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Dream Big!

Q. May a residential condominium restrict a unit owner’s rights with respect to the rental of units?
A. Yes. However, Section 718.110 (13), Florida Statutes, provides that “any amendment restricting unit owners’ rights relating to the rental of units applies only to unit owners who consent to the amendment and unit owners who purchase their units after the effective date of that amendment.”

Q. What is a variable, or dual, commission? Does it have anything to do with the way a listing broker plans to split the commission with the cooperating broker?
A. A variable, or dual, commission is an agreement between the listing broker and the seller. It has nothing to do with the way the listing broker will compensate the cooperating broker.

Typically, the listing broker and the seller agree on a full commission amount to be paid at closing. The listing broker will keep a portion of this amount and pay the remainder to the cooperating broker. In a variable commission arrangement, the broker and seller agree that if the seller or listing broker brings the buyer, the seller pays a reduced commission. This is because the listing broker will receive both the listing and cooperating sides of the commission at closing.

However, if a cooperating broker brings the buyer, the original commission arrangement governs, the seller pays the full commission and the listing broker shares the amount with the cooperating broker stated in the original agreement.

A variable commission arrangement doesn’t mean the listing broker plans to split the commission unevenly. There is no such thing as a 50-50 commission split requirement. The listing broker is always free to offer as much of the commission to the cooperating broker as agreed to by the listing broker and the seller.

Therefore, there is no requirement that the listing broker ever disclose to the cooperating broker how much of the commission the listing broker will retain.

Q. The parties in a transaction are using the FAR Residential Sale and Purchase Contract. The buyer’s inspector noted in his report that the roof has “worn shingles.”  Must the seller replace the roof if the cost falls within the repair limit?
A. No. Section 8(a)(1) of the contract provides that worn shingles are merely cosmetic. The contract provides that the seller warrants that the roof is structurally sound and watertight; it doesn’t warrant against worn shingles.

Q. I’m a single agent for a buyer and have written an offer using the FAR Residential Sale and Purchase contract. The seller’s single agent is telling me that his brokerage prefers the FAR/BAR Contract for Sale and Purchase and that they won’t present the offer to his seller. May they do that?
A. It depends. Section 475.278(3)(a), Florida Statutes, provides that a single agent must present “all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing.” Therefore, if the seller has previously directed his or her single agent in writing that he or she shouldn’t be presented with any offers written on the FAR contract, then it would not be a violation for the seller’s single agent to refuse to present it to the seller. If the seller hasn’t so previously directed his or her single agent in writing, then the agent must timely present the offer.

Q. Is there a Florida law requiring disclosure of known sexual predators or offenders living near a home that is for sale? 
A. There is no law specifically requiring disclosure of this information; however, it is possible this could be an issue covered under the Florida Supreme Court case Johnson vs. Davis, 480 So. 2d 625 (Fla. 1985). In Johnson vs. Davis, the court held that a property owner must disclose any information about the property that isn’t readily known or observable, which could materially affect the property value in the buyer’s eyes.

This principle was later extended to real estate licensees. Although there are no clear-cut, easy-to-apply rules on this issue, it’s recommended that a licensee use his or her best judgment. A licensee may wish to consider the offender’s proximity to the subject property (i.e. if the offender lives four blocks away, it may not be as material to the property’s value as it would be if the offender lived next door).

The licensee may direct the prospective buyer to the Florida Department of Law Enforcement’s Web site, where the public can look up information on sexual offenders and predators living within a particular ZIP code.

Remember, however, that if the licensee is uncomfortable with a seller’s instruction to keep information on an offender’s presence confidential, the licensee should consider whether he or she could continue to represent the seller while also remaining honest to the other side of the transaction. In some situations, the licensee may choose to withdraw from representation.

Real Estate License Law
Q. I’m licensed as a sales associate in Florida. My best friend engages in real estate activity in Florida without a license and has asked me to aid her. Would this jeopardize my own real estate license?
A. Yes. It’s a Florida Real Estate Commission (FREC) violation, pursuant to Section 475.25(1)(a), Florida Statutes, to violate any provision of Section 455.227(1), Florida Statutes. In turn, Section 455.227(1)(j), Florida Statutes, prohibits “aiding, assisting, procuring, employing, or advising any unlicensed person or entity to practice a profession contrary to this chapter, the chapter regulating the profession, or the rules of the department or the board.”

Q. I live in the Panhandle, and I’m licensed as a sales associate in Florida; however, I’d like to engage in real estate activity in Georgia as well. Am I allowed to get a license in another state if I have a Florida license?
A. Yes. Florida law doesn’t prevent a Florida licensee from becoming licensed in another state.  However, note that it is a FREC violation, under Section 475.25(1)(g), Florida Statutes, to practice real estate in Florida and have “had a broker’s or sales associate’s license revoked, suspended, or otherwise acted against, or have had an application for such licensure denied, by the real estate licensing agency of another state, territory, or country.”

Real Estate Practice
Q. I’m a broker with several sales associates working for me. In reviewing the file on a transaction that one of my sales associates closed recently, I discovered some questionable issues that suggest my associate assisted the buyer in engaging in lender fraud. I wasn’t involved with this transaction and had no idea this was going on. Had I known, I wouldn’t have allowed it. If anyone launches an investigation, could I bear any liability for fraud, or responsibility for my associate’s actions in this transaction? 
A. Yes. As the broker, you are responsible for the activities of all your sales associates. Section 475.25(1)(u), Florida Statutes, which became effective July 1, 2006, states that FREC may discipline a broker who has failed “to direct, control or manage a broker associate or sales associate employed by such broker.”

As the broker, you’re responsible for monitoring your associates’ transactions and making sure they aren’t engaging in anything illegal or unethical. Your failure to catch the fraudulent activity before the transaction closed could expose you to liability—both in a lending fraud investigation and with FREC—if this matter is ever reported.

For more information, visit the Mortgage Bankers Association’s Web site at