DOS-39-16-00005-P Requirements Regarding Brokers Receiving Funds, Course Subjects and Hours, and Business Cards

9/28/16 N.Y. St. Reg. DOS-39-16-00005-P

NEW YORK STATE REGISTER

VOLUME XXXVIII, ISSUE 39

September 28, 2016

RULE MAKING ACTIVITIES

DEPARTMENT OF STATE

PROPOSED RULE MAKING

NO HEARING(S) SCHEDULED

I.D No. DOS-39-16-00005-P

Requirements Regarding Brokers Receiving Funds, Course Subjects and Hours, and Business Cards

PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following proposed rule:

Proposed Action:

Amendment of sections 175.1, 175.7, 175.25(d)(2), 176.3(a), 177.3(g) and 177.7 of Title 19 NYCRR.

Statutory authority:

Executive Law, section 91; Real Property Law, section 442-k(1)

Subject:

Requirements regarding brokers receiving funds, course subjects and hours, and business cards.

Purpose:

To provide clarity regarding brokers obligations when receiving compensation, instruction requirements, and business cards.

Text of proposed rule:

Section 175.1 of Title 19 NYCRR is amended to read as follows:

Section 175.1. Commingling money of principal.

A real estate broker shall not commingle the money or other property of his principal with his own and shall at all times maintain a separate, special bank account to be used exclusively for the deposit of said monies and which deposit shall be made [as promptly as practicable] within three business days. Until such time as the money is deposited into a separate, special bank account, it shall be safeguarded in a secure location so as to prevent loss or misappropriation. Said monies shall not be placed in any depository, fund or investment other than a federally insured bank account. Accrued interest, if any, shall not be retained by, or for the benefit of, the broker except to the extent that it is applied to, and deducted from, earned commission, with the consent of all parties.

Section 175.7 of Title 19 NYCRR is amended to read as follows:

Section 175.7. Compensation.

A real estate broker shall make it clear for which party he is acting and he shall not receive compensation from more than one party except with the full knowledge and consent of [all parties] the broker’s client.

Section 176.3(a) of Title 19 NYCRR is amended to read as follows:

Section 176.3. Subjects for study--real estate salespersons.

(a) The following are the required subjects to be included in the course of study in real estate for licensure as a real estate salesperson, and the required number of hours to be devoted to each subject:

Salesperson's Course
Subject Matter:	Hours:
License Law and Regulations	3
Law of Agency	11
Legal Issues	10
The Contract of Sales and Leases	3
Real Estate Finance	5
Land Use Regulations	3
Construction and Environmental Issues	5
Valuation Process and Pricing Properties	3
Human Rights and Fair Housing	4
Real Estate Mathematics	1
Municipal Agencies	2
Property Insurance	[2] 1
License Safety	1
Taxes and Assessments	3
Condominiums and Cooperatives	4
Commercial and Investment Properties	10
Income Tax Issues in Real Estate Transactions	3
Mortgage Brokerage	1
Property Management	2
Instruction	75
Final Examination	3
TOTAL	78

Section 177.3(g) of Title 19 NYCRR is amended to read as follows:

(g) a detailed outline of the subject matter of each course or seminar containing at least 22½ hours of instruction, or of each course module containing at least [three hours] one hour of instruction, together with the time sequence of each segment thereof, the faculty for each segment, and teaching techniques used in each segment;

Section 177.7 of Title 19 NYCRR is amended to read as follows:

Section 177.7. Computation of instruction time.

To meet the minimum statutory requirement, attendance shall be computed on the basis of an hour equaling [60] 50 minutes.

Section 175.25(d)(2) of Title 19 NYCRR is amended to read as follows:

Section 175.25. Business cards.

(2) Notwithstanding subdivision (c) of this section, business cards must contain the business address of the licensee, license type, and the name of the real estate broker or real estate brokerage with whom the associate real estate broker or real estate salesperson is associated. All business cards must also contain the office telephone number for the associate real estate broker, real estate salesperson or team.

Text of proposed rule and any required statements and analyses may be obtained from:

David A. Mossberg, NYS Dept. of State, 123 William St., 20th Fl., New York, NY 10038, (212) 417-2063, email: david.mossberg@dos.ny.gov

Data, views or arguments may be submitted to:

Same as above.

