A group of local real estate agents met last week to discuss upcoming legislation that some fear may be detrimental to their business.
Paulette Richie, president of the Arkansas Realtors Association (ARA), was invited to Hot Springs Village to discuss Arkansas House Bill 1147, which, if passed, will allow unlicensed employees of construction companies to show and sell property.
Richie explained that the original bill, sponsored by Rep. DeAnne Vaught and Sen. Bart Hester in 2021, was “adamantly” opposed by ARA and defeated in committee. She said the “environment” in the state government is different now and, after a few changes were made to the bill, ARA is in favor of passage.
Richie went over key provisions of the proposed bill, saying it only applies to “new, never occupied property, owned by a builder.” Any employee of a construction company can represent and sell property, but the builder must hire a principal broker “who shall be responsible for the conduct of” the employee. The purchaser will retain the right to be represented by a real estate agent or legal counsel. Richie said the new version of the bill has a “narrower scope” and includes the requirement for a written disclosure that the employee is acting solely for the builder.
Richie’s presentation was met with vocal opposition from some of the local agents, and Richie said in defense that if the changes had not been made and approved by ARA, the original bill would have come back and might have passed (“the alternative is worse” ). She added that the only real changes to existing law were the addition of a supervising principal broker and the way the employee is paid.
Agents opposed to the legislation argued that one out-of-state builder, Rausch Coleman, is driving the legislation, and this could open the door for more big builders to come into Arkansas under these conditions.
Several attendees noted that some states already have these provisions in place, and one agent remarked that he had learned through his research that many of the “big builders are coming back to [using] Realtors.” Others remarked that the new bill “doesn’t really affect us” (ie, local Realtors). Another issue raised was the idea of buyers not choosing to pay an agent.
In addition to affecting the livelihood of real estate agents, the concern is that employees selling property on behalf of a builder are not trained in the policies and procedures for transacting real estate.
Local agents were encouraged to voice opposition to the bill by contacting committee members and legislators.