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FLOOR 10/16/2024-SPECIAL ORDERED TO THE FLOOR BILL NO. 35-0391 Thirty-Fifth Legislature of the Virgin Islands October 16, 2024 An Act amending title 27 Virgin Islands Code, chapter 15 relating to real estate brokers and sales associates PROPOSED BY: Senator Novelle E. Francis, Jr. Be it enacted by the Legislature of the Virgin Islands: 1 SECTION 1. Title 27 Virgin Islands Code, chapter 15 is amended in the following 2 instances: 3 (a) In the chapter heading, strike “and Salesmen” and insert “, and Sales Associates”. 4 (b) Section 421 is amended as follows: 5 (1) Insert the following definitions before the definition of “Commission”: 6 “Agency disclosure” means the disclosure, in written form, of the agency 7 relationship. 8 “Agency relationship” means a fiduciary relationship created solely by an 9 express written agency agreement between a person and a real estate broker, 10 2 authorizing the real estate broker to act as an agent for the person according to the 1 scope of authority granted in the written agency agreement for a real estate 2 transaction 3 “Agent” means one authorized and empowered by a written agency 4 agreement to perform actions for a client. 5 “Buyer” means the transferee in a real estate transaction and includes a person 6 who executes an offer to purchase or lease real estate from a seller, whether alone 7 or through an agent, and whether or not a transfer results, or who seeks the services 8 of an agent with the object of entering into a real estate transaction in more than a 9 casual, transitory, or preliminary manner. “Buyer” includes a lessee. 10 “Client” means a buyer or seller, or prospective buyer or seller, or both, or 11 lessor or lessee, or prospective lessor or lessee, or both, who has entered a written 12 agency agreement with a real estate broker in a real estate transaction.” 13 (2) Insert the following definitions after the definition of “Commission”: 14 “Commissioner” means the Commissioner of the Department of Licensing 15 and Consumer Affairs. 16 “Department” means the Department of Licensing and Consumer Affairs. 17 “Dual agency” means an agency relationship in which a licensee is 18 representing both the buyer and seller or both landlord and tenant in the same 19 transaction. 20 “Dual agent” means a licensee who, with the written informed consent of all 21 the parties to a contemplated real estate transaction, has entered into a brokerage 22 agreement with and represents the seller and buyer in the same real estate 23 transaction. 24 3 “Fiduciary” means a real estate broker or sales associate in a relationship of 1 trust and confidence between the real estate broker or sales associate and a client, 2 which requires loyalty, confidentiality, obedience, full disclosure, accounting and 3 the duty to use skill, care and diligence. 4 “Licensee” when used without modification, means a person licensed under 5 any of the provisions of this chapter. 6 “Listing agreement” means a written contract between a seller of real 7 property and a real estate broker by which the broker has been authorized to sell 8 the property or find or obtain a buyer, including rendering other services for which 9 a real estate license is required to the seller pursuant to the terms of the agreement.” 10 (3) Strike the terms “Real estate” and “Real estate broker” and their definitions 11 and insert the following: 12 “Real estate” or “real property” means any interest or estate in land, including 13 any leasehold or condominium, whether corporeal, incorporeal, freehold, or non- 14 freehold. For purposes of this chapter, any rights of redemption are considered to 15 be an interest in real estate. The term does not include: 16 (1) oil and gas leases, royalties, and other mineral interests and rights 17 of way and easements acquired to construct roadways, pipelines, conduits, 18 wires and facilities related to these types of improvement projects for private 19 and public utilities, federal and state governments, or any political 20 subdivision; or 21 (2) any cemetery lot or right of burial in any cemetery. 22 “Real estate broker” means any person who, for another, and for 23 compensation or valuable consideration directly or indirectly paid or promised, 24 4 expressly or impliedly, or with an intent to collect or receive compensation or 1 valuable consideration therefor, acts as agent for any client involved in the showing, 2 sale, purchase, lease, rental or management of real property, or who solicits listings 3 of real estate for the same purpose, or who advertises or holds one’s self out as 4 engaged in any of the foregoing activities. The term includes any person who 5 engages in the business of charging an advance fee, or collecting escrow deposits, 6 or contracting for the collection of a fee in connection with any contract whereby 7 the person undertakes primarily to promote the sale or leasing of real estate through 8 its listing in a publication, either in print or by electronic means issued primarily 9 for that purpose, or referral of information concerning the real estate to brokers, or 10 both.” 11 (4) Insert the following definition after “Real estate broker”: 12 “Real estate transaction” means the transfer or attempted transfer of an 13 interest in a unit of real property, an act conducted as a result of or in pursuit of a 14 contract to transfer an interest in a unit of real property or an act conducted in an 15 attempt to obtain a contract to market real property.” 