Public comment will be received until:

45 days after publication of this notice.

Regulatory Impact Statement

1. Statutory authority:

Real Property Law § 442-k(1) (“NY RPL”) authorizes, in part, the New York State Department of State (the “Department”) and the State Real Estate Board (the “Board”) to promulgate regulations regarding real estate brokers and salespersons. To fulfill this purpose, the Department and the Board have issued rules and regulations which are found at Part 175 of Title 19 NYCRR and are proposing this rule.

2. Legislative objectives:

Article 12-A of the NY RPL protects consumers by ensuring competency of real estate brokers and salespeople. These proposed regulations further legislative objectives in the following ways: By ensuring that principal money entrusted to a licensee is safely secured pending the closing or abandonment of the transaction, and ensuring that brokers and salespeople disclose sources of compensation to their clients, the legislative objective of consumer protection is furthered. By requiring mandatory course instruction in License Safety, the legislative objectives of ensuring competent licensees will be furthered, because it will provide such licensees with the knowledge needed to safely interact with the public; this knowledge is equally beneficial to the public as it is to the licensee. By requiring license type on broker and salesperson business cards, the legislative objectives of protecting consumers against misleading practices is furthered.

3. Needs and benefits:

19 NYCRR 175.1 currently requires real estate brokers to deposit principal money “as promptly as practicable.” This vague requirement has resulted in confusion in the industry. As a result, there are divergent opinions by licensees as to when principal money must be deposited and what must be done prior to the deposit to safeguard this money. To provide necessary clarification the Department is proposing the instant rule.

19 NYCRR 175.7 currently requires brokers to obtain consent from “all parties” prior to receiving compensation from multiple parties. In working with the industry, the Department has been advised that the current regulation has been used as a basis to discourage or deny a buyer’s broker representation in a particular transaction. The proposed rule change will help protect buyer’s brokers and encourage meaningful participation in real estate transactions. Accordingly, to aid buyers by helping ensure they can be represented by a broker of their choosing, the Department is proposing the instant rule.

19 NYCRR 176.3 currently requires real estate courses of study to devote 2 hours to Property Insurance and does not include License Safety as a required subject. The Department has been advised of reports of real estate brokers and salespersons being victims of robberies and other crimes while conducting broker-related duties. The proposed rule change will provide lessons to licensees with respect to awareness of surroundings and safety while conducting broker-related duties. Accordingly, to increase broker and salesperson safety, the Department is proposing the instant rule.

19 NYCRR 177.3(g) currently requires that requests for approval of courses of study include a form which shall include, inter alia, a detailed outline of the subject matter of each course or seminar containing at least 22 and ½ hours of instruction or a detailed outline of each course module containing at least three hours of instruction. However, course module hours comprising the 22 and ½ minimum could only last one hour. The proposed rule change will permit outlines for course modules containing at least one hour of instruction to reflect, in part, the proposal contained herein regarding safety as well as other courses already required which only require one hour of education. Accordingly, to permit outlines of course modules that last only one hour, the Department is proposing the instant rule.

19 NYCRR 177.7 currently requires real estate course attendance to be computed on the basis of an hour equaling 60 minutes. The Department has been advised that computing increments of sixty minutes is less efficient than computing increments of fifty minutes. The proposed rule change will require attendance to be computed on the basis of an hour equaling 50 minutes. Accordingly, to facilitate the efficient use of technology and resources, the Department is proposing the instant rule.

19 NYCRR 175.25(d)(2) currently does not require brokers and salespersons to display their license type on their business cards. Business cards constitute the most immediate and commonly used means by which consumers can view the credentials authorizing individuals to provide real estate broker or salesperson services. By requiring the display of the license type on business cards, the proposed rule will safeguard consumers against misleading information being provided by licensees. The proposed rule will also add clarity to the public regarding a salesperson association with a particular brokerage. Accordingly, to protect consumers the Department is proposing the instant rule.

