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Restrictions On Broker Engagement Contracts

Concerning prohibiting the inclusion of certain terms in a broker engagement contract.
2023 Regular Session
Bill Summary

The act states that, with certain exceptions, a broker engagement contract for the sale of a residential premises must not:

  • Purport to be a covenant running with the land or to be binding on future owners of interests in the real property;
  • Allow for assignment of the right to provide service without notice and agreement of the owner of the residential premises; or
  • Purport to create a recordable lien, encumbrance, or other real property security interest. Any such lien, encumbrance, or other real property security interest is void and unenforceable.

The act defines a "broker engagement contract" as a written contract in which a seller, buyer, landlord, or tenant of a residential premises becomes the client of a broker or agrees to retain the services of a broker in the future and promises to pay the broker a valuable consideration or agrees that the broker may receive a valuable consideration from another person in exchange for the broker producing a seller, buyer, tenant, or landlord ready, able, and willing to sell, buy, or rent the residential premises or for performing other services.

A person that offers to a consumer a broker engagement contract that includes a prohibited provision commits an unfair or deceptive trade practice.

APPROVED by Governor April 3, 2023

EFFECTIVE August 7, 2023

NOTE: This act was passed without a safety clause and takes effect 90 days after sine die.
(Note: This summary applies to this bill as enacted.)


Became Law


Bill Text

The effective date for bills enacted without a safety clause is August 7, 2024, if the General Assembly adjourns sine die on May 8, 2024, unless otherwise specified. Details