Session Scoop: April 19, 2024

Week 6 Report

There was a lot of action at the Capitol this week as the 2024 Legislative Session races towards its April 22nd halfway mark. 

The halfway mark is the time the House starts hearing Senate bills, the Senate starts hearing House bills, and the “money bills”, aka the state budget and state capital outlay program, begin wrapping up public testimony before heading to the House floor. Legislators are expecting many late nights over the next few weeks as they work through the important issues facing Louisiana and race towards the June 3rd finish line.

Read below for an update on just a few of the high-profile matters Louisiana REALTORS® watching as well as an in-depth summary of a few pieces of legislation of specific interest to REALTORS®.

High Profile Legislation Louisiana REALTORS® is Keeping An Eye On

• A package of bills to encourage a more competitive Louisiana property insurance market continued to successfully make their way through the legislative process
• Legislation to streamline the Louisiana Department of Economic Development (LED) so it can respond at the speed of business is set for Senate floor debate
• Many of Governor Landry’s key public records measures moved out of committee for debate by the Senate
• Critical legislation to address rampant legal system abuse moved forward
• The framework for an upcoming limited Constitutional Convention had its committee debut

REALTOR® Related Legislation Summaries

SB No. 322 by Senator Rick Edmonds

Status: Pending Senate floor action

Position: Support

Louisiana REALTORS® requested this legislation be filed to curb the predatory practice of what is commonly called the “40-year listing agreement”.

The bill would do this by making it an unfair trade practice to secure a right in a “real estate service agreement” with a mortgage or other encumbrance on a home. Additionally, the bill would provide a simple mechanism for individuals to petition courts to remove these encumbrances from a property title.

The bill defines a “real estate service agreement” as a document executed by a homeowner granting a broker the right to list their home for sale at any time the owner or their heirs want to sell it in exchange for compensating the homeowner. 

By signing these agreements, a homeowner -- usually unknowingly - grants a mortgage on their home to secure obligations in the agreement. And the only way to extinguish the mortgage is to pay the real estate broker holding it – whether the real estate broker listed the home for sale or not. 

These are not listing agreements, rights of first refusals, or options but instead a hybrid mish-mash of things that keep property out of commerce and increase the costs of the home-buying transaction. And must be reined in.

HB No. 366 by Representative Paula Davis

Status: Pending Senate Commerce, Consumer Protection and International Affairs

Position: Support

House Bill No. 959 pertains to a few matters that Louisiana REALTORS® identified as needing to be addressed over the past year or two.

For instance, Louisiana law often uses the term “real estate agent” which could be interpreted to not include a “real estate broker” due to the common practice of referring to “real estate salespersons” as “agents” and “real estate brokers” as “brokers”. 

If interpreted this way, real estate brokers could be held liable for certain things real estate salespersons would not be held liable for, real estate salespersons could be eligible for certain work real estate brokers may not be eligible for, and real estate brokers could not be qualified to serve on certain local entities while real estate salesperson could.

To prevent this from happening, this bill would amend the definition of “agent” in the real estate law to say that both “agent” and “real estate agent” mean a licensee acting under the provisions of the Louisiana Real Estate License Law in a real estate transaction.” 

The bill also would “clean up” a few issues with defined terms in the Louisiana Real Estate Licensing Law, such as amending the definition of “listing agent” to ensure it would only be read to mean someone licensed by LREC to engage in real estate transactions and not LREC licensed real estate education providers or continuing education vendors.

HB No. 959 by Representative Daryl Deshotel

Status: Scheduled to be heard in House Commerce, Monday, April 19, 2024

Position: Monitor

This bill would “sunset” the existence of professional and occupational licenses by setting a date for them to expire unless “renewed” by the passage of future legislation. This concept is referred to as “sunsetting”.

When the sunset concept was first implemented for state departments, each entity appeared before its legislative oversight committee to discuss department activities.  A bill would then be filed in the next legislative session to “renew” the department.  While these hearings are no longer a common occurrence, a bill is still filed to “renew” departments each time one is set to “sunset”.

Louisiana REALTORS® has no reason to believe the process of “sunsetting” professional and occupational licenses would work any differently and therefore has a neutral position on the bill.