4. Costs:

a. Costs to regulated parties:

Because the proposed amendment to Section 175.1 does not affect the current requirement that real estate brokers retain an escrow account for the deposit of a principal’s money, the Department does not anticipate that it will impose any new costs upon real estate brokers. Because the proposed amendment to Section 175.7 solely requires the consent of the broker’s client rather than all parties, where a broker receives compensation from more than one party, the Department does not anticipate that it will impose any new costs upon real estate brokers. Because the proposed amendment to Section 176.3(a) rearranges the required number of hours for two subjects, the Department does not anticipate that it will impose any new costs upon real estate brokers. Because the proposed amendment to Section 177.3 changes the minimum amount of instruction that a course approval request can describe in an outline of a single course module, the Department does not anticipate that it will impose any new costs upon real estate brokers. Because the proposed amendment to Section 177.7 makes the computation of attendance more efficient, the Department does not anticipate that it will impose any new costs upon real estate brokers. Because the proposed amendment to Section 177.25(d)(2) requires additional or possibly new information to be printed on some licensee’s business cards, the Department anticipates that a nominal cost to comply with this proposal may be incurred. The Department estimates that purchasing new business cards could cost as little as $10.00 for 500 cards.

b. Costs to the Department of State:

The Department does not anticipate any additional costs to implement the rule. Existing staff will handle answering questions about the new escrow requirements, disclosure obligations, the number of subject hours required for courses of study, the new course module length permitted to be outlined in a course approval request, computation of attendance and information displayed on business cards. In addition, existing enforcement staff will investigate and enforce compliance with the proposed rules.

5. Local government mandates:

The rule does not impose any program, service, duty or responsibility upon any county, city, town, village, school district or other special district.

6. Paperwork:

19 NYCRR 175.1 currently requires real estate brokers to place money belonging to a principal into an escrow account. The proposed rule will continue this requirement while making amendments to the existing regulation to better define when the money must be deposited and the steps which must be taken in the interim to safeguard the money. It is anticipated that brokers will need to maintain account ledgers to track the deposit and withdrawal of escrow money and will need to submit deposit and withdrawal slips to financial institutions to complete these tasks.

19 NYCRR 175.7 currently requires real estate brokers and salespeople to make affirmative disclosures to all parties to a transaction prior to accepting compensation for services. The proposed rule will ease current obligations including paperwork by reducing the number of consents a regulated individual is required to obtain.

19 NYCRR 176.3 currently requires real estate courses of study as a salesperson to devote 2 hours to Property Insurance and does not include License Safety as a required subject. Although it is anticipated that owners of courses of study will have to draft instructional coursework with respect to License Safety, this may be mitigated by the reduction in any paperwork related to the decrease in hours required for Property Insurance.

19 NYCRR 177.7 currently requires real estate course attendance to be computed on the basis of an hour equaling 60 minutes. The Department has been advised that computing increments of sixty minutes is less efficient than computing increments of fifty minutes. The proposed rule change will require attendance to be computed on the basis of an hour equaling 50 minutes. By changing the computation of attendance to increments of 50 minutes, the administration of paperwork will be made more efficient and, therefore, will be reduced. No additional paperwork is therefore required by this proposal.

19 NYCRR 175.25(d)(2) currently does not require brokers and salespersons to display their license type on their business cards. Any resulting increase in paperwork would be negligible given that the proposed amendment only requires additional type on business cards that were already being produced and circulated by brokers as a matter of common business practice.

7. Duplication:

This rule does not duplicate, overlap or conflict with any other state or federal requirement.

8. Alternatives:

In preparing this proposed rule making, the Department, worked closely with the Board to consider different alternatives. The Department contemplated not proposing 19 NYCRR 175.1, but determined that the existing regulation did not provide required clarity on when principal money must be deposited and did not explain the need to safeguard this money prior to deposit into escrow. The Department has also learned that there is confusion and divergent interpretations of these requirements throughout the State. The Department considered not amending Section 175.7, but was concerned that if remained unchanged, buyers may become disadvantaged if the current regulation remained a tool to discourage or deny buyers’ brokers. The Department considered not amending 19 NYCRR 176.3, but was concerned that broker and salesperson safety would continue to be at risk. The Department considered not amending 19 NYCRR 177.3(g), but determined that real estate course approval requests would be improved by permitting outlines for shorter course modules containing at least one hour of instruction. The Department considered not amending 19 NYCRR 177.7, but was concerned that requiring attendance computation on the basis of an hour equaling 60 minutes, rather than the proposed 50 minutes, was inefficient. The Department also considered not amending 19 NYCRR 175.25(d)(2), but determined that requiring the listing of license types on broker and salesperson business cards would that this proposal was necessary to clarify existing advertising rules as well as protect the public from possibly misleading information. The Department also considered making the rule effective immediately upon adoption yet ultimately determined that a delayed effective date would provide adequate time to notify and educate licensees about the new requirements and would afford the Department sufficient time to modify its existing procedures so as to implement and enforce the rule.

