CHAPTER 5 SNAPSHOT REVIEW
Real Estate Brokerage Activities & Procedures
Snapshot Review
BROKERAGE OFFICES
Office requirements
● per Florida, each broker to have an office in building with stationary construction; office to be registered with DBPR; to include enclosed room and space for private meetings; records to be kept in office; only brokers may have offices; may have office outside of Florida or at broker’s residence; must comply with ADA
Branch offices
● any office in addition to main office; must be registered; new offices to be registered
Entrance sign requirements
● sign to be displayed at office entrance; must contain broker’s name and trade name with “Licensed Real Estate Broker” included; sales associates’ names not required but must be below broker’s name
Temporary shelters
● to protect associates and customers; cannot be permanent assignment; no transaction closings
Sales associate officing
● sales associates to be registered under a broker and work out of broker’s office; registered under one broker at a time
GUIDELINES FOR ADVERTISING
Prohibitions
● false or misleading advertising; blind advertising; sales associate advertising or conducting business under own name
● licensees selling their own property outside brokerage may advertise but must disclose ownership and licensure
● team advertising to be done under employing broker’s supervision and name
● must be clear the advertiser is a real estate licensee
Wording of advertisements
● must be clear the advertiser is a real estate licensee
Internet advertising
● broker’s name to be included with point of contact information
Telephone solicitation laws
● Telephone Consumer Protection Act – no unsolicited calls, no robocalls, do not call compliance; opt-out option required; time of day restrictions
● exemptions include nonprofits, political organizations, federal debt collectors, real estate licensee with buyer for “for sale by owner”, with established business relationship, with business inquiry within last 3 months
● CAN-SPAM Act – no unsolicited email with commercial message and without prior consent
● Junk Fax Prevention Act – no unsolicited faxes; all faxes to include date and time, company’s name and phone number; unsolicited faxes to include opt-out option
Florida telemarketing laws
● Florida Telemarketing Act and Florida Telephonic Sales law – solicitors need license; time of day restrictions; no blocking caller ID; payments not limited to credit cards; caller has 30 seconds to identify him/herself; provide right to cancel info
● Florida do not call list to be merged with national list; exemptions include nonprofit, political, and religious organizations and licensed insurance professionals; also includes real estate licensees calling about yard sign placed by seller unless seller is on national do not call list
HANDLING DEPOSITS
Escrow account deposit requirements
● bank account used to hold funds belonging to third party until time to disburse; no comingling of broker funds with third party funds
● funds to be delivered to broker by end of next business day; broker to deposit funds immediately – by end of the third business day following receipt of funds
● attorney or title company escrow – same deposit requirements as for broker; licensee to note name, address, and phone on sales contract; broker to request proof of deposit within 10 business days of due date and provide seller proof within 10 business days of request
Management of escrow accounts
● broker to be signatory on escrow account; broker to reconcile account monthly and keep records; account may be interest bearing with parties agreeing on receiver of interest
● conflicting demands for escrow funds to be reported to FREC within 15 business days; broker to initiate settlement procedure within 30 business days; broker’s good faith doubt results in notifying FREC and initiating settlement procedure
● settlement procedures include mediation, arbitration, litigation with interpleader action or declaratory judgment, escrow disbursement order; 3 exceptions to settlement procedures
RENTAL LISTS & RENTAL COMPANIES
Requirements
● licensee to provide receipt or contract with required language about refunds when paid for list of rentals
Rental advertising penalties
● inaccurate lists not complying with requirements – first degree misdemeanor with jail and/or fine as well as license suspension or revocation
REPRESENTING LICENSEE EXPERTISE
Opinion of title
● prohibited from offering opinion of title not written by attorney
Representation of value
● may offer value opinion derived from BPO or CMA; not to represent as appraisal
Misrepresentation of value
● constitutes fraud, breach of contract, or breach of trust, resulting in lawsuits and discipline
Unauthorized practice of law
● third degree felony punishable with probation, prison time, fines, and restitution
COMMISSIONS
Prohibitions
● price fixing, sales associate contracting directly with principal, sales associate suing principal for commission, sharing commission with unlicensed person, paying unlicensed person for performing real estate services
Kickbacks
● prohibited acceptance of favors, advertising, money, gifts, etc. for referring clients to certain businesses unless all parties are informed, no other law prohibits it, paying referral fee to tenant for prospective other tenant, sharing commission with foreign broker
Procuring cause
● broker’s compensation is earned and payable when the broker has performed according to the agreement; two determinants: first to find customer, inducing customer to complete transaction
CHANGE OF EMPLOYER OR ADDRESS
FREC notification ● notify FREC within 10 days of change; license not in force until new license issued
Sales associate Broker change
● violating confidentiality, duplicating records, removing records from broker’s office
Change of address
● notify FREC within 10 days of change; broker to include names of associates still employed and those who have left; licenses not in force until new license issued
BUSINESS ENTITY LICENSING & REGISTRATION
May register as broker
● sole proprietorship, general partnership, limited partnership, for profit corporation, not for profit corporation, LLC, LLP
● ostensible partnerships prohibited
May not register as broker
● corporation sole, joint venture, business trust, cooperative association, unincorporated associations
TRADE NAMES
● fictitious name used as business name; must be registered and appear on license, signage and advertising
● sales associates prohibited from using trade name
● licensee must be authorized to display name, insignia, or designation of an association
ETHICAL PRACTICES
Codes of ethics
● codes of ethics provide self-regulating standards of conduct covering all facets of the profession; serve clients, customers, and the public; avoid sanctions and liability; cover practices such as job performance, duties to clients and customers, disclosures, non-discrimination, professional relationships
Disclosure
● disclosure: compensating parties; property defects; agent’s interest in property; use of client funds; agent’s identity in advertising
Fraud & negligence
● fraud: actual fraud when misrepresentation of material fact is intentional; negative fraud when failure to disclose material fact is intentional
● culpable negligence: when duties are not performed as required, whether or not intentional
Brokerage cooperation
● professional conduct: no unfair advantage; arbitrate disputes; respect relationships; follow accepted practices
