PRINTER'S NO. 596
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No.
657
Session of
2023
INTRODUCED BY BULLOCK, CEPHAS, MADDEN, HILL-EVANS, DELLOSO,
SMITH-WADE-EL, SANCHEZ, ISAACSON, KENYATTA, KINSEY, KHAN,
SCHLOSSBERG, PARKER, D. WILLIAMS AND CERRATO, MARCH 21, 2023
REFERRED TO COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT,
MARCH 21, 2023
AN ACT
Providing for transparency in realty agreements; requiring and
prohibiting certain provisions in realty agreements; and
imposing penalties.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. Short title.
This act shall be known and may be cited as the Transparency
in Realty Agreements Act.
Section 2. Definitions.
The following words and phrases when used in this act shall
have the meanings given to them in this section unless the
context clearly indicates otherwise:
"Real estate professional." A real estate broker,
salesperson, company or other person regularly engaged in the
trade or business of buying and selling real property.
"Realty agreement." A contract under which a real estate
professional agrees to provide realty services connected to the
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purchase or sale of residential real property by a homeowner.
"Security interest." A mortgage, lien or other encumbrance
on residential real property.
Section 3. Realty agreements.
(a) Requirements.--A realty agreement between a real estate
professional and a homeowner shall:
(1) Include a detailed list of the transactions covered
under the realty agreement.
(2) Identify the capacity in which the real estate
professional is involved in the transactions covered under
the realty agreement.
(3) Include a statement to be signed by the homeowner
acknowledging that the homeowner understands the nature and
extent of the transactions covered under the realty
agreement.
(b) Prohibitions.--A realty agreement between a real estate
professional and a homeowner may not:
(1) Provide for a service that will not be performed
within one year of the execution of the realty agreement,
including a one-time payment to the homeowner in exchange for
the exclusive opportunity to list the residential real
property on the realty market for a period in excess of one
year.
(2) Provide a service without the notice or consent of
the homeowner.
(3) Purport to create a security interest in the
residential real property that is the subject of the realty
agreement.
Section 4. Prohibited action.
A real estate professional may not record, or cause to be
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recorded, a security interest on real property covered under a
realty agreement prior to notifying the homeowner with the
details of the security interest and without the express written
consent of the homeowner or the assignee of the homeowner.
Section 5. Cancellation.
(a) Authorization.--A homeowner may cancel a realty
agreement at any time.
(b) Fees.--Cancellation fees specified in a realty agreement
shall be limited to not more than $500.
(c) Notice.--Notice of cancellation of a realty agreement
must be given in writing.
Section 6. Penalties.
(a) Unenforceability and violation of other State law.--If a
violation of section 3 or 4 occurs, the realty agreement shall
be deemed unenforceable and the violation shall constitute an
unfair method of competition and an unfair or deceptive act or
practice under the act of December 17, 1968 (P.L.1224, No.387),
known as the Unfair Trade Practices and Consumer Protection Law.
(b) Damages.--In addition to the penalties specified under
the Unfair Trade Practices and Consumer Protection Law, a real
estate professional found to be in violation of this act shall
be subject to actual damages incurred by any person with an
interest in the residential real property that is the subject of
the unenforceable realty agreement, including reasonable costs
and attorney fees.
Section 7. Effective date.
This act shall take effect in 60 days.
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