9. Federal standards:

There are no federal standards relating to this rule.

10. Compliance schedule:

The rule will be effective 60 days following publication of the notice of adoption to afford sufficient time to notify and educate licensees on the new requirements.

Regulatory Flexibility Analysis

1. Effect of rule:

The rule will apply to licensed real estate brokers and salespeople. The Department of State (the “Department”) currently licenses approximately 126,028 real estate professionals, many of whom operate small businesses.

The rule does not apply to local governments.

2. Compliance requirements:

19 NYCRR 175.1 currently requires real estate brokers to place transaction deposits into an escrow account. The proposed rule adds needed clarity by providing a timeframe for the required deposit and the steps which must be taken prior to the deposit to safeguard said deposit. 19 NYCRR 175.7 currently requires disclosure and consent of all parties to a transaction prior to a broker and/or salesperson accepting compensation. The proposed rule clarifies that a broker or salesperson must obtain consent of their client prior to receiving compensation.19 NYCRR 176.3 currently requires real estate courses of study as a salesperson to devote 2 hours to Property Insurance and does not include License Safety as a required subject. Reducing the Property Insurance minimum to one hour enhances broker and salesperson safety, while maintaining the necessary instruction relating to Property Insurance as well as the regulatory requirement of 78 minimum subject hours. 19 NYCRR 177.3 (g) currently requires that requests for approval of courses of study include a form which shall include, inter alia, a detailed outline of the subject matter of each course or seminar containing at least 22 and ½ hours of instruction or a detailed outline of each course module containing at least three hours of instruction. The proposed rule change will permit outlines for shorter course modules containing at least one hour of instruction. 19 NYCRR 177.7 currently requires real estate course attendance to be computed on the basis of an hour equaling 60 minutes. The proposed rule change increases efficiency by requiring attendance to be computed on the basis of an hour equaling 50 minutes. 19 NYCRR 175.25 (d)(2) currently does not require brokers and salespersons to display their license type on their business cards. The proposed rule will better inform the public about who they are dealing with if such information is required to be printed on a licensee’s business card.

3. Professional services:

Real estate brokers will not need to rely on professional services to comply with the requirements of the proposed amendment to Section 175.1. Brokers are currently required to maintain an escrow account if they collect money from a principal. For those who do not, any needed assistance may be obtained from the financial institution where the account will be held.Real estate brokers will not need to rely on professional services to comply with the requirements of the proposed amendment to Section 175.7. Requiring brokers to receive consent only from the broker’s client prior to receiving compensation from multiple parties does not require professional services. Real estate brokers will not need to rely on professional services to comply with the requirements of the proposed amendment to Section 176.3. Real estate brokers will not need to rely on professional services to comply with the requirements of the proposed amendment to Section 177.3 (g). Real estate brokers will not need to rely on professional services to comply with the requirements of the proposed amendment to Section 177.7. Real estate brokers will not need to rely on professional services to comply with the requirements of the proposed amendment to Section 175.25 (d)(2).

