December 2025
House Bill 3137 establishes new requirements that provide consistency in the management of real estate brokerages and specify additional obligations for principal brokers who oversee the registered businesses.
First, it introduces and defines the term “managing principal broker.” This is not a new license type and does not carry with it any new pre- or post-licensing education obligations or fees. According to this new statute,
a managing principal broker means the individual who is a principal broker and who has registered or assumed responsibility for a business name. Providing this new distinction will make it clear to consumers and the broker community who is ultimately in charge of a given registered business name (RBN).
In addition to identifying “who” oversees an RBN, the new statute clarify the “what” a managing principal broker must do to remain compliant. Previously, while the supervisory responsibilities outlined in statute provided high level direction, this new language is more granular. For brokerages with optimal compliance systems already in place, the new statutes might not be viewed as a new regulatory burden but rather validate your existing business practices. A portion of section 20 of the bill is copied below for reference:
- A managing principal broker shall exercise reasonable supervision and control over the activities of real estate brokers and principal real estate brokers associated with the managing principal broker. Reasonable supervision and control includes the establishment and enforcement of written policies, procedures and systems to:
- Review and manage professional real estate activities of associated brokers.
- Review and manage usage of disclosure forms and contracts.
- Manage document filing and storage.
- Manage handling of client trust funds.
- Manage usage of unlicensed assistants by associated brokers.
- Educate associated brokers on federal, state and local laws relating to the practice of real estate.
- Review and inspect documents that may have a material effect on the rights or obligations of a party to a transaction.
- Ensure all licensees associated with the managing principal broker hold active real estate licenses under ORS 696.022 before the licensees conduct any professional real estate activity.
- The managing principal broker shall establish a system for monitoring compliance of associated brokers with statutes, rules and the brokerage’s policies, procedures and systems.
- The managing principal broker is responsible for the acts of all associated brokers related to professional real estate activities and performed while a licensee’s license is associated with the managing principal broker.
- The managing principal broker may allocate some or all of this supervisory control and responsibility to a principal real estate broker associated with the managing principal broker through a written supervisory agreement.
Any RBN that utilizes written supervisory agreements are also encouraged to read Section 21 and Section 21a of the bill to ensure proper compliance.
A new requirement related to succession planning was added, intended to provide better continuity when there is a change in leadership of an RBN. When multiple principal brokers exist within an RBN, a succession plan must be created that addresses the following:
- Scenarios where the managing principal broker becomes deceased or incapacitated or the managing principal broker’s license becomes inactive, expired, or associated with a different registered business name.
- How supervisory control and responsibility for the registered business name will flow to a remaining principal real estate broker who will assume the managing principal broker role.
Please review HB 3137 in its entirety and reference the Agency’s other articles in this issue of the OREN-J to ensure you are ready for other changes that may affect your business as of January 1st.