58-3062. Prohibited acts.
58-3062
58-3062. Prohibited acts.(a) No licensee, whether acting as an agent, transaction broker or aprincipal, shall:
(1) Fail to account for and remit any money which comes into thelicensee's possession and which belongs to others.
(2) Misappropriate moneys required to be deposited in a trust accountpursuant to K.S.A. 58-3061, and amendments thereto, convert such moneys to thelicensee's personal use or commingle the money or other property of thelicensee's principals with the licensee's own money or property, except thatnothing herein shall prohibit a broker from having funds in an amount not toexceed $100 in the broker's trust account to pay expenses for the use andmaintenance of such account.
(3) Accept, give or charge any rebate or undisclosedcommission.
(4) Pay a referral fee to a person who is properly licensedas a broker orsalesperson in Kansas or another jurisdiction or who holds a corporate realestate license in another jurisdiction if the licensee knows that the paymentof the referral fee will result in the payment of a rebate by the Kansas orout-of-state licensee.
(5) Represent or attempt to represent a broker without thebroker's expressknowledge and consent.
(6) Guarantee or authorize any person to guarantee futureprofits that mayresult from the resale of real property.
(7) Place a sign on any property offering it for sale orlease without thewritten consent of the owner or the owner's authorized agent.
(8) Offer real estate for sale or lease without theknowledge and consent ofthe owner or the owner's authorized agent or on terms other than thoseauthorized by the owner or the owner's authorized agent.
(9) Induce any party to break any contract of sale or lease.
(10) Pay a commission or compensation to any person, not licensed under thisact, for performing any activity for which a license is required under thisact.
(11) Fail to see that financial obligations andcommitments between theparties to an agreement to sell, exchange or lease real estate are in writing,expressing the exact agreement of the parties or to provide, within areasonable time, copies thereof to all parties involved.
(12) Procure a signature to a purchase contract which hasno definitepurchase price, method of payment, description of property or method ofdetermining the closing date.
(13) Engage in fraud or make any substantial misrepresentation.
(14) Represent to any lender, guaranteeing agency or any other interestedparty, either verbally or through the preparation of false documents, an amountin excess of the true and actual sale price of the real estate or termsdiffering from those actually agreed upon.
(15) Fail to make known to any purchaser or lessee anyinterest the licenseehas in the real estate the licensee is selling or leasing or to make known toany seller or lessor any interest the licensee will have in the real estate thelicensee is purchasing or leasing.
(16) Fail to inform both the buyer, at the time an offeris made, and theseller, at the time an offer is presented, that certain closing costs must bepaid and the approximate amount of such costs.
(17) Fail without just cause to surrender any document orinstrument to therightful owner.
(18) Accept anything other than cash as earnest moneyunless that fact iscommunicated to the owner prior to the owner's acceptance of the offer topurchase, and such fact is shown in the purchase agreement.
(19) Fail to deposit any check or cash received as anearnest money depositor as a deposit on the purchase of a lot within five business days after thepurchase agreement or lot reservation agreement is signed by all parties,unless otherwise specifically provided by written agreement of all parties tothe purchase agreement or lot reservation agreement, in which case the licenseeshall deposit the check or cash received on the date provided by such writtenagreement.
(20) Fail to respond in a timely manner to any request from the commissionor the commission's designee for documents orinformation that concernsdirectly or indirectly any real estate transaction or the licensee's realestate business.
(21) Refuse to appear or testify under oath at any hearingheld by the commission.
(22) Demonstrate incompetency to act as a broker,associate broker or salesperson.
(23) Except as provided by K.S.A. 40-2404, and amendments thereto,knowingly receive or accept, directly or indirectly, any rebate,reduction or abatement of any charge, or any special favor or advantage or anymonetary consideration or inducement, involving the issuance of a titleinsurance policy or contract concerning which the licensee is directly orindirectly connected, from a title insurance company or title insurance agent,or any officer, employee, attorney, agent or solicitor thereof.
(24) Engage in the purchase of one-, two-, three- or four-family dwellings,including condominiums and cooperatives, or the acquisition of any right, titleor interest therein, including any equity or redemption interests, if:
(A) (i) At the time of such purchase, the dwellings are subject to a rightof redemption pursuant to foreclosure of a mortgage on such dwellings; (ii) thelicensee fails to give written notice of the purchase, within 20 daysthereafter, to the mortgage holder or judgment creditor who held such mortgage;and (iii) the licensee, unless otherwise required by law or court order, failsto apply any rent proceeds from the dwellings to the judgment lien arising fromthe foreclosure of such mortgage, as payments become due under the loan,regardless of whether the licensee is obligated to do so;
(B) (i) the dwellings are subject to a loan which is secured by a mortgageand which is in default at the time of such purchase or in default within oneyear after such purchase; (ii) the licensee fails to give written notice ofthe purchase, within 20 days thereafter, to the mortgage holder; and (iii) thelicensee, unless otherwise required by law or court order, fails to apply anyrent proceeds from the dwellings to the mortgage as the payments come due,regardless of whether the licensee is obligated on the loan; or
(C) the licensee fails to notify, at the time of rental, any person rentingany such dwelling of the extent and nature of the licensee's interest in suchdwelling and the probable time until possession will be taken by the mortgageholder or judgment creditor.