4. Compliance costs:

Because the proposed amendment to Section 175.1 does not affect the current requirement that real estate brokers retain an escrow account for the deposit of a principal’s money, the Department does not anticipate that it will impose any new costs upon real estate brokers. Because the proposed amendment to Section 175.7 solely requires the consent of the broker’s client rather than all parties, where a broker receives compensation from more than one party, the Department does not anticipate that it will impose any new costs upon real estate brokers. Because the proposed amendment to Section 176.3 (a) rearranges the required number of hours for two subjects, the Department does not anticipate that it will impose any new costs upon real estate brokers. Because the proposed amendment to Section 177.3 changes the minimum amount of instruction that a course approval request can describe in an outline of a single course module, the Department does not anticipate that it will impose any new costs upon real estate brokers. Because the proposed amendment to Section 177.7 makes the computation of attendance more efficient, the Department does not anticipate that it will impose any new costs upon real estate brokers. Because the proposed amendment to Section 177.25 (d)(2) requires additional or possibly new information to be printed on some licensee’s business cards, the Department anticipates that a nominal cost to comply with this proposal may be incurred. The Department estimates that purchasing new business cards could cost as little as $10.00 for 500 cards.

5. Economic and technological feasibility:

The Department has determined that it will be economically and technologically feasible for small businesses to comply with 19 NYCRR 175.1. Because the proposed rule making amends the regulation to better define the timing requirements to deposit a principal’s funds into an escrow account and the prior steps which must be taken to safeguard these funds, it does not increase the costs of doing business. Compliance will be technologically feasible because real estate brokers, including those working for small businesses, will not have to rely on special technology to conform their business practices to the requirements of the proposed rule making.

The Department has determined that it will be economically and technologically feasible for small businesses to comply with 19 NYCRR 175.7. Because the proposed rule making requires the consent of the broker’s client as opposed to all parties to the transaction, it will not increase costs to real estate brokers, including those working for small businesses. Compliance will be technologically feasible because real estate brokers, including those working for small businesses, will not have to rely on special technology to conform their business practices to the requirements of the proposed rule making.

The Department has determined that it will be economically and technologically feasible for small businesses to comply with 19 NYCRR 176.3 (a). Because the proposed rule making simply rearranges the required number of hours for two subjects, the Department does not anticipate that it will impose any costs upon real estate brokers, including those working for small businesses. The Department has determined that it will be economically and technologically feasible for small businesses to comply with 19 NYCRR 177.3 (g). The existing rule already allows a detailed outline of at least three hours of the instruction contained in a course module set forth for approval. Because the proposed rule making simply permits outlines of at least one hour, it does not impose costs on real estate brokers, including those who work for small businesses. The Department has determined that it will be economically and technologically feasible for small businesses to comply with 19 NYCRR 177.3 (g). Because the proposed rule making makes the computation of attendance more efficient by changing the increment of measuring attendance to 50 minutes, it does not impose costs on real estate brokers, including those who work for small businesses.

The Department has determined that it will be economically and technologically feasible for small businesses to comply with 19 NYCRR 175.25 (d)(2). Because the printing of business cards is common practice among real estate brokers, including those in small businesses, adding license type to the information already presented on business cards does not impose significant costs. It will also be technologically feasible for small businesses to comply with the proposed rule given that the rule making simply requires added type on business cards.

6. Minimizing adverse impact:

The Department has not identified any adverse economic impact associated with 19 NYCRR 175.1. Rather, the proposed rule should have a positive economic impact by ensuring that money belonging to a principal is safety secured once tendered to a real estate broker. This will help prevent the loss or diversion of these moneys and prevent any potential lawsuits resulting from said loss. The Department has not identified any adverse economic impact associated with 19 NYCRR 175.7. Rather, the proposed rule should have a positive economic impact on brokers by encouraging broker participation in transactions. The Department has not identified any adverse economic impact associated with 19 NYCRR 176.3 (a). The one hour of License Safety required for course of study approval in the proposed rule is offset by its one hour reduction in required hours devoted to Property Insurance. The Department has not identified any adverse economic impact associated with 19 NYCRR 177.3. There are no adverse impacts associated with expanding the minimum amount of instruction that a course approval request can outline for a single course module. The Department has not identified any adverse economic impact associated with 19 NYCRR 177.7. Rather, the proposed rule should have a positive economic impact by increasing the efficiency of the computation of course attendance. The Department has not identified any adverse economic impact associated with 19 NYCRR 177.25 (d)(2). The cost to brokers associated with design and printing of new business cards is nominal and is needed to provide greater clarity to the public.

