Relating to unfair residential real estate service agreements, providing penalties, and making penalties applicable

“Residential real estate” is also defined in the bill. If an agreement is unfair, the agreement shall be unenforceable. If a person enters into an unfair agreement with a consumer, the person commits an unlawful practice. Several types of remedies are available if a court finds that a person has committed an unlawful practice, including injunctive relief, disgorgement of moneys or property, and a civil penalty not to exceed $40,000 per violation. The bill prohibits a person from causing an unfair agreement, or a notice or memorandum (memo) of an unfair agreement, to be recorded. A person who violates this prohibition commits an aggravated misdemeanor. An aggravated misdemeanor is punishable by confinement for no more than two years and a fine of at least $855 but not more than $8,540. A county recorder may refuse to record an unfair agreement. If an unfair agreement is recorded, the recorded agreement shall not provide actual or constructive notice against an otherwise bona fide purchaser or creditor, or against heirs or other successors-in-interest to the real estate that is the subject of the agreement. If an unfair agreement or a notice or memo of an unfair agreement is recorded, any person with an interest in the real estate that is the subject of the agreement may apply to a district court in the county in which it is recorded for a court order declaring the agreement unenforceable, and any person with an interest in the real estate that is the subject of the agreement may recover actual damages, costs, and attorney fees as may be proven against the person that recorded the agreement. The bill does not apply to a home warranty or similar agreement, an insurance contract, an option or right of refusal to purchase real estate, a maintenance or repair agreement entered into by the homeowners’ association of a common interest community, a mortgage loan or a commitment to make or receive a mortgage loan, a security agreement under the uniform commercial code relating to the sale or rental of personal property or fixtures, or to regulated utility service providers. “Common interest community” is defined in the bill. The bill shall also not be construed to impair a person’s rights established by a mechanics’ lien.