Governor Kotek signed HB 4058 on March 7, 2024. Eight days later, NAR entered into its preliminary settlement agreement with plaintiffs in the Sitzer/Burnett case. Oregon was ahead of the game, and we had no way of knowing that NAR would reach a settlement agreement. However, NAR beat Oregon to the punch on effective dates. The NAR settlement terms went into effect August 17, 2024. HB 4058, for the most part, takes effect January 1, 2025.
Among other things, HB 4058 requires that listing agents enter into listing agreements when representing sellers and the buyers’ agents enter into buyer representation agreements when representing buyers. For the most part, the law and subsequently released administrative rules track the requirements of the settlement agreement. However, there are some differences which will become critically important starting January 1, 2025. Here are the key things you need to know about what Oregon law requires apart from the NAR settlement agreement:
- The NAR settlement agreement requires a written agreement. Oregon law requires a written representation agreement anytime an agent is representing a buyer. A representation agreement is an agreement giving the agent authority to act on behalf of the client in exchange for compensation.
- The NAR settlement agreement requires the written agreement to be in place prior to touring a home. Oregon law requires a representation agreement to be in place before, or as soon as reasonably practicable after, the licensee has commenced efforts to assist the buyer in purchasing real property or in identifying real property for purchase. The practical effect of this is that if touring a home is the first thing you do with a client, you’ll need the agreement in place per the NAR settlement. If you provide some other service first (sending properties, advising, etc.) then Oregon law will require you to have the agreement in place before or shortly after you begin providing that service.
- The NAR settlement agreement does not have content requirements for written agreements other than that they conspicuously describe a definitive amount or rate of compensation. Oregon law and rule requires compensation information but also several additional requirements, including:
- Licensee’s license number
- The name and contact information including telephone number for a principal broker responsible for supervision of the broker
- Term, including effective date and expiration date
- Description of the legal obligations of a buyer’s agent as described in ORS 686.810 or by reference to the initial agency disclosure pamphlet delivered per ORS 696.820
- The buyer’s general search criteria, which may include the price range of desired property and the location of desired property
- Representation agreement termination rights provisions for both buyer and licensee
- A statement whether the agreement is exclusive or nonexclusive.
Additionally, representation agreements cannot exceed a term of 24 months without being actively renewed by the licensee and buyer. HB 4058 has similar requirements for listing agreements, although most of those rules were already in place aside from the requirement to include the licensee’s license number and the contact information for a supervising principal broker.
The Oregon REALTORS® Buyer Representation and Listing Agreements that will launch on January 1, 2025 have been updated to be compliant with all these requirements. The primary change to both documents was the addition of fields for licensee license number and the contact information for a supervising principal broker, as the other requirements were already facilitated by the existing version of the documents.
For more information on buyer rep. agreements and other requirements of the NAR settlement and HB 4058, visit our Buyer Representation and NAR Litigation Resource Hub.