7. Small business participation:

Prior to proposing the rule, the Department discussed the rules at several meetings of the NYS Board of Real Estate (the “Board”), which meetings are open to the public and contain a public comment period. No comments were received. The Department of State will continue its outreach after the rule is formally proposed as a Notice of Proposed Rule Making in the State Register. The publication of the rule in the State Register will provide additional notice to interested parties. Additional comments will be received and entertained by the Department.

8. Compliance:

The rule will be effective sixty (60) days following publication of the Notice of Adoption.

9. Cure Period:

The Department is not providing for a cure period prior to enforcement of these regulations. The proposed rule making will be effective sixty (60) days following publication of the Notice of Adoption. Prior to proposing this rule, the Department notified regulated parties about the new requirements discussing it at open meetings of the Board. As such, licensees have been given adequate notice of the proposed regulation and sufficient time within which to amend their businesses practices so as to comply with the requirements of the proposed rule.

Rural Area Flexibility Analysis

1. Effect of the rule:

The rule will apply to individuals licensed pursuant to Article 12-A of the NY Real Property Law (“NY RPL”). The Department of State (the “Department”) currently licenses approximately 126,028 real estate professionals, some of whom work in rural areas. This proposal does not impose different or additional requirements for individuals in rural areas of the state.

2. Compliance requirements:

19 NYCRR 176.3 currently requires real estate courses of study as a salesperson to devote 2 hours to Property Insurance and does not include License Safety as a required subject. By reducing the Property Insurance minimum to one hour, broker and salesperson safety will be enhanced while maintaining the necessary instruction relating to Property Insurance as well as the regulatory requirement of 78 minimum hours.

19 NYCRR 175.25 (d)(2) currently does not require brokers and salespersons to display their license type on their business cards. The proposed rule will provide protect the public against misleading information from licensees.

3. Professional services:

Licensees will not need to rely on professional services to comply with the requirements of the proposed amendment to Section 175.1. Brokers are currently required to maintain an escrow account if they collect money from a principal. For those who do not, any needed assistance may be obtained from the financial institution where the account will be held.

Licensees will not need to rely on professional services to comply with the requirements of the proposed amendment to Section 175.7. Requiring brokers to receive consent only from the broker’s client prior to receiving compensation from multiple parties does not require professional services.

Licensees will not need to rely on professional services to comply with the requirements of the proposed amendment to Section 176.3. Adding License Safety as a subject requirement and limiting the required hours of Property Insurance as a subject to one hour is self-explanatory and compliance does not require professional services.

Licensees will not need to rely on professional services to comply with the requirements of the proposed amendment to Section 177.3 (g).

Licensees will not need to rely on professional services to comply with the requirements of the proposed amendment to Section 177.7.

Licensees will not need to rely on professional services to comply with the requirements of the proposed amendment to Section 175.7 (d)(2).

4. Compliance costs:

Because the proposed amendment to Section 175.1 does not affect the current requirement that real estate brokers retain an escrow account for the deposit of a principal’s money, the Department does not anticipate that it will impose any new costs upon real estate brokers. Because the proposed amendment to Section 175.7 solely requires the consent of the broker’s client rather than all parties, where a broker receives compensation from more than one party, the Department does not anticipate that it will impose any new costs upon real estate brokers. Because the proposed amendment to Section 176.3 (a) rearranges the required number of hours for two subjects, the Department does not anticipate that it will impose any new costs upon real estate brokers. Because the proposed amendment to Section 177.3 changes the minimum amount of instruction that a course approval request can describe in an outline of a single course module, the Department does not anticipate that it will impose any new costs upon real estate brokers. Because the proposed amendment to Section 177.7 makes the computation of attendance more efficient, the Department does not anticipate that it will impose any new costs upon real estate brokers. Because the proposed amendment to Section 177.25 (d)(2) requires additional or possibly new information to be printed on some licensee’s business cards, the Department anticipates that a nominal cost to comply with this proposal may be incurred. The Department estimates that purchasing new business cards could cost as little as $10.00 for 500 cards.

