AN ACT Relating to real estate brokers and salespersons; and amending RCW 18.85.010, 18.85.030, 18.85.040, 18.85.050, 18.85.060, 18.85.090, 18.85.095, 18.85.100, 18.85.110, 18.85.120, 18.85.130, 18.85.140, 18.85.150, 18.85.155, 18.85.161, 18.85.170, 18.85.180, 18.85.200, 18.85.210, 18.85.215, 18.85.220, 18.85.230, 18.85.240, 18.85.271, 18.85.290, 18.85.300, 18.85.310, 18.85.320, 18.85.330, 18.85.340, 18.85.343, 18.85.345, 18.85.350, 18.85.360, and 18.85.400.

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

Sec. 1. Section 2, chapter 252, Laws of 1941 as last amended by section 1, chapter 305, Laws of 1981 and RCW 18.85.010 are each amended to read as follows:

In this chapter words and phrases have the following meanings unless otherwise apparent from the context:

(1) "Real estate broker," or "broker," means a person, while acting for another for commissions or other compensation or the promise thereof, or a licensee under this chapter while acting in ((~~his~~)) the person's own behalf, who:

(a) Sells or offers for sale, lists or offers to list, buys or offers to buy real estate or business opportunities, or any interest therein, for others;

(b) Negotiates or offers to negotiate, either directly or indirectly, the purchase, sale, exchange, lease, or rental of real estate or business opportunities, or any interest therein, for others;

(c) Negotiates or offers to negotiate, either directly or indirectly, the purchase, sale, or exchange of a used mobile home in conjunction with the purchase, sale, exchange, rental, or lease of the land upon which the used mobile home is located;

(d) Advertises or holds himself or herself out to the public by any oral or printed solicitation or representation that he or she is so engaged; or

(e) Engages, directs, or assists in procuring prospects or in negotiating or closing any transaction which results or is calculated to result in any of these acts;

(2) "Real estate ((~~salesman~~)) salesperson" or "((~~salesman~~)) salesperson" means any natural person employed, either directly or indirectly, by a real estate broker, or any person who represents a real estate broker in the performance of any of the acts specified in subsection (1) of this section;

(3) An "associate real estate broker" is a person who has qualified as a "real estate broker" who works with a broker and whose license states that ((he)) such person is associated with a broker;

(4) The word "person" as used in this chapter shall be construed to mean and include a corporation or copartnership, except where otherwise restricted;

(5) "Business opportunity" shall mean and include business, business opportunity and good will of an existing business or any one or combination thereof;

(6) "Commission" means the real estate commission of the state of Washington;

(7) "Director" means the director of licensing;

(8) "Real estate multiple listing association" means any association of real estate brokers:

(a) Whose members circulate listings of the members among themselves so that the properties described in the listings may be sold by any member for an agreed portion of the commission to be paid; and

(b) Which require in a real estate listing agreement between the seller and the broker, that the members of the real estate multiple listing association shall have the same rights as if each had executed a separate agreement with the seller;

(9) "Clock hours of instruction" means actual hours spent in classroom instruction in any tax supported, public vocational-technical institution, community college, or any other institution of higher learning or a correspondence course from any of the aforementioned institutions certified by such institution as the equivalent of the required number of clock hours, and the real estate commission may certify courses of instruction other than in the aforementioned institutions; and

(10) "Incapacitated" means the physical or mental inability to perform the duties of broker prescribed by this chapter.

Sec. 2. Section 5, chapter 252, Laws of 1941 as last amended by section 2, chapter 139, Laws of 1972 ex. sess. and RCW 18.85.030 are each amended to read as follows:

The director shall appoint an adequate staff to assist ((~~him~~)) in performing the duties of the department.

Sec. 3. Section 4, chapter 252, Laws of 1941 as last amended by section 3, chapter 139, Laws of 1972 ex. sess. and RCW 18.85.040 are each amended to read as follows:

The director, with the advice and approval of the commission, may issue rules and regulations to govern the activities of real estate brokers, associate real estate brokers and ((~~salesmen~~)) salespersons, consistent with this chapter, fix the times and places for holding examinations of applicants for licenses and prescribe the method of conducting them. The director shall enforce all laws, rules and regulations relating to the licensing of real estate brokers, associate real estate brokers, and ((~~salesmen~~)) salespersons, grant or deny licenses to real estate brokers, associate real estate brokers, and ((~~salesmen~~)) salespersons, hold hearings and suspend or revoke the licenses of violators and may deny, suspend or revoke the authority of a broker to act as the designated broker of persons who commit violations of the real estate license law or of the rules and regulations. The director shall institute a program of education for the benefit of the licensees.

Sec. 4. Section 5, chapter 252, Laws of 1941 as last amended by section 4, chapter 139, Laws of 1972 ex. sess. and RCW 18.85.050 are each amended to read as follows:

Neither the director nor any employees, shall be interested in any real estate business regulated by this ((~~1972 amendatory act~~)) chapter: PROVIDED, That if any real estate broker, associate real estate broker, or ((~~salesman~~)) salesperson is employed by the director or by the commission as an employee, the license of such broker, associate real estate broker, or ((~~salesman~~)) salesperson shall not be revoked, suspended, or canceled by reason thereof.

