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Committee gives 5-0 due-pass recommendation to real estate licensing updates
Summary
The Senate Industry and Business Committee voted 5-0 to recommend engrossed House Bill 1125, a pre-filed agency bill that clarifies referral and compensation language, extends testing rules for broker applicants, allows the commission to set renewal timing in rules, and expands wholesaling disclosure requirements beyond residential transactions.
The Senate Industry and Business Committee on transcript voted 5-0 to give a due-pass recommendation to engrossed House Bill 1125, legislation that updates North Dakota real estate licensing law.
Representative Scott Louser, sponsor of the pre-filed agency bill, told the committee the measure consolidates several technical changes and clarifications in statute. “There are essentially 4 changes to this bill,” Louser said, summarizing the items as: clarifying sharing of compensation (referrals), adjusting broker testing timing, giving the commission flexibility on renewal dates, and extending wholesaling disclosure to nonresidential transactions.
The bill, an agency pre-filed measure from the Real Estate Commission, is intended to align statute with existing administrative practice and recent industry developments. Jeanne Prom, executive director of the North Dakota Real Estate Commission, said the changes update North Dakota Century Code chapter 43-23 and remove ambiguity about when a license is required for referrals. “The key to needing a license for referral is only if you're compensated,” Prom said. She described the text on broker testing as allowing broker applicants to take the broker exam before finishing a pre-licensure course and said replacing specific renewal dates with a timeframe set by the commission would move that detail into administrative rules.
Jill Beck, chief executive officer of the North Dakota Association of Realtors, told the committee the association worked with the commission on the bill and supported the language changes. Beck said the association’s membership and commission staff collaborated through regular, open meetings to vet the updates.
Louser and Prom also discussed recent national litigation affecting how broker compensation and referral arrangements are structured. Louser described how a multibillion-dollar lawsuit involving franchises and the National Association of Realtors led to industrywide changes about how buyer-broker compensation is handled; HB 1125 includes language intended to reflect the intent of that litigation in state law, he said. The bill’s wholesaling provision was expanded from last session’s residential-only requirement to require disclosure and licensing for wholesaling in all transactions.
After brief committee discussion and a motion on the engrossed bill, the clerk recorded aye votes from Senators Klein, Kessel, Chairman Barta, Vice Chair Behm and Senator Engott. The committee named Senator Angus as the carrier for the bill.
Supporters said the bill mostly codifies existing administrative rules and clarifies requirements for licensees and out-of-state brokers who refer business into North Dakota. No opposition testimony was offered at the hearing.
