NDT S.B. 221 75(R)BILL ANALYSIS LICENSING & ADMINISTRATIVE PROCEDURES S.B. 221 By: Sibley (Brimer) 3-17-97 Committee Report (Unamended) BACKGROUND In 1995, the Legislature amended Section 15(a)(6)(G) of the Real Estate License Act to require a definite termination date, that is not subject to prior notice, in any contract for a real estate broker's services. This expanded a long standing requirement that definite termination dates be included in listing contracts to also require definite termination dates in buyer representation agreements and tenant representation agreements. The 1995 amendment was broadly written so that the Act now requires property management agreements to have definite termination dates that are not subject to prior notice. Traditionally, a property manager might enter into an agreement that would automatically renew from year to year. Property management agreements are typically on-going relationships that may last several years. The real estate industry reported that the 1995 amendment was not intended to change this practice in the property management field. PURPOSE To permit real estate brokers to enter into property management agreements that may automatically renew from period to period, without lifting the requirements that other brokerage service contracts (listings and buyer representation agreements) contain definite termination dates that are not subject to prior notice. RULEMAKING AUTHORITY It is the committee's opinion that this bill does not expressly grant any additional rulemaking authority to a state officer, department, agency or institution. SECTION BY SECTION ANALYSIS Section 1. Exempts property management agreements from the requirement that a brokerage service contract contain a definite termination date that is not subject to prior notice. Section 2. Effective date. Provides that the Act applies only to contracts executed on or after the effective date. Contracts executed before the effective date are governed by the law then in effect. Section 3. Emergency Clause.