ARC 9247C - Iowa Administrative Rules

Adopted and Filed

Offices and management, amendments to ch 7

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ARC 9247C

REAL ESTATE COMMISSION[193E]

Adopted and Filed

Rulemaking related to offices and management

The Real Estate Commission hereby amends Chapter 7, “Offices and Management,” Iowa Administrative Code.

Legal Authority for Rulemaking

This rulemaking is adopted under the authority provided in Iowa Code chapter 17A and section 543B.18.

State or Federal Law Implemented

This rulemaking implements, in whole or in part, Iowa Code chapter 543B.

Purpose and Summary

This rulemaking complies with 2024 Iowa Acts, House Files 2326, 2394, and 2291. The amendments set forth supporting guidance to licensees regarding wholesaling, unlicensed professional permitted acts, and supporting guidance to real estate teams regarding advertising and licensing.

Public Comment and Changes to Rulemaking

Notice of Intended Action for this rulemaking was published in the Iowa Administrative Bulletin on February 19, 2025, as ARC 8853C. A public hearing was held on the following date(s):

●March 11, 2025

No public comments were received. No changes from the Notice have been made.

Adoption of Rulemaking

This rulemaking was adopted by the Commission on April 3, 2025.

Fiscal Impact

This rulemaking has no fiscal impact to the State of Iowa.

Jobs Impact

After analysis and review of this rulemaking, no impact on jobs has been found.

Waivers

Any person who believes that the application of the discretionary provisions of this rulemaking would result in hardship or injustice to that person may petition the Commission for a waiver of the discretionary provisions, if any, pursuant to 481—Chapter 6.

Review by Administrative Rules Review Committee

The Administrative Rules Review Committee, a bipartisan legislative committee which oversees rulemaking by executive branch agencies, may, on its own motion or on written request by any individual or group, review this rulemaking at its regular monthly meeting or at a special meeting. The Committee’s meetings are open to the public, and interested persons may be heard as provided in Iowa Code section 17A.8(6).

Effective Date

This rulemaking will become effective on June 18, 2025.

The following rulemaking action is adopted:

ITEM 1.Amend subrule 7.3(4) as follows:

7.3(4) All listingsbrokerage and property management agreements are canceled by the broker whose license is suspended or revoked upon receipt of the order of revocation or suspension and prior to the effective date of the order.

a.The seller or landlord, or buyer or tenant, are advised that the seller or landlord, or buyer or tenant, may enter into a listing or brokerage agreement with another broker of choice.

b.A broker whose license is suspended or revoked cannot sell or assign listingsbrokerage or management agreements to another broker without the written consent of the owner of the propertyclient, and any sale or assignment of listingsbrokerage or management agreements are completed prior to the effective date of the order.

ITEM 2.Amend subrule 7.4(3) as follows:

7.4(3) An arrangement in which a real estate licensee, in connection with the sale of a lot to a consumer or homebuilder, obligates the consumer or homebuilder to pay a commissioncompensation on the value of the house to be constructed on the lot.

ITEM 3.Amend subrule 7.4(6) as follows:

7.4(6) Any arrangement in which a real estate licensee enters into an agreement with a mortgage broker, bank, savings and loan, or other financial institution pursuant to which the making of a loan is directly or indirectly conditioned upon payment of a real estate commissioncompensation to the real estate licensee.

ITEM 4.Amend paragraph 7.9(1)“c” as follows:

c.An affiliated business arrangement does not include an arrangement in which a real estate licensee, or an associate of a real estate licensee, gives or pays an undisclosed commissioncompensation in a transaction to any other licensee for a referral to provide real estate brokerage services, including franchise affiliates, if there is no direct or beneficial ownership interest of more than 1 percent in the business entity providing the service. Referral fees or commissionscompensation paid by a licensee to another licensee under these conditions are exempted from the disclosure criteria.

ITEM 5.Amend paragraph 7.11(2)“b” as follows:

b.While this rule does not obligate that a licensee list property owned by the licensee with the employing or affiliated broker, the broker may obligate as a condition of employment or affiliation that the licensee list the property with the employing or affiliated broker or pay a commissioncompensation.