Sec. 5. Section 8, chapter 252, Laws of 1941 as amended by section 5, chapter 139, Laws of 1972 ex. sess. and RCW 18.85.060 are each amended to read as follows:

The director shall adopt a seal with the words real estate director, state of Washington, and such other device as ((he)) the director may approve engraved thereon, by which ((he)) shall ((~~authenticate~~)) be authenticated the proceedings of ((~~his~~)) the office. Copies of all records and papers in the office of the director certified to be a true copy under the hand and seal of the director shall be received in evidence in all cases equally and with like effect as the originals. The director may deputize one or more of his or her assistants to certify records and papers.

Sec. 6. Section 15, chapter 252, Laws of 1941 as last amended by section 8, chapter 139, Laws of 1972 ex. sess. and RCW 18.85.090 are each amended to read as follows:

The commission shall be responsible for the preparation of the examination to be submitted to applicants, and shall make and file with the director a list, which may be signed by a majority of the members of the commission conducting the examination, of all applicants who successfully passed the examination and of those who failed.

Any applicant who fails to pass the examination may apply again.

No applicant shall be permitted to take the examination for a real estate broker's license without first satisfying the director that ((he)) the applicant:

(1) Has had a minimum of two years of actual experience as a full time real estate ((~~salesman~~)) salesperson in this state or in another state having comparable requirements within the five years previous to applying for said examination or is, in the opinion of the director, otherwise and similarly qualified, or is otherwise qualified, by reason of practical experience in a business allied with or related to real estate;

(2) Is eighteen years of age or older;

(3) Has a high school diploma or its equivalent;

(4) Has furnished proof, as the director may require, that ((he)) the applicant has completed successfully ninety clock hours of instruction in real estate. The ninety clock hours of instruction shall include one course in brokerage management and one course in real estate law. This instruction must be completed within five years prior to applying for the examination.

The requirements of subsections (1) through (4) of this section shall not apply to persons who are licensed as brokers under any real estate license law in Washington which exists prior to this law's enactment and whose license has not been subsequently revoked: PROVIDED, That requirements for brokers created by this ((~~1972 amendatory act~~)) chapter shall apply to any person who is licensed as a ((~~salesman~~)) salesperson on or before ((~~the effective date of this 1972 amendatory act~~)) May 23, 1972, if such person shall apply to become a broker or associate broker after ((~~this 1972 amendatory act is in effect~~)) May 23, 1972.

Sec. 7. Section 7, chapter 139, Laws of 1972 ex. sess. as amended by section 2, chapter 370, Laws of 1977 ex. sess. and RCW 18.85.095 are each amended to read as follows:

It is hereby established that the minimum requirements for an individual to receive a ((~~salesman's~~)) salesperson's license are that the individual:

(1) Is eighteen years of age or older;

(2) Is a resident of the state of Washington; ((~~and~~))

(3) Has passed a ((~~salesman's~~)) salesperson's examination; and

(4) Has successfully completed a thirty clock hour course in real estate fundamentals prior to obtaining a first real estate license.

No licensed ((~~salesman~~)) salesperson shall have ((~~his~~)) the license renewed a second time unless ((~~he furnishes~~)) proof is furnished, as the director may require, that ((he)) the licensee has successfully completed an additional thirty clock hours of instruction in real estate courses approved by the director.

Nothing in this section shall apply to persons who are licensed as ((~~salesmen~~)) salespersons under any real estate license law in Washington which exists prior to this law's enactment and whose license has not been subsequently revoked.

Sec. 8. Section 8, chapter 222, Laws of 1951 as amended by section 9, chapter 139, Laws of 1972 ex. sess. and RCW 18.85.100 are each amended to read as follows:

It shall be unlawful for any person to act as a real estate broker, associate real estate broker, or real estate ((~~salesman~~)) salesperson without first obtaining a license therefor, and otherwise complying with the provisions of this chapter.

No suit or action shall be brought for the collection of compensation as a real estate broker, associate real estate broker, or real estate ((~~salesman~~)) salesperson, without alleging and proving that the plaintiff was a duly licensed real estate broker, associate real estate broker, or real estate ((~~salesman~~)) salesperson prior to the time of offering to perform any such act or service or procuring any promise or contract for the payment of compensation for any such contemplated act or service.

Sec. 9. Section 3, chapter 252, Laws of 1941 as last amended by section 9, chapter 370, Laws of 1977 ex. sess. and RCW 18.85.110 are each amended to read as follows:

This chapter shall not apply to (1) any person who purchases property and/or a business opportunity for his or her own account, or that of a group of which he or she is a member, or who, as the owner or part owner of property, and/or a business opportunity, in any way disposes of the same; nor, (2) any duly authorized attorney in fact, or an attorney at law in the performance of his or her duties; nor, (3) any receiver, trustee in bankruptcy, executor, administrator, guardian, or any person acting under the order of any court, or selling under a deed of trust; nor, (4) any secretary, bookkeeper, accountant, or other office personnel who does not engage in any conduct or activity specified in any of the definitions under RCW 18.85.010; nor, (5) any owner of rental or lease property, members of the owner's family whether or not residing on such property, or a resident manager of a complex of residential dwelling units wherein such manager resides; nor, (6) any person who manages residential dwelling units on an incidental basis and not as ((~~his~~)) a principal source of income so long as that person does not advertise or ((~~hold himself out~~)) represent to the public by any oral or printed solicitation or representation that he or she is so engaged.

