New 2009 Laws Affecting Real Estate
Oregon Revised Statutes (ORS) chapter 696 was amended through the 2009 legislative making changes to the laws affecting real estate. The following are highlights of the provisions of these new laws:
Broker and Property Managers (Effective January 1, 2010):
- Clarifies that real estate brokers cannot establish branch offices or register business names.
- Clarifies that funds placed in escrow be placed in a “licensed” escrow depository.
- Eliminates the requirement to publish in the OREN-J the names and addresses of applicants whose licenses were refused or the addresses of licensees who have been disciplined.
- Provides principal brokers the ability to establish an entity to receive commissions.
- Provides the Agency authority to issue a limited license to an applicant.
- Authorizes the Agency to impose a civil penalty on a licensee engaged in the management of rental real estate for failure to produce records of $1,000 per day with a $10,000 cap.
Escrow Agents (Effective January 1, 2010):
- Establishes escrow licensing by rule.
- Requires an escrow agent to submit an application for changes in ownership, and requires fingerprints and criminal background check for new owners and officers prior to change.
- Allows for the suspension or revocation of an escrow license for failing to maintain a required surety bond.
- Allows the Agency to “reprimand” an escrow license, which is a lesser sanction than the currently allowed sanctions of suspension or revocation.
- Provides for sanction for escrow licensees who do untrustworthy acts outside the scope of conduct under the license.
- Clarifies the requirements that escrow agents not only have a written escrow agreement, but that the escrow agent must follow written instructions.
Continuing Education (Effective January 1, 2011):
- Requires real estate broker or property manager applicant to have high school diploma or equivalent.
- Requires applicant for a principal broker license to pass a state license examination.
- Creates new continuing education requirements including a course on changes to law and rule.
- Changes certification of continuing education for all licensees to self-certification.
- Requires Agency to certify continuing education course providers; establishes criteria for entities which may apply for certification as a continuing education course provider; and requires course providers to ensure courses and instructors meet statute and rule requirements.
- Requires the Real Estate Board to update content of continuing education course based on change to real estate rule or law.
- Requires the Agency to work with real estate professionals and educators to establish eligible course topics and create learning objectives for each course.
Sole Practitioners (Effective January 1, 2010):
- As of January 1, 2010, the category of “sole practitioner” is eliminated and all current sole practitioners will become principal brokers with no additional requirements and no additional fee. Real estate broker licensees seeking to operate independently after that date will need to obtain a principal broker license.
- Eliminates the requirement that a principal broker supervise real estate brokers and states that a principal broker “may” supervise.
- Allows a real estate broker to “temporarily supervise and control” the professional real estate activity of a principal broker due to unforeseen circumstances or temporary absence for up to 90 days.
- Eliminates the concept of “licensed personal assistant.”
Individuals Exempt from Licensing (Effective January 1, 2010):
The following individuals are exempt: the sole or managing member of a domestic or foreign limited liability company (LLC), a partner in a partnership, or an officer or director of a domestic or foreign corporation. All exempt entities added by the measure must be registered and operating in Oregon and must be engaged in the acquisition, sale, exchange, lease, transfer, or management of real estate in the LLC, partnership, or corporation.
establishes a mechanic's lien for labor and/or materials provided when improving real property if there is a chance of nonpayment. The basic policy of mechanic's liens is that the real estate owner should not benefit from work that enhanced the property without properly paying for the improvement.
Q: What is zoning?
A: Zoning is governmental control over the use of real estate. Local, state, or federal government can assert the control, but it is usually exercised by local government. Zoning often encompasses issues such as land use, building specifications, and environmental impact. For example, local government can require that certain property be used only for industrial purposes.
Q: How are zoning ordinances changed?
A: Local zoning ordinances are changed through administrative proceedings. The government may rezone particular property or amend a particular zoning ordinance. An option for a landowner seeking to use property in a way forbidden by the applicable zoning law is to apply for a variance. A variance is an exception to the zoning ordinance granted to an individual party. Often the process of receiving a variance requires an administrative hearing, public disclosure, and community input.
Q: What federal laws have an impact on commercial real estate?
A: Real estate has been traditionally governed by state law, but federal law now permeates many aspects of commercial real estate. Important areas of federal control are in tax law, bankruptcy, finance and banking regulation, and antitrust. Additionally, federal environmental laws have a huge bearing on commercial real estate. For example, the Clean Water Act and the Endangered Species Act both can impact land use and development in environmentally sensitive areas, and federal law also intensely regulates past and future property contamination and pollution.
Sole Practitioners (Effective January 1, 2010):
- As of January 1, 2010, the category of “sole practitioner” is eliminated and all current sole practitioners will become principal brokers with no additional requirements and no additional fee. Real estate broker licensees seeking to operate independently after that date will need to obtain a principal broker license.
- Eliminates the requirement that a principal broker supervise real estate brokers and states that a principal broker “may” supervise.
- Allows a real estate broker to “temporarily supervise and control” the professional real estate activity of a principal broker due to unforeseen circumstances or temporary absence for up to 90 days.
- Eliminates the concept of “licensed personal assistant.”
Individuals Exempt from Licensing (Effective January 1, 2010):
- The following individuals are exempt: the sole or managing member of a domestic or foreign limited liability company (LLC), a partner in a partnership, or an officer or director of a domestic or foreign corporation. All exempt entities added by the measure must be registered and operating in Oregon and must be engaged in the acquisition, sale, exchange, lease, transfer, or management of real estate in the LLC, partnership, or corporation.
