Chapter 10 - Laws and Rules Affecting Oklahoma RE Practice

Question 1

What is the fundamental purpose of the RE Commission?

Answer 1

To safeguard the public interest and provide services by assisting and providing resources; encouraging and requiring high standards of knowledge and ethical practices of licensees; investigating and sactioning licensed activities, and prosecution of unlicensed people who violate code and rules

Question 2

Describe the Commission - authority, members (requirements), term, election, and other responsibilities.

Answer 2

Has sole authority to issue RE licenses in state and regulate practice of licensees

7 members, who must be US citizens and OK residents at least 3 of the past 5 years. 5 of the members must be RE brokers with at least 5 years experience. One member must be a lay person (no RE experience) and one person must be an active representative of an approved OK RE school located in the state

Members serve a 4 year term. OAR provides recommendations for persons to serve. A chairperson and vice-chairperson are selected each year

Commissioners also oversee money in the OK RE Commission Revolving Fund - application renewal, fines, etc. funds to be invested at discretion of commissioners in securities through OK State Treasurer’s Cash Management Program

Question 3

What are the summarized powers and duties of the Commission?

Answer 3

Adopt rules, issue and deny licenses, regulate and discipline licensees, and prescribe penalties for violations

Draft and revise RE purchase and/or lease contracts and any related addend for standardization and use by RE licensees

Question 4

What are the services of RE?

Answer 4

Anyone performing one of the 8 services below for compensation (anything of value) must be licensed:

• advertise
• appraise
• auction
• buy
• exchange
• lease
• rent
• sell

“A BAR SALE”

Question 5

Who is excluded from needing a license?

Answer 5

• person w/ interest in business entity performing RE activities for its own use
• person acting as attorney-in-fact for owner of RE authorizing final consummation by performance of contract for sale, lease, or exchange
• any attorney-at-law performing duties of attorney
• receiver, trustee in bankruptcy, admin, executor, or his/her attorney, performing his/her duties
• person performing acts under order of court, acting as trustee, will agreement or deed of trust
• acting as resident manager for owner or employee acting as resident manager
• engages in activity of acquisition of RE on behalf of entity, public or private
• resident of apartment building, duplix, or complete
• receives referral fee not to exceed $100
• any person or entity managing lodging facility
• employees of licensed RE broker who lease residential housing units
• qualify through state or federal housing subsidized program

Question 6

What are the requirements for all RE applicants?

Answer 6

A) Good moral character
B) 18 or older
C) Successfully completed 90 hours or equivalent in basic RE instruction. Certificate is valid for 3 years. 6 hour certified college transcript

Question 7

What must a provisional sales associate do (continuing ed) after they receive their PSA license?

Answer 7

Submit evidence of 45 clock hours or equivalent, representing post-license education RE instruction. Must be completed before PSA expires after 12 months

Question 8

What is the requirement for a broker or broker-associate license?

Answer 8

A) Two year’s experience, within past 5 years, as licensed RE associate or PSA
B) Completion of 90 clock hours or it’s equivalent of advanced RE instruction

After issuance of license, licensee must complete additional 90 hours or equivalent in instruction

Question 9

Can a business entity get licensed?

Answer 9

Yes, as long as the managing member or broker is a licensed broker

Question 10

How can non-OK residents get a license in OK?

Answer 10

Completing the RE portion of the exam, giving written consent that actions and suits of law can be commenced in county of OK

The Commission may enter into a non-residential agreement with another jurisdiction and qualify actively licensed non-resident applicants

A non-resident applicant w/ an inactive license may apply to the Commission to operate as a non-resident provisional sales associate or broker - completes docs and all requirements

Question 11

What is a cooperative brokerage agreement?

Answer 11

Where a broker is duly licensed in another state and enters into an agreement with an OK licensed RE broker

Question 12

What happens when an applicant wants to reapply for licensure?

Answer 12

Applicant may not reapply within the first 3 years after revocation

Question 13

What do broker candidates get tested in for the Advanced Course in RE (different than agent)?

Answer 13

• broker supervision
• establishing a RE office
• business, financial, and brokerage management
• OK broker relationships
• anti-trust and deceptive trade

Question 14

Who does a renewal not applicable to?

Answer 14

• licensees on inactive status
• licensees holding PSA license
• non-resident licensees if licensee maintains a current license in another state and has satisfied education requirements for renewal in that state

Question 15

What is the continuing ed requirement for salespersons?

Answer 15

A minimum of 21 hours of Commission approved courses before the end of 3 year license expiration

12 of 21 hours are mandated by the Commission in:

• professional conduct
• broker relationships act
• fair housing
• current issues including code and rule updates

Remaining 9 hours can be in any Commission-approved course

Brokers must complete the 15 hour “Broker in Charge” course plus two of the four topics from above

Question 16

How will a licensee get reinstate if license has lapped (not been renewed)?

Answer 16

Will have to make a payment equal to exam fee and late penalty fees for period. Following docs are submitted:

1) Less than one year - license and late fee, reinstatement fee, national criminal history check, and docs required by commission
2) More than 1 year, but less than 3 - same as 1, but also reinstatement applicaiton, licensing exam, and statement that applicant has read License Code and Rules booklet
3) If more than 3 years - must reapply as original applicant

If PSA did not renew on time, but did do post-license education prior to expiration, they can apply and qualify as original applicant

Question 17

When must a licensee or business entity file for an occurence?

