PRINTER'S NO. 13
No. 11 Session of 1989
INTRODUCED BY LLOYD, RITTER, GRUITZA, VROON, FOX, GEIST, COHEN, WILLIAMS, MICHLOVIC, D. W. SNYDER, MELIO, KUKOVICH, WOZNIAK, THOMAS, DeLUCA, BELFANTI, MOEHLMANN, TIGUE, LINTON, RAYMOND, BOYES, NOYE, PRESTON, YANDRISEVITS, CAWLEY, STUBAN, DISTLER, VAN HORNE, ITKIN, COLAIZZO, FREEMAN, BOWLEY, MORRIS, GIGLIOTTI, HALUSKA, VEON, CORRIGAN, SCHULER, STABACK, KOSINSKI, E. Z. TAYLOR, DEMPSEY AND KAISER, JANUARY 18, 1989
REFERRED TO COMMITTEE ON PROFESSIONAL LICENSURE, JANUARY 18, 1989
AN ACT 1 Amending the act of February 19, 1980 (P.L.15, No.9), entitled 2 "An act establishing the State Real Estate Commission and 3 providing for the licensing of real estate brokers and 4 salesmen," regulating time shares, continuing education and 5 disclosures; and further providing for exclusions. 6 The General Assembly of the Commonwealth of Pennsylvania 7 hereby enacts as follows: 8 Section 1. The definition of "time share" in section 201 of 9 the act of February 19, 1980 (P.L.15, No.9), known as the Real 10 Estate Licensing and Registration Act, amended March 29, 1984 11 (P.L.162, No.32), is amended to read: 12 Section 201. Definitions. 13 The following words and phrases when used in this act shall 14 have, unless the context clearly indicates otherwise, the 15 meanings given to them in this section: 16 * * *
1 "Time share." The right, however evidenced or documented, to 2 use [or occupy a dwelling unit held in fee simple or by lease] 3 and occupy one or more units on a periodic basis according to an 4 arrangement allocating use and occupancy rights of that unit or 5 those units between other similar users. As used in this 6 definition, the term "unit" is a building or portion thereof 7 permanently affixed to real property and designated for separate 8 occupancy or a campground or portion thereof designated for 9 separate occupancy. 10 Section 2. Section 304(6) of the act, amended March 29, 1984 11 (P.L.162, No.32), is amended to read: 12 Section 304. Exclusions. 13 Except as otherwise provided in this act, the provisions of 14 this act shall not apply to the following: 15 * * * 16 (6) The elected officer, director or employee of any 17 banking institution or trust company operating under Federal 18 or State banking laws [where only the real estate] when 19 acting on behalf of the banking institution or trust company 20 [is involved]. The Secretary of Banking may, by regulation, 21 establish professional standards applicable to an elected 22 officer, director or employee when the real estate is not 23 involved in a loan transaction with the banking institution 24 or trust company. 25 Section 3. The act is amended by adding a section to read: 26 Section 404.1. Continuing education. 27 (a) The commission shall adopt, promulgate and enforce rules 28 and regulations consistent with the provisions of this act 29 establishing requirements of continuing education to be met by 30 individuals licensed as real estate brokers and real estate 19890H0011B0013 - 2 -
1 salespersons under this act as a condition for renewal of their 2 licenses. The commission may waive all or part of the continuing 3 education requirement for a salesperson or broker who shows 4 evidence, to the commission's satisfaction, that he was unable 5 to complete the requirement due to illness, emergency or 6 hardship. Such regulations shall include any fees necessary for 7 the commission to carry out its responsibilities under this 8 section. 9 (b) Beginning with the license period designated by 10 regulation, each person licensed pursuant to this act shall be 11 required to obtain 14 hours of mandatory continuing education 12 during each two-year license period. A licensed broker or 13 salesperson who wishes to activate a license which has been 14 placed on inactive status shall be required to document no more 15 than 14 hours of continuing education. Upon renewal of the 16 license, the commission shall waive all or part of the 14 hours, 17 on a prorated basis, if one year or less remains before the next 18 renewal at the time such license is activated. 19 (c) All courses, materials, locations and instructors shall 20 be approved by the commission. No credit shall be given for any 21 course in office management. 22 (d) The commission shall initiate the promulgation of 23 regulations to carry out the provisions of this section within 24 six months of the effective date of this section. 25 Section 4. Sections 606, 607 and 608, added March 29, 1984 26 (P.L.162, No.32), are amended to read: 27 Section 606. Broker's disclosure to seller. 28 In any listing agreement or contract of agency, the broker 29 shall make the following disclosures to any seller of real 30 property: 19890H0011B0013 - 3 -
1 (1) A statement that the broker's commission and the 2 time period of the listing [are negotiable] have been 3 determined as a result of negotiations between the broker and 4 the seller. 5 (2) A statement describing the purpose of the Real 6 Estate Recovery Fund established under section 801 and the 7 telephone number of the commission at which the seller can 8 receive further information about the fund. 9 Section 607. Broker's disclosure to buyer. 10 In any sales agreement or sales contract, a broker shall make 11 the following disclosures to any prospective buyer of real 12 property: 13 (1) A statement that the broker is the agent of the 14 seller[, not the buyer] or that the broker is the agent of 15 the buyer. 16 (2) A statement describing the purpose of the Real 17 Estate Recovery Fund established under section 801 and the 18 telephone number of the commission at which the purchaser can 19 receive further information about the fund. 20 (3) A statement of the zoning classification of the 21 property [except for single-family dwellings. Failure of any 22 sales agreement or sales contract to contain a statement of 23 the zoning classification of the property] except in cases 24 where the property (or each parcel thereof, if subdividable) 25 is zoned solely or primarily to permit single-family 26 dwellings. Failure to comply with this requirement shall 27 render the sales agreement or sales contract [null and void 28 and] voidable at the option of the buyer; and, if voided, any 29 deposits tendered by the buyer shall be returned to the buyer 30 without any requirement for any court action. 19890H0011B0013 - 4 -