(25) Commit forgery or, unless authorized to do so by aduly executed powerof attorney, sign or initial any contractual agreement on behalf of anotherperson in a real estate transaction.
(26) Enter into contracts with persons not licensed by thecommission toperform services requiring a license under K.S.A. 58-3034 et seq.,and amendments thereto, except as provided by K.S.A. 58-3077, andamendments thereto.
(b) No salesperson or associate broker shall:
(1) Except as provided in subparagraph (A) or (B),accept a commission or other valuable consideration from anyone other than thebroker by whom the licensee is employed or with whom the licensee isassociated as an independent contractor.
(A) A salesperson or associate broker may accept a commission or othervaluable consideration from a licensee who employs the salesperson or associatebroker as a personal assistant provided that: (i) The licensee and thesalesperson or associate broker who is employed as a personal assistant arelicensed under the supervision of the same broker, and (ii) the supervisingbroker agrees in writing that the personal assistant may be paid by thelicensee.
(B) If a salesperson or associate broker has (i) organized as a professionalcorporation pursuant to K.S.A. 17-2706 et seq., and amendmentsthereto, (ii) incorporated under the Kansas general corporation code containedin K.S.A. 17-6001 et seq., and amendments thereto, (iii) organizedunder the Kansas limited liability company act contained in K.S.A.17-7662 et seq., and amendments thereto, or (iv) has organized as alimited liability partnership as defined in K.S.A. 56a-101, andamendments thereto, the commission or other valuable consideration may be paidby the licensee's broker to such professional corporation, corporation, limitedliability company or limited liability partnership. This provision shall notalter any other provisions of this act.
(2) Fail to place, as soon after receipt as practicable, any deposit moneyor other funds entrusted to the salesperson or associate broker in the custodyof the broker whom the salesperson or associate broker represents.
(3) (A) Except as provided by subparagraph (B), beemployed by or associated with a licensee at any one time other than thesupervising broker who employs such salesperson or associate broker or withwho the salesperson or associate broker is associated as an independentcontractor.
(B) An associate broker may be employed by or associated with more than onesupervising broker at any one time if each supervising broker who employs orassociates with the associate broker consents to such multiple employment orassociation. Such consent shall be on a form provided by the commission andshall not be effective until a signed copy of the completed form has been filedwith the commission.
(4) Except as provided by subsection (b), pay a commission or compensation toany person for performing any activity for which a license is required underthis act.
(5) (A) Fail to disclose to such salesperson's or associate broker'ssupervisingbroker or branch broker that such salesperson or associate broker isperforming any activity for which a license is required under K.S.A. 58-3036,and amendments thereto; or (B) perform any activity for which alicense is required under K.S.A. 58-3036, and amendments thereto, outsidethe supervision of the supervising broker orbranch broker. The provisions of this subsection shall not apply to anyactivity or person exempted from the real estate brokers' and salespersons'license act pursuant to K.S.A. 58-3037, and amendments thereto.
(6) Fail to submit to the supervising broker or branch broker, within 10business days, any document that must be maintained in the supervising broker'sor branch broker's business records for each real estate transaction. Theten-day period shall commence when the document isexecuted by the client orcustomer or, if a signature is not required or is not obtained, uponpresentation of a document to the client or customer.
(c) No broker shall:
(1) Pay a commission or compensation to any person for performing theservices of an associate broker or salesperson unless such person is licensedunder this act and employed by or associated with the broker.
(2) Fail to deliver to the seller in every real estate transaction, atthe time the transaction is closed, a complete, detailed closing statementshowing all of the receipts and disbursements handled by the broker forthe seller, or fail to deliver to the buyer a complete statement showingall money received in the transaction from such buyer and how and for whatthe same was disbursed, or fail to retain true copies of such statementsin the broker's files, except that the furnishing of such statements tothe seller and buyer by an escrow agent shall relieve the broker'sresponsibility to the seller and the buyer.
(3) Fail to properly supervise the activities of an associated or employedsalesperson or associate broker.
(4) Lend the broker's license to a salesperson, or permit a salespersonto operate as a broker.
(5) Fail to provide to the principal a written report every 30 days, alongwith a final report, itemizing disbursements made by the broker from advancelisting fees.
