1. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Course Goal The primary goal of this course is to reaffirm for licensees, those responsibilities of which they must be cognizant when dealing in a business relationship with each other and the public. 1

2. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Lesson 1 Louisiana Law and Regulations – Part I 2

3. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Lesson 1 Objectives Upon completion of this lesson, each student will be able to: Identify the education requirements for both active brokers and agents as well as those for inactive licensees. Identify the education requirements for both active brokers and agents as well as those for inactive licensees. 3

4. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Lesson 1 Objectives Upon completion of this lesson, each student will be able to: Explain the license renewal process for both active and inactive licensees including the procedures to be followed to regain active status after being inactive. Explain the license renewal process for both active and inactive licensees including the procedures to be followed to regain active status after being inactive. 4

5. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Lesson 1 Objectives Upon completion of this lesson, each student will be able to: Identify the three types of escrow accounts and explain the purpose and function of each account, as well as acceptable procedures in utilizing each. Identify the three types of escrow accounts and explain the purpose and function of each account, as well as acceptable procedures in utilizing each. 5

6. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Education Requirements 45 hours post-licensing 45 hours post-licensing Within 180 days of licensing Within 180 days of licensing Will satisfy 8 hours of CE Will satisfy 8 hours of CE Does not satisfy mandatory CE Does not satisfy mandatory CE 6

7. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Education Requirements (cont’d) 12 hours of CE each year 12 hours of CE each year 4 of 12 hours in the mandatory subject 4 of 12 hours in the mandatory subject 7

8. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Names on Licenses Legal names only Legal names only Legal entities Legal entities Revoked licenses Revoked licenses 8

9. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Trade Names Must be registered with the Secretary of State Must be registered with the Secretary of State Distinguish from others Distinguish from others 9

10. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Concurrent Licensing Brokers Brokers Associate brokers Associate brokers Salespeople Salespeople Concurrent timeshare registration Concurrent timeshare registration 10

11. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Structure of a Brokerage Proprietorship Proprietorship Structured entity Structured entity Must have a responsible broker Must have a responsible broker Broker may represent multiple entities Broker may represent multiple entities 11

12. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Independent Contractor Status of Licensee Must be licensed Must be licensed Not be paid by the hour Not be paid by the hour Must have a contract Must have a contract 12

13. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Renewal Applications Individual licensee responsible Individual licensee responsible Must wait for broker to renew Must wait for broker to renew No activity after December 31 No activity after December 31 13

14. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission License Renewal - Active All licenses issued for one year All licenses issued for one year Licenses expire on December 31 Licenses expire on December 31 Three month delinquent renewal period Three month delinquent renewal period 14

15. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission License Renewal - Inactive Issued for one year, just like active Issued for one year, just like active Expires on December 31 Expires on December 31 Same 3 month delinquent renewal period Same 3 month delinquent renewal period 15

16. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Change of Licensing Status From active to inactive From active to inactive Structured entities must remain active Structured entities must remain active Individual brokers Individual brokers 16

17. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Going Inactive Can be done anytime Can be done anytime Can be done while delinquent Can be done while delinquent 17

18. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission While Inactive May not act as a licensee May not act as a licensee Must renew inactive license Must renew inactive license May transfer to active status May transfer to active status CE not required while inactive CE not required while inactive 18

19. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Returning from Inactivity (1 to 5 years) 1 to 3 years inactive - 20 hours CE 1 to 3 years inactive - 20 hours CE 4 to 5 years inactive - 40 hours CE 4 to 5 years inactive - 40 hours CE Need for license law and rules & regulations Need for license law and rules & regulations Over 5 years inactive - 80 hours CE Over 5 years inactive - 80 hours CE 19

20. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Returning to Active Status Without prior completion of post-licensing Without prior completion of post-licensing Prior completion of post-licensing Prior completion of post-licensing 20

21. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Veterans Waiver Active military Active military Spouses Spouses 21

22. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission License Transfer Fee Exceptions Broker’s death Broker’s death Failure to renew broker license Failure to renew broker license Suspension or revocation of broker Suspension or revocation of broker Transfer of broker to inactive status Transfer of broker to inactive status Termination of licensee by broker Termination of licensee by broker 22

23. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Death of a Broker Temporary assumption of duties Temporary assumption of duties 23

24. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Duties of the Appointed Broker/Salesperson Notify licensees of death Notify licensees of death No new contracts No new contracts Licenses returned to Commission Licenses returned to Commission 24

25. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Impaired Brokers Individual broker Individual broker Sponsoring broker Sponsoring broker Qualifying broker Qualifying broker 25

26. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Termination of a Licensee Decision by licensee or the broker Decision by licensee or the broker 5 days to return the license 5 days to return the license Stop all activity Stop all activity 26

27. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Termination of Broker Representation or Dissolution Return of licenses within 10 days Return of licenses within 10 days New qualifying broker within 5 days New qualifying broker within 5 days If merger, notify LREC within 5 days If merger, notify LREC within 5 days 27

28. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Termination Requirements Relinquishment of property Relinquishment of property Return of keys Return of keys Failure to comply Failure to comply 28

29. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Broker-Agent Disputes LREC will not be involved LREC will not be involved Financial issues are a civil matter Financial issues are a civil matter License must still be returned to LREC License must still be returned to LREC 29

30. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Broker’s Place of Business Main office address Main office address Branch offices Branch offices 30

31. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Branch Offices Licenses Licenses Supervision Supervision Duties Duties Penalties Penalties 31

32. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Change of: Business address Business address Business telephone number Business telephone number Post office box Post office box 32

33. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Payment of Commissions to Unlicensed Individuals Illegal to pay unlicensed individuals Illegal to pay unlicensed individuals Business telephone number Business telephone number Payment of referral fees Payment of referral fees 33

34. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Broker’s Obligation Not To Pay Commissions Agent sharing with unlicensed person Agent sharing with unlicensed person 34

35. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Payment To Former Licensees Former licensees Former licensees Transferees Transferees 35

36. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Payments To Business Entities of Licensees Commissions can be assigned to companies Commissions can be assigned to companies Licensee must be the sole participant Licensee must be the sole participant 36

37. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Sharing Referral Brokerage Fees Across Jurisdictions Sharing with licensees permitted Sharing with licensees permitted Referral agent must not be involved in transaction Referral agent must not be involved in transaction 37

38. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Referral Fees Require Reasonable Cause An introduction An introduction A contractual relationship A contractual relationship Referral prior to contract initiation Referral prior to contract initiation 38

39. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Interference with Brokerage Relationships Demanding referral fees without cause Demanding referral fees without cause Reducing relocation benefits Reducing relocation benefits 39

40. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Interfering with Contractual Relationships Do not counsel on contract termination Do not counsel on contract termination 40

41. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Damages for Interference with Contractual Relationships Actual damages Actual damages Attorney fees Attorney fees 41

42. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Non-Compete Agreements Agent’s right to rescind Agent’s right to rescind Bold text Bold text 42

43. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Errors and Omission Insurance Required of all active licensees Required of all active licensees Obtain privately or from LREC Obtain privately or from LREC Not required while inactive Not required while inactive 43

44. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Types of Escrow Accounts Sales escrow account Sales escrow account Rental trust account Rental trust account Security trust account Security trust account 44

45. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Who has an escrow account? Only brokers Only brokers Not associate brokers Not associate brokers Not salespeople Not salespeople 45

46. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Specifics of Escrow Accounts Naming the account Naming the account Location of the account Location of the account Interest on the account Interest on the account 46

47. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Specifics of Escrow Accounts (cont’d) Branch office and additional accounts Branch office and additional accounts Signatory rights on checking accounts Signatory rights on checking accounts 47

48. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Specifics of Escrow Accounts (cont’d) Personal funds in escrow accounts Personal funds in escrow accounts $2,500 limit $2,500 limit Exception to the $2,500 limit Exception to the $2,500 limit 48

49. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Deposits Into Escrow Accounts Money Money Anything of value Anything of value 49

50. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Withdrawing Funds From An Escrow Account Limited to 10 specific reasons Limited to 10 specific reasons 50

51. Broker and Agent Responsibilities © 2011 Louisiana Real Estate Commission Handling Escrow Disputes Disburse funds on mutual consent Disburse funds on mutual consent Disburse on interpretation of the contract Disburse on interpretation of the contract Deposit funds with the court Deposit funds with the court Disburse funds on order of the court Disburse funds on order of the court 51