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Real estate brokers licensed in Indiana should be aware of several changes to state law coming out of the 2025 legislative session.
House Bill 1347 is relevant to numerous aspects of brokers’ practices, including practices for holding client funds, required provisions in listing agreements, and qualifications for managing brokers. All of the changes go into effect on July 1.
The first change of which brokers should be aware pertains to audits conducted by the Indiana Professional Licensing Agency.
Under the old law, the PLA was authorized, but not required, to audit licensed brokers for compliance with continuing education requirements mandated by state law.
Under the new law, the PLA is required to perform annual, random audits of 1-10% of licensed real estate brokers who are required to meet continuing education requirements. (See Ind. Code § 25-34.1-9-1 et. seq. for more information on brokers’ continuing education requirements.)
While some brokers with inactive licenses are exempt from continuing education requirements, all other licensed brokers must complete at least 12 hours of courses per year and at least 36 hours per 3-year cycle.
The next change in law regarding brokers amends the statutory requirements for a broker to qualify as a managing broker.
Under the old version of Ind. Code § 25-34.1-4-0.5, a broker needed to hold an active license for at least 2 years before becoming eligible to be a managing broker.
The amended law increases this requirement to 3 years and adds a new requirement: a written examination administered by the Indiana Real Estate Commission. The new law did not eliminate the existing requirement that brokers take and pass at least 24 hours of Commission-approved broker management courses.
Brokers should also take note of changes to Ind. Code § 25-34.1-4-5 regarding how broker companies maintain client funds.
According to this change, a broker company must maintain one or more trust accounts for client funds and deposit all funds belonging to others (including earnest money, funds held in escrow for closing, and undistributed sale proceeds) in the account(s).
Broker companies must also clearly identify any trust accounts used for client funds as such. While state law already required brokers to keep client funds in trust accounts, the changes in House Bill 1347 clarify that broker companies must maintain such trust accounts at all times.
Another change in state law applies a number of requirements, which formerly applied only to listing agreements and buyer agency agreements for real estate purchases and sales, to agreements for leases as well.
Under the new law, codified at Ind. Code § 25-34.1-12-1 and 25-34.1-12-2, listing agreements for the sale or leasing of real property must be in writing—either on paper or in electronic format—and include a definite expiration date. A copy of the signed agreement must be sent to the property owner within 3 business days of execution. Finally, the listing broker must keep all originals and electronic files in her or his office.
Similarly, under the amended law, buyer agency agreements and agreements to represent tenants must also be in writing, include a definite expiration date, and be sent to the buyer or tenant within three business days of execution. Brokers who frequently represent landlords and tenants should ensure their form documentation meets these new requirements.
Finally, House Bill 1347 mandates two changes to the Indiana Real Estate Commission’s residential real estate disclosure form. Under the new law, the Commission must adopt a new residential disclosure form containing 2 additional disclosures: (1) whether the property is located in a locally designated historic district, and (2) whether the property is subject to a conservation easement.
Indiana brokers should consult with a licensed attorney if they have any questions regarding how to implement these new requirements.•
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Kiamesha-Sylvia Colom and Katelyn Klingler Leveque are attorneys in Taft’s Real Estate group. Opinions expressed are those of the authors.
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