16 (5) Insert the following definitions after the definition of “Real estate salesman”: 17 “Seller” means the transferor in a real estate transaction and includes an 18 owner who lists real estate with an agent, whether or not a transfer results, or who 19 receives an offer to purchase or lease real estate property of which they are the 20 owner from an agent on behalf of another. “Seller” includes a lessor. 21 “Staff” means an employee or any person in an independent contractor or 22 sponsorship relationship with a real estate broker. 23 5 “Temporary sales apprentice” means a person employed, sponsored, or 1 engaged by a real estate broker on a temporary and limited basis as described in 2 §426a. 3 “Temporary Sales Apprentice Permit” means a six-month permit to work as 4 a temporary sales apprentice under the supervision of a real estate broker, subject 5 to the limitations established in §426a.” 6 (6) Strike the term “Real estate salesman” and insert “Sales associate”, and in the 7 definition of “Real estate salesman”, insert “any form of” before “compensation” and 8 strike “or otherwise”. 9 (7) Designate the definitions as subsections (a)-(u), respectively. 10 (c) Section 422 is amended as follows: 11 (1) In subsection (2), strike “subpoena witnesses” and insert “hear testimony and 12 receive evidence, subpoena documents and witnesses as it relates to resolving matters 13 within the Commission’s jurisdiction,”; 14 (2) In subsection (3), strike all the language and insert the following new 15 language: “conduct all proceedings and maintain records in accordance with the Virgin 16 Islands Code and federal regulations related to administrative procedures;”; 17 (3) In subsection (4), insert “examine and” before “recommend”; 18 (4) In subsection (5), strike both occurrences of “of Licensing and Consumer 19 Affairs”, and strike “annual reports” and insert “an annual report”; 20 (5) Subsection (6) is amended as follows: 21 (A) Strike “rules and regulations and”; 22 (B) Insert “and promulgate regulations” after the first occurrence of 23 “bylaws”; 24 6 (C) Strike “salesman” and insert “sales associates”; and 1 (D) Strike “ , which rules, regulations or bylaws shall be approved by the 2 Governor.” and insert “The regulations, which must be promulgated in accordance 3 with title 3, chapter 35 of the Virgin Islands Code, must also establish the scopes 4 of practice for each license category and set standards for professional practice and 5 continuing education requirements;”. 6 (6) Re-designate subsections (1)-(6) as subsections (a) through (f). 7 (7) Add subsections (g)-(j) that read as follows: 8 “(g) maintain and publish, either in print or electronically, a current list of all 9 persons holding a license issued under this chapter; 10 (h) adopt a professional code of ethics consistent with industry standards; 11 (i) Except as provided in 27 V.I.C.§430, set reasonable fees for services 12 provided by the Commission at the rates sufficient to cover operating expenses 13 incurred by the Commission in carrying out its functions; and 14 (j) recommend to the Attorney General of the Virgin Islands prosecutions 15 or the bringing of civil actions to seek injunctions and other relief against violations 16 of this chapter outside the jurisdiction of the Commission.” 17 (d) Section 423 is repealed and reenacted with amendments to read as follows: 18 “§ 423. License required; exemptions to licensure. 19 (a) All persons engaging in the sale or purchase of real estate for others 20 shall hold a valid Real Estate Broker license, or when employed under the direct 21 supervision of a licensed real estate broker, a Sales Associate license. 22 (b) Any person admitted to practice law in the Virgin Islands as a member 23 of the Virgin Islands Bar upon application, presentment of a valid membership card, 24 7 and payment of the required fee, must be issued any of the licenses in subsection 1 (a) and any renewals of the respective license. 2 (c) Except as otherwise provided in this chapter, this chapter does not 3 apply to: 4 (1) receivers, referees, administrators, executors, guardians, 5 conservators, trustees, or other persons appointed or acting under the 6 judgment or order of any court while acting in that capacity, or attorneys-at- 7 law in the ordinary practice of their profession, but these persons shall not be 8 regularly engaged in the real estate business and shall not hold themselves 9 out as real estate brokers or sales associates unless they are licensed under 10 this chapter; 11 (2) any trustee or auctioneer acting under the authority of a power of 12 sale in a mortgage, deed of trust, or similar instrument securing the payment 13 of a bona fide debt; 14 (3) except for title companies, any bank, trust company, building and 15 loan or savings and loan association, or insurance company, having a 16 fiduciary interest such as a receiver, referee, administrator, executor, 17 guardian, conservator or trustee, when the bank, trust company, building and 18 loan or savings and loan association, or insurance company is so engaged; 19 (4) any person who is employed by a licensed real estate broker in a 20 solely stenographic or clerical capacity and who does not perform, offer, 21 agree, or attempt to perform, any of the activities specified in this chapter; 22 (5) any officer or employee of the United States or Territorial 23 government while performing official duties; or 24 8 (6) any owner or lessor who performs acts that would require a 1 license under this chapter when such acts are performed in the regular course 2 of or incidental to the owner or lessor’s management of the real property, 3 business and the investments therein. 