|One of the major changes of last year’s Indiana real estate license law update was to put all licensees on the same license renewal cycle, which was extended by one year to three years. Before the update, license renewal cycles were two years in length with salesperson licensees renewing in the middle of even-numbered years and broker licensees renewing in the middle of odd-numbered years.
Another major change of the license law update was to eliminate the salesperson license. Those entering the profession will now do so as a broker and those currently licensed as a salesperson must upgrade their license to broker status by passing a transition course (in lieu of continuing education) before June 30, 2014, keeping them on the same renewal cycle.
In order to align the license renewal cycle of broker licensees with that of salesperson-transitioned-to-broker licensees, the Indiana Real Estate Commission (IREC) just officially extended the renewal deadline from June 30, 2013 to June 30, 2014. While the extension was intended as part of the original license law update, it wasn’t able to be legally accomplished until May 7, when Governor Pence signed Senate Enrolled Act 615 into law.
News of the deadline extension has naturally caused some confusion among the broker community. We hope the following clears things up.
- The license renewal deadline extension applies only to legacy brokers – those who were licensed as a broker prior to the license law update or, on or before June 30, 2012.
- Legacy brokers must complete 24 hours of continuing education prior to the new license renewal deadline of June 30, 2014. Here is the breakdown:
- 16 C.E. hours of the old curriculum—6 mandatory and 10 elective hours taken any time after July 1, 2011, just as a broker would have prior to the license law update according to the old two-year license renewal cycle and deadline of June 30, 2013.
While the 16 hours does not need to be completed until the new license renewal deadline of June 30, 2014, we recommend completing it as soon as possible for a few reasons. One, we anticipate the availability of courses to dwindle as the new deadline gets closer; two, we anticipate a traffic jam of brokers trying to complete C.E. before the deadline; and three, the IREC and the Indiana Professional Licensing Agency will be working overtime to process renewals for both legacy brokers and salespersons-transitioned-to-brokers. It is not worth taking the risk that your renewal is not processed by the deadline, leaving you without a valid license.
- C.E. hours of the new curriculum—This has yet to be established by the IREC, but should be in the next few weeks in order to give schools and instructors time to prepare appropriate classes. This cannot be taken before July 1, 2013.
RECP is now offering a live, two-day class at a variety of locations around the state for just $99 to help legacy brokers fulfill their 16-hour C.E. requirement. RECP is also offering this class online and on-demand for the same price so brokers can learn from any computer anywhere at their own pace. Visit www.RECP.org or call 1-800-742-4067 for more information and to register.
Once the curriculum is established for the 8-hour C.E. requirement, RECP will offer both live and online/on-demand classes for legacy brokers.
Last but least, we offer one-page guides to the license law update here, and will soon begin answering frequently asked questions on that same page.
For Principal Brokers
As of July 1, 2014, the term Principal Broker is eliminated and replaced with Managing Broker. So, those who were licensed as a broker and designated as a principal on June 30, 2014, will become a Managing Broker on July 1, 2014.
Also as of July 1, 2014, those wanting to go out on their own must do the following:
- Have their broker license assigned to a Managing Broker for a minimum of two years; and
- Take and pass a 24-hour Broker Management course.
Again, we offer one-page guides to the license law update here, and will soon begin answering frequently asked questions on that same page.
Last, Principal Brokers may want to take advantage of RECP’s private-label education for their agents. Contact Kathy Harbaugh for more information: email@example.com or 765-461-3446 cell or text.
More on SEA 615
The IAR Legislative Session Wrap-up email sent to all members on May 10 provides more detail on SEA 615. You can read that email in its entirety here.
House Enrolled Act 1372 was a legislative idea that arose from numerous calls by brokers to the IAR legal hotline. In short, the bill sought to protect brokers against liability from imputed knowledge regarding a past transaction on a property by a broker at the same brokerage. It also sought to remove the provision regarding the seller’s disclosure form that allows failure by the buyer to sign the form to be the sole reason to invalidate a contract.
We are pleased to report that Governor Pence signed this IAR priority bill into law on May 2. Here is more on HEA 1372, which you can also get from the aforementioned session wrap-up email.
HEA 1372 clarifies existing law to further prevent liability for past transactions involving the same property in the same brokerage when a client says, "you should have known this…someone else in your office was involved in a transaction with this same property and knew of the defect or adverse condition".
In such an instance, the client tries to impute the knowledge to a present transaction. This change would expressly bar a client from doing this and would not allow a cause of action against a broker for failure to disclose such defects, adverse condition or repair from a past transaction. This clarification brings Indiana in line with other states
The Seller’s Disclosure Form is a valuable tool for buyers, sellers and REALTORS® when it comes to a residential real estate transaction. It serves as the seller’s description of the property, to the best of their knowledge, at the point in time the form is filled out. It is required by law, but it is NOT part of the real estate contract.
IAR has received numerous complaints from brokers via our legal hotline regarding real estate transactions invalidated for the sole reason that the buyer had not signed the seller’s disclosure form.
HEA 1372 removes the requirement of the buyer’s signature on the disclosure form as a condition of the contract. This change will prevent a buyer from receiving a disclosure form, not signing it, then trying to use this failure to sign to say there is no contract. The law currently says the buyer has to execute this disclosure form before there is an enforceable offer.
HEA 1372 closes this loophole, while still maintaining the original intent for the signature requirement: proof of receipt of the form by the buyer.
- Buyer’s signature will still be used as proof of receipt of disclosure
- Buyer cannot invalidate contract due solely to their own negligence in failing to sign a form that is clearly in their possession
- Disclosure form, which by its nature is NOT a part of the contract, cannot be used any longer to invalidate a contract
- Buyer is protected by maintaining requirement that disclosure form be received prior to closing transaction
- Seller is protected by closing this loophole that kills deals at last minute