Sec. 10. Section 1, chapter 25, Laws of 1979 as amended by section 1, chapter 72, Laws of 1980 and RCW 18.85.120 are each amended to read as follows:

Any person desiring to be a real estate broker, associate real estate broker, or real estate ((~~salesman~~)) salesperson with the exception of applicants meeting the requirements of RCW 18.85.161, must pass an examination as provided in this chapter. Such person shall make application for an examination and for a license on a form prescribed by the director. Concurrently, the applicant shall:

(1) Pay an examination fee of twenty-five dollars as directed by the director if a ((~~salesman's~~)) salesperson's license is applied for and of forty dollars if a broker's license is applied for.

(2) If the applicant is a corporation, furnish a list of its officers and directors and their addresses, and if the applicant is a copartnership, a list of the members thereof and their addresses.

(3) Furnish such proof as the director may require that the applicant is a resident of the state of Washington or, if the applicant is a corporation or copartnership, that the designated broker of the corporation or copartnership is a resident of the state of Washington.

(4) Furnish such other proof as the director may require concerning the honesty, truthfulness, and good reputation, as well as the identity, including but not limited to fingerprints, of any applicants for a license, or of the officers of a corporation making the application.

Sec. 11. Section 11, chapter 222, Laws of 1951 as amended by section 11, chapter 139, Laws of 1972 ex. sess. and RCW 18.85.130 are each amended to read as follows:

The director shall provide each original applicant for a license with a manual containing a sample list of questions and answers pertaining to real estate law and the operation of the business and may provide the same at cost to any licensee or to other members of the public. The director shall ascertain by written examination, that each applicant, and in case of a corporation, or copartnership, that each officer, agent, or member thereof whom it proposes to act as licensee, has:

(1) Appropriate knowledge of the English language, including reading, writing, spelling, and arithmetic;

(2) An understanding of the principles of real estate conveyancing, the general purposes and legal effect of deeds, mortgages, land contracts of sale, exchanges, rental and option agreements, and leases;

(3) An understanding of the principles of land economics and appraisals;

(4) An understanding of the obligations between principal and agent;

(5) An understanding of the principles of real estate practice and the canons of business ethics pertaining thereto; and,

(6) An understanding of the provisions of this chapter.

The examination for real estate brokers shall be more exacting than that for real estate ((~~salesmen~~)) salespersons.

All moneys received for the sale of the manual to licensees and members of the public shall be placed in the real estate commission fund to be returned to the current biennium operating budget.

Sec. 12. Section 2, chapter 25, Laws of 1979 and RCW 18.85.140 are each amended to read as follows:

Before receiving ((~~his~~)) a license every real estate broker must pay a license fee of forty dollars, every associate real estate broker must pay a license fee of forty dollars, and every real estate ((~~salesman~~)) salesperson must pay a license fee of twenty-five dollars. Every license issued under the provisions of this chapter expires on the applicant's birthday following issuance of the license which date will henceforth be the renewal date. Licenses issued to corporations and partnerships expire December 31st, which date will henceforth be their renewal date. On or before the renewal date an annual renewal license fee in the same amount must be paid.

If the application for a renewal license is not received by the director on or before the renewal date, the renewal license fee shall be fifty-five dollars for a real estate broker and associate real estate broker and thirty-five dollars for a real estate ((~~salesman~~)) salesperson. Acceptance by the director of an application for renewal after the renewal date shall not be a waiver of the delinquency.

The license of any person whose license renewal fee is not received within one year from the date of expiration shall be canceled. This person may obtain a new license by satisfying the procedures and qualifications for initial licensing, including the successful completion of any applicable examinations.

The director shall issue to each active licensee a license and a pocket identification card in such form and size as ((he)) the director shall prescribe.

Sec. 13. Section 3, chapter 25, Laws of 1979 and RCW 18.85.150 are each amended to read as follows:

A temporary broker's permit may, in the discretion of the director, be issued to the legally accredited representative of a deceased or incapacitated broker, the senior qualified ((~~salesman~~)) salesperson in that office or other qualified representative of the deceased or incapacitated broker, which shall be valid for a period not exceeding four months and in the case of a partnership or a corporation, the same rule shall prevail in the selection of a person to whom a temporary broker's permit may be issued.

Sec. 14. Section 14, chapter 139, Laws of 1972 ex. sess. as amended by section 6, chapter 370, Laws of 1977 ex. sess. and RCW 18.85.155 are each amended to read as follows:

Responsibility for any ((~~salesman~~)) salesperson, associate broker or branch manager in conduct covered by this chapter shall rest with the broker to which such licensees shall be licensed.