4 (d) No person may purport to be a real estate broker or sales associate or to 5 be qualified to engage in any real estate transaction by using the title of “real estate 6 broker” or “sales associate”, or use any words or symbols indicating or tending to 7 indicate that the person is a real estate broker or sales associate, or licensed to 8 engage in real estate transactions regulated by this chapter, without meeting the 9 applicable requirements and holding a license as set forth in this chapter.” 10 (e) Section 424 is amended in the following instances: 11 (1) In subsection (a), strike “salesman” and insert “associate” , and insert “ and 12 shall be accompanied by the applicable real estate license fee” after “prescribe”. 13 (2) Subsection (b) is amended by inserting “or sales associate” after both 14 occurrences of “broker”. 15 (f) Insert section 424a. to read as follows: 16 “§ 424a. Qualifications for licensure. 17 (a) To be eligible for licensure as a real estate broker or sales associate, an 18 applicant must: 19 (1) attain the age of 21 for a Real Estate Broker License, or attain the age 20 of 18 for a Sales Associate; 21 (2) be a citizen of the United States or a lawful permanent resident; 22 (3) be a resident of the Territory for 90 consecutive days prior to the date 23 of application; 24 9 (4) be a high school graduate or the holder of a high school equivalency 1 certificate; 2 (5) have successfully completed the education requirements prescribed by 3 the Commission’s regulations; 4 (6) have passed any examination as required by the Commission’s 5 regulations; 6 (7) have not had an application for a license under this chapter denied for 7 reasons other than failure to pass the required examination(s) under this chapter; 8 (8) have not had a real estate license suspended in the Territory or 9 elsewhere, which suspension is still in effect on the date on which the application 10 is filed; and 11 (9) have not had a real estate license revoked in the Territory or elsewhere 12 within three years prior to the date on which the application is filed. 13 (b) For a real estate broker applicant, the Commission shall require proof that the 14 applicant has actively participated in the general real estate brokerage business in the 15 Virgin Islands as a licensed sales associate for a period of not less than two years or has 16 had experience as a real estate broker, or the equivalent title in the real estate business, 17 outside of the Territory for a period of at least two years; which must be established by 18 affidavit sworn to under oath or other and further proof required by the Commission. 19 (c) A sales associate must be sponsored by a licensed real estate broker after 20 passing the written examination in subsection (a)(5) before the Commission may issue a 21 Sales Associate license.” 22 (g) Section 425 is repealed and reenacted with amendments to read as follows: 23 “§ 425. Examination of applicants, education. 24 10 (a) The Commission shall adopt reasonable education requirements in 1 coordination with the Virgin Islands Department of Education as may be required by law 2 and shall collaborate with the Department of Labor on the establishment of an 3 apprenticeship program governed by this chapter. 4 (b) The Commission shall adopt examination requirements and develop and 5 update any applicable examination as necessary to remain current with the Virgin Islands 6 Code and regulations. 7 (c) The standards for examination for a Real Estate Broker and Sales Associate 8 license must be designed to demonstrate that the applicant has an adequate understanding 9 of the general purposes and the general legal effects of deeds, mortgages, land contracts 10 of sale, leases, and an adequate understanding of the obligations between both the client 11 and agent in a real estate transaction, as well as the provisions of this chapter. 12 (d) The examination for a Real Estate Broker license must be of a more exacting 13 nature and scope and more stringent than the examination for a Sales Associate’s license.” 14 (h) Section 426 is amended as follows: 15 (1) Strike all the language in subsection (a) and replace with the following 16 language: “The Commission, upon a determination that all requirements for licensure 17 under this chapter have been satisfied, shall issue a license to each qualifying applicant 18 within 30 days by mail or e-mail.” 19 (2) Subsection (b) is amended as follows: 20 (A) In the first sentence, strike “pocket card” and insert “license”, strike 21 “size and”, and strike “real estate salesman” and insert “ or sales associate”. 22 (B) Strike all the language after the first sentence. 