5. Minimizing adverse impacts:

The Department has not identified any adverse economic impact associated with 19 NYCRR 175.1. Rather, the proposed rule should have a positive economic impact by ensuring that money belonging to a principal is safety secured once tendered to a real estate broker. This will help prevent the loss or diversion of these moneys and prevent any potential lawsuits resulting from said loss. The Department has not identified any adverse economic impact associated with 19 NYCRR 175.7. Rather, the proposed rule should have a positive economic impact on brokers by encouraging broker participation in transactions. The Department has not identified any adverse economic impact associated with 19 NYCRR 176.3 (a). The one hour of License Safety required for course of study approval in the proposed rule is offset by its one hour reduction in required hours devoted to Property Insurance. The Department has not identified any adverse economic impact associated with 19 NYCRR 177.3. There are no adverse impacts associated with expanding the minimum amount of instruction that a course approval request can outline for a single course module. The Department has not identified any adverse economic impact associated with 19 NYCRR 177.7. Rather, the proposed rule should have a positive economic impact by increasing the efficiency of the computation of course attendance. The Department has not identified any adverse economic impact associated with 19 NYCRR 177.25(d)(2). The cost to brokers associated with design and printing of new business cards is nominal and is needed to provide greater clarity to the public.

6. Rural area participation:

Prior to proposing the rule, the Department discussed the amendments at several meetings of the NYS Board of Real Estate, which meetings are open to the public and contain a public comment period. No comments were received. The Department will continue its outreach after the rule is formally proposed as a Notice of Proposed Rule Making in the State Register. The publication of the rule in the State Register will provide additional notice to interested parties located in rural areas. Additional comments will be received and entertained by the Department.

Job Impact Statement

1. Impact of the rule

The rule will impact real estate brokers, salespeople working under the supervision of real estate brokers, and course of study owners.

19 NYCRR 175.1 currently requires real estate brokers to place transaction deposits into an escrow account. The proposed rule making provides clarity as to when this money must be deposited and clarifies that steps must be taken prior to said deposit to safeguard the deposit money. The Department of State (the “Department”) has not identified any adverse impact of this rule making on jobs and employment opportunities.

19 NYCRR 175.7 currently requires disclosure and consent of all parties to a transaction prior to a broker and/or salesperson accepting compensation. The proposed rule clarifies that a broker or salesperson must obtain the consent of their client, rather than the consent of all parties, prior to receiving compensation. The Department has not identified any adverse impact of this rule making on jobs and employment opportunities.

19 NYCRR 176.3 currently requires real estate courses of study as a salesperson to devote 2 hours to Property Insurance and does not include License Safety as a required subject. By reducing the Property Insurance minimum to one hour, broker and salesperson safety will be enhanced while maintaining the necessary instruction relating to Property Insurance and the regulatory requirement of 78 minimum hours. The Department has not identified any adverse impact of this rule making on jobs and employment opportunities.

19 NYCRR 177.3 (g) currently requires that requests for approval of courses of study include a form which shall include, inter alia, a detailed outline of the subject matter of each course or seminar containing at least 22 and ½ hours of instruction or a detailed outline of each course module containing at least three hours of instruction. The proposed rule change will permit outlines for shorter course modules containing at least one hour of instruction. The Department has not identified any adverse impact of this rule making on jobs and employment opportunities.

19 NYCRR 177.7 currently requires real estate course attendance to be computed on the basis of an hour equaling 60 minutes. The proposed rule change increases efficiency by requiring attendance to be computed on the basis of an hour equaling 50 minutes. The Department has not identified any adverse impact of this rule making on jobs and employment opportunities.

19 NYCRR 175.25 (d)(2) currently does not require brokers and salespersons to display their license type on their business cards. The Department has not identified any adverse impact of this rule making on jobs and employment opportunities.

2. Categories and numbers affected

The rule will apply to licensed real estate brokers, real estate salespeople, and real estate course owners. Currently, the Department licenses approximately 126, 028 professionals subject to this rule.

3. Regions of adverse impact

The Department has not identified any region of the state where the rule would have a disproportionate adverse impact on jobs or employment opportunities. Licensees work in all areas of the state.

4. Minimizing adverse impact

The Department has not identified any adverse impacts of this rule on employment or employment opportunities.

To provide adequate time for licensees to bring themselves into compliance with the rule requirements, the Department will not make the rule effective until sixty days following publication of the notice of adoption.

DOS-39-16-00005-P Requirements Regarding Brokers Receiving Funds, Course Subjects and Hours, and Business Cards

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