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Chapter 3 & 4

License Law & Commission Rules/ Duties & Disclosures

QuestionAnswer
Department of Business & Professional Regulation (DBPR) Created by statute, the department regulates professions in the state of Florida, one of which is the Division of Real Estate
DBPR powers issue cease & desist orders (lic & unlic) - administer oaths, take depos, issue subpoenas, & adopt rules-LICENSEES ONLY
DBPR citations 455-citations are issued when rules or laws are violated. the max fine is 5,000 per offense
FREC FLORIDA REAL ESTATE COMMISSION 475-An administrative agency formed to: educate real estate licensees ;pass rules to regulate the operation of licensees & to interpret f.s 475 ; impose disciplinary action against licensees for rule and law violations
FREC members 4-must be licensed real estate brokers for at least 5yrs; 1 must be a licensed real estate sales associate for at least 2yrs; 2 cannot be licensed or have ever been; 1 must be at least 60yrs of ageber
FREC member office terms fs 475; appointed by the governor to at least 4 year terms; may serve no more then 2 consecutive terms; no maximum number of years- but no more than 2 consecutive terms
FREC powers FS 475- executive powers (publish books & education members) quasi-legislative powers (interpret & implement fs 475) quasi-judicial powers (impose disciplinary actions against licensees)
FREC disciplinary authority fs 475- deny applications; issue reprimands; place licensee on probation; suspend licensee on probation; suspend licensee up to 10yrs; permanently revoke license; issue administrative fines up to 5,000 per offense
voluntary inactive status licensee who does not wish to engage in the real estate business; may remain in this status indefinitely; must renew license by completing continuing education every 2 years
involuntary inactive fs 455.02/475.183 licensee does not renew their license; automatically becomes involuntary inactive; stays in the status for 2 years; cannot perform real estate services; license null & void after 2 years
us armed forces members FREC RULE 61J2-1.015 dues & renewal requirements waived while on active duty; continues for 6 months after leaving active duty; applies to spouse while stationed outside Fl; must not engage in real estate activities during this period to maintain status
void & ineffective licenses only active broker in a firm has license; suspended, revoked or becomes ineffective; all licensees under broker are automatically involuntary inactive; turn license back to DBPR- license is cancelled
multiple license fs 475.215 issued to a qualifying broker owning more than one real estate company
group license FREC rule 61J2 6.006 a sales or broker associate working for one owner-developer who is registered, not licensed
common law unwritten law derived from english common law; uses previous court decisions as guidelines
statutory law written laws are called statues; enforced by the courts; fs 455 & 475 are examples
administrative law laws enforced by administrative agencies; have the power to levy monetary fines; fs 455 & 475 are examples
special agent authorized by an employer to perform a single act; the agents employer is her principle
general act authorized to act for an employer on a continuing basis; authority is limited to a specific trade or business; a licensee is a general agent of her broker or owner-employer
arm's length relationship parties are adversaries; licensees may never deal at arms length; owe everyone honesty and fairness
universal agent may act for her principal in all matters (power of attorney) acting for someone lacking the mental capacity
Subagent extension of other agencies; licensee is a general agent for their broker/ owner-employer; licensee is a subagent of broker/ owner-employers principals
brokerage relationships transaction broker (written disclosure not required) single agent (written disclosure required) no brokerage relationship (written disclosure required) applies to residential sales as defined by florida
brokerage relationship disclosures fs 475- transaction broker (written disclosure not required) single agent (written disclosure required) no brokerage relationship (written disclosure required) applies to residential sales as defined by florida
brokerage relationship disclosure must be made before or at the time of entering into a contract, or- before showing the property (which ever occurs first)- written disclosures must be kept for 5 years
transaction broker duties fs 475.278-deal honesty & fairly; disclose all known facts that materially affect the value of the property; account for all funds; use skill care & diligence; present all offers & counter offers; limited confidentiality; additional duties as agreed
single agent duties fs 475-deal honestly & fairly; disclose all known facts that materially affect the value of the property; account for all funds; use skill, care & diligence; present all offers & counter offers; loyalty; full confidentiality; obedience; full disclosure
no brokerage relationship fs 475- deal honestly & fairly; disclose all known facts that materially affect the value of the property; account for all funds
consent to transition to transaction broker notice fs 475- single agent changes to transaction broker relationship; principle must give written consent; no written consent-licensee must remain single agent
designated sales associate fs 475 non residential sale (as defined by fl) both parties request single agency representation from same firm in same transaction; both parties must have assets 1,000,000 or more; broker assigns one agent to represent buyer & another to represent seller
principal employer of a single agent
dual agency one licensee represents both buyer & seller; in the same transaction; as a single agent; illegal in the state of florida
fiduciary duties fs 475.01 duties owed to a principal in single agency; principal can sue licensee if these duties are breached; may bring criminal penalties by attorney general
presenting offers licensee must transmit any & all offers; written & verbal; offers without a deposit; charged with concealment if failure to present
find a purchaser (listing contract) commission is due once sales contract is signed
effect a sale (listing contract) commission is not due until title transfers (closing)
payment of commission licensee can only be paid by their broker/owner- developer; broker may give written permission for closing agent to pay licensee @ closing; licensee not paid- can only sue employer-not public
overage or secret profit illegal for broker to receive more than customary profit; unless employer is informed
illegal kickback frec rule 61J2- commission & additional fee paid to licensee; without all parties knowledge; without proper license; for which no service was performed; regulated by the respa
legal kickback frec 61J2- commission & additional fee paid to licensee; all parties to the transaction are informed; with proper license if require; an actual service was performed; regulated by the respa
referral fee to licensees fs 475.25/ frec rule 61J2 may share commission with out parties knowledge or permission; recipient must have active license in another state or country; if not a fla licensee- may participate in the transaction
referral fee to non-licnsees fs 475.25/ frec 61J2-10.028 licensee may not share commission with unlicensed parties; may share commission to unlic parties; may share commission to unlic party to the transaction; with full disclosure to all interested parties
relationships document retention fs 475.5015 residential relationship disclosure documents; must be kept in files for 5 years; for all written contracts; even if transaction doesn't close
multiple listing service (mls) member- broker organization; brokers agree to place all listings in mls; listing brokers offer commission split to selling brokers called "cooperating" brokers
Created by: dmboo