1. Real Estate Principles and Practices Chapter 20 License Law © 2014 OnCourse Learning

2. Key Terms Agent Associate broker Broker Censure Earnest money License law Reciprocal license Revocation Rules and regulations Salesperson Subdivider Suspension Trust account

3. © 2014 OnCourse Learning 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

4. © 2014 OnCourse Learning 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

5. © 2014 OnCourse Learning Who Needs a License? Owner or lessor Attorney-in-fact Attorney-at-law Receiver or trustee in bankruptcy Administrator or executor Court-appointed guardian

6. © 2014 OnCourse Learning 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

7. © 2014 OnCourse Learning 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

8. © 2014 OnCourse Learning Types of Licenses Two types of licenses SalespersonBroker Agent Broker AKA: Agent – represents the principal May conduct business in their own name or a trade name Partnership or corporation

9. © 2014 OnCourse Learning Types 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

10. © 2014 OnCourse Learning Types 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 Concept

11. © 2014 OnCourse Learning Licensing 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

12. © 2014 OnCourse Learning Licensing Exams Obtaining a license in a new state No exam Only state portion Different exams for broker or salesperson

13. © 2014 OnCourse Learning Requirements of Applicants Minimum age: 18 – 21 1 – 3 years experience for broker license College courses Continuing education

14. © 2014 OnCourse Learning Commissions Independent contractor: self employed Independent contractor: self employed % of commission earned by the firm % of commission earned by the firm 100% commission plus share of expenses 100% commission plus share of expenses No set commission fee No set commission fee

15. © 2014 OnCourse Learning License Fee Fee paid for initial license Renewal Continuing education Renewal fee Infraction of the license lawRevocationSuspension

16. © 2014 OnCourse Learning Nonresident Licenses Right of reciprocity Proof of licensure Nonresident salesperson must be employed by non-resident broker Real estate commission designated as licensee’s agent Education requirements License

17. © 2014 OnCourse Learning Errors and Omissions Insurance Available to all licensees and cannot be cancelled Competitive bidding procedures Governing board determines coverage, permissible deductibles and exemptions Guidelines Cost cannot exceed board or commission limit

18. © 2014 OnCourse Learning Governing Bodies Real estate commission enforces the license laws Rules and regulations: Rules and regulations: promulgated by the real estate commission National Association of REALTORS®

19. © 2014 OnCourse Learning Governing Bodies Consists of active licensees and unlicensed individuals Director: Keeps record Conducts exams Issue and renews licensees Holds seminars Issues, revokes, or suspends licenses

20. © 2014 OnCourse Learning Governing Bodies Analyze laws and regulations monitoring changes in the industry Similar education requirements among states Computer data base censures, License revocations, suspensions, fines, reprimands, censures, or surrenders Association of Real Estate Law License Officials

21. © 2014 OnCourse Learning Trust 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

22. © 2014 OnCourse Learning Earnest-Money Deposits Remains in trust account until transaction is consummated or terminated Check issued to cooperating broker’s trust account Transferred to escrow agent or

23. © 2014 OnCourse Learning Guaranty Funds Recovery Fund

24. © 2014 OnCourse Learning Unfair 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

25. © 2014 OnCourse Learning Unfair 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

26. © 2014 OnCourse Learning Unfair 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

27. © 2014 OnCourse Learning Unfair Trade Practices Failure to present all written offers Providing less favorable service to minorities

28. © 2014 OnCourse Learning Disciplinary Action Commission investigates upon suspected or reported violation of license law No violation – complaint dismissed Hearing scheduled if complaint appears justified

29. © 2014 OnCourse Learning Unlicensed Persons Reported to the attorney general Injunction order to cease