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HB 1853

TREASURER-HIGHER EDUCATION

104th Regular Session Introduced by Curtis Tarver

Act 835 clarifies real estate licensees' fiduciary duties in Arkansas, enhancing client protection and defining dual agency obligations for ethical practices.

Rule 19(a) / Re-referred to Rules Committee
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Bill Summary · HB 1853

Summary of House Bill 1853 (Act 835)

Purpose and Intent

House Bill 1853, now known as Act 835, aims to amend existing laws regarding agency relationships and duties related to real estate licenses in Arkansas. The primary intent of the bill is to clarify the obligations of dual agency and enhance the understanding of fiduciary duties that real estate licensees owe to their clients.

Key Provisions

The bill introduces several significant changes to the Arkansas Code § 17-42-316, which governs agency relationships in real estate:

  1. Primary Duty of Fidelity:

    • Licensees have a primary duty of absolute fidelity to protect and promote the interests of their clients.
    • In cases of dual agency, where a licensee represents multiple clients, this duty can be waived if all parties consent.

  2. Duties of Licensees:

    • Licensees must:
      • Use reasonable efforts to further the interests of their clients.
      • Exercise reasonable skill and care in their representation.
      • Perform the terms of the written agency agreement.
      • Follow lawful instructions from the client, unless it exposes them to liability.
      • Disclose material facts of the transaction that are not confidential.
      • Advise clients to seek expert advice when necessary.
      • Account for all moneys and property received related to the client's interests.
      • Keep confidential information secure, with specific provisions for dual agency situations.

  3. Confidentiality:

    • Licensees must refrain from disclosing confidential information unless authorized by the client or required by law.
    • The bill specifies that confidentiality obligations cannot be waived by clients, except under the conditions outlined for dual agency.

Affected Parties

This legislation primarily affects:
- Real Estate Licensees: Those who operate within the real estate market in Arkansas will need to adhere to the updated fiduciary duties and obligations.
- Clients of Real Estate Licensees: Individuals and entities engaging the services of real estate professionals will benefit from clearer definitions of their rights and the responsibilities of their agents.

Procedural Timeline

  • Introduced: March 19, 2025
  • Passed by House: April 3, 2025
  • Passed by Senate: April 14, 2025
  • Enrolled and Transmitted to Governor: April 15, 2025
  • Notification of Act 835: April 17, 2025

Conclusion

House Bill 1853 (Act 835) serves to modernize and clarify the legal framework surrounding agency relationships in real estate transactions in Arkansas. By defining the obligations of dual agency and reinforcing the fiduciary duties of licensees, the bill aims to protect the interests of clients and ensure ethical practices within the industry.

Compiled from official sources — confirm details with the bill’s official record.

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