23 (i) Section 426a is added to read as follows: 24 11 “§ 426a. Temporary Sales Apprentice Permit. 1 (a) The Commission may issue a Temporary Sales Apprentice Permit to an 2 applicant for a Sales Associate License who has met the requirements to sit for the 3 examination upon the written request of the applicant’s sponsoring real estate broker 4 agreeing to be responsible for the acts of the temporary sales apprentice. A Temporary 5 Sales Apprentice Permit is valid for six months and may be renewed once and does not 6 confer any property right in the privileges to be exercised under the permit. The authority 7 to act under the temporary permit terminates upon the expiration date of the permit or as 8 of the date when the holder of the permit successfully qualifies for a Sales Associate 9 license by written examination under section 425, whichever date occurs first. 10 (b) The holder of a Temporary Sales Apprentice Permit shall not sign any 11 contract or agreement on behalf of the real estate broker with whom the temporary sales 12 apprentice is employed or independently contracted.” 13 (j) Section 427 is amended in the following instances: 14 (1) Strike the section heading and insert a new section heading to read as: 15 “Effective term of license, license renewal, continuing education”. 16 (2) In the second sentence, strike “or a real estate salesman” and insert “or sales 17 associate”. 18 (3) Insert the following language after the second sentence: “The renewal 19 application must include proof that the licensee has met continuing education 20 requirements prescribed by the Commission’s regulations.”. 21 (4) Designate the existing language as subsection (a) and insert subsections (b), 22 (c), and (d) that read as follows: 23 12 “(b) A licensee who fails to renew the license annually in the month 1 immediately following the month of expiration, shall not conduct any real estate 2 business until reinstatement of the license. The license may be reinstated during 3 the first 12 months immediately following the date the license became invalid by 4 payment of any penalty or reinstatement fees established by the Commission, in 5 addition to the renewal fee. 6 (c) A licensee who fails to reinstate a license during the first 12 months 7 immediately following the date the license became invalid, prior to resuming any 8 business under the license, shall submit an application on the prescribed form and 9 meet all other requirements for licensure. 10 (d) A person may not engage in a professional practice governed by this 11 chapter without a valid license.” 12 (k) Sections 427a to 427c are added to read as follows: 13 “§ 427a. Inactivation of License. 14 (a) Licensees under this chapter may request that their license be placed into 15 inactive status as provided by the Commission’s regulations and upon payment of any 16 applicable fee or other reasonable requirements. The licensee shall be designated as being 17 inactive and any issued inactive license certification may include an endorsement stating 18 that it is inactive and does not permit the holder to transact business under it. 19 (b) A licensee may reactivate an inactive license by paying an activation fee and 20 complying with all procedures provided in the regulations. 21 § 427b. Conditions for participation in dual agency relationship. 22 (a) No licensee shall participate in a dual agency relationship unless both the 23 seller and the buyer, or both the lessor and the lessee, in the transaction have full 24 13 knowledge of the dual representation and consent in writing to the dual representation on 1 the agency disclosure statement. 2 (b) Before a licensee obtains the consent of any party to a dual agency 3 relationship, the licensee shall disclose to both the buyer and seller, or to the lessor and 4 lessee, all relevant information necessary to enable each party to make an informed 5 decision as to whether to consent to the dual agency relationship. If, after consent is 6 obtained, there is a material change in the information disclosed to the buyer and the 7 seller, or to the lessor and the lessee, the licensee shall disclose the change of information 8 to the buyer and the seller or to the lessor and the lessee, and give them an opportunity to 9 revoke their consent. Either party consenting to dual agency may revoke that agency 10 consent at any time during the transaction. 11 (c) No licensee shall participate in a dual agency relationship unless the real 12 estate brokerage firm has established a procedure under which licensees, including 13 management level licensees, who represent one client will not have access to and will not 14 obtain confidential information concerning another client of the firm involved in the dual 15 agency transaction. 16 § 427c. Fiduciary duties of a licensee in an agency relationship. 17 (a) The common law of agency as supplemented by this section applies to the 18 relationship between a licensee and the licensee's client. 19 (b) In accepting employment by a client, a licensee pledges a primary duty of 20 absolute fidelity to protect and promote the interests of the client or clients. 