Chapter 3: Real Estate License Law and Commission Rules

Question 1

The DBPR

Answer 1

The Department of Business and Professional Regulation is commonly referred to as “The Department” or DBPR.

It is under the executive branch of the Governor and is governed by F.S. 120. The Department is structured according to the requirements of F.S.20.165.

Question 2

Who is the head of the Department

Answer 2

The head of the Department is the Secretary, who is appointed by the Governor and is subject to confirmation by the Senate. There is no set term limit; the Secretary serves at the pleasure of the Governor. The Secretary is responsible for planning, directing, coordinating, and executing the powers, duties, and functions vested in the Department, its divisions, bureaus and other subunits.

Question 3

Where are the principal offices of the DBPR, The Department

Answer 3

The principal offices of the Department are in Tallahassee, Florida.

Question 4

F.S. 455

Answer 4

Created the Department to provide licensing, oversight, and regulation of businesses and professions in the state of Florida. The intent of it is to regulate professionals in the most cost-efficient manner so as to maximize competition, minimize the cost of licenses, and maximize public access.

Question 5

The F.S.455 statute specifies that professions should only be regulated when:

Answer 5

• The unregulated practice of a profession can cause harm to the public health, safety or welfare.
• The potential for such harm is recognizable and clearly outweighs any anticompetitive impact that may result from regulation.
• The public is not effectively protected by other means such as federal, state or local legislation, statutes or ordinances.
• Less restrictive means of regulation are not available.

Question 6

F.S. 475 contains 4 parts

Answer 6

• Part 1: Real Estate Brokers, Sales Associates and Schools; Defines the Florida Real Estate Commission (FREC). The Florida Administrative Code contains additional Commission rules that apply to real estate licensees.
• Part 2: Appraisers; Defines the Florida Real Estate Appraisal Board (FREAB). Contains additional FREAB rules that apply to appraisal licensees.
• Part 3: The Commercial Real Estate Sales Commission Lien Act; Allows a broker to place a lien on an owner’s net proceeds (personal property) for commissions earned during a sales transaction.
• Part 4: The Commercial Real Estate Leasing Commission Lien Act; Allows a broker who has earned a commission to place a lien on an owner’s real estate interests in commercial real estate that has been leased.

Question 7

The Division of Real Estate (DRE)

Answer 7

One of the divisions of the Department is the Division of Real Estate (DRE or the Division).

The Division protects the public by regulation of real estate and appraisal licensees through education and compliance, pursuant to F.S. 475

The Division is responsible for the examination, licensing, and regulation of over a quarter of a million individuals, corporations, real estate schools and instructors.

Question 8

Who is in charge of the Division

Answer 8

The Director of the Division is appointed by the Secretary of the Department and is subject to approval by a majority of the members of the Florida Real Estate Commission (FREC or the Commission). The Division Director is a salaried state employee who acts as the day-to-day manager of the Division. The Division offices are located in Orlando, Florida and may not be moved without permission of the legislature.

Question 9

DBPR: Licensing & Regulation

Answer 9

The Department is responsible for licensing and regulation of the real estate profession.

Question 10

FREC: Rule-making & Disciplinary Authority

Answer 10

The Department delegates rule-making and disciplinary authority for the real estate profession to the FREC (Commission).

Question 11

DRE: Day-today Work of Regulation

Answer 11

The Commission is an administrative agency that has only seven members and no employees, so the day-to-day work of regulation of the real estate profession falls to the Division of Real Estate (Division). The Commission and the Division carry out the following Department duties:
• Conduction the investigation of applicants, licensees and unlicensed persons.
• Prosecuting those individuals and entities charged with violations of laws or rules.
• Issuing, renewing, and reissuing licenses.

Question 12

Powers of the Department

Answer 12

1. Issuing injunctions
2. Cease-and Desist Orders Against Unlicensed Parties
3. Citations and Administrative Fines

Question 13

Issuing injunctions

Answer 13

from a court against a licensee for failure to follow a Department order. The Department does not have the authority to issue injunctions against unlicensed persons, but may seek an injunction from the courts for failure to follow a Department order.

Question 14

Cease- and Desist Orders Against Unlicensed Parties

Answer 14

The Department also has the power to issue a cease-and-desist order against an unlicensed party for violation of any rule or law under its administration.

Question 15

Citations and Administrative Fines

Answer 15

Citations may be issued to violators of specified rules that include the payment of an administrative fine not to exceed $5,000 per offense.

