The following questions and answers are provided by Florida Realtors, the state’s real estate association. Questions about these opinions should be directed to the association’s legal department at (407) 436-1409.
Q: I’m a broker, and my business focuses on property management and rentals. I plan to register a home office to use as my main real estate brokerage company office. This is permitted under the local zoning ordinances in my area. Am I required to have an office sign, even if I will never have customers come to my home office?
A: Yes. Section 475.22, Florida Statutes, requires that all offices must have a sign on or about the office entrance. The sign must be easily observable and readable by a person about to enter the office, and it must contain the name of the broker together with the trade name, if any. For a partnership or corporation, the sign must contain the name of the firm or corporation or the trade name of the firm or corporation, together with the name of at least one broker. Additionally, the words “licensed real estate broker” or “lic. real estate broker” must appear on the office entrance signs.
Q: Is a sales associate or a broker associate permitted to open an office?
A: No. Sales associates and broker associates are neither required nor permitted to have real estate offices. Instead, sales professionals are required to be registered with, and to work out of, an office maintained and registered in the name of a broker. Section 475.22, Florida Statutes, requires each active broker to maintain an office and to register that office with the Florida Real Estate Commission.
Q: My customer asked me to research his title. Is this a service I can or should provide?
A: As the determination and analysis of acceptable title is an extremely complex legal undertaking, real estate professionals should avoid giving their customers opinions on title. Section 475.25(j), Florida Statutes, provides that a real estate licensee can be subject to discipline (including a complete revocation of his or her license) for rendering an opinion that title to a property is good or merchantable, except when correctly based on a current opinion of a licensed attorney at law. Further, the licensees who do this may be disciplined if they’ve failed to advise prospective buyers to consult their attorney on the merchantability of the title or to obtain title insurance.
Q: A property developer wants me to manage properties for his beachside residential apartment building, which has 120 units. He previously had a professional management company assisting in the building management, but due to economic conditions, the developer is looking for an alternative manager.
I’ve never tackled something of this size, but I think I’m up to the challenge. I don’t have a Community Association Management license. Do I need one for a building this size?
A: Many people mistakenly believe the trigger for mandating a CAM license has to do with the complexity of a management situation. That’s not entirely accurate. In this example, there’s no mention of an association. If the developer wholly owns the apartment building and no association is involved with it, there is no legal requirement for you to have a CAM license to manage it.
If it is governed under an association and the developer is going to have you manage that association, you would be required to have a CAM license.
That said, some of the things learned in a CAM licensing class may be very useful to you in a complex management situation like the one you describe here, so you may want to consider getting the license regardless.
Q: I am hosting an open house for local real estate professionals to become acquainted with a new residential development and would like to have participants drop their business cards into a fishbowl and then randomly draw names from the bowl and award prizes. Is this permissible?
A: No. This activity would be considered a “game of chance” and would violate Chapter 849, Florida Statutes, which deals with gambling; however, prizes may be awarded based on the results of a “game of skill.”
Q: Do referral fees have to flow through a brokerage company, or can they be paid directly to an associate?
A: Referral fees should flow through the brokerage company to the associate, in accordance with Section 475.42(1)(d),Florida Statutes. Although FREC says that 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.
Q: May I share a referral fee with someone who doesn’t hold a real estate license?
A: Section 475.25(1)(h), Florida Statutes, prohibits a Florida licensee from paying a fee or compensating someone who doesn’t hold a real estate license in Florida or another state.
However, there’s a very limited finder’s fee exception in Section 475.011(13), Florida Statutes, that permits a property management firm or the landlord personally to pay up to $50 per transaction to an apartment tenant who refers another tenant to live in the same complex.
Q: I became licensed as a sales associate by the DBPR just over a year ago. One of my older colleagues at the office says that makes me eligible to get licensed as a broker. Is this true?
A: No. While that would have been true in 2007, the law was changed in 2008. Section 475.17(2)(b)1, Florida Statutes, now provides that to become licensed as a broker, a person must have held an active real estate sales associate’s license for at least 24 months during the preceding five years.
Q: I waited until the last minute to do the required postlicensure education. Unfortunately, I failed to complete it prior to the expiration date. My license is now null and void. Is it possible to obtain an extension of time?
A: Perhaps. The Florida Real Estate Commission may allow an additional six-month period to complete the postlicensure education if you were unable, due to “individual physical hardship,” to complete the course within the required time. Individual physical hardship is defined as a case where the licensee cannot, by reason of a physical disability, attend the place where the classes are conducted. FREC requires the extension request to be in writing and supported by statements of doctors and other persons having knowledge of the facts.
Q: I’m a sales associate, and a seller wants me to list her property. We’ve decided to enter into a 12-month listing agreement, with a provision that it will renew automatically for an additional six months if the seller doesn’t cancel it in writing. May the listing agreement renew automatically?
A: No. Section 475.25(1)(r), Florida Statutes, provides that it’s a violation of real estate licensing law if a real estate licensee “has failed in any written listing agreement to include a definite expiration date, description of the property, price and terms, fee or commission, and a proper signature of the principal(s); and has failed to give the principal(s) a legible, signed, true and correct copy of the listing agreement within 24 hours of obtaining the written listing agreement. The written listing agreement shall contain no provision requiring the person signing the listing to notify the broker of the intention to cancel the listing after such definite expiration date.”
Q: I am a recently married sales associate. I’ve decided to legally change my name to my married name. Am I required to change my name on my sales associate license?
A: Yes. Rule 61J2-9.007, Florida Administrative Code, provides that when there’s been a legal name change, the licensee shall file a request for the real estate license to be reissued in the new name. For a new license to be reissued, a copy of the legal document that legally changed the name (marriage license in this case) must be included in this request.