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Section 28 relates to partial invalidity of any part of the bill.
A similar bill passed the House in the Seventy-fourth Congress. Hearings were held on it at that time and again during the present session on the bill here reported. Persons long engaged in the practice of cosmetology, owners of beauty shops, managers of schools, operators, and apprentices appeared before the subcommittee having the bill 'under consideration and aided materially in its study of the proposed legislation. It is believed that this bill meets the approval of those most directly concerned, the cosmetologists and their patrons, and if enacted into law it will prove to be in the best interests of both the trade and the public.
REGULATION OF REAL-ESTATE BROKERS AND SALESMEN
IN THE DISTRICT OF COLUMBIA
May 20, 1937.-Committed to the Committee of the Whole House on the state of
the Union and ordered to be printed
Mrs. NORTON, from the Committee on the District of Columbia,
submitted the following
[To accompany H. R. 6563)
The Committee on the District of Columbia, to whom was referred the bill (H. R. 6563) to define, regulate, and license real-estate brokers and real-estate salesmen; to create a real-estate commission in the District of Columbia; to protect the public against fraud in realestate transactions, and for other purposes, having considered the same, report favorably thereon and recommend that the bill do pass with the following amendments:
On page 1, in the first line of the title of the bill, after the word "brokers", insert "business chance brokers".
On page 15, line 21, after the dollar sign, strike out the numerals “25” and insert the numerals “50”.
On page 16, line 4, after the dollar sign, strike out the numeral "5" and insert the numerals “10”.
On page 25, line 18, strike out beginning with the word "Supreme” down through and including the word "Columbia" on page 25, line 19, and insert in lieu thereof “District Court of the United States for the District of Columbia”.
The need for a law regulating the conduct of real-estate businesses has long been recognized in the District of Columbia and bills similar to H. R. 6563 have been introduced in the last number of sessions of Congress but failed of passage. In the Seventy-first Congress, pursuant to a Senate Resolution (S. Res. 58) the subcommittee on Insurance and Banks of the Committee on the District of Columbia conducted an exhaustive investigation of the real-estate, mortgage, and security situation in the District. In the course of its investigation the subcommittee found that the lack of regulatory laws governing real-estate brokers and salesmen in the District rendered the public
practically hopeless to obtain adequate redress against fraud and misrepresentation in real-estate transactions.
The bill hereby reported is not complex either in its general principle or administrative provisions. Its essential feature is provision for the licensing of all real-estate brokers and salesmen in the District by a disinterested real-estate commission. The commission is invested with authority to revoke licenses on proof in a public hearing of fraudulent or other conduct prejudicial to the public interest. The bill has been so drawn that no one who is competent and honest will be denied the right to engage in the real-estate business, but on the other hand if any person licensed or applying for license has been guilty of improper practices contrary to the public welfare, their further operation can be prevented without awaiting the slow process of indictment and conviction in the courts for criminal acts. Those who are denied a license, or whose licenses are revoked, will have under the express terms of the bill the right to appeal to the District Court of the United States for the District of Columbia as well as review by the Court of Appeals.
The law reports of every jurisdiction embrace thousands of cases resulting from incompetency, fraud, deception, or other illegitimate practices in connection with real-estate dealings. As a result of this condition a majority of States have enacted laws for the public protection against incompetent or unscrupulous real-estate operators. H. R. 6563 is similar to laws now in force in 28_States, including Alabama, Arizona, Arkansas, California, Colorado, Delaware, Florida, Georgia, Idaho, Illinois, Iowa, Louisiana, Michigan, Montana, Nebraska, Nevada, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, Utah, Vermont, Virginia, Washington, Wisconsin, and Wyoming.
These laws are in their essence akin to the laws of practically all States requiring the examination and licensing of doctors, dentists, lawyers, architects, and others whose incompetency or dishonesty in the conduct of their profession or business would result in public injury.
The courts of many States and the United States Supreme Court have upheld the validity of laws similar to the bill hereby reported. While fraud can now be punished and redress obtained through the processes of the civil and criminal laws, such processes are slow and uncertain. The transactions complained of are often intricate and obscure and during the long period required to bring offenders to justice, those guilty of dishonest conduct in the real-estate business can continue to operate and to defraud others. This bill is intended, therefore, to prevent as well as to punish fraud. The penalties provided by the bill, in addition to the denial of or revocation of licenses, are a fine of not more than $500, or imprisonment for not more than 6 months, or both, in the case of an individual. For a corporation, a fine of not more than $1,000 is provided, with individual penalties for officers, agents, or employees of such corporation.
The committee feels that there is a real need for a law to protect the people of the District from fraudulent and dishonest practices in the real-estate business, and that this bill if enacted into law will be effective for the public protection.
There is attached hereto and made a part of this report a letter from the President of the Board of Commissioners of the District of Columbia approving this proposed legislation.
COMMISSIONERS OF THE DISTRICT OF COLUMBIA,
Washington, March 3, 1937. The Honorable William E. BANKHEAD,
Speaker of the House of Representatives, Washington, D. C. MY DEAR MR. SPEAKER: The Commissioners of the District of Columbia have the honor to submit the enclosed draft of a proposed bill to define, regulate, and license real-estate brokers and real-estate salesmen; to create a Real Estate Commission in the District of Columbia; to protect the public against fraud in real-estate transactions, and for other purposes.
A bill similar to the one enclosed was offered in the Seventy-fourth Congress, first session, and was known as S. 1019. The Commissioners, however, have made certain amendments to the bill as introduced in the Seventy-fourth Congress, and those amendments are indicated on the attached draft.
Pursuant to Senate Resolution 58 of the Seventy-first Congress, a subcommittee on insurance and banks of the Committee on the District of Columbia conducted an exhaustive investigation into the real-estate, mortage, and securities situation in the District of Columbia, and in the course of its investigation the subcommittee found that the lack of regulatory laws governing real-estate brokers and salesmen in the District of Columbia rendered the public practically helpless to obtain adequate redress against fraud and misrepresentation in real-estate transactions.
There is a need for regulation of the conduct of real-estate business, and this need has been very generally recognized throughout the country. Instances of abuse and fraud in connection with the real-estate transactions in the District of Columbia brought to the attention of the committee the need of a real-estate license law. The features covered in the proposed legislation are endorsed by the Federation of Citizens Associations, the Better Business Bureau of Washington, and the publishers of several local newspapers.
The essential feature is a provision for the licensing of all real-estate brokers and salesmen in the District of Columbia by a disinterested commission. Under the terms of the proposed bill, the commission is vested with authority to revoke licenses on proof in a public hearing of fraud or other conduct prejudicial to the public interest. As stated in the Senate's report on S. 1019
"The bill has been so drawn that no one who is competent and honest will be denied the right to engage in the real-estate business. On the other hand, if any person licensed or applying for license has been guilty of improper practices contrary to the public welfare, their further operation can be prevented without awaiting the slow process of indictment and conviction in the courts for criminal acts."
There is no question as to the validity of the law, since courts of many States and the United States Supreme Court have upheld the validity of the laws similar to the bill proposed.
The Commissioners have submitted the proposed draft to the Budget Bureau and have been advised that there is no objection to the presentation of this bill to Congress. It is respectfully urged that the enclosed draft be enacted into law. Very respectfully,
M. C. HAZEN,
District of Columbia.