estate appraiser", a person who holds a current, valid certificate as a state-certified general real estate appraiser issued pursuant to the provisions of sections 339.500 to 339.549;
[(22)] (23) "State-certified residential real estate appraiser", a person who holds a current, valid certificate as a state-certified residential real estate appraiser issued pursuant to the provisions of sections 339.500 to 339.549;
[(23)] (24) "State-licensed real estate appraiser", a person who holds a current, valid license as a state-licensed real estate appraiser pursuant to the provisions of sections 339.500 to 339.549;
[(24)] (25) "Subdivision", a tract of land that has been divided into blocks or plots with streets, roadways, open areas and other facilities appropriate to its development as residential, commercial or industrial sites;
[(25)] (26) "Temporary appraiser licensure or certification", the issuance of a temporary license or certificate by the commission to a person licensed or certified in another state who enters this state for the purpose of completing a particular appraisal assignment.
339.710. For purposes of sections 339.010 to 339.180, RSMo, and sections 339.710 to 339.860, the following terms mean:
(1) "Adverse material fact", a fact related to the property not reasonably ascertainable or known to a party which negatively affects the value of the property. Adverse material facts may include matters pertaining to:
(a) Environmental hazards affecting the property;
(b) Physical condition of the property which adversely affects the value of the property;
(c) Material defects in the property;
(d) Material defects in the title to the property;
(e) Material limitation of the party's ability to perform under the terms of the contract;
(2) "Affiliated licensee", any broker or salesperson who works under the supervision of a designated broker;
(3) "Agent", a person or entity acting pursuant to the provisions of this chapter;
(4) "Broker disclosure form", the current form prescribed by the commission for presentation to a seller, landlord, buyer or tenant who has not entered into a written agreement for brokerage services;
(5) "Brokerage relationship", the relationship created between a designated broker, the broker's affiliated licensees, and a client relating to the performance of services of a broker as defined in section 339.010, and sections 339.710 to 339.860. If a designated broker makes an appointment of an affiliated licensee or affiliated licensees pursuant to section 339.820, such brokerage relationships are created between the appointed licensee or licensees and the client. Nothing in this subdivision shall:
(a) Alleviate the designated broker from duties of supervision of the appointed licensee or licensees; or
(b) Alter the designated broker's underlying contractual agreement with the client;
(6) "Client", a seller, landlord, buyer, or tenant who has entered into a brokerage relationship with a licensee pursuant to sections 339.710 to 339.860;
(7) "Commercial real estate", any real estate other than real estate containing one to four residential units[, real estate on which no buildings or structures are located,] or real estate classified as agricultural and horticultural property for assessment purposes pursuant to section 137.016, RSMo. Commercial real estate does not include single family residential units including condominiums, townhouses, or homes in a subdivision when that real estate is sold, leased, or otherwise conveyed on a unit-by-unit basis even though the units may be part of a larger building or parcel of real estate containing more than four units;
(8) "Commission", the Missouri real estate commission;
(9) "Confidential information", information obtained by the licensee from the client and designated as confidential by the client, information made confidential by sections 339.710 to 339.860 or any other statute or regulation, or written instructions from the client unless the information is made public or becomes public by the words or conduct of the client to whom the information pertains or by a source other than the licensee;
(10) "Customer", an actual or potential seller, landlord, buyer, or tenant in a real estate transaction in which a licensee is involved but who has not entered into a brokerage relationship with the licensee;
(11) "Designated agent", a licensee named by a designated broker as the limited agent of a client as provided for in section 339.820;
(12) "Designated broker", any individual licensed as a broker who is operating pursuant to the definition of "real estate broker" as defined in section 339.010, or any individual licensed as a broker who is appointed by a partnership, association, limited liability corporation, or a corporation engaged in the real estate brokerage business to be responsible for the acts of the partnership, association, limited liability corporation, or corporation. Every real estate partnership, association, or limited liability corporation, or corporation shall appoint a designated broker;