(d) (1) If a purchase agreement provides that the earnest money be held byan escrow agent other than a real estate broker, no listing broker shall:
(A) Fail to deliver the purchase agreement and earnest money deposit to theescrow agent named in the purchase agreement within five business days afterthe purchase agreement is signed by all parties unless otherwise specificallyprovided by written agreement of all parties to the purchase agreement, inwhich case the broker shall deliver the purchase agreement and earnest moneydeposit to the escrow agent named in the purchase agreement on the dateprovided by such written agreement; or
(B) fail to obtain and keep in the transaction file a receipt from the escrowagent showing date of delivery of the purchase agreement and earnestmoney deposit.
(2) If a purchase agreement provides that the earnest money be held by anescrow agent other than a real estate broker and the property was not listedwith a broker, no broker for the buyer shall:
(A) Fail to deliver the purchase agreement and earnest money deposit to theescrow agent named in the purchase agreement within five business days afterthe purchase agreement is signed by all parties unless otherwise specificallyprovided by written agreement of all parties to the purchase agreement, inwhich case the broker shall deliver the purchase agreement and earnest moneydeposit to the escrow agent named in the purchase agreement on the dateprovided by such written agreement; or
(B) fail to obtain and keep in the transaction file a receipt from the escrowagent showing date of delivery of the purchase agreement and earnestmoney deposit.
(3) If a purchase agreement provides that the earnest money be held by anescrow agent other than a real estate broker and neither the seller nor buyeris represented by a broker, no transaction broker shall:
(A) Fail to deliver the purchase agreement and earnest money deposit to theescrow agent named in the purchase agreement within five business days afterthe purchase agreement is signed by all parties unless otherwise specificallyprovided by written agreement of all parties to the purchase agreement, inwhich case the broker shall deliver the purchase agreement and earnest moneydeposit to the escrow agent named in the purchase agreement on the dateprovided by such written agreement; or
(B) fail to obtain and keep in the transaction file a receipt from the escrowagent showing date of delivery of the purchase agreement and earnestmoney deposit.
The commission may adopt rules and regulations to require that such purchaseagreement which provides that the earnest money be held by an escrow agentother than a real estate broker include: (1) Notification of whether or not theescrow agent named in the purchase agreement maintains a surety bond, and (2)notification that statutes governing the disbursement of earnest money held intrust accounts of real estate brokers do not apply to earnest money depositedwith the escrow agent named in the purchase agreement.
(e) No licensee shall:
(1) Threaten to engage in or engage in physical abuse or engage inharassmenttowards:
(A) A client or customer;
(B) another licensee;
(C) commission members or staff;
(D) staff of the office of administrative hearings;
(E) staff from any real estate trade association or multiple listing service;or
(F) any person from another business or industry whose services are requestedor requiredas part of a real estate transaction.
(2) threaten to file or file a lien on residential property;
(3) conduct real estate business with impaired judgment orobjectivity as theresult of mental illness or addiction to alcohol or controlled substances;
(4) be finally adjudicated by a federal or state agency andfound to beguilty of a violation of a federal or state law regulating the real estateindustry or regulating a closely related industry whose licensees or membersare commonly involved in real estate matters;
(5) be finally adjudicated by a federal or state agency andfound to beguilty of a violation of a federal or state law prohibiting discriminationagainst any client or customer on the basis of color, race, gender, religion,national origin, age, disability or familial status; or
(6) intentionally misappropriate or misuse any personalproperty or realproperty of a client or customer.
(f) A branch broker shall not be employed by or associated with more thanonesupervising broker at any one time unless each supervising broker who employsor associates with the branch broker consents to such multiple employment orassociation. Such consent shall be on a form provided by the commission andshall not be effective until a signed copy of the completed form has been filedwith the commission.
(g) Nothing in this section shall be construed to grant anyperson a privateright of action for damages or to eliminate any right of action pursuant toother statutes or common law.
History: L. 1980, ch. 164, § 29;L. 1986, ch. 209, § 14;L. 1989, ch. 167, § 7;L. 1991, ch. 163, § 5;L. 1992, ch. 120, § 1;L. 1993, ch. 241, § 6;L. 1995, ch. 252, § 20;L. 1996, ch. 212, § 7;Revived, L. 1997, ch. 65, § 13;L. 1997, ch. 65, § 14;L. 1998, ch. 93, § 74;L. 1999, ch. 119, § 86;L. 2000, ch. 102, § 4;L. 2002, ch. 72, § 1;L. 2004, ch. 67, § 1;L. 2004, ch. 180, § 6;L. 2005, ch. 179, § 19;L. 2006, ch. 159, § 2;L. 2008, ch. 155, § 5;L. 2009, ch. 7, § 4; July 1.