Everything that Brokers and Sales Associates should do, must not do, and how they maintain licensed status is governed by Florida Statute 475. This law also covers accredited schools and property appraisers. Parts III and IV of the Statute include the Commercial Real Estate Sales Commission and Leasing Commission Lien Acts. The Statute also covers accredited pre-license, post-license license, and continuing education programs. In this article, we will focus on the basics of Florida Real Estate License Law as it applies to residential sales licensees.
Florida License Law’s Purpose
The State of Florida’s primary goal is to protect the general public with anything to do with real estate. This includes buying, selling, renting, leasing, and property management. The law, therefore “regulates real estate brokers, sales associates, and schools . . . in the interests of public welfare.” It is important, therefore, for all licensees to see the law as a clarifying process for us, and as a protective process for everyone with whom we deal.
How is the Law’s Purpose Maintained?
The law establishes a Real Estate Commission whose responsibility is to “foster the education of brokers, broker associates, sales associates, and instructors concerning the ethical, legal, and business principles which should govern their conduct.” This means that every licensee, and those who want to become licensees, can rely on the fact that accredited schools and accredited courses offer what they need to learn in order to perform their duties correctly.
Who Does the Law Say May Become a Licensee?
Florida Real Estate Law is very clear on this topic. An individual, rather than a corporation or LLC, must be at least 18 years old, be a high school graduate or equivalent, be honest, truthful and trustworthy. They must also be of good character and have a reputation for fair dealing. All licensees must be appropriately qualified. Unqualified individuals, therefore, may not conduct real estate transactions on any piece of real estate to which they do not hold title.
How Do You Keep Your License?
In essence, licensees keep their status if they follow the law, rather than violating it, and by satisfactorily completing appropriate accredited continuing education courses. These courses include real estate principles and practice, so licensees can keep on improving their competence. The law also requires that continuing education includes ethics and updates to the law.
How Does the Law Say Licensees May Work With the General Public?
Licensees may hold an active or inactive or a voluntary inactive license. Inactive licensees may not perform professional real estate activities. Active licensees may act as a Transaction Broker or as a Single Agent. The particular responsibilities and levels of authority are determined by the Brokerage Relationship Disclosure Act, which is covered in Florida Statute 475.272.
The law no longer permits dual agency even though some other states do, and some out-of-state buyers or sellers may assume dual agency status exists in Florida. Florida law requires that the form of representation is disclosed at the earliest opportunity to minimize any potential confusion. The two forms of representation are:
- Single agency, when a licensee may represent and have a fiduciary responsibility to the buyer or the seller – but not both.
- Transaction brokerage, when a licensee provides a limited, and non-fiduciary representation to either or both parties to a transaction. Transaction brokers may not work to the advantage or detriment to one of the transaction parties.
The law permits a licensee to switch between one and the other, provided the appropriate forms are disclosed and signed, so the buyer and seller understand the change. The law also states how a licensee must treat the other party if they are acting as a single agent for one side.
- Designated sales associate, when a commercial transaction where a buyer or seller has at least $1 million involved, and at the request of the party, wants a licensee to be designated as their single agent.
The managing broker determines which relationships are permitted. The law permits licensees to perform other duties as long as they are in writing and agreed to.
The law states disclosure requirements do not apply to non-residential transactions, or to rental or leasing transactions, as well as to some other specific situations. It does address how timeshare transactions are handled. This sort of detail is another example of Florida Real Estate License Law encompassing everything for the understanding of licensees, and the protection of the public.
What Else Does the Law Include?
Florida real estate license law also covers how a brokerage business, its office and other internal procedures are handled. One of the critical areas is how escrow and other entrusted funds must be handled. A licensee, for example, must deliver such funds to the broker within one business day, and the office must deposit those funds in an approved bank account within three business days. The office must keep a full paper trail.
One final area comprehensively covered is violation of the law, and disciplinary matters. Licensees who contravene Florida law may be required to attend corrective training, they may be fined, and may have their license revoked.
Florida Real Estate License law is detailed. It addresses all aspects of organization and activity. Licensees are in a position of trust, and the law expects that trust to be taken seriously. Every licensee who works within the law represents the industry well. If you would like to learn more about accredited courses because you want to become a licensee, or because you are due to take continuing or additional education, then please click this link to contact us.