Housing remained at the forefront during the past legislative session. Some bills focused on responding to the COVID-19 pandemic, while others centered on racial equity and fair housing.
The two bills in which the Real Estate Agency has focused our attention are House Bill 2550, which provide additional instructions to a seller's agent; and House Bill 2703, which implements additional requirements for the Law and Rule Required Course (LARRC).
House Bill 2550, amending ORS 686.805
You may hear House Bill 2550 referred to as the “Love Letter Bill." It amends Oregon Revised Statutes (ORS) 696.805, relating to the duties of a seller's agent in a real estate transaction. In real estate industry parlance, love letters refer to notes, letters, and pictures that buyers may submit along with their offers to purchase in order to create an emotional connection between sellers and buyers — especially when significant competition exists on a given property.
In addition to the affirmative duties that existed in this statute, the following language has been added:
ORS 696.805(7) In order to help a seller avoid selecting a buyer based on the buyer's race, color, religion, sex, sexual orientation, national origin, marital status or familial status as prohibited by the Fair Housing Act (42 U.S.C. 3601 et seq.), a seller's agent shall reject any communication other than customary documents in a real estate transaction, including photographs, provided by a buyer.
The Agency has received a number of questions from licensees about the bill, focused mostly on:
- What do “customary documents" mean?
- What happens when an agent is acting in a disclosed limited agent to both buyer and seller?
- What happens if a licensee violates these additional affirmative duties?
First, regarding customary documents, the Agency interprets that to mean disclosure forms, sales agreements, counter offer(s), addenda, and reports. Love letters would not be considered customary documents. The intent of the bill was clear during the legislative process, and the Agency does not envision additional rulemaking at this time.
Next, if an agent is acting as a disclosed limited agent to both buyer and seller, the new duties still apply. As provided in
ORS 696.815(2), “A real estate licensee acting pursuant to a disclosed limited agency agreement has the following duties and obligations: (a) To the seller, the duties under ORS 696.805…" (See statute for full text.)
Finally, with respect to violations of ORS 696.805(7), the Agency's approach to responding to complaints is outlined in Oregon Administrative Rules Chapter 863, Division 27. Complaints related to this new provision would be treated like any other relating to violations of affirmative duties, which follow the steps described in rule. (See
OAR 863-027-0010 to learn more.) The Agency has a long established progressive disciplinary process as described in
OAR 863-027-0020. The goal of progressive discipline is to correct a licensee's inappropriate behavior, deter the licensee from repeating the conduct, and educate the licensee to improve compliance with applicable statutes and rules. Please review the above rules to learn more about the factors we consider in the progressive disciplinary process; we evaluate all relevant factors to determine whether to issue a non-disciplinary educational letter of advice or to discipline a licensee through reprimand, suspension, or revocation.
House Bill 2703, amending ORS 696.174
This bill expands the Oregon Real Estate Board's role in determining content and learning objects for the Law and Rule Required Course (LARRC). The new language for ORS 696.174(a) reads, “At least three hours in a course approved by the Real Estate Board on state and federal fair housing laws and recent changes in real estate rule and law …"
Recognizing that discrimination persists, and that the legacy of past discrimination still affects protected communities today, this bill ensures that the LARRC class provides licensees important education and perspective on the topic of fair housing.
Immediately upon its passage, Agency staff began working on formulating outline content and learning objectives for this new LARRC component. The Real Estate Board reviewed and approved this material at its August 2nd board meeting, and continuing education providers have been notified. You can
read the approved material on the Real Estate Agency's website.
The amendment to ORS 696.174 applies to real estate licenses that are renewed or reactivated on or after July 1, 2022.
Therefore, if you are renewing on or after July 1, 2022, please note your LARRC course must include the new fair housing material which will be included in all updated LARRC courses as of January 1st, 2022.
The Agency is only conducting rulemaking related to assigning a specific course number to the new LARRC. This way it can be appropriately recorded when licensees complete the course.