21 (c) A fiduciary must put the interest of the client ahead of the interests of the 22 agent and any third party. Licensees owe to all parties in a real estate transaction the 23 fiduciary duty to: 24 14 (1) use reasonable efforts to further the interest of the client; 1 (2) exercise reasonable skill and care in representing the client and carrying 2 out the responsibilities of the agency relationship; 3 (3) perform the terms of the written agency agreement and agency 4 relationship; 5 (4) follow lawful instructions of the client unless doing so would expose 6 the licensee to liability from another party to a contract, lease, or rental agreement; 7 (5) perform all duties specified in this section in a manner that 8 demonstrates loyalty to the interests of the client; 9 (6) comply with all requirements of this section and other applicable 10 statutes and rules; 11 (7) disclose to the client material facts of the transaction that the licensee 12 is aware of or should be aware of in the exercise of reasonable skill and care and 13 that are not confidential information under a current or prior agency or dual agency 14 relationship; 15 (8) advise the client to obtain expert advice concerning material matters 16 when necessary or appropriate; 17 (9) account in a timely manner for all moneys and property received in 18 which the client has or may have an interest; and 19 (10) keep confidential any information given to the licensee in confidence, 20 or any information obtained by the licensee that the licensee knows a reasonable 21 individual would want to keep confidential, unless disclosure of this information is 22 required by law, violates a fiduciary duty to a client, becomes public knowledge, 23 15 or is authorized by the party in writing. This requirement includes not disclosing 1 confidential information to any licensee who is not an agent of the client. 2 (d) Unless otherwise agreed, the duty to protect a client's confidences continues 3 after the brokerage service agreement expires or is otherwise terminated. 4 (e) A licensee who represents more than one client in a real estate transaction, or 5 provides services as a dual agent, owes the duties as specified in subsection (c) to each 6 client, except where the duties to one client will violate the fiduciary duties of the licensee 7 to other clients. 8 (f) The duties required of a licensee under this section shall not be waived by a 9 client. 10 (g) The licensee is further obligated to act in accordance with the code of 11 professional conduct provided in regulations, when: 12 (1) representing a seller, including a lessor, in an agency relationship; 13 (2) representing a buyer, including a lessee, in an agency relationship; 14 (3) representing both buyer and seller in a dual agency relationship.” 15 (l) Section 428 is amended in the following instances: 16 (1) In subsection (a), strike all the language and insert new language to read as 17 follows: 18 “Each real estate broker shall maintain a fixed office within the Virgin Islands 19 which shall be designated on the license. The fixed office may also be the residence 20 of the real estate broker, subject to approval by the Department of Planning and 21 Natural Resources and the Virgin Islands Fire Services. The license of a real estate 22 broker and the license of each sales associate in the employ of or under contract 23 with a real estate broker shall be prominently displayed in the office.” 24 16 (2) In subsection (b), strike “the applicant for a real estate broker’s license” and 1 insert “a real estate broker”. 2 (3) Add subsection (c) to read as follows: 3 “(c) Whenever a real estate broker changes the location of the place of 4 business or discontinues the business, the real estate broker shall notify the 5 Commission in writing not later than 15 days after the event and return the license 6 to the Commission. If there is a change of office location, the licensee shall apply 7 to the Commission designating the new location of his office.” 8 (m) Section 429 is amended in the following instances: 9 (1) Strike the section heading and insert a new section heading that reads as 10 follows: “Unlawful conduct; suspension or revocation of license; penalties”. 11 (2) Subsection (a) is amended by striking “Commissioner of Licensing and 12 Consumer Affairs, upon recommendation of the Commission, and subject to appeal to 13 the Governor within fifteen days of such recommendation may,” and inserting 14 “Commission may impose a monetary penalty or”, inserting a comma after “hearing by 15 the Commission”, and striking “guilty of any of the offenses described in this chapter” 16 and inserting “to have committed any offense in subsection (b) or in any regulations 17 adopted thereunder”. 18 (3) Subsection (b) is amended as follows: 19 (A) Insert “investigate the actions of any person engaged in the business or 20 acting in the capacity of real estate broker or sales associate within this Territory, 21 and” after “person,” in the first sentence. 22 (B) Strike “recommend to the Commissioner of Licensing and Consumer 23 Affairs the revocation or suspension of” and insert “revoke or suspend”. 24 17 (C) Strike “mentioned herein” and insert “within the scope of this chapter”. 1 (D) Strike “guilty of” and insert “to have committed any of the following 2 acts”. 3 (E) In paragraph (1), strike “agents or salesman” and insert “staff or other 4 licensees,”. 