ITEM 6.Amend rule 193E—7.12(543B) as follows:

193E—7.12(543B) CommissionCompensation controversies. The commission will not and is not authorized by law to consider or conduct hearings involving disputes over fees or commissionscompensation between cooperating brokers, salespersons, and other brokers.

7.12(1) A former employing or affiliated broker may pay a commissioncompensation directly to a broker associate or salesperson who is presently assigned to another broker or firm, or whose license is inactive, expired, suspended or revoked, only if the commissioncompensation was earned while the broker associate or salesperson was actively licensed and assigned to the former broker. Whether or not a commissioncompensation was earned while the broker associate or salesperson was licensed with the former broker depends upon the licensee’s written agreement with the former broker. The commission will not determine whether a commissioncompensation is earned or whether a commissioncompensation is to be paid.

7.12(2) If the licensee is presently assigned to another broker or firm, the former broker does not pay the commissioncompensation to the new employing or affiliated broker or firm.

7.12(3) An Iowa real estate broker may pay a commissioncompensation ora fee to or receive a commissioncompensation ora fee from a nonresident broker who is actively licensed in the broker’s resident state but not licensed in Iowa. The nonresident broker takes no part in the listing, showing, negotiating offers or any other functions of a broker in Iowa unless actively licensed in Iowa.

7.12(4) No change.

ITEM 7.Amend rule 193E—7.13(543B) as follows:

193E—7.13(543B) Support personnel for licensees; permitted and barred activities. Whenever a licensee affiliated with a broker engages support personnel to assist the affiliated licensee in the activities of the real estate brokerage business, both the firm or sponsoringdesignated broker and the affiliated licensee are responsible for supervising the acts or activities of the support personnel; however, the affiliated licensee has the primary responsibility for supervisionsubject to Iowa Code section 543B.7A. Unless the support person holds a real estate license, the support person cannot perform any activities, duties, or tasks of a real estate licensee as identified in Iowa Code sections 543B.3 and 543B.6 and may perform only ministerial duties that do not need discretion or the exercise of the licensee’s own judgment. Personal assistants are considered support personnel.

7.13(1) and 7.13(2) No change.

7.13(3) Broker supervision and improper use of license and office. While individual and designated brokers are responsible for supervising the real estate-related activities of all support personnel, an affiliated licensee employing a personal assistant has the primary responsibility for supervision of that personal assistant. A broker is not held responsible for inadequate supervision if:

a.The unlicensed person violated a provision of Iowa Code chapter 543B or of commission rules that is in conflict with the supervisingdesignated broker’s specific written policies or instructions;

b. to e. No change.

7.13(4) In order to provide reasonable assistance to licensees and their support personnel, but without defining every permitted activity, the commission has identified certain tasks that unlicensed support personnel under the direct supervision of a licensee affiliated with a firm or broker may not perform.

a.Permitted activities include, but are not limited to, the following:

(1)	Answer the telephone, provide information about a listing to licensees, and forward calls from the public to a licensee;
(2)	Submit data on listings to a multiple listing service;
(3)	Check on the status of loan commitments after a contract has been negotiated;
(4)	Assemble documents for closings;
(5)	Secure documents that are public information from the courthouse and other sources available to the public;
(6)	Have keys made for company listings;
(7)	Write advertisements and promotional materials for the approval of the licensee and supervisingdesignated broker;
(8)	Place advertisements in magazines, newspapers, websites, social media, and other media as directed by the supervisingdesignated broker;
(9)	Record and deposit earnest money, security deposits, and advance rents, and perform other bookkeeping duties;
(10)	Type contract forms as directed by the licensee or the supervisingdesignated broker;
(11)	Monitor personnel files;
(12)	Compute commissioncompensation checks;
(13)	Place signs on property;
(14)	Order items of routine repair as directed by a licensee;
(15)	Act as courier for such purposes as delivering documents or picking up keys. The licensee remains responsible for ensuring delivery of all executed documents obligated by Iowa law and commission rules;
(16)	Schedule appointments with the seller or the seller’s agent in order for a licensee to show a listed property;
(17)	Arrange dates and times for inspections;
(18)	Arrange dates and times for the mortgage application, the preclosing walk-through, and the closing;
(19)	Schedule an open house;
(20)	Perform physical maintenance on a property; or
(21)	Accompany a licensee to an open house or a showing and perform the following functions as a host or hostess: 1.Open the door and greet prospects as they arrive; 2.Hand out or distribute prepared printed material; 3.Have prospects sign a register or guest book to record names, addresses and telephone numbers; 4.Accompany prospects through the home for security purposes and not answer any questions pertaining to the material aspects of the house or its price and terms.;
(22)	Independently host open houses for tours attended by licensed brokers and salespersons only.;
(23)	Advertise and list property for rent;
(24)	Show property for rent;
(25)	Collect rent and deposits for the rental of property; or
(26)	Complete and execute form agreements for the rental of property.

