HB 986 — An Act providing for transparency in realty agreements; prohibiting unfair real estate service agreements; and imposing penalties.

PRINTER'S NO.    1076

                    THE GENERAL ASSEMBLY OF PENNSYLVANIA



                         HOUSE BILL
                         No. 986
                                                Session of
                                                  2025

     INTRODUCED BY CEPHAS, MADDEN, SANCHEZ, HILL-EVANS, PIELLI,
        GIRAL, KHAN, CERRATO AND NEILSON, MARCH 20, 2025

     REFERRED TO COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT,
        MARCH 20, 2025


                                     AN ACT
 1   Providing for transparency in realty agreements; prohibiting
 2      unfair real estate service agreements; and imposing
 3      penalties.
 4      The General Assembly of the Commonwealth of Pennsylvania
 5   hereby enacts as follows:
 6   Section 1.   Short title.
 7      This act shall be known and may be cited as the Unfair Real
 8   Estate Service Agreements Act.
 9   Section 2.   Definitions.
10      The following words and phrases when used in this act shall
11   have the meanings given to them in this section unless the
12   context clearly indicates otherwise:
13      "Association."     As defined under 15 Pa.C.S. § 102 (relating
14   to definitions).
15      "Consumer."     A person who is the recipient or anticipated
16   recipient of a real estate service.
17      "Person."   A natural person, corporation, corporate
18   fiduciary, partnership, limited partnership, limited liability
 1   company, joint venture or association.
 2      "Real estate service."     As defined under section 201 of the
 3   act of February 19, 1980 (P.L.15, No.9), known as the Real
 4   Estate Licensing and Registration Act.
 5      "Real estate service agreement."     A contract under which a
 6   real estate service provider agrees to provide a real estate
 7   service to a consumer.
 8      "Real estate service provider."      A person providing or who is
 9   anticipated to provide a real estate service to a consumer
10   pursuant to a real estate service agreement.
11      "Recording."     Presenting a document to a county recorder of
12   deeds for official placement in the public land records.
13      "Unfair real estate service agreement."     A real estate
14   service agreement that:
15            (1)   purports to run with the land or to be binding on
16      future owners of interests in the real property;
17            (2)   purports to create or allow a lien, encumbrance or
18      other security interest in the property; or
19            (3)   allows for the agreement to be assigned without
20      timely notification to the owner of the property.
21   Section 3.     Unfair real estate service agreements.
22      (a)   Enforceability.--An unfair real estate service agreement
23   is void and unenforceable as a matter of law.
24      (b)   Deceptive act.--An unfair real estate service agreement
25   entered into with a consumer shall be deemed a deceptive act
26   under the act of December 17, 1968 (P.L.1224, No.387), known as
27   the Unfair Trade Practices and Consumer Protection Law.
28      (c)   Recording prohibited.--
29            (1)   A person may not record or cause to be recorded an
30      unfair real estate service agreement or notice or memorandum

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 1      of an unfair real estate service agreement in this
 2      Commonwealth.
 3            (2)   A person who violates paragraph (1) shall be guilty
 4      of a misdemeanor of the third degree.
 5            (3)   If an unfair real estate service agreement is
 6      recorded in this Commonwealth, it shall not provide actual or
 7      constructive notice against an otherwise bona fide purchaser
 8      or creditor.
 9      (d)   Recording of court order.--If an unfair real estate
10   service agreement or a notice or memorandum of an unfair real
11   estate service agreement is recorded in this Commonwealth, a
12   party with an interest in the real property that is the subject
13   of the agreement may apply to the court of jurisdiction in the
14   county where the recording exists to record a court order
15   declaring the agreement unenforceable.
16      (e)   Right of recovery.--
17            (1)   A consumer with an interest in real property that is
18      the subject of an unfair real estate service agreement,
19      whether or not any lien or other notice is filed against the
20      property in the office of the county recorder of deeds, may
21      bring a civil action against the real estate service
22      provider. Relief shall include, but not be limited to:
23                  (i)    Preliminary and other equitable or declaratory
24            relief as may be appropriate.
25                  (ii)    An order that the consumer is not required to
26            repay or reimburse any money paid to the consumer by the
27            real estate services provider.
28                  (iii)    Actual damages suffered by the consumer, as
29            follows:
30                         (A)   Except as provided under clause (B), damages

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 1                  shall equal the amount of damages suffered by the
 2                  consumer or $5,000, whichever amount is greater.
 3                         (B)   If the consumer is 60 years of age or older,
 4                  damages shall equal the amount of damages suffered by
 5                  the consumer or $15,000, whichever amount is greater.
 6                  (iv)    Reasonable attorney fees and other litigation
 7            costs reasonably incurred.
 8            (2)   This section shall not replace or supersede any
 9      other remedy at law or equity that the consumer may have.
10      (f)   Relationship to other laws.--Nothing in this section
11   shall alter or amend any part of the act of February 19, 1980
12   (P.L.15, No.9), known as the Real Estate Licensing and
13   Registration Act.
14   Section 4.     Penalties.
15      (a)   Unenforceability and violation of other State law.--If a
16   violation of section 3 occurs, the realty agreement shall be
17   deemed unenforceable and the violation shall constitute an
18   unfair method of competition and an unfair or deceptive act or
19   practice under the act of December 17, 1968 (P.L.1224, No.387),
20   known as the Unfair Trade Practices and Consumer Protection Law.
21      (b)   Damages.--In addition to the penalties specified under
22   the Unfair Trade Practices and Consumer Protection Law, a real
23   estate professional found to be in violation of this act shall
24   be subject to actual damages incurred by any person with an
25   interest in the residential real property that is the subject of
26   the unenforceable realty agreement, including reasonable costs
27   and attorney fees.
28   Section 5.     Effective date.
29      This act shall take effect in 60 days.



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