My Favorite pages

 

What's this?remove

 
  • Sign in to use the “My Favorites” feature.
 

Connect with us on:

X Email this page:


OK Cancel

Legal FAQ's
License Law

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: 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: 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 (CAM) 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: 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: 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: 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 am going to be managing a large apartment complex. Do I need a community association manager (CAM) license? 

A: No. A CAM license is not required for the management of apartment buildings, commercial properties or single-family dwellings. 

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 (FREC) 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: May a sales associate be paid directly for conducting a broker price opinion? 

A: No. Section 475.42(1)(d), Florida Statutes, does not allow sales associates to 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. BPOs fall within the defi nition of real estate brokerage activity— “appraising” property—as per Section 475.01, Florida Statutes. 

Q: I’m a broker, and I employ an unlicensed assistant. Is it possible for unlicensed assistants to have their own MLS ID? 

A: Maybe. It depends on the rules of your regional MLS. You’ll need to contact your regional MLS to determine if it allows unlicensed assistants to have their own MLS ID. 

Q: I’m a sales associate and want to set up a company using my team name so that my broker can pay my commissions to this separate company. May I do this? 

A: No. Pursuant to Section 475.161, Florida Statutes, a sales associate or broker associate must use his or her legal name as it appears on his or her real estate license when incorporating as a limited liability company (LLC), professional corporation (PA) or professional limited liability company (PLLC). 

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. 

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 real estate broker and an appraiser. I just entered a plea of nolo contendere to DUI (a misdemeanor). Is there a duty to report this misdemeanor to the Florida Real Estate Commission or the Florida Real Estate Appraisal Board? 

A: Yes. As of Oct. 1, 2009, Section 455.227(1)(t), Florida Statutes, requires you to report this misdemeanor to the FREC and the FREAB within 30 days after the plea or after being found guilty. Prior to Oct. 1, 2009, real estate licensees and appraisers had a duty to report only felonies to the FREC and the FREAB. 

Q: I’m a sales associate, and I want to incorporate for tax purposes. I want to incorporate as “World’s Best Realtor LLC.” Is that OK? 

A: No. Pursuant to Section 475.161, Florida Statutes, a sales associate may incorporate as a PA (Professional Corporation), an LLC (Limited Liability Company) or a PLLC (Professional Limited Liability Company) for the purpose of having commission paid to the appropriate corporation. The PA, LLC or PLLC may be incorporated only under the sales associate’s legal name as registered with the Department of Business and Professional Regulation. For example: John Johnson, PA. 

Q: As a broker, what do I need to retain in my office files? 

A: According to Section 475.5015, Florida Statutes, a broker must retain in his or her office files “at least one legible copy of all books, accounts, and records pertaining to her or his real estate brokerage business for at least five years from the date of receipt of any money, fund, deposit, check or draft entrusted to the broker, or in the event no funds are entrusted to the broker, for at least five years from the date of execution by any party of any listing agreement, offer to purchase, rental property management agreement, rental or lease agreement or any other written or verbal agreement which engages the services of the broker.” In the event that litigation arises as a result of any transaction, the records must be maintained for at least two years after the conclusion of the civil action or the conclusion of any appellate proceeding, whichever is later, but in no case less than five years. 

Q: May the Department of Business and Professional Regulation inspect my office and my files? 

A: Yes. Section 475.5016, Florida Statutes, provides that the DBPR, its employees and/or agents have the power to inspect and audit, in a lawful manner at all reasonable hours, any broker or brokerage office.

Further, Section 475.5015, Florida Statutes, provides the DBPR the authority to inspect such "books, accounts and records as will enable the department to determine whether such broker is in compliance with the provisions of this chapter." 

Q: I’m a real estate licensee with a listing. I’ve been contacted by a sales associate who has a buyer interested in making an offer on my seller’s property. However, I’ve discovered that this sales associate’s license is inactive, and that this person is not currently working for a broker. May I still pay the cooperating agent a commission? 

A: No. Section 475.25(1)(h), Florida Statutes, provides that a real estate licensee may not share commission with a person not properly licensed as a broker, broker-associate or sales associate.

Further, since the cooperating agent’s license is inactive, he or she is in violation of Section 475.42(1)(a), Florida Statutes, which is a felony of the third degree. If the agent’s license is inactive, the agent may not receive compensation. 

Q: The Florida Real Estate Commission disciplined me several years ago. Is there a way to expunge my record? 