In addition to the broker, a branch manager shall bear responsibility for ((~~salesmen~~)) salespersons and associate brokers operating under the branch manager at a branch office.

Sec. 15. Section 21, chapter 222, Laws of 1951 as last amended by section 7, chapter 370, Laws of 1977 ex. sess. and RCW 18.85.161 are each amended to read as follows:

A nonresident broker may apply for and be issued a nonresident broker's license upon compliance with all of the provisions of this chapter. ((He)) The broker shall not be required to maintain a definite place of business within this state, but shall retain in this state all funds arising from transactions within this state, until such funds are distributed to the proper parties involved, and ((he)) the broker shall be subject to the requirements of this chapter relating to the handling and depositing of closing funds.

Any privileges accorded herein to a nonresident shall apply only to a licensed real estate broker of two years' experience or more and only so long as the broker shall (1) maintain an active place of business within the state of his or her domicile, and (2) maintain ((~~his~~)) the license in good standing in the state of his or her domicile: PROVIDED, That such nonresident is domiciled in a state which extends similar recognition and courtesies to licensed real estate brokers of this state. When any broker moves into this state from a state having similar reciprocal laws and desires a license, and if such broker has maintained a license in his or her home state in good standing prior to ((~~his~~)) moving into this state, ((he)) the broker shall, in the discretion of the director, not be required to take the state examination for a license.

The director may waive the requirement of examination of any applicant for a license in the case of an application from a nonresident who is licensed in a state having similar requirements, under the laws of which, similar recognition and courtesies are extended to licensees of this state by mutual written agreement of the directors and commissions of the concerned states.

((~~Salesmen~~)) Salespersons employed by a nonresident broker who has been issued a nonresident broker's license may operate for such broker in this state upon payment of the license fee required of ((~~salesmen~~)) salespersons during such time as they continue licensed under the nonresident broker in this state and if such ((~~salesman~~)) salesperson maintains a license in good standing under ((~~his~~)) a broker in ((~~his~~)) the licensee's home state.

An applicant for a nonresident license shall irrevocably consent to having suits and actions commenced against ((~~him~~)) the applicant in any county of this state in which the plaintiff resides, and to service of any process or pleadings by delivery thereof to the director. The service shall be valid and binding upon the applicant. The consent shall be in a form prescribed by the director, acknowledged before a notary public, and, if the applicant is a corporation, shall be accompanied by a certified copy of the resolution of the board of directors authorizing the execution of the same. Any process or pleading so served upon the director shall be in duplicate. One copy shall be filed in the office of the director, and one copy shall be immediately forwarded by registered mail to the applicant's office address given in ((~~his~~)) the application. Service shall be deemed to have been made upon the applicant on the third day following the deposit of the copy in the mail.

Sec. 16. Section 10, chapter 252, Laws of 1941 as last amended by section 16, chapter 139, Laws of 1972 ex. sess. and RCW 18.85.170 are each amended to read as follows:

No license issued under the provisions of this chapter shall authorize any person other than the person to whom it is issued to do any act by virtue thereof nor to operate in any other manner than under ((~~his~~)) the person's own name except:

(1) When a license is issued to a corporation it shall entitle one officer thereof, to be named by the corporation in its application, who shall qualify the same as any other agent, to act as a real estate broker on behalf of said corporation, without the payment of additional fees;

(2) When a license is issued to a copartnership it shall entitle one member thereof to be named in the application, who shall qualify to act as a real estate broker on behalf of the copartnership, without the payment of additional license fees;

(3) A licensed broker, associate broker, or ((~~salesman~~)) salesperson may operate and/or advertise under a name other than the one under which the license is issued by obtaining the written consent of the director to do so;

(4) A broker may establish one or more branch offices under a name or names different from that of the main office if the name or names are approved by the director, so long as each branch office is clearly identified as a branch or division of the main office. No broker may establish branch offices under more than three names. Both the name of the branch office and of the main office must clearly appear on the sign identifying the office, if any, and in any advertisement or on any letterhead of any stationery or any forms, or signs used by the real estate firm on which either the name of the main or branch offices appears.

Sec. 17. Section 15, chapter 222, Laws of 1951 as amended by section 41, chapter 52, Laws of 1957 and RCW 18.85.180 are each amended to read as follows:

Every licensed real estate broker must have and maintain an office in this state accessible to the public which shall serve as ((~~his~~)) the office for the transaction of business. Any office so established must comply with the zoning requirements of city or county ordinances and the broker's license must be prominently displayed therein.

Sec. 18. Section 43, chapter 52, Laws of 1957 as amended by section 17, chapter 266, Laws of 1971 ex. sess. and RCW 18.85.200 are each amended to read as follows:

Notice in writing shall be given to the director of any change by a real estate broker, associate broker, or ((~~salesmen~~)) salesperson of his or her business location or of any branch office. Upon the surrender of the original license for the business or the duplicate license applicable to a branch office, and a payment of a fee of five dollars, the director shall issue a new license or duplicate license, as the case may be, covering the new location.