b.Barred activities include, but are not limited to, the following:

(1)	Making cold calls by telephone or in person or otherwise contacting the public for the purpose of securing prospects for listings, leasing, sale,or exchanges, or property management;
(2)	Independently hosting open houses, kiosks, home show booths, or fairs attended by the public;
(3)	Preparing promotion materials or advertisements without the review and approval of licensee and supervisingdesignated broker;
(4)	Showing propertyfor sale independently;
(5)	Answering any questions on title, financing, or closings (other than time and place);
(6)	Answering any questions regarding a listing except for information on price and amenities expressly provided in writing by the licensee;
(7)	Discussing or explaining a contract, listing, lease, agreement, or other real estate document with anyone outside the firm;
(8)	Negotiating or agreeing to any commission, commission splitcompensation, management fee, or referral fee on behalf of a licensee, seller, or buyer with another licensee, client, or customer;
(9)	Discussing with the owner of real property the terms and conditions of the real property offered for sale or lease;
(10)	Collecting or holding deposit moneys, rent, other moneys or anything of value received from the owner of real property or from a prospective buyer or tenant;
(11)	Providing owners of real property or prospective buyers or tenants with any advice, recommendations or suggestions as to the sale, purchase,or exchange, rental, or leasing of real property that is listed, to be listed, or currently available for sale or lease; or
(12)	Holding one’s self out in any manner, orally or in writing, as being licensed or affiliated with a particular firm or real estate broker as a licensee.

ITEM 8.Amend rule 193E—7.14(543B) as follows:

193E—7.14(543B) Information provided by nonlicensed support personnel limited. Nonlicensed support personnel may, on behalf of the employer licensee, provide information concerning the sale, exchange, purchase, rental, lease, or advertising of real estate only to another licensee. Support personnel provides information only to another licensee that has been provided to the personnel by the employer licensee either verbally or in writing.

ITEM 9.Amend subrule 7.15(3) as follows:

7.15(3) A customer’sclient’s agent or representative cannot negotiate directly or indirectly with a seller or buyer, or landlord or tenant, if the agent knows, or acting in a reasonable manner should have known, that the seller or buyer, or landlord or tenant, has a written unexpired listing or brokerage agreement for services on an exclusive basis.

ITEM 10.Amend subrule 7.15(4) as follows:

7.15(4) A listing agent cannot refuse to permit a customer’sclient’s agent or representative to be present at any step in a real estate transaction, including, but not limited to, viewing a property, seeking information about a property, or negotiating directly or indirectly with an agent about a property listed by such agent;, and noan agent refusescannot refuse to show a property listed by that agent or otherwise deal with a represented customerclient who requests that thecustomer’sclient’s agent or representative be present at any step in the real estate transaction, except as provided in this subrule.

a.The customer’sclient’s agent or representative does not have the right to be present at any discussion of confidential matters or evaluation of the offer by the seller and the listing agent.

b.Unless the seller provides written instructions to the listing agent to exclude a customer’sclient’s agent or representative from being present when the offer is presented, it is not unlawful for the customer’sclient’s agent or representative to be present.

c.Compliance with this rule does not need or obligate a listing broker to sharesplit any commissioncompensation or to otherwise compensate a customer’sclient’s agent.

[Filed 4/15/25, effective 6/18/25]

[Published 5/14/25]

EDITOR’S NOTE: For replacement pages for IAC, see IAC Supplement 5/14/25.