A bill establishing new minimum service requirements for all real estate licensees in Tennessee unless such duties are waived in writing has passed the state legislature and is expected to be signed by the governor.

Senate Bill 2897 mandates that licensees assist clients by showing properties, receiving all offers and forwarding them to the client, answering clients’ questions during negotiations and advising them on what is needed for a successful closing – unless those duties “are specifically and individually waived in writing by a client.”

The bill, sponsored by State Sen. Jamie Woodson, R-Knoxville, also establishes that the negotiation and execution of either an exclusive agency listing agreement or an exclusive right to sell listing agreement with a seller establishes an agency relationship with the seller.

Tennessee Gov. Phil Bredesen is expected to sign the bill, according to Alexanderia Honeycutt, a research analyst for Sen. Woodson.

The initial version of the bill did not have the opt-out provision in which clients can waive the duties in writing. The amended version, allowing clients to waive the duties, passed both the Tennessee House and Senate and has gone to the governor.

The subject of minimum real estate services has been prominent in the news lately. In November 2005, the Department of Justice advised the New Mexico Real Estate Commission to reject proposed amendments to the New Mexico administrative code that, the DOJ said, “would limit a consumer’s freedom to choose which real estate services to buy and could cause New Mexico consumers to pay more for real estate brokerage services.”

The amendment removed a written waiver provision in the code similar to the one provided for in the Tennessee bill. Despite the DOJ’s intervention, the New Mexico Real Estate Commission in February voted to approve the measure.

In February, Kentucky legislators stripped provisions from a proposed bill that sought to establish new service requirements for all real estate licensees in the state. The Kentucky Real Estate Commission proposed the legislation, which, among other things, would have mandated that agents receive property offers, according to Norman Brown, executive director for the commission.

Legislation and real estate regulations seeking to establish new service requirements have been proposed in several other states — and opposed by federal agencies, which have said such measures can restrict consumer choice and have an anticompetitive effect on the real estate marketplace.

Supporters have said that the measures are needed to prevent confusion by consumers and other real estate agents who attempt to work with real estate licensees that offer limited real estate services, such as the placement of a property in a multiple listing service for a flat fee.

Also, supporters have said that the measures seek to reinforce laws of agency that are intended to ensure that consumers receive some basic level of service from real estate professionals.

Meanwhile, opponents have questioned why state officials would seek to limit the available real estate service options for consumers and potentially drive up the cost of real estate services. In several cases, state legislators and governors have approved minimum-service legislation even after federal agencies announced opposition to the measures.

Realtor trade groups have typically backed the legislation measures.

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