1 Section 608. Information to be given at initial interview. 2 The commission shall establish rules or regulations which 3 shall set forth the manner and method of disclosure of 4 information to the prospective buyer or seller during the 5 initial interview. Such disclosure shall include, but shall not 6 be limited to: 7 (1) A statement that the broker is the agent of the 8 seller or that the broker is the agent of the buyer. 9 (2) The purpose of the Real Estate Recovery Fund and the 10 telephone number of the commission at which further 11 information about the fund may be obtained. 12 (3) A statement that the duration of the listing 13 agreement or contract and the broker's commission are 14 negotiable. 15 (4) A statement that any sales agreement must contain 16 the zoning classification of a property except in cases where 17 the property (or each parcel thereof, if subdividable) is 18 zoned solely or primarily to permit single-family dwellings. 19 Section 5. The act is amended by adding sections to read: 20 Section 608.1. Limited broker's disclosure. 21 A limited broker shall, prior to the signing of a sales 22 agreement or sales contract, provide a prospective purchaser or 23 seller with a statement describing the purpose of the Real 24 Estate Recovery Fund established under section 801. The 25 statement shall include the telephone number of the commission 26 at which the prospective purchaser or seller can receive further 27 information about the fund. The commission shall establish rules 28 and regulations setting forth the manner and method of 29 disclosure by limited brokers. 30 Section 609. Right to cancel purchase of time share. 19890H0011B0013 - 5 -
1 (a) A purchaser shall have the right to cancel the purchase 2 of a time share until midnight of the seventh day following the 3 date on which the purchaser executed the purchase contract. 4 (b) The right of cancellation shall be set forth 5 conspicuously in boldface type of at least ten point in size 6 immediately above the signature of the purchaser on the purchase 7 contract in substantially the following form: 8 "You, the purchaser, may cancel this purchase at any time 9 prior to midnight of the seventh day following the date 10 of this transaction. If you desire to cancel, you are 11 required to notify the seller, in writing, at (address). 12 Such notice shall be given by certified return receipt 13 mail or by any other bona fide means of delivery which 14 provides you with a receipt. Such notice shall be 15 effective upon being postmarked by the United States 16 Postal Service or upon deposit of the notice with any 17 bona fide means of delivery which provides you with a 18 receipt." 19 This clause is to be separately initialed by the purchaser. 20 Copies of all documents which place an obligation upon a 21 purchaser shall be given to the purchaser upon execution by the 22 purchaser. 23 (c) Notice of cancellation shall be given by certified 24 return receipt mail or by any other bona fide means of delivery, 25 provided that the purchaser obtains a receipt. A notice of 26 cancellation given by a bona fide means of delivery shall be 27 effective on the date postmarked or on the date of deposit of 28 the notice with any bona fide means of delivery. 29 (d) Within ten business days after the receipt of a notice 30 of cancellation, all payments made under the purchase contract 19890H0011B0013 - 6 -
1 shall be refunded to the purchaser and any documents executed by 2 the purchaser, in connection with the purchase contract, shall 3 be returned to him. In the event of a cancellation pursuant to 4 this section, any promotional prizes, gifts and premiums issued 5 to the purchaser by the seller shall remain the property of the 6 purchaser. 7 (e) The right of cancellation shall not be waivable by any 8 purchaser. 9 (f) A purchaser who exercises the right of cancellation 10 shall not be liable for any damages as a result of the exercise 11 of that right. 12 (g) In addition to constituting a violation of this act, a 13 violation of this section by any individual, corporation, 14 partnership, association or other entity shall also be deemed a 15 violation of the act of December 17, 1968 (P.L.1224, No.387), 16 known as the "Unfair Trade Practices and Consumer Protection 17 Law." The Attorney General is authorized to enforce this 18 section. Any actions brought by the Attorney General to enforce 19 this section shall be in addition to any actions which the 20 commission may bring under this act. 21 (h) The right of the purchaser to bring an action to enforce 22 this section shall be independent of any rights of action which 23 this section confers on the Attorney General and the commission. 24 (i) Nothing in this act shall affect any rights conferred 25 upon the purchaser by 68 Pa.C.S. Pt. II Subpt. B (relating to 26 condominiums). 27 (j) This act shall be applicable to time shares which are 28 located within this Commonwealth and to time shares which are 29 located outside this Commonwealth but for which the purchase 30 contract was executed by the purchaser within this Commonwealth. 19890H0011B0013 - 7 -
1 Section 6. This act shall take effect in 60 days. L28L63JRW/19890H0011B0013 - 8 -