PA 17-169—HB 6432

Insurance and Real Estate Committee

AN ACT CONCERNING DISCLOSURES BY REAL ESTATE BROKERS AND REAL ESTATE SALESPERSONS IN COMMERCIAL TRANSACTIONS AND NOTICES OF COMMISSION RIGHTS

SUMMARY: This act delays when a real estate broker or salesperson acting as an agent must disclose whom he or she represents in commercial real estate transactions. It also changes when commercial real estate brokers must file notices of commission rights with town clerks.

The act also makes minor and conforming changes.

EFFECTIVE DATE: January 1, 2018

DISCLOSURES

Under prior law, a broker or salesperson acting as an agent in a real estate transaction had to disclose in writing whom he or she was representing at the beginning of the first personal meeting about a (1) purchaser's or lessee's specific needs or (2) seller's or lessor's real property. The act maintains this requirement for transactions involving residential real property (i.e., one- to four-family residential real estate located in the state) but delays it for commercial real estate transactions (i.e., transactions involving the sale, exchange, lease, or sublease of real, nonresidential property). Under the act, disclosures in commercial real estate transactions must be made before a prospective purchaser or lessee signs the purchase contract or lease, respectively. The act requires the consumer protection commissioner to adopt implementing regulations as she deems necessary.

By law, the disclosures (1) are not required if the other party is also represented by a real estate broker or salesperson and (2) must be signed by prospective purchasers or lessees.

COMMISSION RIGHTS

By law, a real estate broker that files a notice of commission with the town clerk of the town in which the property is located has certain rights to any commission charged with respect to a commercial real estate transaction (i.e., the broker can file a lien). Under prior law, the broker had to file the notice within 30 days of the execution of the lease or the tenant's occupancy, whichever is later. The act instead requires a broker to file the notice within 60 days of the lease's execution, the tenant's occupancy, or the rent commencement date specified in the lease, whichever is later.