Sec. 19. Section 27, chapter 252, Laws of 1941 as last amended by section 18, chapter 139, Laws of 1972 ex. sess. and RCW 18.85.210 are each amended to read as follows:

The director may publish annually a list of names and addresses of brokers and ((~~salesmen~~)) salespersons licensed under the provisions hereof, together with a copy of this chapter and such information relative to the enforcement of the provisions hereof as ((he)) the director may deem of interest to the public; and ((he)) the director may mail one copy thereof to each licensed broker.

Sec. 20. Section 8, chapter 370, Laws of 1977 ex. sess. and RCW 18.85.215 are each amended to read as follows:

(1) Any license issued under this chapter and not otherwise revoked shall be deemed "inactive" at any time it is delivered to the director. Until reissued under this chapter, the holder of an inactive license shall be deemed to be unlicensed.

(2) An inactive license may be renewed on the same terms and conditions as an active license, and failure to renew shall result in cancellation in the same manner as an active license.

(3) An inactive license may be placed in an active status upon completion of an application as provided by the director and upon compliance with this chapter and the rules adopted pursuant thereto. If a holder has an inactive license for more than three years, the holder must show proof of having successfully completed a thirty clock hour course in real estate within one year prior to the application for active status.

((~~(3)~~)) (4) The provisions of this chapter relating to the denial, suspension, and revocation of a license shall be applicable to an inactive license as well as an active license, except that when proceedings to suspend or revoke an inactive license have been initiated, the license shall remain inactive until the proceedings have been completed.

Sec. 21. Section 7, chapter 252, Laws of 1941 as last amended by section 1, chapter 22, Laws of 1967 and RCW 18.85.220 are each amended to read as follows:

All fees required under the provisions of this chapter shall be paid to the state treasurer. The sum of five dollars from each license fee and each renewal fee received from a broker, associate broker, or ((~~salesman~~)) salesperson, shall be placed in the general fund. The balance of such fees and all other fees paid under the provisions of this chapter shall be placed in a special fund to be designated the real estate commission fund, one-half of which may be held and used for the sole purpose of inspecting the books, records and operations of the brokers, associate brokers, and ((~~salesmen~~)) salespersons.

Sec. 22. Section 4, chapter 25, Laws of 1979 and RCW 18.85.230 are each amended to read as follows:

The director may, upon his own motion, and shall upon verified complaint in writing by any person, investigate the actions of any person engaged in the business or acting in the capacity of a real estate broker, associate real estate broker, or real estate ((~~salesman~~)) salesperson, regardless of whether the transaction was for his or her own account or in ((~~his~~)) the capacity as broker, and may temporarily suspend or permanently revoke or deny the license of any holder who is guilty of:

(1) Obtaining a license by means of fraud, misrepresentation, concealment, or through the mistake or inadvertence of the director;

(2) Violating any of the provisions of this chapter or any lawful rules or regulations made by the director pursuant thereto;

(3) Being convicted in a court of competent jurisdiction of this or any other state, or federal court, of forgery, embezzlement, obtaining money under false pretenses, bribery, larceny, extortion, conspiracy to defraud, or any similar offense or offenses: PROVIDED, That for the purposes of this section being convicted shall include all instances in which a plea of guilty or nolo contendere is the basis for the conviction, and all proceedings in which the sentence has been deferred or suspended;

(4) Making, printing, publishing, distributing, or causing, authorizing, or knowingly permitting the making, printing, publication or distribution of false statements, descriptions or promises of such character as to reasonably induce any person to act thereon, if the statements, descriptions or promises purport to be made or to be performed by either the licensee or ((~~his~~)) the licensee's principal and the licensee then knew or, by the exercise of reasonable care and inquiry, could have known, of the falsity of the statements, descriptions or promises;

(5) Knowingly committing, or being a party to, any material fraud, misrepresentation, concealment, conspiracy, collusion, trick, scheme or device whereby any other person lawfully relies upon the word, representation or conduct of the licensee;

(6) Accepting the services of, or continuing in a representative capacity, any ((~~salesman~~)) salesperson who has not been granted a license, or after ((~~his~~)) the license has been revoked or during a suspension thereof;

(7) Conversion of any money, contract, deed, note, mortgage, or abstract or other evidence of title, to his or her own use or to the use of ((~~his~~)) the licensee's principal or of any other person, when delivered to ((~~him~~)) the licensee in trust or on condition, in violation of the trust or before the happening of the condition; and failure to return any money or contract, deed, note, mortgage, abstract or other evidence of title within thirty days after the owner thereof is entitled thereto, and makes demand therefor, shall be prima facie evidence of such conversion;

(8) Failing, upon demand, to disclose any information within ((~~his~~)) the licensee's knowledge to, or to produce any document, book or record in ((~~his~~)) the licensee's possession for inspection of the director or ((~~his~~)) the director's authorized representatives acting by authority of law;

(9) Continuing to sell any real estate, or operating according to a plan of selling, whereby the interests of the public are endangered, after the director has, by order in writing, stated objections thereto;

(10) Committing any act of fraudulent or dishonest dealing or a crime involving moral turpitude, and a certified copy of the final holding of any court of competent jurisdiction in such matter shall be conclusive evidence in any hearing under this chapter;

