House passes RELRA amendments

On Tuesday, the state House of Representatives passed legislation to allow parties in a real estate transaction to reach an agreement in writing in advance as to how escrow money will be distributed in the event a dispute occurs.

Senate Bill 241 (Tomlinson, R-Bucks) passed the House and Senate by unanimous votes, and will be presented to Governor Rendell for his signature. The legislation also provides that associate brokers and salespersons may set up entities such as S corporations or limited liability companies (LLCs) to conduct their real estate business and receive commissions.

The legislation would require that only a licensee may own an entity that is paid a commission by the broker. The provisions in the bill will become effective 60 days after being signed by the Governor. Nothing in this bill requires real estate licensees to make any changes in their day-to-day practice; PAR will provide additional information over the next few months.