License Law What you need to know about referral fees, name changes, title research, opening an office, reporting crimes and more. Referral fees should flow through the brokerage company to the associate. The Florida Real Estate Commission (FREC) has said an associate may be paid directly at closing if a broker instructs the closing agent (in a specific writing) to authorize direct payment. FREC has not expanded this to include other situations. (Section 475.42(1)(d), Florida
Statutes)
Florida licensees are not allowed to pay a fee or compensate someone for real estate services who doesn’t hold a real estate license in Florida or another state – this includes attorneys. There is a very limited finder’s fee exception: a property management firm or landlord can pay up to $50 per transaction to an apartment tenant who refers another tenant to live in the same complex. (Sections 475.25(1)(h) and 475.011(13), Florida Statutes) Designated Sales Associate law
Title researchDetermining and analyzing acceptable title is an extremely complex legal undertaking. A licensed attorney is the best person to offer an opinion that title to a property is good or merchantable. Real estate agents should advise prospective buyers to consult their attorney on the merchantability of the title or to obtain title insurance. Real estate agents or brokers can be subject to discipline (and could even have their license revoked) for rendering an opinion about a title. We recommend that real estate professionals avoid giving their customers opinions on title. (Section 475.25(j), Florida Statutes) Multiple licenses
Name changesWhen an agent or broker changes their name legally, they must request that their real estate license be reissued in the new name. They must include a copy of the legal document that legally changed the name (e.g., a marriage license) in this request. (Rule 61J2-9.007, Florida Administrative Code) Hiring someone new to the fieldA new sales associate may not begin engaging in real estate activity until he/she has received a license number by the Florida Division of Real Estate (DRE) and the Department of Business and Professional Regulation (DBPR) database reflects the appropriate information. Opening an office
Broker price opinionsBroker price opinions (BPOs) are considered to be a real estate brokerage activity. Sales associates may not collect any money in connection with a real estate brokerage transaction, whether as commission or other payment, except in the name of their employer—the broker. (Section 475.42(1)(d), Florida Statutes). So if an associate performs a BPO, that associate can only collect a fee for that BPO through his or her broker. Listing agreementsA listing agreement cannot renew automatically. All listing agreements must contain a definite expiration date. (Section 475.25(1)(r), Florida Statutes) Unlicensed assistantsEach regional MLS determines whether unlicensed assistants may have their own MLS ID. The Florida Real Estate Commission (FREC) has a list of informally approved activities an unlicensed assistant can perform. See the Unlicensed Assistants section for a list of permissible activities. Licensed assistantsA sales associate may pay a licensed real estate assistant for activity that doesn’t require a real estate license to perform. For work requiring a real estate license to perform, the broker must pay the assistant. File retention
Displaying a real estate licenseThere is no legal requirement to display your license on the wall or anywhere else in your office. Setting up a corporation
InspectionsThe Department of Business and Professional Regulation (DBPR), its employees and/or agents have the power to inspect and audit any broker or brokerage office in a lawful manner at all reasonable hours. Further, the DBPR can inspect a broker’s books, accounts and records to determine whether he/she is complying with regulations. (Sections 475.5015 and 475.5016, Florida Statutes) Expired licensesIf a sales associate’s license is inactive, that associate cannot receive compensation for any real estate work. Further, the agent is committing a third-degree felony by practicing real estate without a valid license. (Section 475.42(1)(a), Florida Statutes) Disciplinary actions
Listing and selling a mobile homeA real estate licensee may sell a mobile home and the land on which the mobile home is located without having a mobile home dealer’s license. If the seller does not own the land, the agent would probably first need to get a mobile home dealer’s license issued by the Department of Highway Safety and Motor Vehicles (DHSMV). Auctioning real estateAny real estate licensee can auction real property, even if they do not have an auctioneer’s license. (Section 475.01(1)(a), Florida Statutes) Sharing office spaceTwo brokerage firms are legally entitled to share office space. However, the companies should make all efforts to keep their businesses completely separate from each other in order to avoid creating an ostensible partnership, created by public perception that the brokers or brokerages are working together as one entity. If an ostensible partnership is created, each broker or brokerage may be exposed to the other’s liability. Also, each brokerage must maintain a sign on or near the office entrance that is easily observed and read by anyone about to enter the office. (Section 475.22,Florida Statutes) Inactive status
Operating without a license
Reporting crimes
Crimes and related fees
You May Also LikeHow long must brokers keep records in California?Per California Business & Professions Code §10148, licensed real estate brokers are required to retain copies of all listings, deposit receipts, canceled checks, trust records and any additional documents they execute or obtain whilst conducting real estate business for three years.
How long must a broker retain earnest money records?Although agents are required by law to retain records for three years, often times communications are needed to protect against claims after this minimum. Communications that include representation or agreement may trigger agent liability long after escrow has closed.
What's the minimum length of time Arizona designated brokers are required to keep transaction documents?The records shall be open at all reasonable times for inspection by the commissioner or the commissioner's representatives. The records of each transaction and employment records shall be kept by the broker for a period of at least five years from the date of the termination of the transaction or employment.
How many years of experience as a real estate salesperson do you need in order to be eligible to obtain your broker's license in California?A minimum of two years full-time licensed salesperson experience within the last five years or the equivalent is required. Following are acceptable methods of documenting the experience requirement for the broker examination.
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