Q & A on licensure law

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  • | 12:00 p.m. May 11, 2012
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Here are some questions on licensure law with answers provided by Florida Realtors.

Q: An agent’s real estate license is inactive; however, he continues to operate as a sales associate. Could he go to prison for this?

A: Yes. Section 475.42 (1) (a), Florida Statutes, now stipulates that a person who operates as a broker or sales associate without being the holder of a valid and current active license “commits a felony of the third degree.”

Pursuant to Section 775.082, Florida Statutes, third degree felonies are punishable by a term of imprisonment not exceeding five years.

Q: A man is currently licensed as a broker-associate with a brokerage corporation. Another brokerage company has expressed an interest in using him as their broker. Pursuant to the real estate license law, may Ihe be licensed as broker-associate at one firm and as broker at another firm simultaneously?

A: No. The real estate license law provides that a licensed broker may be issued an additional license as broker, but not as a broker-associate or sales associate. Therefore, you may not be licensed as a broker-associate at your current firm and as a broker for the second company at the same time. You could, however, be licensed as a broker for more than one brokerage firm.

Q: If a person fails to renew her salesperson license prior to the expiration of my renewal period, does her license automatically revert to involuntarily inactive status?

A: Yes. Pursuant to Section 475.182(3), Florida Statutes, a license that is not renewed at the end of the license period as prescribed by the Department of Business and Professional Regulation “shall automatically revert to involuntarily inactive status.”

A licensee whose license is involuntarily inactive is precluded from engaging in any real estate brokerage activity

Q: Does FREC report a licensee’s real estate-related criminal activity to the proper authorities, such as the State Attorney’s office?

A: Section 475.25(7), Florida Statutes, provides FREC “shall promptly report to the proper prosecuting authority any criminal violation of any statute relating to the practice of the real estate profession regulated by the commission.”

Q: FREC found an agent guilty of violating Chapter 475, Florida Statutes, and imposed a $250 administrative fine. How long does he have to pay the fine?

A: Rule 61J2-10.031 provides that in cases where FREC imposes an administrative fine and costs, if any, for violation of Chapters 455 and 475, Florida Statutes, or the rules promulgated thereunder, the fine and costs shall be paid within 30 days of the filing of the final order unless directed otherwise by FREC.

Q: A broker wants to hire a sales associate who passed the exam but has not yet received her real estate license from the Florida Division of Real Estate (DRE). May a sales associate be registered with a broker and conduct real estate activity before receiving a license number from DRE?

A: No. According to DRE policy, a new sales associate may not commence engaging in real estate activity until he/she has been issued a license number by DRE and the DBPR database reflects the appropriate information.

Q: May a real estate licensee auction real estate without having an auctioneer’s license?

A: Yes. Section 475.01(1)(a), Florida Statutes, states that a real estate licensee can auction real property.

Q: An agent’s client sued him in civil court on a negligence theory and obtained a judgment against me. May he apply to get reimbursed from the Real Estate Recovery Fund?

A: No. Section 475.482, Florida Statutes, states that the Real Estate Recovery Fund shall be disbursed as reimbursement to any person, partnership or corporation adjudged by a court to have suffered monetary damages by reason of any act (as a part of a real estate brokerage transaction) committed by any broker or sales associate who was the holder of a current license; was neither the seller, buyer, landlord or tenant in the transaction nor an officer or director of a corporation, a member of a limited liability company, or a partner of a limited liability partnership which was the seller, buyer, landlord or tenant and was acting solely in the capacity of a real estate licensee.

This means that the Recovery Fund is available to persons who have suffered from acts of a real estate licensee and not to reimburse real estate licensees for damages a licensee incurred as a result of the licensee’s own negligence.

Q: A sales associate has an assistant who is also licensed. May she pay the assistant, or must her broker pay?

A: If payment is for work that requires a real estate license to perform, then payment must come from the broker. If the licensed assistant is being paid for activity that doesn’t require a real estate license to perform, then the sales associate may pay the assistant directly.

Q: An office is acting as single agent for the seller of a million-dollar house. The seller has indicated she won’t sign a consent to transition to a transaction broker form if the office finds a buyer. Since this is a million-dollar property, may the broker designate sales associates to act as single agents for the seller and the buyer in the same transaction?

A: No. Section 475.2755, Florida Statutes (Designated Sales Associate Law), does not apply to residential sales, as defined in 475.278. Therefore, your office can only act as a single agent for one party (in this case the seller to the transaction.)

Q: A sales associate is thinking of moving to California but would like to keep her Florida real estate license and become voluntarily inactive. How long may she remain voluntarily inactive without losing her real estate license?

A: There’s no limit to the time a sales associate may remain voluntarily inactive, if the sales associate renews as inactive every two years and satisfies the continuing education requirements prescribed by the Florida Real Estate Commission (FREC).

Q: A man is a broker and sole proprietor, and owns homes in both Maryland and Florida. His Maryland home doesn’t have zoning or homeowners’ association restrictions against maintaining a business office in my home, but his Florida home does. May he register my Maryland home as my principal office?

A: Yes. Section 475.22(2), Florida Statutes, states that if a broker’s registered office is outside Florida, the broker shall agree in writing to cooperate with any investigation initiated by the Department of Business and Professional Regulation (DPBR), including supplying any requested documents or appearing at any designated office of the department.

Q: A person wants to become a real estate licensee but was convicted of a crime 20 years ago. May he become licensed?

A: It depends. The person must disclose the conviction on his application for licensure. Length of time between the conviction and the application, as well as severity of the offense, are factors that FREC considers in determining whether to approve an applicant.

Q: A woman obtained a real estate sales associate license almost 10 years ago; however, she hasn’t engaged in much real estate brokerage activity. She decided not to renew my license at the end of my last renewal period, and therefore, jer license is currently involuntarily inactive. How long may my license remain involuntarily inactive?

A: Two years. Section 475.183, Florida Statutes, provides that after two years of involuntarily inactive status, the license “shall automatically expire” and that once it expires, “it becomes null and void without further action by the commission or the department.”

Q: A New York real estate broker calls a Florida agent to say she has a buyer interested in one of the listings featured on her Web site. The agent is scheduling a showing while the buyer is in Florida on an upcoming visit. The New York broker would like a referral fee if her buyer buys my listing. May the Florida agent pay a referral fee to a broker licensed under the laws of another state?

A: Yes. Section 475.25(1)(h), Florida Statutes, provides that “a licensed broker of this state may pay a referral fee or share a real estate brokerage commission with a broker licensed or registered under the laws of a ‘foreign’ state so long as the ‘foreign’ broker does not violate any law of this state.”

Generally, this means that you may pay a referral fee to a broker who, for example, is licensed under the laws of New York, provided the broker hasn’t engaged in any real estate brokerage activity while in our state. Before you agree to pay the “foreign” broker, be sure to verify that the foreign broker is properly licensed in his/her state.

Q: May a commercial broker have one of his sales associates act as a single agent for the buyer and one for the seller?

A: Yes. Section 475.2755, Florida Statutes (the “Designated Sales Associate” law) provides that in any transaction other than a “Residential Sale” as defined in Section 475.278 (5) (a), “The broker at the request of the customers may designate sales associates to act as single agents for different customers in the same transaction” provided the buyer and seller each have assets of $1 million or more and provided the disclosure requirements of the statute are satisfied.



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