On August 12, 2004 the Kansas Real Estate Commission approved a set of guidelines implementing the recent amendment to gift and gratuities statute. Senate Bill 404 went into effect on July 1, 2004 and amended the Kansas license law repealing the Kansas prohibition of the offering of prizes, gifts or gratuities.

The KREC included the following items as examples of permissible gifts:

1. Use of a moving van
2. Contribution of monies to charity
3. Coupons for appliances, trips, meals, sporting events, free or reduced lodging, reduced commission, payment of seller’s closing costs, payments of buyer’s closing costs other than earnest money deposit, loan origination fee, or any other lender fees
4. Payment for a survey, homeowners warranty policy, inspections, repairs, title search, taxes, insurance and filing fees
5. Reduction of commission that would be due from the client or customer

The following items are examples of gifts that are not permitted:

1. Payment of money for the buyer’s earnest money deposit, down payment, loan origination fees or any other fee or cost associated with the loan
2. Payment of cash to a principle in the transaction unless the principal has a real estate license and the gift is disclosed in the sales contract
3. Rebate money to a principle in the transaction

In 2003 the Kansas Legislature approved House Bill 2205 which creates an additional seller disclosure for special assessments attached to a property. The requirements of HB 2205 can now be found at Kansas Statutes Annotated 12-6a20.

      12-6a20.   Disclosure by seller; acknowledgment. As part of the contract or prior to the execution of a contract for the sale of any real property which is subject to a special assessment or fee pursuant to K.S.A. 12-6a01 et seq., and amendments thereto, the seller of the property shall disclose to the buyer that the property is subject to such special assessment or fee or located in an improvement district created pursuant to K.S.A. 12-6a01 et seq., and amendments thereto. If the amount of such special assessment or fee is unknown, the seller shall make a good faith estimation of such amount. The seller of the property shall obtain a written acknowledgment from the buyer that the buyer is aware of such assessment or fee or that the property is located in an improvement district created pursuant to K.S.A. 12-6a01 et seq., and amendments thereto.

The key requirements of 12-6a20 are:

• HB 2205 went into effect on July 1, 2003.
• The sellers disclosure of specials must be part of the contract or made prior to the execution of the contract.
• The disclosure requires a written acknowledgment from the buyer.
• If the amount of the assessment is unknown, a good faith estimate must be made as to the amount.
• In keeping with a seller’s agent duties, the seller’s agent has a fiduciary duty to aid the seller in his or disclosure requirements.