AN ACT Relating to withheld real estate brokerage commissions; and adding new sections to chapter 18.85 RCW.

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

NEW SECTION. Sec. 1. As used in sections 2 through 8 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 as a commission even if: (1) The demanding broker delivers to the closing agent a notice of demand in conformance with the requirements of section 5 of this act; and (2) the notice is received by the closing agent prior to closing but 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 in connection with the transaction. In the event of a dispute, the closing agent shall, prior to closing, deliver to each party involved in the dispute a copy of the notice of demand by registered or certified mail, return receipt requested, or by personal service by the broker or another person over the age of eighteen.

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:

!sc_,50

NOTICE OF DEMAND FOR REAL ESTATE COMMISSION

@lb To: !sc_,29

!sc ,6(Name of closing agent)

Re: !sc_,29

!sc ,12(Seller(s))

!sc ,4!sc_,29

!sc ,12(Buyer(s))

Escrow Number: !sc_,29

Address: !sc_,35

!sc ,9!sc_,35

Legal Description: !sc_,38

!sc ,19!sc_,38

@la

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 !sc_,20 (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 $ !sc_,20.

Demand is hereby made that broker be paid the commission in the above amount in cash at closing of the above transaction, or as follows: !w_

!w_

!tp1,1 @lb Date: !sc_,15!tl!sc_,27

!tl(Name of broker)

!sc_,21!tl!sc_,27

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

!tl!sc_,27

!tl(Address of brokerage firm)

!tl!sc_,27

!tl(Phone number)

@la

!sc_,50

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 so disburse; 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 fifteen 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 five hundred 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 may also award reimbursement to the broker for the fees and costs paid pursuant to section 7 of this act.

NEW SECTION. Sec. 9. Sections 1 through 8 of this act are each added to chapter 18.85 RCW.