A: It depends. Although Florida law does not refer to the process as expungement, Section 455.2255(1), Florida Statutes, states, in part, that a “licensee may petition the department to review a disciplinary incident to determine whether the specific violation meets the standard of a minor violation as set forth in Section 455.225(3). 

Q: I’m a sales associate and I want to open a real estate corporation. May I be an officer or director of this real estate corporation?
 

A: A sales associate may be a shareholder of a real estate corporation; however, he or she may not be an officer or director of that corporation as per Chapter 61J2-5.016, Florida Administrative Code. Furthermore, the corporation must have a qualifying broker registered with the Department of Business and Professional Regulation. The qualifying broker of the corporation must be an officer or director of the real estate corporation. 

Q: I recently failed my post-licensure end-of-course examination. How long must I wait to retake the exam? 

A: According to FREC Rule 61J2-3.020(8)(a), students failing a FREC-prescribed end-of-course examination must wait 30 days from the date of the original exam to retest. 

Q: My real estate license is inactive; however, I continue to operate as a sales associate. Could I 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: I’m currently licensed as a broker-associate with a brokerage corporation. Another brokerage company has expressed an interest in using me as their broker. Pursuant to the real estate license law, may I 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 I fail to renew my salesperson license prior to the expiration of my renewal period, does my 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 me guilty of violating Chapter 475, Florida Statutes, and imposed a $250 administrative fine against me. I’m having trouble coming up with the money. How long do I 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: I want to hire a sales associate who passed the exam but has not yet received her real estate license (license number) 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: My client sued me in civil court on a negligence theory and obtained a judgment against me. May I 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: I am a sales associate and I have an assistant who is also licensed. May I pay the assistant, or must my broker pay him or her? 

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: Our office acts 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 our office finds a buyer. Since this is a million-dollar property, may our 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: I’m a sales associate thinking of moving to California, but I’d like to keep my Florida real estate license and become voluntarily inactive. How long may I remain voluntarily inactive without losing my 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: I am a broker and sole proprietor, and I own homes in both Maryland and Florida. My Maryland home doesn’t have zoning or homeowners’ association restrictions against maintaining a business office in my home, but my Florida home does. May I 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: One of my friends wants to become a real estate licensee. He was convicted of a crime 20 years ago. May he become licensed? 

A: It depends. Your friend 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: I obtained a real estate sales associate license almost 10 years ago; however, I haven’t engaged in much real estate brokerage activity. I decided not to renew my license at the end of my last renewal period, and therefore, my 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 recently called to tell me she has a buyer interested in one of my listings featured on my Web site. We are scheduling a showing while the buyer is in Florida next week. The New York broker would like a referral fee if her buyer buys my listing. May I 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: As a commercial broker, may I have one of my 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.

Q. What proof is required from both the buyer and the seller that they each have assets of $1 million or more?

A. Section 475.2755, Florida Statutes, merely requires the buyer and seller to indicate that they have the requisite assets by signing disclosures stating their assets meet the threshold.

Q. Does the “Designated Sales Associate” law apply to a commercial lease — so that one sales associate may act as the single agent for a landlord and the other as a single agent for a tenant?

A. Yes. Section 475.2755, Florida Statutes, provides “the term ‘buyer’ means a transferee or lessee in a real property transaction, and the term ‘seller’ means the transferor or lessor in a real property transaction.”
 

Q: I’m a broker and my license renewal period ends this year. I took the three-hour “core law” course in year one of my renewal period and again in year two of my renewal period. May I take it again and get three more hours toward the 14 hour continuing education requirement for brokers during the renewal period? 

A: No. You are only permitted to take the core law course twice. Florida Administrative Code 61J2-3.009(2)(b) states: “a licensee who takes the three-hour ‘core law’ course in each year of the renewal period shall be allowed a total of six hours toward the 14 hour requirement.” 

Q: I was supposed to renew my sales associate license for the first time by March 31, but I failed the post-licensure exam on March 20. Now I must wait 30 days to retake the exam. What is the status of my license? 

A: Section 475.17(3)(c), Florida Statutes, provides “the license of any sales associate who does not complete the post-licensure education requirement prior to the first renewal following initial licensure shall be considered null and void. Such person wishing to again operate as a real estate sales associate must re-qualify by satisfactorily completing the sales associate pre-licensure course and passing the state examination for licensure as a sales associate.” 

Q: An elderly woman wants me to list and sell her mobile home located on a lot she rents from a mobile home park. As a real estate broker, may I list and sell her mobile home? 

A: No. A 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. Here, since the seller does not own the land, you would first need to obtain a mobile home dealer’s license issued by the Department of Highway Safety and Motor Vehicles (DHSMV). Contact information, including application forms required for licensure as a Mobile Home Dealer, can be found at the DHSMV's Web site located at www.hsmv.state.fl.us. 