Question 16

The Department is authorized to

Answer 16

• Issue cease-and-desist orders,
• Administer oaths
• Take depositions
• Issue subpoenas
• Issue a notice of noncompliance or a citation, and
• Adopt rules concerning violations that may be submitted for mediation. (mediation offenses are defined as those that are economic in nature and are caused by and can be corrected by licensees. 14 days are allowed after contact by a mediator for the parties to agree to mediation and the matter must be resolved within 60 days.)

Question 17

Conducting Investigations

Answer 17

The Department conducts investigations and the prosecution of complaints through the Division.
Enforcement costs are to be borne by the profession being regulated. A fee of $5 is collected from all applicants for licensure and all those who request a renewal of license to pay for investigation and prosecution of unlicensed activity.

Question 18

Civil Action

Answer 18

The Department may also act as a plaintiff in a civil action. A civil penalty of not less than $500 or more than $5,000 for each offense may be imposed.

Question 19

All Professions, Under F.S. 455

Answer 19

The Department issues and renews all licenses for all professions administered under F.S.455, including real estate licenses. The statute establishes procedures for biennial renewal of licenses; however, certain licenses may be issued for a four-year period.

Question 20

Licensing Fees

Answer 20

Fees for licenses are determined by the budgetary requirements of each board or division, but may not exceed limits established by statute.
A board is allowed neither to operate with a negative balance nor to become a profit center.

Question 21

Child Support Compliance

Answer 21

Applications for new and renewal licenses are screened in accordance with F.S.409 to confirm compliance with child support obligations. New applicants can be denied and renewal applicants can be suspended if found to be delinquent with child support obligations. Licenses can be reinstated after notification to the Department that a licensee has complied.

Question 22

Giving False Information is a Third Degree Felony

Answer 22

Giving false info when applying for or renewing a license is a felony of the third degree, which is punishable by a criminal court. In addition, the Commission may take punitive action against those applying for a renewal under such circumstances.

Question 23

Permit Required

Answer 23

Any school, institution or person offering to prepare students for a state exam for a sales associate or broker license must first be approved and issued a permit by the Department. Each school must have a permit holder, and each location from which the courses are offered must be individually issued a permit. Each instructor must also be issued a permit.
All permits are issued for a two-year period, which expires on September 30th of odd numbered years (i.e. September 30,2021). A permit to teach the Department approved courses cannot be used as an endorsement by the Commission.

Question 24

Testing Service

Answer 24

The Division of Professions is responsible for providing testing services designed to assure competency to practice in an applicant’s chosen field. Currently, a private testing service is under contract with the Department to provide testing services for real estate and appraisal applicants.

Question 25

Exams are Confidential

Answer 25

The theft or reproduction of such material is a third-degree felony.

Question 26

Powers of the Commission

Answer 26

The Commission is an administrative agency that has been delegated certain powers under F.S.475 and F.A.C. 61J2

Question 27

Four Specific types of the Commission’s powers

Answer 27

Executive Powers
Quasi-legislative Powers
Quasi-judicial Powers
Ministerial Powers

Question 28

Executive Powers

Answer 28

The power to keep the public informed- executive powers include the publication of books and newsletters to keep licensees and the public informed of new and important changes in the law and rules governing the real estate profession, furthering the education of potential and current licensees, and the investigation of complaints against licensee. The executive powers can be exercised by the chairperson acting alone or can be delegated by quorum vote to any other Commission member.

Question 29

Quasi-legislative Powers

Answer 29

The power to make and pass rules- that regulate the operation of licensees and the real estate profession. Rules enacted by the Commission are not laws, but have much of the same effect. The purpose of the rule-making authority is to allow the Commission to interpret and implement law. The quasi-legislative powers cannot be delegated; a quorum vote of the Commission is required to exercise this authority. Rules enacted by the Commission do not require the approval of any agency or the legislature. They do not become effective, however, until 20 days after they have been filed with the Secretary of State. Rules cannot be in conflict with the U.S. Constitution, the laws of the state of Florida or the United States.

Question 30

Quasi-judicial Powers

Answer 30

The Power to impose disciplinary action- for violations of laws or rules. These powers are similar to the actions of a court of law. The Commission has the authority to deny an application, and to reprimand, fine, or place a licensee on probation, or suspend or revoke a license. The quasi-judicial powers cannot be delegated and require a quorum vote to be exercised.

Question 31

Ministerial Powers

Answer 31

The power to keep records and perform clerical duties- since the Commission has neither staff nor employees, Division employees perform these functions on behalf of the Commission.