5 (F) In paragraph (3), strike “keep such funds of others in escrow or trustee 6 account” and insert “comply with any of the fiduciary duties requirements in 7 section 427 c.”. 8 (G) Strike all the language in paragraph (4) and insert the following new 9 language: 10 “being convicted in a court of competent jurisdiction of this Territory 11 or any state, or federal court, of forgery, embezzlement, obtaining money 12 under false pretenses, bribery, larceny, extortion, conspiracy to defraud, 13 sexual crimes, drug distribution, arson, physical violence, or any similar 14 offense or offenses. For the purposes of this paragraph, being convicted 15 includes all instances in which a plea of guilty or nolo contendere is the basis 16 for the conviction and all proceedings in which the sentence has been 17 deferred or suspended, or” 18 (H) At the end of paragraph (9), strike the period after “real estate business 19 and insert “ , or”, and insert paragraphs (10) through (14) to read as follows: 20 “(10) failing to provide an agency disclosure to the buyer or seller, or 21 both in the case of dual agency. The writing must be made before or at the 22 time of entering into a listing agreement or an agreement for representation 23 or before showing of property, whichever occurs first, or 24 18 (11) knowingly committing, or being a party to any material fraud, 1 misrepresentation, concealment, conspiracy, collusion, trick, scheme, or 2 device, whereby any other person relies upon the word, representation or 3 conduct of the licensee, or 4 (12) discriminating against any person in hiring or in sales activity 5 based on race, color, religion, sex, disability, gender identity, or national 6 origin, or violating any of the provisions of any state or federal anti- 7 discrimination law. A certified copy of the final holding of any court of 8 competent jurisdiction in such matter, or a certified copy of the order issued 9 by any state or federal administrative agency having jurisdiction in such 10 matter, shall be conclusive evidence in any hearing conducted under this 11 chapter, or 12 (13) failing to exercise reasonable supervision over the activities of 13 licensees and any unlicensed staff, or 14 (14) failing to inform the Commission in writing within 30 days of a 15 conviction as described in paragraph (4).” 16 (4) Insert a subsection (c) that reads as follows: 17 “(c) If the licensee does not agree with the penalty imposed, the licensee 18 may appeal the penalty pursuant to the appeals process in 3 V.I.C. § 272(f).” 19 (n) Section 429a. is added to read as follows: 20 “§ 429a. Notice to Commission upon termination of Sales Associate for 21 statutory violation; Contests; Sanctions. 22 (a) The responsible real estate broker who discharges a sales associate for a 23 violation of any of the provisions of this chapter prescribing a ground for disciplinary 24 19 action, shall file a certified written statement of the facts concerning the violation with 1 the Commission within 24 hours. The failure of the responsible real estate broker to notify 2 the Commission as required by this section may result in the temporary suspension or 3 permanent revocation of the license of the responsible real estate broker, upon notice and 4 hearing. 5 (b) Whenever a sales associate is discharged or terminates the sponsorship, 6 employment, or contractual relationship with a real estate broker, the real estate broker, 7 not later than 15 calendar days after the discharge or termination, shall mail notification 8 to the Commission with a copy of the former Sales Associate’s license. A copy of this 9 notice must also be sent to the former sales associate. 10 (c) It is unlawful for any sales associate to perform any of the acts specified in 11 this chapter under authority of the license issued pursuant to this chapter, from the date 12 of discharge or termination until the sales associate is sponsored by another real estate 13 broker and a license is reissued by the Commissioner.” 14 (o) Section 430 is amended in the following instances: 15 (1) The introductory clause is amended by striking “Treasury of the Virgin 16 Islands” and inserting “General Fund of the Treasury of the Government of the Virgin 17 Islands”. 18 (2) Paragraph (1) is amended by striking all the language and inserting new 19 language to read as follows: 20 “For each examination for a Real Estate Broker’s License or Sales Associate 21 License, a fee not to exceed $350.”. 22 (3) Paragraph (2) is amended by striking “broker’s” and inserting “Real Estate 23 Broker’s”, and by striking “$200” and inserting “$365.”. 24 20 (4) Paragraph (3) is amended by striking “salesman’s” and inserting “Sales 1 Associate’s”, and by striking “$100” and inserting “$285”. 2 (5) Paragraph (4) is amended by striking “$80” and inserting “$100”. 3 (6) Paragraph (5) is amended by striking “$5” and inserting “$75”. 4 (7) Paragraph (6) is amended by striking “$2” and inserting “$50”. 5 (8) Strike paragraph (7) and insert a new paragraph (7) that reads as follows: 6 “(7) A non-refundable license application fee of $50 and a non-refundable 7 background check fee of $200.” 8 (9) Re-designate paragraphs (4) and (5) as paragraphs (8) and (9) and insert new 9 paragraphs (4) and (5) to read: 10 “(4) For the issuance or renewal of each Temporary Sales Apprentice 11 Permit, a fee of $130. 