Q: I’m a newly licensed broker and intend to do business as a sole proprietor. Rather than lease office space in a commercial building, I’d prefer to register my home as my principal office. Does the Florida Real Estate Commission (FREC) permit a broker to register his/her residence as his/her principal office? 

A: Yes. Rule 61J2-10.022, Florida Administrative Code, states that a broker’s office “may be in a residential location, if not contrary to local zoning ordinances, provided the minimum office requirements are met and the required broker’s sign is properly displayed … .” 

Q: I’m a broker licensed in Georgia and Florida. The Georgia Real Estate Commission suspended my license for a violation of Georgia's real estate license law. May the Florida Real Estate Commission (FREC) take action against my Florida broker’s license based on what just took place in Georgia? 

A: Yes. Section 475.25(1)(g), Florida Statutes, allows FREC to take action against your Florida license if the real estate licensing agency of another state took action against your license in that state. 

Q: Must a broker who is actively licensed with a real estate brokerage corporation have an ownership interest in the corporation? 

A: No. There is no requirement that a broker own any shares of the corporation. However, Rule 61J2-5.016, Florida Administrative Code, does require that every broker licensed with a corporation be registered as an officer or director of the corporation. 

Q: I am a broker operating as a sole practitioner. May I operate as ABC Realty without starting a corporation? 

A: Yes. Rule 61J2-10.034, Florida Administrative Code, provides in part that an individual broker may use a trade name and, if so, it must be disclosed upon the request for license and be placed upon the registration or license. The rule further provides that FREC will refuse to issue a license should the trade name be or contain a trade name that is the same as the real or trade name of another FREC registrant or licensee. 

Q: My neighbor, who doesn't have a real estate license, always seems to know which people in our neighborhood are planning to put their homes on the market. I’ve gained several listings as a result, and she recently joked that we ought to work out a referral fee arrangement. I don’t think this is a bad idea, but I’m not sure I can compensate someone who isn’t licensed. May I pay my neighbor a fee for referring sellers to me? 

A: No. Section 475.25(1)(h), Florida Statutes, prohibits real estate licensees from sharing a commission with, or paying a fee to, any person “not properly licensed as a broker, broker-associate, or sales associate” under Florida law who refers “real estate business, clients, prospects, or customers” to a real estate licensee. 

Q: I’m the qualifying broker of brokerage company A, and I’d like to be the qualifying broker at brokerage company B as well. Is this permissible? And, if so, may my sales associates and broker-associates also be licensed with each brokerage? 

A: As to the first question, yes. A broker may be licensed as a broker for multiple brokerages, per Section 475.215(1), Florida Statutes. As to the second question, no. Section 475.215(2), Florida Statutes, says that sales associates and broker-associates can have no more than one registered employer at a time. 

Q: As a broker, may I pay a referral fee to my sister, who lives in a country without real estate licensing laws? 

A: Section 475.25(1)(h), Florida Statutes, permits a “licensed broker of this state to 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.”

It’s been FREC’s position that a Florida broker may pay a referral fee or share a commission with someone from a foreign country that lacks licensing requirements so long as: 1) the person has not violated the laws/regulations of the country where the referral is being made and; 2) the person has not violated Florida law. 

Q: I failed to complete my broker post-licensing education requirements before my first renewal. I know that my broker’s license is now considered null and void, but another broker told me that I may revert to my sales associate’s license. Is that true? 

A: Yes. According to Section 475.17(4)(c), Florida Statutes, a broker who wishes to operate as a sales associate, may be issued a sales associate license after providing proof that he or she has satisfactorily completed a 14-hour continuing education course within six months following expiration of his or her broker’s license.

To operate as a broker, the licensee must re-qualify by satisfactorily completing the broker’s pre-licensing course and passing the state examination for licensure as a broker. 

Q: My husband recently retired, and we would like to split our time between Florida and Colorado. I have a Florida sales associate's license.  Does Florida’s real estate license law prohibit me from having a Colorado real estate sales associate license, too? 

A: No. Florida’s real estate license law does not prohibit an individual who has a Florida sales associate license from being licensed in any other state. 

Q: May a brokerage firm have more than one trade name? 

A: No. Rule 61J2-10.034, FAC, provides that no individual, partnership or corporation may be registered under more than one trade name. 

