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New Legislation that Impacts Licensees

Previously, we addressed new legislation that impacts licensees. The following new legislation may also affect your practice.

Earnest Money Disbursement

House Bill 2490 changes language in ORS 696.5811 regarding disbursement of earnest money by escrow agents. Previously, escrow agents had an ability to impose additional requirements on the parties to a transaction prior to release of earnest money, such as execution of releases or waivers of liability. HB 2490 disallows such additional requirements. In addition, it allows escrow agents to disburse earnest money in accordance with agreements made between the parties after the initial sale agreement was executed.

Holders of Real Estate Licenses

Senate Bill 167 clarifies to whom real estate broker or manager licenses may be issued. The law clarifies that only individuals may hold licenses, not corporations and other entities. In addition, the law directs the Real Estate Agency to formulate rules to allow brokerages to maintain licensee records out of state, and to specify whether and how inactive or suspended licensees may act on their own behalf in transactions.

Commission v. Compensation

In our previous article about new legislation, we discussed a change in the law from the use of the term “commission” to use of “compensation” in order to accommodate various forms of broker compensation. Senate Bill 482 also requires an escrow agent to hold back any compensation, not just commission, that is due to a real estate licensee.

Tenants by the Entirety

House Bill 2365 amends ORS 93.180 by creating an automatic assumption that a husband and wife take title as tenants by the entirety unless otherwise stated, regardless of language that follows their names. For instance, a husband’s and wife’s names need not be followed by language such as “husband and wife” or “tenants by the entirety” in order to indicate that they are holding title as tenants by the entirety.

Proof of Legal Lot

House Bill 2723 accomplishes several items relating to a seller providing proof of a legal lot. First, HB 2723 amends ORS 93.040, revising the warning language which must be included in every sale agreement. The language now advises buyers to verify that the subject property was lawfully established. Second, HB 2723 amends the ORS 105.464 seller’s disclosure statement by requiring a seller to indicate whether the subject property was lawfully established. Third, HB 2723 allows a parcel of land created without local government approval to be legalized if it would have complied with approval criteria in effect at the time the land was sold.

Employees and Non-Competition Agreements

Senate Bill 248 in part amends ORS 653.295, which relates to non-competition agreements entered into by employers and their employees. Although many real estate licensees are independent contractors, it is important for licensees and brokerage owners to understand what now constitutes an enforceable non-competition agreement. First, SB 248 requires a written offer of employment to disclose that a non-competition agreement is condition of employment. This written offer and accompanying disclosure must be provided to a potential employee at least 2 weeks prior to commencement of employment. Second, employers who wish to enter into non-competition agreements with their employees may only do so upon initial employment or upon giving the employee an advancement such as a raise or promotion. Third, non-competition agreements may not exceed two years in length. It is important to note that SB 248 applies only to employment relationships, not independent contractors, and does not apply to agreements not to solicit employees or customers.


A significant number of additional changes to Oregon Revised Statutes were made during the latest legislative session, including changes to the Oregon Condominium Act and the Oregon Planned Community Act. Brokers would be well advised to review additional changes to the law by visiting the Oregon State Legislature website, which is located at

This column contains general information only and must not be construed as legal advice. Questions may be submitted directly to Maylie & Grayson by fax at (503) 775-1765, by email at or by mail at 7959 SE Foster Road, Portland, Oregon 97206.

7959 SE Foster Road Portland, Oregon 97206 T. 503.771.7929 F. 503.775.1765