Chapter 2: Real Estate License Law and Qualifications for Licensure Flashcards Preview

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Flashcards in Chapter 2: Real Estate License Law and Qualifications for Licensure Deck (47)
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1

What is the purpose of the Florida Real Estate License Law

to protect the public. The Department is essentially a consumer protection agency.

2

Caveat Emptor

before statutory law existed, means, “let the buyer beware.” It was “buyer beware” on property defects that rendered the property unfit for ordinary purposes.

3

The Commission

The Florida Real Estate Commission (FREC)

4

The Department

The Department of Business and Professional Regulation (DBPR)

5

The Division

The Division of Real Estate (DRE)

6

Persons Who are Required to be Licensed

A Florida real estate license is required when anyone performs a service that is specified under F.S. 475 and when the following 4 conditions are simultaneously present, unless that individual is otherwise exempt under the law.
1. Performing a service of real estate
2. In the state of Florida
3. For another
4. For compensation

7

Statutory Services of Real Estate

F.S.475.01 specifies the real estate services shown below that require those who perform such services to possess a current and valid Florida real estate license.

A BAR SALE (Appraising, Buying, Auctioning, Renting, Selling, Advertising, Leasing, Exchanging)

8

By-bidders

using by-bidders to drive up the price of property that is being auctioned with no intention of buying is illegal. Is a violation of the real estate license law and other laws that deal with fraudulent or deceptive practices.

9

Individuals who are exempt from licensure

1. attorneys & accountants
2. appraisers
3. business organizations
4. court appointees
5. salaried employees
6. other individuals

10

Attorneys-in-fact

any person acting for the purpose of the execution of contracts or conveyances only is exempt. They are granted authority under a power of attorney to act for others in some capacity, such as signing documents

11

Attorneys at law

may perform legal services on behalf of their clients without a real estate license. They may prepare documents, handle closings, and give legal advice. However they may not perform services of real estate for compensation, receive sales commissions or referral fees without a real estate license.

12

Certified public accountants

may perform accounting services on behalf of their clients; they may prepare documents and handle closings. They may not perform services of real estate for compensation, receive sales commissions….etc.

13

Partners in a partnership

who perform real estate services for the partnership are dealing for themselves, as well as for the other partner(s). If each partner receives a pro rata share of profit based on his or her ownership interest in the partnership, no real estate license is required for any of the partners. However, if a partner or partners receive a share of profit in excess of their ownership interest in the partnership, all partners are in violation of the license law.

14

Corporations

that sell, exchange, or lease their own real property don't need a license.

15

Timeshare exchange companies

are exempt from licensure to the extent that the exchange company is engaged in exchange program activities as described in, and complies with F.S. 721.18, the Florida Timeshare Act.

16

Court Appointees

are persons who are appointed by a court of law to perform services of real estate. They may do so for a fee or salary but not for a commission.
o Trustees
o Receivers
o Masters in chancery
o Court-appointed appraisers

17

Salaried Employees

who are employed by the following entities or of individuals, partnerships, or corporations who own real estate may perform real estate services on behalf of their employers without being licensed.
o Government agencies
o Railroads
o Rural electric cooperatives
o Public utilities
o Salried employees of an owner, or of a registered broker for an owner, of an apartment community who work in an onsite rental office of the apartment community in a leasing capacity are exempt. A tenant in an apartment community may receive up to $50 cash, personal property, or credit toward rent for the referral of a new tenant for the same complex.
o Salaried managers of condominium or cooperative apartment complexes are exempt when renting individual units within such condominium or cooperative apartment complex if rentals arranged by the person are for periods no greater than one year.

18

Other individuals who do not need real estate license

o Individuals may buy, sell, or perform services of real estate for themselves without having a real estate license.
o Persons who deal strictly in personal property transactions. As an example, mortgages are personal property.
o Cemetery lot salespersons
o Renting of a mobile home lot or recreational lot
o Owners of one or more timeshare periods
o Radio, television or cable enterprise employees may perform real estate services on behalf of the employer.
o Any person or other entity that rents, or advertises for tent, transient occupancy of public lodging establishments such as hotels, motels, and rooming houses.
o Dealers registered under the Securities and Exchange Act of 1934, this exemption applies whether stock or assets of the business enterprise are purchased or sold. The exemption does not apply to a sale, exchange, purchase or rental of land, buildings, fixtures, or other improvements to the land that is not made in connection with the sale, exchange, purchase, or rental of a business enterprise.

