Kentucky Administrative Regulations › Title 201 - GENERAL GOVERNMENT CABINET › Chapter 11 - Real Estate Commission › Section 201 KAR 11:121 - Standards of professional conduct

Current through Register Vol. 51, No. 1, July 1, 2024
RELATES TO:
				KRS
				324.010(3),
				324.111,
				324.112,
				324.121,
				324.160,
				324.281(5),
				324.310,
				324.360,
				381.9203(1),
				(3),
				383.580,
				24 C.F.R.
				3500,
				44 C.F.R.
				64.3(b),
				12 U.S.C.
				2601-2617
NECESSITY, FUNCTION, AND CONFORMITY:
				KRS
				324.281(5) and
				324.282 require the Real Estate
				Commission, with the approval of the executive director of the Kentucky Real
				Estate Authority, to promulgate administrative regulations necessary to carry
				out and enforce the provisions of KRS Chapter 324.
				KRS
				324.121 authorizes a principal broker to
				designate an affiliated licensee to act as agent for a seller or lessor, buyer
				or lessee, or prospective buyer to the exclusion of all other licensees
				associated with the principal broker.
				KRS
				324.360(2) requires the
				commission to promulgate an administrative regulation authorizing a seller's
				disclosure of conditions form with content as set forth by
				KRS
				324.360(3).
				KRS
				324.160(4)(e) authorizes the
				commission to take disciplinary action if a licensee acts for more than one (1)
				party in a transaction without the knowledge of all parties. This
				administrative regulation establishes requirements for designated agency; the
				required Seller's Disclosure of Property Condition form; a specific process and
				form for disclosing prior relationships between parties in a residential
				transaction; standards and requirements, to inform and set certain standards
				for licensees and to protect the public, regarding delivery of signed
				documents, broker supervision, broker record retention, sales associate
				affiliation and termination, and written agreements between licensees and
				consumers to provide real estate brokerage services, including standards for
				listing and purchase contracts; and behavior considered improper
				conduct.
Section 1. Improper Conduct.
(1) In addition to the obligations and
			 prohibitions set forth in
			 KRS
			 324.160, a licensee shall not:
(a) Accept or agree to accept, or offer or
			 agree to offer, anything of value to another person in violation of the federal
			 Real Estate Settlement Procedures Act,
			 12 U.S.C.
			 2601 through
			 2617 ("RESPA"). This provision
			 shall not affect paying or receiving referral fees between principal brokers
			 for brokerage services;
(b) Refuse
			 or prohibit any prospective purchaser from viewing or inspecting real estate
			 listed for sale or lease with the real estate brokerage company with which the
			 licensee is affiliated, without the written and signed direction of the listing
			 or leasing client. This provision shall not be construed to permit otherwise
			 unlawful discrimination;
(c) Offer
			 real estate for sale or lease without written consent from the person or
			 persons, or entity or entities authorized to sell or lease the subject real
			 estate;
(d) Fail to satisfy one (1)
			 or more of the following fiduciary duties owed to the licensee's client:
1. Loyalty;
2. Obedience to lawful
			 instructions;
3.
			 Disclosure;
4.
			 Confidentiality;
5. Reasonable care
			 and diligence; and
6.
			 Accounting;
(e) Fail to
			 satisfy one (1) or more of the following duties owed to the licensee's
			 prospective client:
1. Good faith;
2. Fair dealing; and
3. The duty of confidentiality;
(f) Fail to satisfy one (1) or
			 more of the following duties owed to a consumer or to any other party in a
			 transaction:
1. Good faith; and
2. Fair dealing;
(g) Enter an ongoing team or group
			 relationship with any other licensee at the same brokerage company without the
			 written consent of the principal broker;
(h) Induce any party to a contract for sale
			 or lease to break the contract for the purpose of substituting in lieu thereof
			 a new contract for sale or lease with another principal broker;
(i) If advertising real property at an
			 absolute auction, sell the advertised property to anyone other than the highest
			 bona fide bidder on the day of the auction; and
(j) If dually licensed as an auctioneer and
			 real estate licensee, before a real estate licensee commences an auction, the
			 licensee shall disclose his or her status as a real estate licensee to
			 potential purchasers and whether he or she intends to bid during the
			 auction.