Providing for transparency in realty agreements; prohibiting unfair real estate service agreements; and imposing penalties.
Summary
HB986, titled the Unfair Real Estate Service Agreements Act, would prohibit certain real estate service contracts that are considered unfair or abusive. The bill defines an “unfair real estate service agreement” as one that purports to run with the land, creates or allows a lien or other security interest in the property, or permits assignment without timely notice to the property owner. Such agreements would be void and unenforceable, and entering into one with a consumer would be treated as a deceptive act under Pennsylvania’s Unfair Trade Practices and Consumer Protection Law.
The bill also bars recording these agreements, or notices or memoranda of them, in county land records. If such a document is recorded, it would not provide notice to bona fide purchasers or creditors, and affected parties could seek a court order declaring the agreement unenforceable. HB986 creates civil remedies for consumers, including equitable relief, actual damages, attorney fees, and a minimum damages floor of $5,000, or $15,000 for consumers age 60 or older. It also makes recording a prohibited agreement a third-degree misdemeanor and allows additional damages against a real estate professional found in violation.
Impact
HB986 would add a new layer of consumer protection to Pennsylvania real estate law by invalidating certain service agreements tied to residential property and by restricting their recording in county deed records. It would expand the reach of the Unfair Trade Practices and Consumer Protection Law to cover these agreements as deceptive practices, while leaving the Real Estate Licensing and Registration Act unchanged. The bill would affect real estate service providers, real estate professionals, property owners, and purchasers or creditors who rely on land records, and it would create both civil liability and criminal penalties for prohibited conduct.
Sentiment
The available voting history suggests the bill received generally favorable support in the House, passing the Housing and Community Development Committee 25-1 and the House floor 153-50, with unanimous support in Appropriations. That pattern indicates broad agreement that the bill addresses a consumer-protection problem in real estate transactions. The absence of committee transcripts limits insight into detailed debate, but the margin of passage suggests the measure was viewed positively overall, even if not unanimously.
Contention
The main points of contention likely center on whether the bill goes too far in voiding private contracts and imposing criminal and civil penalties on real estate service providers. Opponents may object to the third-degree misdemeanor penalty, the damages floor, and the special $15,000 minimum for older consumers, while supporters likely argue these provisions are needed to deter deceptive practices and protect homeowners from hidden or burdensome property-related agreements. Another possible area of dispute is the bill’s treatment of recorded documents and its effect on the reliability of land records and contract enforcement.
Prohibits unfair residential real estate service agreements which are certain service agreements which are not to be performed within two years following the time such agreement is entered into.
Prohibits unfair residential real estate service agreements which are certain service agreements which are not to be performed within two years following the time such agreement is entered into.
Prohibits the use of service agreements that are unfair to an owner of residential real estate who enters into such an agreement or to persons who may become owners of that real estate in the future.
Prohibits the use of service agreements that are unfair to an owner of residential real estate who enters into such an agreement or to persons who may become owners of that real estate in the future.
Prohibits unfair residential real estate service agreements which are certain service agreements which are not to be performed within two years following the time such agreement is entered into.
Providing for licensing and regulation of shared equity providers and shared equity agreements and for duties of Department of Banking and Securities; and imposing penalties.
Providing for gestational carrier agreements; in child protective services, further providing for employees having contact with children and adoptive and foster parents; and imposing penalties.
Prohibits unfair residential real estate service agreements which are certain service agreements which are not to be performed within two years following the time such agreement is entered into.