(11) Advertising in any manner without affixing the broker's name as licensed, and in the case of a ((~~salesman~~)) salesperson or associate broker, without affixing the name of the broker as licensed for whom or under whom the ((~~salesman~~)) salesperson or associate broker operates, to the advertisement;

(12) Accepting other than cash or its equivalent as earnest money unless that fact is communicated to the owner prior to ((~~his~~)) the acceptance of the offer to purchase, and such fact is shown in the earnest money receipt;

(13) Charging or accepting compensation from more than one party in any one transaction without first making full disclosure of all the facts to all the parties interested in the transaction;

(14) Accepting, taking or charging any undisclosed commission, rebate or direct profit on expenditures made for the principal;

(15) Accepting employment or compensation for appraisal of real property contingent upon reporting a predetermined value;

(16) Issuing an appraisal report on any real property in which the broker or ((~~salesman~~)) salesperson has an interest unless ((~~his~~)) the interest is clearly stated in the appraisal report;

(17) Misrepresentation of his or her membership in any state or national real estate association;

(18) Discrimination against any person in hiring or in sales activity, on the basis of race, color, creed or national origin, or violating any of the provisions of any state or federal antidiscrimination law;

(19) Failing to keep an escrow or trustee account of funds deposited with ((~~him~~)) the broker relating to a real estate transaction, for a period of three years, showing to whom paid, and such other pertinent information as the director may require, such records to be available to the director, or ((~~his~~)) the director's representatives, on demand, or upon written notice given to the bank;

(20) Failing to preserve for three years following its consummation records relating to any real estate transaction;

(21) Failing to furnish a copy of any listing, sale, lease or other contract relevant to a real estate transaction to all signatories thereof at the time of execution;

(22) Acceptance by a ((~~salesman~~)) salesperson, associate broker or branch manager of a commission or any valuable consideration for the performance of any acts specified in this ((~~1972 amendatory act~~)) chapter, from any person, except the licensed real estate broker with whom he or she is licensed;

(23) To direct any transaction involving ((~~his~~)) the licensee's principal, to any lending institution for financing or to any escrow company, in expectation of receiving a kickback or rebate therefrom, without first disclosing such expectation to ((~~his~~)) the licensee's principal;

(24) Failing to disclose to an owner ((~~his~~)) an intention or true position if ((he)) the licensee directly or indirectly through third party, purchases for himself or herself or acquires or intends to acquire any interest in, or any option to purchase, property;

(25) In the case of a broker licensee, failing to exercise adequate supervision over the activities of his or her licensed associate brokers and ((~~salesmen~~)) within the scope of this ((~~1972 amendatory act~~)) chapter;

(26) Any conduct in a real estate transaction which demonstrates bad faith, dishonesty, untrustworthiness or incompetency;

(27) Acting as a mobile home and travel trailer dealer or ((~~salesman~~)) salesperson, as defined in RCW 46.70.011 ((~~as now or hereafter amended~~)), without having a license to do so;

(28) Failing to assure that the title is transferred under chapter 46.12 RCW when engaging in a transaction involving a mobile home as a broker or ((~~salesman~~)) salesperson; or

(29) Violation of an order to cease and desist which is issued by the director under this chapter.

Sec. 23. Section 45, chapter 52, Laws of 1957 and RCW 18.85.240 are each amended to read as follows:

The director may deputize one or more ((~~of his~~)) assistants to perform his or her duties with reference to refusal, revocation or suspension of licenses, including the power to preside at hearings and to render decisions therein subject to the approval of the director.

Sec. 24. Section 25, chapter 222, Laws of 1951 as amended by section 20, chapter 139, Laws of 1972 ex. sess. and RCW 18.85.271 are each amended to read as follows:

If the director shall decide, after such hearing, that the evidence supports the accusation by a preponderance of evidence, ((he)) the director may revoke the license in question or withhold renewal of any such license or suspend any such license. In such event ((he)) the director shall enter an order to that effect and shall file the same in ((~~his~~)) the director's office and immediately mail a copy thereof to the affected party at the address of record with the department. Such order shall not be operative for a period of ten days from the date thereof. Any licensee or applicant aggrieved by a final decision by the director in a contested case whether such decision is affirmative or negative in form, is entitled to a judicial review in the superior court under the provisions of the Administrative Procedure Act, chapter 34.04 RCW. Upon instituting appeal in the superior court, the appellant shall give a cash bond to the state of Washington, which bond shall be filed with the clerk of the court, in the sum of five hundred dollars to be approved by the judge of said court, conditioned to pay all costs that may be awarded against such appellant in the event of an adverse decision, such bond and notice to be filed within thirty days from the date of the director's decision.

Sec. 25. Section 17, chapter 222, Laws of 1951 as last amended by section 21, chapter 139, Laws of 1972 ex. sess. and RCW 18.85.290 are each amended to read as follows:

If said appellant shall fail to perfect ((~~his~~)) the appeal or fail to pay the expense of preparing the transcript as provided herein, said stay of proceedings shall automatically terminate.

