Major Legislative Win: Ohio REALTORS® Celebrate HB 466 Passage
In a significant legislative milestone for the real estate industry, HB 466 has passed both chambers of the Ohio Statehouse. This groundbreaking legislation, championed by Ohio REALTORS®, will require the use of written agency agreements between real estate professionals and their clients. The law will ensure clarity, consistency, and trust throughout the homebuying and selling processes in the state of Ohio.
Background and Purpose of HB 466:
As a result of the recent settlement by the National Association of REALTORS® (NAR), Realtors involved in MLS and assisting homebuyers will be required to enter into written agency agreements with their clients beginning on August 17th, 2024.
To address this change, Ohio REALTORS® advocated for standardizing this practice in state law, ensuring uniformity across Ohio’s real estate sector. By codifying this requirement, HB 466 will promote consistency among all real estate professionals, fostering transparency and mutual understanding in transactions.
Key Provisions of HB 466:
The core of HB 466 is the requirement for licensed brokers and salespersons to enter into written agreements with their clients before showing a property for a seller or presenting an offer for a buyer. This includes activities such as marketing or showing properties for sellers and making purchase offers for buyers. Written agreements must include the following key provisions:
- An expiration date,
- Information on fair housing and blockbusting laws,
- Whether the relationship is exclusive or nonexclusive,
- Terms of compensation, and
- A conspicuous statement that broker fees and commissions are not set by law, are fully negotiable, and may be paid by the seller, the buyer, the landlord, the tenant, or a third party, or by sharing or splitting the fees and commissions between brokers.
This law aligns Ohio with best practices already adopted in over 20 other states, including Indiana and Pennsylvania. Ohio REALTORS® has long advocated for the use of written representation agreements, and this legislation marks a significant achievement in our efforts to promote transparency in real estate transactions across Ohio. This approach will ensure that all parties have a clear understanding of their responsibilities, reducing the likelihood of disputes and fostering a more transparent market.
Advocacy Journey
Ohio REALTORS® began diligently working with lawmakers shortly after the NAR settlement was reached in March to provide clarity to the changing industry. With written agency agreements becoming a requirement for REALTORS®, they saw the need to establish a statewide standard for their usage to ensure that all real estate professionals operate under similar guidelines, regardless of whether they are REALTORS® or not.
Sponsored by Jean Schmidt (R-Loveland) and Representative Brennan (D-Parma), this bill was introduced to provide the necessary framework for standardizing this practice. Ohio REALTORS® focused their advocacy efforts on educating lawmakers on the importance of this legislation and the urgent need to pass it prior to industry changes take effect in August. The Ohio General Assembly responded, and HB 466 was expedited through the legislative process, passing through both chambers in less than three months after its introduction. The bill now heads to Governor DeWine’s desk for his signature.
