(Effective Date 04-26-00 unless 06-00-00 is Indicated)

(Note: subrule 1.27(1), paragraph "c," has changed as indicated)

c. A broker shall not commingle personal funds in a trust account; provided, however, that not more than $100, or the amount specified in Iowa Code section 543B.46(4), $500 of the broker's personal funds may be maintained in each separate account if (1) such personal funds are separately accounted for and (2) such personal funds are intended to be used by the broker to pay for expenses directly related to maintaining the account.
The broker shall ensure that personal funds are deposited to cover bank service charges as specified in Iowa Code section 543B.46, and that at no time are trust moneys used to cover any charges. Upon notification that the broker's personal funds are not sufficient to cover service charges initiated by the bank that are above the normal maintenance charges, the broker shall deposit personal funds to correct the deficiency within 15 days of the closing date of that bank statement.

(Note: Rule 1.27 has changed by adding new subrule 1.27(15).

1.27(15) Every broker shall retain for a period of at least five years true copies of all business books; accounts, including voided checks; records; contracts; closing statements; disclosures; signed documents; and correspondence relating to each real estate transaction that the broker has handled and each property managed. The records shall be made available for inspection by the commission, staff, and its authorized representatives at all times during usual business hours at the broker's regular place of business. If the brokerage closes, the records shall be made available for inspection by the commission, staff, and its authorized representatives upon request.

(Note: Chapter 1 has changed by adding following new rule)

193E--1.41(543B) Rebates and inducements. (Introductory paragraph Rescinded June 6, 2000)

1.41(1) A licensee shall not pay a commission, any part of the commission, or valuable consideration to an unlicensed third party for performing brokerage functions or engaging in any activity that requires a real estate license. Referral fees or finder's fees paid to unlicensed third parties for performing brokerage activities, or engaging in any activity that requires a real estate license, are prohibited.

1.41(2) In a listing contract, the broker is principal party to the contract. The broker may, with proper disclosure, pay a portion of the commission earned to an unlicensed seller or landlord that is a principal party to the listing contract. This will be deemed a reduction in the amount of the earned commission.

1.41(3) (Rescinded and Reserved June 9, 2000).

1.41(4) A licensee may present a gratuitous gift, such as flowers or a door knocker, to the buyer or tenant subsequent to closing and not promised or offered as an inducement to buy or lease. The permission and disclosure requirements of 193E--1.42(543B) do not apply as long as any client relationship has terminated.

1.41(5) A licensee may present free gifts, such as prizes, money, or other valuable consideration, to a potential party to a transaction or lease, prior to signing a contract to purchase or lease and not promised or offered as an inducement to buy or lease. It is the licensee's responsibility to ensure that the promotion is in compliance with other Iowa laws, such as gaming regulations. The permission and disclosure requirements of 193E--1.42(543B) do not apply as long as no client relationship has been established with the buyer or lessee.

1.41(6) The offering by a licensee of a free gift, prize, money, or other valuable consideration as an inducement shall be free from deception and shall not serve to distort the true value of the real estate service being promoted.

1.41(7) (Rescinded and Reserved June 9, 2000).

1.41(8) A licensee may make donations to a charity, or other not-for-profit organization, for each listing or closing, or both, that the licensee has during a specific time period. The receiving entity may be selected by the licensee or by a party to the transaction. The contribution may be in the name of the licensee or in the name of a party to the transaction. Contributions are permissible only if the following conditions are met:
a. There are no restrictions placed on the payment;
b. The donation is for a specific amount;
c. The receiving entity does not act or participate in any manner that would require a license;
d. The licensee exercises reasonable care to ensure that the organization or fund is a bona fide nonprofit;
e. The licensee exercises reasonable care to ensure that the promotional materials clearly explain the terms under which the donations will be made; and
f. All required disclosures are made.

(Note: Subrule 1.42(6) had changed by adding new paragraphs "i" and "j:"

i. The provisions of these rules and subrules do not apply to a gratuitous gift, such as flowers or a door knocker, to a buyer or tenant subsequent to closing and not promised or offered as an inducement to buy or lease as long as any client relationship has terminated.

j. The provisions of these rules and subrules do not apply to a free gift, such as prizes, money, or other valuable consideration, to a potential party to a transaction or lease prior to signing a contract to purchase or lease and not promised or offered as an inducement to sell, buy, or lease as long as no client relationship has been established with the buyer or lessee.

June 6, 2000