Chapter 696

 

      Chapter 696

 

ATTY. GEN. OPINIONS: Sales of subdivision lots by mobile home salespeople, (1975) Vol 37, p 865; sales or offers of interests in limited partnerships to invest in real estate, (1978) Vol 38, p 1971

 

      696.010

 

NOTES OF DECISIONS

 

      Where plaintiff undertook to assist defendant in selling its sawmill business and sale of business resulted in sale of real estate connected with business, this was not sufficient to support finding that undertaking was “calculated to result” in a sale of real estate, so plaintiff was not engaged in real estate activity under this section. Moody v. Hurricane Creek Lumber Co., 290 Or 729, 625 P2d 1306 (1981)

 

ATTY. GEN. OPINIONS: Seller of own business franchise not a “business chance broker,” (1972) Vol 36, p 100; Rental Housing Services as relating to the definition of “real estate brokers,” (1973) Vol 36, p 413

 

      696.020

 

NOTES OF DECISIONS

 

      Realtor purchasing property for himself was obligated to advise seller that realtor had changed the terms of the option prepared by seller’s counsel by eliminating the 10-year provision for realtor to pay off the balance of the contract. Gergen v. Bartzat, 46 Or App 347, 611 P2d 352 (1980)

 

      Where contract for sale of house established that parties would share losses as well as profits from venture, contract was not illegal broker’s contract. Gergen v. Bartzat, 46 Or App 347, 611 P2d 352 (1980)

 

      Where plaintiff assisted defendant in procuring a buyer for its sawmill business, plaintiff was not required to be licensed under this section. Moody v. Hurricane Creek Lumber Co., 290 Or 729, 625 P2d 1306 (1981)

 

      Though this section prohibits unlicensed person from receiving compensation for real estate activity, it does not prevent person from testifying as expert if properly qualified. State Dept. of Trans. v. Montgomery Ward Dev., 79 Or App 457, 719 P2d 507 (1986), Sup Ct review denied

 

      Licensee acting on behalf of entity in which licensee had partial ownership interest was acting in “licensee’s own behalf.” Atwood v. Real Estate Commissioner, 97 Or App 138, 775 P2d 880 (1989)

 

      Licensee’s sale of real estate on licensee’s own behalf includes performance of contract by seller, not merely formation of contract. Atwood v. Real Estate Commissioner, 97 Or App 138, 775 P2d 880 (1989)

 

ATTY. GEN. OPINIONS: Advertisements of Rental Housing Services as “holding oneself out as engaging in the business of a real estate broker,” (1973) Vol 36, p 413

 

      696.022

 

NOTES OF DECISIONS

 

Under former similar statute (ORS 696.050)

 

      The terms “trustworthy” and “competent” are not unconstitutional for vagueness. Klein v. Real Estate Commr. Holbrook, 19 Or App 646, 528 P2d 1355 (1974)

 

      696.030

 

NOTES OF DECISIONS

 

      “Regular employe” means employe whose services for his or her employer are of recurring nature for which employe is expected to perform from time to time pursuant to his original engagement. Brown v. Haverfield, 276 Or 911, 557 P2d 233 (1976)

 

      Action to recover compensation for brokerage services was proper despite lack of license where plaintiff was “regular employe” of defendant within terms of this section which exempts certain persons from licensing requirement of ORS 696.710. Brown v. Haverfield, 276 Or 911, 557 P2d 233 (1976)

 

      696.200

 

ATTY. GEN. OPINIONS: Management of two or more branch offices by associate broker, (1980) Vol 41, p 35

 

      696.241

 

      See also annotations under ORS 696.240 in permanent edition.

 

NOTES OF DECISIONS

 

      Since purpose of this section is to prevent abuses arising from commingling of funds entrusted to brokers with brokers’ other funds, “neutral escrow depository” means an escrow depository other than a broker, but includes escrow depositories owned or controlled by a broker. Banif Corp. v. Black, 12 Or App 385, 507 P2d 49 (1973)

 

      Broker was not guilty of “conversion” of down payment where clear evidence showed broker complied with statutory requirements by depositing down payment made by purchaser in trust fund account. Huszar v. Certified Realty Co., 278 Or 29, 562 P2d 1184 (1977)

 

      696.290

 

NOTES OF DECISIONS

 

      Washington real estate broker who supervised execution of listing agreement by Oregon sellers is deemed to have engaged in negotiations and cannot, therefore, qualify as cooperating broker under this section. Fields v. Macnab, 70 Or App 154, 688 P2d 409 (1984)

 

      696.300

 

      See annotations under ORS 696.301.

 

      696.301

 

      See also annotations under ORS 696.300 in permanent edition.

 

NOTES OF DECISIONS

 

Under former similar statute (ORS 696.300)

 

      Breach of legally enforceable agreement by real estate broker is not requisite to finding of “bad faith,” “untrustworthiness” and “improper dealing” which include breach of moral obligation or duty owed to another. Blank v. Black, 14 Or App 470, 512 P2d 1016 (1973), Sup Ct review denied

 

      Additional violations similar to violation charged were admissible in administrative hearing under this section to show that violation charged was deliberate. Flagg v. Layman, 16 Or App 129, 517 P2d 329 (1973)

 

      Conduct demonstrating untrustworthiness is limited to acts by licensee in his capacity as broker or salesman, excepting where licensee is acting for himself in private capacity or he has been convicted of certain enumerated crimes. Klein v. Real Estate Commr. Holbrook, 19 Or App 646, 528 P2d 1355 (1974)

 