An aggrieved party may secure review of a final judgment of the superior court under this ((~~1972 amendatory act~~)) chapter by appeal therefrom. Such appeal shall be taken in the manner provided by law for appeals from the superior court in other civil cases.

Sec. 26. Section 17, chapter 252, Laws of 1941 as last amended by section 18, chapter 222, Laws of 1951 and RCW 18.85.300 are each amended to read as follows:

Every bond given under the provisions of this chapter, after approval by the director, shall be filed in ((~~his~~)) the director's office. Any person who may be damaged by the wrongful conversion of trust funds by any real estate broker, associate real estate broker, or real estate ((~~salesman~~)) salesperson, shall, in addition to other legal remedies, have a right of action on such bond for all damages not exceeding five thousand dollars against a broker or one thousand dollars against a ((~~salesman~~)) salesperson. The aggregate liability of the surety upon the bond of any real estate broker, associate real estate broker, or real estate ((~~salesman~~)) salesperson for all claims which may arise thereunder shall not exceed the sum specified therein.

Sec. 27. Section 19, chapter 222, Laws of 1951 as last amended by section 44, chapter 52, Laws of 1957 and RCW 18.85.310 are each amended to read as follows:

Every licensed real estate broker shall keep adequate records of all real estate transactions handled by or through ((~~him~~)) the broker's office. The records shall include, but are not limited to, a copy of the earnest money receipt, and an itemization of the broker's receipts and disbursements with each transaction. These records and all other records hereinafter specified shall be open to inspection by the director or ((~~his~~)) the director's authorized representatives.

Every real estate broker shall also deliver or cause to be delivered to all parties signing the same, at the time of signing, conformed copies of all earnest money receipts, listing agreements and all other like or similar instruments signed by the parties, including the closing statement.

Every real estate broker shall also keep separate real estate fund accounts in a recognized Washington state depositary authorized to receive funds in which shall be kept separate and apart and physically segregated from licensee broker's own funds, all funds or moneys of clients which are being held by such licensee broker pending the closing of a real estate sale or transaction, or which have been collected for said client and are being held for disbursement for or to said client and such funds shall be deposited not later than the first banking day following receipt thereof.

Any violation by a real estate broker of any of the provisions of this section, or RCW 18.85.230, shall be grounds for revocation of the licenses issued to the broker.

Sec. 28. Section 26, chapter 252, Laws of 1941 as last amended by section 14, chapter 235, Laws of 1953 and RCW 18.85.320 are each amended to read as follows:

The license of a real estate ((~~salesman~~)) salesperson or associate real estate broker shall be retained at all times by ((~~his~~)) the designated broker and when any real estate ((~~salesman~~)) salesperson or associate real estate broker ceases to represent ((~~his~~)) the broker ((~~his~~)) the license shall cease to be in force. Notice of such termination shall be given by the broker to the director and such notice shall be accompanied by and include the surrender of the ((~~salesman's~~)) salesperson's or associate real estate broker's license. Failure of any broker to promptly notify the director of such ((~~salesman's~~)) salesperson's or associate real estate broker's termination after demand by the affected ((~~salesman~~)) salesperson or associate real estate broker shall work a forfeiture of the broker's license. Upon application of the ((~~salesman~~)) salesperson or associate real estate broker and the payment of five dollars, the director shall issue a new license for the unexpired term, if such ((~~salesman~~)) salesperson or associate real estate broker is otherwise entitled thereto. When a real estate ((~~salesman's~~)) salesperson's or associate real estate broker's services shall be terminated by ((~~his~~)) a broker for a violation of any of the provisions of RCW 18.85.230, a written statement of the facts in reference thereto shall be filed forthwith with the director by the broker.

Sec. 29. Section 24, chapter 252, Laws of 1941 as last amended by section 15, chapter 235, Laws of 1953 and RCW 18.85.330 are each amended to read as follows:

It shall be unlawful for any licensed broker to pay any part of ((~~his~~)) the broker's commission or other compensation to any person who is not a licensed real estate broker in any state of the United States or its possessions or any province of the Dominion of Canada, or to a real estate ((~~salesman~~)) salesperson not licensed to do business for such broker; or for any licensed ((~~salesman~~)) salesperson to pay any part of his or her commission or other compensation to any person, whether licensed or not, except through ((~~his~~)) the salesperson's broker.

Sec. 30. Section 23, chapter 252, Laws of 1941 as amended by section 20, chapter 222, Laws of 1951 and RCW 18.85.340 are each amended to read as follows:

Any person acting as a real estate broker, associate real estate broker, or real estate ((~~salesman~~)) salesperson, without a license, or violating any of the provisions of this chapter, shall be guilty of a gross misdemeanor.

Sec. 31. Section 2, chapter 261, Laws of 1977 ex. sess. and RCW 18.85.343 are each amended to read as follows:

(1) The director may issue a cease and desist order to a person after notice and hearing and upon a determination that the person has violated a provision of this chapter or a lawful order or rule of the director.

