S-0737

AN ACT Relating to withheld real estate brokerage commissions; and adding new sections to Title 64 RCW.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. As used in sections 2 through 9 of this act, "closing agent" means any escrow agent, attorney, lender, real estate broker, or other person who closes a real estate or business opportunity transaction.

NEW SECTION. Sec. 2. A closing agent shall continue to hold in trust, following the closing of a real estate or business opportunity transaction, the amount of money demanded by a real estate broker, less any amounts held in trust by the broker as of closing, as a commission when: (1) The closing agent receives from the demanding broker at the office where the closing is to occur a notice of demand in conformance with the requirements of section 5 of this act; (2) the notice is received by the closing agent prior to closing; and (3) the written closing instructions of the principal from whom demand is made do not require the closing agent to pay the broker the amount demanded by the broker in the notice of demand as required by section 6(1) of this act.

NEW SECTION. Sec. 3. The broker making the demand under section 5 of this act warrants that there is a written agreement which provides for payment of a commission to the demanding broker on the subject transaction.

NEW SECTION. Sec. 4. A broker may make demand only for the broker's share of the commission, as such share is provided for in the written agreement referred to in section 3 of this act.

NEW SECTION. Sec. 5. The notice of demand required in section 2 of this act shall be in substantially the following form:

____________________________________________________

NOTICE OF DEMAND FOR REAL ESTATE COMMISSION

To: _______________________________

(Name of closing agent)

Re: _______________________________

(Seller(s))

_____________________________

(Buyer(s))

Escrow Number: _____________________________

Address: ___________________________________

___________________________________

Legal Description: ______________________________________

______________________________________

The undersigned real estate broker declares under penalty of perjury that he or she has earned a commission based on a written agreement signed by _____________ (a principal in the above-referenced transaction). Under the terms of that agreement, the principal agreed to pay broker a commission in the amount of $ ____________________.

Demand is hereby made that broker be paid the commission in the above amount, less any amounts held in trust by the broker as of closing, in cash at closing of the above transaction, or as follows:

_______________________________________________

_______________________________________________________________

Date: ____________________ ___________________________

(Name of broker)

___________________________ ___________________________

(Signature of broker/agent) (Name of brokerage firm)

___________________________

(Address of brokerage firm)

___________________________

(Phone number)

_____________________________________________

NEW SECTION. Sec. 6. A closing agent in a transaction described in section 2 of this act shall disburse the demanded commission only under one of the following conditions:

(1) The closing agent receives written instructions signed by the principal from whom demand is made authorizing the closing agent to disburse the commission to the demanding broker; or

(2) A court of competent jurisdiction or arbitrator agreed to by the principal, closing agent, and broker, orders the closing agent to disburse the funds.

NEW SECTION. Sec. 7. If either written instructions pursuant to section 6(1) of this act or a court order or arbitrator's order pursuant to section 6(2) of this act is not received by the closing agent prior to or within thirty days after the closing date, the closing agent shall file an interpleader action with a court of competent jurisdiction and deposit the demanded funds with the court. The broker making the demand shall pay the closing agent's reasonable costs and attorneys' fees for the filing of the interpleader action not to exceed two hundred fifty dollars.

NEW SECTION. Sec. 8. The prevailing party shall be entitled to reasonable attorneys' fees and costs in any interpleader action filed under section 7 of this act. Furthermore, if the broker is the prevailing party, the court shall also award reimbursement to the broker for the fees and costs paid pursuant to section 7 of this act.

NEW SECTION. Sec. 9. A closing agent is not liable for failing to comply with sections 1 through 8 of this act, if the closing agent made a good faith effort to substantially comply with sections 1 through 8 of this act.

NEW SECTION. Sec. 10. Sections 1 through 9 of this act are each added to Title 64 RCW.