12 (5) For each brokerage business Office of Real Estate Agents and Brokers, 13 an annual fee of $450.” 14 (10) Designate the existing language as subsection (a) and add subsection (b) to 15 read as follows: 16 “(b) (1) The Commission may, by regulation, increase the fees under this 17 chapter but a regulation that increases the fees set forth in this chapter by more than 18 20% over a 5-year period is void. 19 (2) Subject to the increase limitation set forth in paragraph (1), the 20 Commissioner, in consultation with the Commission, may revise any fee 21 established by the Commission.” 22 (p) Section 431 is amended in the following instances: 23 21 (1) Subsection (a) is amended by striking “or a licensed real estate salesman” and 1 inserting “sales associate”, strike “broker or a salesman” and insert “real estate broker or 2 sales associate”. 3 (2) Strike the language in subsection (b) and replace with the following language: 4 “(b) (1) Except as otherwise provided in this chapter, it is unlawful for any 5 person to engage, or attempt to engage, either directly or indirectly, in the business 6 of, or act in the capacity of, real estate broker or sales associate, temporary or 7 otherwise, and no person shall advertise or represent themselves as being 8 authorized to act as a real estate broker or sales associate, or to engage in an activity 9 regulated by this chapter without a license. No person licensed under this chapter 10 may engage in any activity beyond the scope of their respective license. 11 (2) Any person who, after a hearing, shall be found by the Commission to 12 have unlawfully engaged, or attempted to engage, in a real estate transaction 13 regulated by this chapter, or any person who knowingly assisted a person to 14 unlawfully engage in such practice, shall be subject to a fine imposed by the 15 Commission of not more than $10,000 for each offense.” 16 (3) Subsection (c) is amended by striking “any of the provisions of this 17 chapter or any rules or regulations issued hereunder” and inserting “or knowingly 18 participates in the violation of subsection (b) or any of the provisions of section 429 19 or any regulations issued thereunder”, and by striking “fined not more than $500 or 20 imprisoned not more than six months or both” and inserting “guilty of a 21 misdemeanor punishable by a fine not to exceed $10,000 or by imprisonment not 22 to exceed six months, or by a fine and imprisonment.”. 23 22 SECTION 2. Any person or entity holding a license under this chapter on the effective 1 date of this act, upon renewal of the license, shall comply with chapter 15 of title 27 of the 2 Virgin Islands Code, as amended by section 1 of this act. 3 SECTION 3. The Virgin Islands Real Estate Commission shall, not later than 90 days 4 after the enactment of this act, promulgate regulations to reflect the amendments to chapter 15 5 of title 27 of the Virgin Islands Code under section 1 of this act. 6 BILL SUMMARY 7 Section 1 of this bill amends title 27, Virgin Islands Code, chapter 15 as follows: 8 In section 421, existing definitions were amended and new definitions were inserted 9 relating to real estate brokers, sales associates, and real estate transactions. 10 Section 422 was amended by making technical amendments and updating the powers and 11 duties of the Real Estate Commission (“Commission”) by giving the Commission the power 12 and duty to: hear testimony and receive evidence, and subpoena documents and witnesses as 13 it relates to resolving matters within the Commission’s jurisdiction; conduct all proceedings 14 and maintain records in accordance with the Virgin Islands Code and federal regulations 15 related to administrative procedures; promulgate its regulations in accordance with title 3, 16 chapter 35 of the Virgin Islands Code and update its regulations to establish the scopes of 17 practice for each license category and set standards for professional practice and continuing 18 education requirements; conduct all proceedings and maintain records in accordance with the 19 Virgin Islands Code and federal regulations related to administrative procedures; adopt a 20 professional code of ethics consistent with industry standards; set reasonable fees, except as 21 provided in 27 V.I.C.§430, for services provided by the Commission at the rates sufficient to 22 cover operating expenses incurred by the Commission in carrying out its functions; and 23 recommend to the Attorney General of the Virgin Islands prosecutions or the bringing of civil 24 23 actions to seek injunctions and other relief against violations of this chapter outside the 1 jurisdiction of the Commission. 2 Section 423 was repealed and reenacted with amendments requiring that all persons 3 engaging in the sale or purchase of real estate for others hold a valid Real Estate Broker license, 4 or when employed under the direct supervision of a licensed real estate broker, hold a Sales 5 Associate license; providing for exemptions from the licensure requirement, and retaining the 6 provision that any person who is a member of the Virgin Islands Bar shall, upon application 7 and a showing of his membership and a payment of the required fee, be issued any of the 8 licenses under the chapter and any renewals thereto. 