(2) If the director makes a written finding of fact that the public interest will be irreparably harmed by delay in issuing an order, ((he)) the director may issue a temporary cease and desist order. Before issuing the temporary cease and desist order, whenever possible the director shall give notice by telephone or otherwise of the proposal to issue a temporary cease and desist order to the person. Every temporary cease and desist order shall include a provision that a hearing will be held upon request to determine whether or not the order will become permanent.

At the time the temporary cease and desist order is served, the licensee shall be notified that he or she is entitled to request a hearing for the sole purpose of determining whether or not the public interest imperatively requires that the temporary cease and desist order be continued or modified pending the outcome of the hearing to determine whether or not the order will become permanent. The hearing shall be held within thirty days after the department receives the request for hearing, unless the licensee requests a later hearing. A licensee may secure review of any decision rendered at a temporary cease and desist order review hearing in the same manner as a contested case.

Sec. 32. Section 9, chapter 252, Laws of 1941 and RCW 18.85.345 are each amended to read as follows:

The attorney general shall render to the director opinions upon all questions of law relating to the construction or interpretation of this chapter, or arising in the administration thereof, that may be submitted to ((~~him~~)) the attorney general by the director, and shall act as attorney for the director in all actions and proceedings brought by or against ((~~him~~)) the director under or pursuant to any provisions of this chapter.

Sec. 33. Section 16, chapter 235, Laws of 1953 as last amended by section 2, chapter 22, Laws of 1967 and RCW 18.85.350 are each amended to read as follows:

The director may prefer a complaint for violation of any section of this chapter before any court of competent jurisdiction.

The prosecuting attorney of each county shall prosecute any violation of the provisions of this chapter which occurs in his or her county, and if the prosecuting attorney fails to act, the director may request the attorney general to take action in lieu of the prosecuting attorney.

Process issued by the director shall extend to all parts of the state, and may be served by any person authorized to serve process of courts of record, or may be mailed by registered mail to the licensee's last business address of record in the office of the director.

Whenever the director believes from evidence satisfactory to him or her that any person has violated any of the provisions of this chapter, or any order, license, decision, demand or requirement, or any part or provision thereof, ((he)) the director may bring an action, in the superior court in the county wherein such person resides, against such person to enjoin any such person from continuing such violation or engaging therein or doing any act or acts in furtherance thereof. In this action an order or judgment may be entered awarding such preliminary or final injunction as may be proper.

The director may petition the superior court in any county in this state for the immediate appointment of a receiver to take over, operate or close any real estate office in this state which is found, upon inspection of its books and records to be operating in violation of the provisions of this chapter, pending a hearing as herein provided.

Sec. 34. Section 49, chapter 52, Laws of 1957 and RCW 18.85.360 are each amended to read as follows:

The director may administer oaths; certify to all official acts; subpoena and ((~~bring before him~~)) require appearance of any person in this state as a witness; compel the production of books and papers; and take the testimony of any person by deposition in the manner prescribed for procedure of the superior courts in civil cases, in any hearing in any part of the state.

Each witness, who appears by order of the director, shall receive ((~~for his attendance~~)) the fees and mileage allowed to a witness in civil cases in the superior court. Witness fees shall be paid by the party at whose request the witness is subpoenaed.

If a witness, who has not been required to attend at the request of any party, is subpoenaed by the director, ((~~his~~)) the witness's fees and mileage shall be paid from funds appropriated for the use of the real estate department in the same manner as other expenses of the department are paid.

Sec. 35. Section 2, chapter 78, Laws of 1969 and RCW 18.85.400 are each amended to read as follows:

Each real estate multiple listing association shall submit to the real estate commission for approval or disapproval its entrance requirements. No later than sixty days after receipt of the real estate multiple listing associations entrance requirements the commission shall, with the directors approval, approve or disapprove the said entrance requirements. In no event shall the real estate commission approve any entrance requirements which shall be more restrictive on the person applying to join a real estate multiple listing association than the following:

(1) Require the applicant at the time of application and admission to be a licensed broker under chapter 18.85 RCW;

(2) Require the applicant, if all members of the real estate multiple listing association are so required, to obtain and maintain a policy of insurance, containing specified coverage within designated limits protecting members from claims by sellers who have made keys to their premises available to members for access to their properties, against losses arising from damage to or theft of contents of such properties;

(3) Require the applicant to pay an initiation fee computed by dividing an amount equal to five times the book value of the real estate multiple listing association concerned (exclusive of any value for listings and exclusive of all investments not related to the operation of the real estate multiple listing association and exclusive of all real estate), by the number of real estate broker members of said organization: PROVIDED, That in no event shall the initiation fee exceed twenty-five hundred dollars;

(4) Require the applicant for membership to have been:

(a) A broker in the territory of the real estate multiple listing association for a period of one year; or

(b) An associate broker with one year's experience in the area of the real estate multiple listing association, who in addition has had one year's experience as a broker in any other area of the state.

(5) Require the applicant to follow any other rules of the association which apply to all the members of such association: PROVIDED, That such other rules do not violate federal or state law: PROVIDED, That nothing in this ((~~1969 amendatory act~~)) chapter shall be construed to limit the authority of any real estate multiple listing association to engage in any activities which are not otherwise prohibited by law.