Q: I’m a sales associate who recently took the 45-hour post-licensing course at my local real estate school during my initial licensure period. I took the course during a really busy week, and despite my best efforts, I missed 12 hours of the course. Now, the school won’t give me a course-completion slip. Is the school allowed to do this? 

A: Yes. Section 475.17(3), Florida Statutes, provides that notice of satisfactory completion shall not be issued if the student has absences in excess of 10 percent of the required classroom hours. 

Q: I am a sales associate and want to form a Professional Association (PA) so that my broker can pay my commissions to the PA. Does the PA have to be formed in my legal name? 

A: Yes. Section 475.161 permits a sales associate to be licensed as a professional corporation (i.e. PA) but states that such a license "shall be issued in the licensee's legal name only…" 

Q: My brokerage firm handles property management for an apartment complex that is primarily rented to students of the local university. We want to offer a $45 gift certificate to any tenant who refers college classmates to our apartment complex. May we legally give this compensation to an unlicensed tenant? 

A: Yes. As long as the value of the gift certificate doesn't exceed $50. Section 475.011(13), Florida Statutes, allows any property management firm of an apartment complex to pay a finder's fee, up to $50, to an unlicensed tenant for "introducing or arranging an introduction between parties to a transaction involving the rental or lease of an apartment unit." 

Q: I’m the sole broker and owner of a real estate brokerage corporation, which currently handles only residential transactions. I want to set up a branch office to run the commercial side of my business. May I register a trade name for the branch office and continue to use the corporate name for my principal office? 

A: No. The registration of a branch office with the DBPR/DRE would simply permit your brokerage corporation to engage in real estate brokerage activity from more than one location (i.e., the principal and branch office). The branch office would be required to conduct business under the same name as the principal office.

Therefore, if you choose to register a trade name/DBA for your company, both offices would be required to use that trade name. 

Q: Can a sales associate be paid directly from a property owner for conducting a BPO or CMA for that owner? 

A: No. Since performing a BPO or CMA constitutes real estate brokerage activity, the compensation collected in connection with that activity must be paid to the sales associate’s broker/brokerage, who can then pay the sales associate. 

Q: May two real estate brokerages share office space? 

A: Yes. Although there is no specific provision in the real estate license law which would prohibit two brokerage firm’s from sharing office space the company’s should make all efforts to keep their businesses completely separate from each other in order to avoid creating an ostensible partnership.

If the public perceives that the brokers or the brokerages are working together as one entity, an ostensible partnership (an agency relationship that arises by the actions of the parties rather than by an agreement) may be created. If an ostensible partnership is created, each broker or brokerage may be exposed to the other’s liability.

Additionally, each real estate brokerage must comply with the office requirements of Section 475.22 Florida Statutes, including maintaining an office entrance sign on or about the office entrance that is easily observed and read by any person about to enter the office. 

Q: I’m a broker and owner of a real estate brokerage company. I’m thinking about setting up a separate company that will only engage in referrals of buyers and sellers to other brokerage firms. Must this company be registered with the DBPR/DRE as a real estate brokerage? 

A: Yes. The company must be registered with the DBPR/DRE as a real estate brokerage since collecting compensation in connection with the referral of real estate business falls within the definition of real estate activity pursuant to Section 475.01(1)(a), Florida Statutes. 

Q: I’m a broker and a seller wants me to list her property. We’ve decided to enter into a written six-month listing agreement, which will renew automatically for an additional six months if the seller doesn’t cancel in writing. May I have an automatic renewal provision in a listing agreement. 

A: Although a listing that includes such a provision may be enforceable, under section 475.25(1)(r) the FREC can discipline a licensee for including an automatic renewal provision in a listing. Therefore, you should not include such a provision in a written listing agreement. 

Q: I’m a sales associate preparing an offer for my buyer. A title company is holding the earnest money deposit. What information about this title company must be reflected on a sale and purchase contract? 

A: Rule 61J2- 14.008(2)(b), FAC, provides that if a title company or an attorney is maintaining the earnest money deposit, the sale and purchase contract must include the name, address and telephone number of the title company or the attorney. Both the Florida Realtors and the Florida Realtors/Florida Bar contract forms provide spaces designated for this information to be written. 

Q: An attorney who referred a buyer to me wants a referral fee. I would be happy to pay her, but she isn’t a real estate licensee. She claims she doesn’t need a real estate license because she is a properly licensed Florida attorney. May I pay this attorney a referral fee or commission? 

A: No. An attorney is exempt from the licensure requirements of chapter 475 but only to the extent that the attorney is acting “within the scope of her or his duties” as an attorney. This exemption does not permit a Florida licensed attorney to collect a fee from a real estate licensee for the referral of business, clients, prospects or customers to the licensee. Additionally, a licensee who pays such a fee can be disciplined by the Florida Real Estate Commission. 