Answer 17

• Change of address or number - 10 days

- Home address - 10 days

Question 18

Advertising rules include:

Answer 18

• must use business name licensed with Commission
• yard signs must have broker’s office telephone number
• name of another licensed firm cannot be used
• must indicate real estate broker, not private party
• franchises must use name and broker/business
• cannot be direct towards race/color/creed/religion/etc.
• advertising must be confined to property being sold
• must get permission
• in social networking, must reference license status
• cannot use yard sign at personal residence
• seller incentives cannot be advertised

Question 19

What are advertising rules for associates?

Answer 19

• prohibited from advertising under only associate’s name
• must be under direct supervision of broker
• must include broker’s name
• open house or directional signs used in conjunction with broker’s signs do not need to have a name or trade name of the associate’s broker and broker’s number

Question 20

What can a licensee be disciplined (that I might not already think of)?

Answer 20

• accepting commission or valuable consideration as a RE associate from anyone other than the broker
• soliciting, selling, or offering for sale RE by offering “free lots”, conducting lotteries or contests, or offering prizes to influence a purchaser or prospect
• accepting employment contingent on appraisal report. Appraisals must be in compliance with the OK RE appraisal law and must disclose to employer whether person is licensed or certified
• offering, loaning, paying, or making to appear to have been paid, a down payment or earnest money deposit for a purchaser or seller in connection with RE transaction

Question 21

What are some prohibited dealings (that I might not already think of)?

Answer 21

• making of brokerage service contract w/o termination date
• purchasing property without making disclosure and obtaining approval of owner, or failure by licensee to exert best effort in order to later purchase or acquire property for himself
• repeated misrepresentations
• procuring signature to purchase offer or contract or lease which has no definite purchase price or method of payment, termination date, possession/property date
• failure to make known in writing to any purchaser any interest in property
• discouraging a party from obtaining an inspection
• allowing access to the property without the owner’s authorization
• failing to disclose any relationships in transaction
• failure to ensure all persons in transaction are licensed

Question 22

What is a substantial misrepresentation that would be subject to disciplinary action?

Answer 22

1) recommendation or use by licensee of fictitious or false instrument for incuding loan or insure sum of money
2) Failure to disclose to buyer or cooperative licensee defect regarding condition of RE
3) Use by RE broker of name or trade name of licensee whose license has been revoke or supsended
4) Representing to any lender, guaranteeing agency or other interested party, either verbally or prep of false docs, an amount in excess of true and actual sales price - differing from what was agreed upon

Question 23

What happens when a suspension or revocation becomes effective (that I might not already think of)?

Answer 23

• when a license is suspended/revoked, associates under supervision are placed “inactive”
• if suspended/revoked broker has branch office, license for branch will be placed inactive unless ordered by Comission; all associates are “inactive”
• listings must be cancelled between order of suspension and effective date
• suspended/revoked broker shall not assign listings without to another broker w/o written consent of listed party

Question 24

What are penalties against unlicensed persons?

Answer 24

• misdemeanor punishable by a fine up to $1,000 or imprisonment in county jail up to 6 months or both
• OREC may impose fine of up to $5,000 or amount of commission earned (whichever is greater) for each violation

Question 25

What are penalties against licensees?

Answer 25

• admin fine not less than $100 and no more than $2,000 for each violation or
• up to $5,000 for multiple violations resulting from a single incident or transaction

All admin fees are due within 30 days of notification and license may be suspended until fine is paid. If fines aren’t paid within 30 days, fines double and the licensee has another 30 day period. If not paid then, license will be revoked

Question 26

How long does a licensee have before a written response is required for a complaint?

Answer 26

A licensee has 15 days and after 15 day answer period, a field investigation or preliminary investigation may be conducted

• If action is needed, may suspend license within 30 days
• Broker will be notified

Question 27

What are psychologically impacted properties?

Answer 27

• an impact based on things like HIV or AIDS occupant or site of suicide, homicide, or felony
• OK says this is not material fact and doesn’t have to be disclosed

Question 28

Do registered sex offenders or violent crime offenders need to be disclosed?

Answer 28

No duty to disclose

Question 29

Is licensee required to disclose property size?

Answer 29

• No duty to disclose

- If licensee provides 3rd party information, must identify source of info

Question 30

What are dual contracts?

Answer 30

Concern same parcel of real property, one is the true and actual price and one is based on a mortgage

Question 31

What does the OK Education and Recovery fund address?

Answer 31

1) Source of funds for consumers who are injured financially as result of actions of licensee
2) Provide educational programs for futher development of OK RE licensees

Money should be used to reimburse claimants who are awarded judgements by an OK RE licensee in any transaction

Licensees contribute with application and renewal fees

Question 32

What is the process to receive payment from the Education and Recovery fund?

Answer 32

1) file with district court
2) cause of action must be less than 2 years prior to filing
3) party filing should notify the Commission
4) final judgement is received
5) judgement is enforced
6) compensation recovered by claimant is awarded

A claim cannot be made if:

• claimant is spouse of judgement debtor or representative of spouse
• claimant is licensee who acted on own behalf
• claimant’s claim is based on RE transcation where claimant is partically responsible for outcome

Question 33

What amount can a judgement be paid from the Education and Recovery fund?

Answer 33

• $25,000 or the unsatisfied portion, whichever is less
• reimbursement of attorney fees not to exceed 25% of claimant’s amount approved by Commission
• claims are limited to $50,000 in aggregate for a parcel of land

Question 34

If the Education and Recovery fund balance exceeds $250,000 the Commission can spend funds for educational purposes on:

Answer 34

• promoting advancement of education in RE field for benefit of general public
• underwrite educational seminars and other forms of educational projects
• establish RE courses at institutions of higher learning located in state and accreditted
• contract for particular educational project in field of RE to further purposes of license code