Real Estate Principles and Practices Chapter 20 License Law © 2014 OnCourse Learning.
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Transcript of Real Estate Principles and Practices Chapter 20 License Law © 2014 OnCourse Learning.
Real EstateReal Estate Principles and Practices Principles and Practices
Chapter 20Chapter 20
License LawLicense Law
© 2014 OnCourse Learning
© 2014 OnCourse Learning
Key TermsKey Terms
Agent
Associate broker
Broker
Censure
Earnest money
License law
Reciprocal license
Revocation
Rules and regulations
Salesperson
Subdivider
Suspension
Trust account
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Who Needs a License?Who Needs a License?
Negotiate the listing, sale, purchase, exchange, rent, lease, or option
Receive a fee for providing a lead
Manage property
BPO or CMA
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Who Needs a License?Who Needs a License?
Sell lots or parcels for the owner
Charge an advanced fee to promote the sale
Buy sell or deal in options
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Who Needs a License?Who Needs a License?
Owner or lessor
Attorney-in-fact
Attorney-at-law
Receiver or trustee in bankruptcy
Administrator or executor
Court-appointed guardian
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Who Needs a License?Who Needs a License?
Officer or employee of federal or state agency
Resident manager of apartment complexes or person employed by the owner
Person who sells or purchases oil, gas, or mineral leases
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Who Needs a License?Who Needs a License?
Person who renders opinions of value for real estate taxation
Owners of railroads and public utilities
Employees or officers of the federal government when working in official capacity
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Types of LicensesTypes of Licenses
Two types of licensesSalesperson
BrokerBroker
Broker AKA: AgentAgent – represents the principal
May conduct business in their own name or a trade name
Partnership or corporation
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Types of LicensesTypes of Licenses
Associate Broker: Associate Broker: has a broker's license but works for another broker
Salesperson must work for a broker
Trust account: account for money belonging to others
Broker is legally responsible for salespersons
Branch offices: broker or associate broker
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Types of LicensesTypes of Licenses
Colorado – all licensees are brokers
Broker associate: Broker associate: employed and supervised
Independent broker: Independent broker: self employed with no licensees
Employing broker: Employing broker: can employ and must supervise licensees
Single License ConceptSingle License Concept
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Licensing ExamsLicensing Exams
Completion of required course
Written application & fee
Written or computerized exam
80 – 100 questions apply to all states
Minimum of 30 questions state specific
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Licensing ExamsLicensing Exams
Obtaining a license in a new state
No exam
Only state portion
Different exams for broker or salesperson
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Requirements of ApplicantsRequirements of Applicants
Minimum age: 18 – 21
1 – 3 years experience for broker license
College courses
Continuing education
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CommissionsCommissions
• Independent contractor: self Independent contractor: self employedemployed
• % of commission earned by the firm% of commission earned by the firm
• 100% commission plus share of 100% commission plus share of expensesexpenses
• No set commission feeNo set commission fee
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License FeeLicense Fee
Fee paid for initial license
RenewalContinuing education
Renewal fee
Infraction of the license law
RevocationRevocation
SuspensionSuspension
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Nonresident LicensesNonresident Licenses
Right of reciprocityProof of licensure
Nonresident salesperson must be employed by non-resident broker
Real estate commission designated as licensee’s agent
Education requirements
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Errors and Omissions Errors and Omissions InsuranceInsurance
Available to all licensees and cannot be cancelled
Competitive bidding procedures
Governing board determines coverage, permissible deductibles and exemptions
GuidelinesGuidelines
Cost cannot exceed board or commission limit
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Governing BodiesGoverning Bodies
Real estate commission enforces the license laws
Rules and regulations: Rules and regulations: promulgated by the real estate commission
National Association of REALTORS®
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Governing BodiesGoverning Bodies
Consists of active licensees and unlicensed individuals
Director:Keeps record
Conducts exams
Issue and renews licensees
Holds seminars
Issues, revokes, or suspends licenses
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Governing BodiesGoverning Bodies
Analyze laws and regulations monitoring changes in the industry
Similar education requirements among states
Computer data base
License revocations, suspensions, fines, reprimands, censures, censures, or surrenders
Association of Real Estate Law License OfficialsAssociation of Real Estate Law License Officials
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Trust AccountsTrust Accounts
Must place all money belonging to others in an trust account
Subject to inspection
Shielded from creditors
Commingle: mixing of personal and business funds
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Earnest-Money DepositsEarnest-Money Deposits
Remains in trust account until transaction is consummated or terminated
Check issued to cooperating broker’s trust account
Transferred to escrow agent
oror
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Guaranty FundsGuaranty Funds
Recovery FundRecovery Fund
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Unfair Trade PracticesUnfair Trade Practices
Discrimination based on protected categories
Misleading or inaccurate advertising
Funds must be placed in a trust account / may not commingle
Undisclosed commission, rebate, or direct profit
Representing another broker or accepting commission from another broker without consent
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Unfair Trade PracticesUnfair Trade Practices
Guaranteeing future profits
Placing a “For Sale” sign without written permission
Offering terms other than as authorized by owner or owner’s representative
Inducing a party to break a contract
Failure to present all offers
Paying an unlicensed person
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Unfair Trade PracticesUnfair Trade Practices
Failure to provide an expiration date or copy of listing contract
Failure to provide a copy of sales contract to buyer and seller
Failure to provide a copy of the settlement statement
Failure to put offer in writing when requested by purchaser
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Unfair Trade PracticesUnfair Trade Practices
Failure to present all written offers
Providing less favorable service to minorities
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Disciplinary ActionDisciplinary Action
Commission investigates upon suspected or reported violation of license law
No violation – complaint dismissed
Hearing scheduled if complaint appears justified
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Unlicensed PersonsUnlicensed Persons
Reported to the attorney general
Injunction order to cease