      Realtor purchasing property for himself was obligated to advise seller that realtor had changed the terms of the option prepared by seller’s counsel by eliminating 10-year provision for realtor to pay the balance of contract. Macdonald v. Dormaier, 272 Or 122, 535 P2d 527 (1975)

 

In general

 

      “Guilty knowledge” of a violation of this section on the part of the broker must be proved to find a violation. Vincent v. Real Estate Div., 24 Or App 913, 548 P2d 180 (1976)

 

      Prohibition against conduct of same or different character that demonstrates “bad faith, incompetency or untrustworthiness or dishonest, fraudulent or improper dealing” is not unconstitutionally vague. Stanfill v. Real Estate Division, 35 Or App 549, 581 P2d 980 (1978), Sup Ct review denied

 

      Evidence that real estate broker failed to disclose, and instructed another person not to disclose, that repairs, on which consummation of sale was contingent, had not been made, was sufficient to show bad faith and improper dealing in violation of this section. Stanfill v. Real Estate Division, 35 Or App 549, 581 P2d 980 (1978), Sup Ct review denied

 

      Real Estate Commissioner erred in concluding same conduct by real estate licensee violated different subsections of this section. Pratt v. Real Estate Division, 76 Or App 483, 709 P2d 1134 (1985)

 

      “Improper dealings” is not limited to actions taken with culpable mental state. Garton v. Real Estate Commissioner, 127 Or App 340, 873 P2d 359 (1994), Sup Ct review denied

 

      Authority of Real Estate Commissioner to discipline licensee who “has done” any of listed acts does not allow discipline based on potential future actions. Dearborn v. Real Estate Agency, 334 Or 493, 53 P3d 436 (2002)

 

      Act or conduct of same or different character as listed actions must be substantially related to trustworthiness, competence, honesty or good faith to engage in real estate activity. Dearborn v. Real Estate Agency, 334 Or 493, 53 P3d 436 (2002)

 

      Under pre-2003 version of statute, Real Estate Commissioner may suspend, revoke or deny license for act or conduct substantially related to fitness of licensee, notwithstanding that act or conduct occurred before issuance of license. Kerley v. Real Estate Agency, 337 Or 309, 96 P3d 1211 (2004)

 

ATTY. GEN. OPINIONS

 

In general

      Advertisement by real estate salesperson as member of “Million Dollar Club,” (1979) Vol 39, p 511

 

      696.385

 

ATTY. GEN. OPINIONS: Real Estate Division authority to prohibit featuring name or picture of salesperson in real estate advertisement, (1979) Vol 39, p 511

 

      696.395

 

ATTY. GEN. OPINIONS: Appointing authority of Director of Commerce, (1975) Vol 37, p 494

 

      696.511

 

NOTES OF DECISIONS

 

      Person “acts in capacity of escrow agent” when, pursuant to written instructions from principals and for money or other consideration, person: 1) receives matters of value to which person has no right, title or interest; 2) holds matters received as neutral third party until occurrence of event or condition specified by principals; and 3) upon occurrence of event or condition, delivers matters to other person having right, title or interest. Coast Security Mortgage Corp. v. Real Estate Agency, 331 Or 348, 15 P3d 29 (2000)

 

      696.520

 

NOTES OF DECISIONS

 

      Although attorney may act as escrow agent and close real estate transactions between parties, he must take precautions to guard his professional responsibility by making complete written disclosure fully stating his position with respect to clients and other parties to the transaction. In re Bauer, 283 Or 55, 581 P2d 511 (1978)

 

      696.525

 

NOTES OF DECISIONS

 

      Neither this section, nor Oregon Escrow Law as a whole, authorizes direct action by injured party against surety. Gardner v. First Escrow Corp., 72 Or App 715, 696 P2d 1172 (1985), Sup Ct review denied

 

      696.578

 

      See annotations under ORS 696.560 in permanent edition.

 

      696.579

 

      See annotations under ORS 696.565 in permanent edition.

 

      696.710

 

NOTES OF DECISIONS

 

      The action to recover compensation for brokerage services was proper despite the lack of a license where the plaintiff was a “regular employe” of the defendant within the terms of ORS 696.030 which exempts certain persons from the licensing requirement of this section. Brown v. Haverfield, 276 Or 911, 557 P2d 233 (1976)

 

      This section imposes absolute bar to bringing and maintaining action for compensation for real estate activities unless plaintiff is licensed real estate agent in Oregon. Fields v. Macnab, 70 Or App 154, 688 P2d 409 (1984)

 

      Expenditures relating to opening of office for marketing of timeshares does not come within definition of compensation for purposes of this section. Jim Jarvis-Jim Beamer, Inc. v. Black Bear Resort, 85 Or App 51, 735 P2d 1240 (1987), Sup Ct review denied

 

      This section does not bar action by licensed real estate salesperson brought pursuant to valid assignment from licensed real estate broker. Scanlon v. Jensen, 102 Or App 631, 796 P2d 371 (1990), Sup Ct review denied

 

ATTY. GEN. OPINIONS: Seller of own business franchise not a “business chance broker,” (1972) Vol 36, p 100

 

      696.810

 

NOTES OF DECISIONS

 

      Where defendant real estate agent and buyer, represented by plaintiff trustee, entered into contract that stated defendant was not expected to render specialized professional services to buyer, such as detailed property inspection, defendant did not violate duties of real estate agent under this section by not offering advice about investment strategies because that advice is outside scope of statutory duties. Gibson v. Bankofier, 275 Or App 257, 365 P3d 568 (2015)