19

Sales associate

must be employed by a real estate broker or owner-developer to practice. Must apply for and complete all pre-license requirements to obtain initial license. Must also complete all post-license requirements prior to their initial license expiration in order to keep their sales associate license and continue practicing real estate. After that, ongoing biennial (every two years) continuing education requirements must be met to maintain a sales associate license.

20

Broker

a broker is a person who performs services of real estate as an agent for another, who is compensated for those services, either directly or indirectly. A broker must maintain an office and may hire sales associates or broker associates to perform services of real estate on his or her behalf. Sales associates and broker associates receiver their compensation from their employing broker, and are never compensated directly by the customer. Broker applicants must complete all broker pre-license requirements. A licensed sales associate who wishes to apply to be a broker must have been employed under one or more actively licensed brokers for at least 24 months within the preceding 5 years before becoming eligible to take the state broker exam. Ongoing biennial continuing education requirements must be met to maintain a broker’s license.

21

Broker Associate

an applicant for a broker’s license may choose to continue employment in a sales associate capacity with a current employer subsequent to passing the state broker examination. If so the applicant will be registered as a broker associate after passing the broker examination. A broker associate is qualified to receive a broker’s license but chooses instead to be employed under the direction, control, and management of an actively licensed broker or owner-developer. In this capacity, the broker associate acts as a sales associate, not as a broker.

An applicant for a Florida real estate license is not required to be a resident of the state of Florida, or to be a citizen of the United States

22

Pre-licensing

• Complete the required sales associate or broker pre-license education and pass the pre-license course final exam with a score of 70% or higher.
• Submit an application for the state exam, along with payment of a fee for the initial license.
• Submit electronic fingerprints that will be used in a background check to determine any criminal history.
• Pass the state examination with a score of 75% or higher (to obtain an inactive license)
• Obtain employment and file employment information

23

Post-licensing (for the first renewal)

• Complete the required sales associate or broker post-license education and pass the post-license course final exam
• Pay a renewal fee

24

Continuing Education (CE) (every 2 years)

must be completed for all subsequent two year renewal periods following the first renewal. To complete this the candidate must:
• Complete the required 14-hour continuing education.
• Pay a renewal fee.

25

Mutual Recognition (not reciprocity)

the state of Florida has entered into contractual agreements, referred to as mutual recognition, with a limited number of states that recognize the similarity in the content of their mutual educational and experience requirements for real estate licensing. Mutual recognition applies to specific states and is not the same as reciprocity, which would allow for licensees from one state to practice in another state. Florida does not have reciprocity with any other state with regard to real estate licensing.

26

Mutual recognition states

Alabama, Arkansas, Connecticut, Georgia, Illinois, Mississippi, Nebraska, and Rhode Island.

A qualifying nonresident of Florida who has been actively licensed in another state who wishes to become licensed in Florida, and resides in a state with which Florida has entered into a mutual recognition agreement, may bypass the pre-licensing requirements.

Instead the may apply and take a 40-question law examination. A score of 75% or higher (answering 30 questions or more correctly) qualifies the individual for an initial Florida license that is equivalent to their out-of-state license (i.e. brokers licensed as brokers; sales associates licensed as sales associates).

They may submit a certification of license history from the state where he or she is claiming mutual recognition.

27

Florida residency

is defined as anyone who has resided in the state four months or more during the previous year, or who presently resides in Florida with the intent to reside continuously for a period of four months or more months. Residency can include a recreational vehicle, hotel, rental unit, or any temporary or permanent location in Florida.

28

Fee waiver program for unlicensed military veterans and their spouses

- The Department has the ability to waive the initial licensing fee, the initial application fee, and the initial unlicensed activity fee for military veterans and their spouses at the time of discharge who apply to the Department for a state professional license. Military licensees can keep their license in good standing without renewing or paying dues or fees for a period of two years after discharge from active duty as ling as they do not engage in real estate activities during this time. Spouses, while married to active duty military members stationed outside of Florida, and for a period of two years after the military member is discharged from active duty, are exempt from license renewal requirements, provided they do not engage in real estate activities.

29

Professional License for active duty service members or spouses

The Department will issue a professional license to applicants who are or were active duty members of the armed forces of the United States. Former military members must have received an honorable discharge. A professional license will also be issued to a spouse or to one who was married at any time to the member during any period of active duty, or to a surviving spouse who was married to the active duty member at the time of their death.

30

Applying for an initial Real Estate License

• Completed application
• Fee payment
• Electronic fingerprints
• Supporting documentation- documentation must be provided that pertains to background issues listed on the application, if applicable. Criminal convictions, other than minor traffic infractions, must also be disclosed. Failure to answer honestly may result in disciplinary action, which might include the denial or revocation of licensure.