Steve Strode, Oregon Real Estate Commissioner
September 2024
Whether you are reading this issue of the Oregon Real Estate News-Journal as a licensee or a consumer, by now you are probably aware that the industry is undergoing a period of significant change. Some of these are outside the Agency's regulatory purview, yet others are completely in our scope. Navigating this balance is familiar territory for us and is expressly written into our mission statement:
The mission of the Oregon Real Estate Agency is to provide quality protection for Oregon consumers of real estate, escrow, and land development services, balanced with a professional environment conducive to a healthy market atmosphere.
In this month's Commissioner's Column, I would like to share the Agency's current view on some recent changes, so you understand how we track them and determine whether to get involved.
As of this writing, the Oregon Realtors website notes “18,000+" members, out of the Oregon Real Estate Agency's (OREA) count of 24,431 total real estate licensees as of July 31, 2024. Even though we do not regulate trade associations such as Oregon Realtors, you can see that there is a significant overlap in population. This results in some confusion over what we regulate versus what business practices are left up to the industry.
Transaction Forms
One area of licensee confusion has involved the real estate transaction forms used by Realtor members. In Oregon, there are no state-mandated suites of forms to be used for all transactions. For many years a private company was owned by several Realtor associations and was the dominant provider for licensee-represented transactions, with forms access sold on a subscription basis. The ownership structure changed and, more recently, Oregon Realtors introduced an additional suite of forms for use by members. For over a year both suites of forms have existed in the marketplace, completely permissible under current law. We have followed this development as it relates to our mission – balancing consumer protection and a healthy real estate market atmosphere.
During this period, I received calls from concerned licensees ranging from asking why the Commissioner's office is not more involved to insisting that the Agency chooses one company over the other and then mandating the use of the prevailing party's forms. These calls have diminished but continue to resurface occasionally.
It would be regulatory overreach currently for OREA to mandate one provider's form over another's. Separate from this, however, we may have a regulatory role if a consumer believes they have been harmed and files a complaint with the Agency. Transaction-related complaints often focus on incompetence, untrustworthiness, and conduct below the standard of care. You may review the full list of Grounds for Discipline in
ORS 696.301.
The Agency does not have any data on market penetration and adoption rates across the state for either forms provider. However, during the timeframe that both suites of forms have existed for licensees to use, we have not received any complaints alleging the misuse of forms during a transaction – neither consumer against licensee nor licensee against licensee. Should this change, we are committed to working with stakeholders to ensure proper consumer protection.
Written Representation Agreements and Industry Lawsuits
This article assumes some familiarity with the spate of National Association of Realtors and brokerage lawsuits. For a more complete understanding from NAR's viewpoint, please use
this link. You can also research independent information from reputable industry and news publications.
The settlement covers business practices that do, and do not, intersect with Oregon Real Estate License Law. Settlement issues that are outside our authority include commission rates charged by licensees, publication of offers of compensation, and MLS policies.
The area of the settlement that will intersect with state law relates to written buyer representation agreements. Here in Oregon, the industry is currently in a period of evolution. House Bill 4058 was passed earlier this year that will require written buyer service agreements – but not until 2025. However, licensees who are also Realtor members were required to begin using written agreements on August 17, 2024. That means by the time HB 4058 goes into effect, Realtor licensees should be well versed in the practice.
Please note, as a part of implementing House Bill 4058 the Agency is also undergoing a rulemaking process. Rulemaking may establish additional requirements beyond what is established under current Realtor member policy. We encourage you to stay informed by
subscribing to administrative rule updates.
Rulemaking involves the following steps:
- Consult with the Oregon Real Estate Board in gathering recommendations; this was completed during the April and June board meetings.
- Prepare a set of draft rules, which is currently in progress.
- Convene a work group of industry members for additional feedback and editing.
- Conduct a public comment period and hold public hearing.
- Submit and publish a final set of rules in time for the January 1, 2025, effective date.
Advertising Rules
The NAR settlement does not affect current
advertising rules under our authority – licensees are still expected to be truthful and not misleading, advertise property with written permission by seller, identify their registered business name, etc.
Licensees who are also Realtor members will need to follow additional membership rules of their association and any MLS to which they subscribe. If you are uncertain about the requirements of the settlement, you must reach out to those resources directly for the latest and correct information.
Standard of Care
Earlier I referenced the concept of
conduct below the standard of care. The full language in ORS 696.301(15) is “Engaged in any conduct that is below the standard of care for the practice of professional real estate activity in Oregon as established by the community of individuals engaged in the practice of professional real estate activity in Oregon."
Occasionally during an investigation, we are also provided documentation from a local Realtor Association that the licensee was found in violation of the trade association's Code of Ethics. While the NAR's Code of Ethics (COE) are not articulated in statute, it is our opinion that the process employed by a Realtor Association in determining COE violations does meet the standard established in ORS 696.301(15). As such, we may choose to reference such a violation in an Educational Letter of Advice, reprimand, suspension, or revocation.