(13) "Designated transaction broker", a licensee named by a designated broker or deemed appointed by a designated broker as the transaction broker for a client pursuant to section 339.820;
(14) "Dual agency", a form of agency which may result when an agent licensee or someone affiliated with the agent licensee represents another party to the same transaction;
(15) "Dual agent", a limited agent who, with the written consent of all parties to a contemplated real estate transaction, has entered into an agency brokerage relationship, and not a transaction brokerage relationship, with and therefore represents both the seller and buyer or both the landlord and tenant;
(16) "Exclusive brokerage agreement", means a written brokerage agreement which provides that the broker has the sole right, through the broker or through one or more affiliated licensees, to act as the exclusive limited agent, representative, or transaction broker of the client or customer that meets the requirements of section 339.780;
(17) "Licensee", a real estate broker or salesperson as defined in section 339.010;
(18) "Limited agent", a licensee whose duties and obligations to a client are those set forth in sections 339.730 to 339.750;
(19) "Ministerial acts", those acts that a licensee may perform for a person or entity that are informative in nature and do not rise to the level which requires the creation of a brokerage relationship. Examples of these acts include, but are not limited to:
(a) Responding to telephone inquiries by consumers as to the availability and pricing of brokerage services;
(b) Responding to telephone inquiries from a person concerning the price or location of property;
(c) Attending an open house and responding to questions about the property from a consumer;
(d) Setting an appointment to view property;
(e) Responding to questions of consumers walking into a licensee's office concerning brokerage services offered on particular properties;
(f) Accompanying an appraiser, inspector, contractor, or similar third party on a visit to a property;
(g) Describing a property or the property's condition in response to a person's inquiry;
(h) Showing a customer through a property being sold by an owner on his or her own behalf; or
(i) Referral to another broker or service provider;
(20) "Residential real estate", all real property improved by a structure that is used or intended to be used primarily for residential living by human occupants and that contains not more than four dwelling units or that contains single dwelling units owned as a condominium or in a cooperative housing association, and vacant land classified as residential property. The term "cooperative housing association" means an association, whether incorporated or unincorporated, organized for the purpose of owning and operating residential real property in Missouri, the shareholders or members of which, by reason of their ownership of a stock or membership certificate, a proprietary lease, or other evidence of membership, are entitled to occupy a dwelling unit pursuant to the terms of a proprietary lease or occupancy agreement;
(21) "Single agent", a licensee who has entered into a brokerage relationship with and therefore represents only one party in a real estate transaction. A single agent may be one of the following:
(a) "Buyer's agent", which shall mean a licensee who represents the buyer in a real estate transaction;
(b) "Landlord's agent", which shall mean a licensee who represents a landlord in a leasing transaction;
(c) "Seller's agent", which shall mean a licensee who represents the seller in a real estate transaction; and
(d) "Tenant's agent", which shall mean a licensee who represents the tenant in a leasing transaction;
(22) "Subagent", a designated broker, together with the broker's affiliated licensees, engaged by another designated broker, together with the broker's affiliated or appointed affiliated licensees, to act as a limited agent for a client, or a designated broker's unappointed affiliated licensees engaged by the designated broker, together with the broker's appointed affiliated licensees, to act as a limited agent for a client. A subagent owes the same obligations and responsibilities to the client pursuant to sections 339.730 to 339.740 as does the client's designated broker;
(23) "Transaction broker", any licensee acting pursuant to sections 339.710 to 339.860, who:
(a) Assists the parties to a transaction without an agency or fiduciary relationship to either party and is, therefore, neutral, serving neither as an advocate or advisor for either party to the transaction;
(b) Assists one or more parties to a transaction and who has not entered into a specific written agency agreement to represent one or more of the parties; or
(c) Assists another party to the same transaction either solely or through licensee affiliates. Such licensee shall be deemed to be a transaction broker and not a dual agent, provided that, notice of assumption of transaction broker status is provided to the buyer and seller immediately upon such default to transaction broker status, to be confirmed in writing prior to execution of the contract.
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