9 The amendment to section 424 relates to the application for licensure and updates the 10 titles of the different real estate personnel. Section 424a. was added and establishes the 11 qualifications to obtain a license as a real estate broker or sales associate and setting forth 12 minimum age, citizenship, education, and examination requirements. The minimum age was 13 reduced from 21 to 18 for sales associates. The Virgin Islands residency requirement was 14 reduced from two years for a real estate broker and one year for a sales associate to ninety days 15 to conform to the residency period that has been required by the Commission for the past 15 16 years. Section 424a. also: disqualifies applicants, under certain circumstances, who have had 17 their licenses denied, suspended, or revoked; requires that a real estate broker applicant provide 18 proof that the applicant has actively participated in the general real estate brokerage business 19 in the Virgin Islands as a licensed sales associate or has had the equivalent experience in general 20 real estate business outside of the Virgin Islands for at least two years; and requires a sales 21 associate, prior to a license being issued, to be sponsored by a licensed real estate broker after 22 passing the written examination. 23 24 Section 425 was repealed and reenacted with amendments. The new language retains the 1 requirement that applicants pass a written examination and requires the Commission to adopt 2 examination requirements and be responsible for developing and updating any applicable 3 examination to remain current with the Virgin Islands Code and regulations; requires the 4 Commission to adopt reasonable education requirements in coordination with the Virgin 5 Islands Department of Education; removes the provision that required an applicant to wait six 6 months to re-take an examination that the applicant failed twice in succession to pass; and 7 established the topics that the written examination must cover for licensure as a real estate 8 broker and sales associate. 9 Section 426 was amended by allowing a license to be issued by e-mail and by making 10 technical amendments. Section 426a. was added and retains the language in the current law 11 pertaining to the Commission’s ability to issue a temporary sales apprentice permit. 12 Section 427 was amended by making technical amendments and by establishing the 13 requirements for license renewal and reinstatement. Sections 427a. was added and allows a 14 licensee to place his license into inactive status. Sections 427b. was added and establishes the 15 requirements for a licensee to participate in a dual agency relationship. Section 427c. was added 16 and establishes the fiduciary duties of a licensee in an agency relationship. Section 428 was 17 amended by replacing the language requiring each resident licensed real estate broker to 18 maintain a fixed office with language requiring each real estate broker to have a fixed office 19 location; requiring that certain notification requirements be followed when there is a change in 20 office location or discontinuation of business; providing the penalties for failure to comply with 21 the notification requirements; and making technical amendments. 22 Section 429 was amended by allowing the Commission to investigate complaints about 23 the actions of any person engaged in the business or acting in the capacity of a real estate 24 25 licensee, and allowing for the suspension or revocation of a license when a licensee: fails to 1 provide a client with a written agency disclosure within a certain time; violates a fiduciary duty; 2 commits fraud; engages in discrimination; fails to provide notice to the Commission within 30 3 days of a conviction of certain crimes; and fails to exercise reasonable supervision over staff. 4 This section was also amended to allow a licensee to appeal any adverse action under the 5 appeals process in 3 V.I.C. § 272(f) instead of to the Governor. Section 429a. was added and 6 establishes the notice requirements to be followed when a sales associate is discharged by their 7 responsible real estate broker for a violation of any of the provisions of chapter 15 prescribing 8 a ground for disciplinary action or is separated for other reasons. Section 430 was amended by 9 making technical amendments; increasing existing fees; allowing the Commission, by 10 regulation, to increase the fees under chapter 15 if the increase does not exceed 20% over a 11 five-year period; and allowing the Commissioner of DLCA to revise any fee established by the 12 Commission, in consultation with the Commission and subject to the increase limitation. 13 Section 431 was amended by making technical amendments, retaining the provision in 14 the current law prohibiting any person or entity from engaging in any of the real estate activities 15 provided in the chapter without first obtaining a license, and increasing the penalties for 16 violations. 17 Section 2 of this bill requires that any person or entity holding a license under chapter 15 18 of title 27 of the Virgin Islands Code, upon renewal of the license, comply with all provisions 19 of section 1 of this bill. 20 Section 3 requires the Commission within 90 days of enactment, to revise its regulations 21 to reflect the new provisions of this bill. 22 BR24-1262/October 15, 2024/GC 23