Q: How long must a person hold his or her sales associate’s license before becoming a licensed broker? 

A: Effective July 1, 2008, Section 475.17 (2)(b), Florida Statutes, was amended to require that a person applying to be licensed as a real estate broker hold an active sales associate’s license for at least 24 months during the preceding five years. Prior to this change, the requirement was only 12 months. 

Q: Are all seven members of the Florida Real Estate Commission licensed brokers? 

A: No. Section 475.02(1), Florida Statutes, provides: "Four members [of FREC] must be licensed brokers, each of whom has held an active license for the five years preceding appointment; one member must be a licensed broker or a licensed sales associate who has held an active license for the two years preceding appointment; and two members must be persons who are not, and have never been, brokers or sales associates." 

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, 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. 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. 

Q: I know I’m prohibited from being employed as a broker-associate for one brokerage while I’m a broker for my own brokerage. How can I be a broker for the brokerage corporation I work for if there’s already a qualifying broker?
 

A: A brokerage corporation may have more than one broker licensed with it as long as every broker is registered as an officer or director of the brokerage. 

Q: I’m a broker and sole proprietor, and my principal office is in my home. My business has been growing recently, and I would like to have a sales associate work for me. Am I allowed to have a sales associate licensed under me if I work out of my home? 

A: Yes. 

Q: I’m a broker who recently decided to open a new real estate company. My partner and I will each be 50 percent owners of the company’s voting stock. This partner is not a real estate licensee; in fact, three years ago the state issued an injunction against him for the unlicensed practice of real estate while employed as an unlicensed assistant at another real estate company. The DBPR recently rejected my corporate application package because of this violation by my partner. May they do this? 

A: Rule 61J2-5.014, FAC, allows FREC or the DBPR to refuse to issue a registration for a corporation if any individual having more than 40 percent ownership of the voting stock has had an injunction issued against him or her for the unlicensed practice of real estate. 

Q: Where can I find information about mutual recognition and the states that Florida has entered into these agreements with? 

A: For more information on mutual recognition, visit http://www.myflorida.com/dbpr/re/MutualRecognition.html 

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: My broker has a multiple broker license and is the broker for three separate brokerage corporations. I’m a sales associate registered under one of those brokerages. Since my broker is the same broker for all three companies, may I engage in real estate activity for all of those brokerages? 

A: No. You may only engage in real estate brokerage activity on behalf of the brokerage company you are licensed. Although your broker may be multiply licensed with three firms, you are prohibited as a sales associate from being multiply licensed. 

Q: I’m a new sales associate who is being trained by a seasoned sales associate at my office. I think this sales associate is paying referral fees to unlicensed people, which I know isn’t permitted under Section 475.25(1)(h), Florida Statutes. Am I legally required to report this activity to FREC? 

A: No. Section 475.25(1)(a), Florida Statutes, provides that real estate licensees are exempt from having to report such violations. 

Q: I’m a sales associate and have entered into a listing agreement with a seller, but failed to provide a legible, signed, true and correct copy of the listing agreement within 24 hours of obtaining the written listing agreement. Is the listing agreement enforceable? 

A: The listing agreement is still enforceable. However, per Section 475.25(1)(r), Florida Statutes, the Florida Real Estate Commission may discipline a licensee for failing to provide a "principal" with a copy of the legible, signed listing agreement within 24 hours of obtaining the written listing agreement. 

Q: I’ve applied to become a sales associate, but because I have a criminal history I must appear before FREC. What is FREC, and what is its function? 

A: FREC, the Florida Real Estate Commission, was created to educate and regulate real estate licensees. Per Section 475.02, Florida Statutes, the Commission consists of seven members appointed by the Governor, subject to confirmation by the Senate. Four FREC members must be licensed real estate brokers, who have each held an active license for five years preceding appointment. One member must be a licensed broker or a licensed sales associate who has held an active license for the two years preceding appointment and two members must be individuals who are not, and never have been, real estate brokers or sales associates. FREC members are appointed for four-year terms, and at least one member must be at least 60 years of age. 

Q: Where can I find the names of current FREC members? 

A: The names of current Commission members (five real estate licensees and two consumer members) can be found at http://www.myfloridalicense.com/dbpr/re/FrecMembers.html 

Q: Must I place my real estate license on the wall in my office? 

A: No. There is no legal requirement to display your license on the wall or anywhere else in your office.