Proposal would allow real estate brokers to form business corporations

The Banking, Commerce and Insurance Committee heard testimony March 15 on a proposal that would exempt realtors from the Nebraska Professional Corporation Act.

Schuyler Sen. Chris Langemeier introduced AM673 as an amendment to LB315, a bill originally introduced by Boys Town Sen. Rich Pahls regarding allowing real estate salespeople to form corporations.

Langemeier said that during the course of the committee hearing on LB315, it became apparent that many real estate brokers in Nebraska have formed corporations other than professional corporations, as required by current law.

Under the provisions of the Langemeier amendment, a designated broker under the Nebraska Real Estate License Act could be organized as a business corporation.

Secretary of State John Gale, who testified in a neutral capacity, explained that the professional corporation act covers physicians, dentists, certified public accountants, lawyers and real estate agents among others. Those who are governed by the act are personally responsible for their conduct as professionals, he said, and as a result have personal liability for their conduct.

“They cannot shelter themselves from liability by becoming a business corporation,” he said.

Gale said there are approximately 400 designated real estate brokers in Nebraska who would be exempted under the proposal.

“I think that it’s a practical reality that exempting designated brokers does not do damage to the public interest,” he said.

The committee voted 8-0 to strike the original language of LB315, insert the Langemeier
amendment in its place and advance the bill to general file.