Question 32

Disciplinary Authority of the Commission

Answer 32

• Denial of application for licensure
• Disciplinary actions for violations
o A licensee who is found to be guilty of a violation may receive one of the following:
• Be issued a reprimand or an administrative fine of up to $5,000 per offense,
• Be placed on probation, or
• Have their license suspended for up to ten years or permanently revoked.
The Commission must inform the Division of Florida Condominiums, Timeshares, and Mobile Homes when any disciplinary action is taken against any of its licensees.
The Commission is also required to report any violation of law to the proper prosecuting authority for possible criminal prosecution.

Question 33

Composition of the Commission

Answer 33

There are 7 members on the Commission who are appointed by the Governor and subject to confirmation by the Senate.
• 4 members must be licensed brokers, each of whom has held an active license for the 5 preceding appointment;
• 1 member must be a licensed broker or a licensed sales associate who has held an active license for the two years preceding appointment; and
• 2 members, called lay members, must be persons who are not, and have never been, brokers or sales associates. The function of the lay members is to give public input into the regulation of the profession.
• At least 1 member must be 60 years of age or older.

Question 34

Term of Office

Answer 34

4-year terms
Members may not serve more than 2 consecutive terms, although there is not a maximum number of years in which they may serve as long as no more than 2 terms are consecutive.
Appointments are staggered so that no more than 2 members’ terms will expire in any one year. Should a member die during their term, the Governor will appoint a replacement for the remaining portion of the term.
Members are allowed to continue in their professions as licensed brokers, broker associates, or sale associates while serving on the Commission. Lay members may also maintain their separate professions while serving.
Although Commission members are not salaried, each member receives a per diem for each day they work on the Commission business, plus expenses as outlined in F.F. 122.061(6)(a).

Question 35

Meetings of the Commission

Answer 35

Meets at least once a month usually in the offices of the Division located in Orlando. One meeting a year is an organizational meeting during which the members select, from among themselves, the chairperson and vice chairperson for the current year. A quorum (majority of the members) must be present in order to conduct certain duties authorized by law. The Commission is required to take and maintain on file minutes of all meetings, as well as any records accumulated in the performance of its duties.

Question 36

CE credit for attending a legal session

Answer 36

real estate licensees may earn three hours of specialty continuing education credit per renewal cycle for attending one legal session of the FREC meeting.

Question 37

Documentation of Proceedings of the Commission

Answer 37

Official Seal

Prima Facie Evidence

Question 38

Official Seal

Answer 38

the Commission is required to place its official seal on the records o its meetings and on other records and papers reflecting actions of the Commission. The purpose served by the official seal is to authenticate the records.

Question 39

Prima Facie Evidence

Answer 39

certificates entered into evidence in court proceedings are called prima facie evidence, which literally means “on the face of it.” Prima facie evidence is a rebuttable presumption that facts presented are true and correct. This means that the evidence can be overcome by other evidence sufficient to contradict its authenticity. Prima Facie evidence may be accepted in a Florida court as evidence.

Question 40

Initial Issue

Answer 40

An applicant’s initial issue is the first license received in the category in which he or she is qualified. Upon completing this course and passing the state exam, you will receive your initial sales associate license. The license is valid on the date the applicant receives official notification of passage of the state examination.

Question 41

Changing an inactive license to active

Answer 41

Once employed, the licensee can request an active real estate license by filing employment information on the completed DBPR transaction form with the Division.

Question 42

Initial license expiration

Answer 42

The initial license is valid for a maximum of two years. All licenses expire on either march 31st or September 30th in any given year. All newly licensed sales associates and broker licensees must complete the post-licensing education before the end of the first license renewal period. The expiration date is on the license.

Question 43

Renewal

Answer 43

A renewal replaces a prior license and is requested by the licensee when a license is about to expire. The Department mails a notice of renewal to the last known address of the licensee approximately 60 days prior to the license expiration date. Renewals are effective when received by the Department. All renewals are valid for 2 years. If the renewal request is received by the Department prior to the expiration date, the next licensing period still begins on the day following the expiration date of the current license. The request for renewal must be made prior to the expiration of the current license to prevent the license from becoming null and void.

Question 44

First renewal after initial license

Answer 44

For the first renewal following the initial license, must renew by completing the post licensing requirements prior to the expiration of the initial license. Failure to do so will result in a null and void license status.

Question 45

Null and void

Answer 45

a sales associate may not practice real estate and must obtain a new initial license to re-enter the real estate profession

Question 46

A broker’s license status will also become null and void

Answer 46

as a result of failing to complete their post-licensing (first renewal) requirements prior to the expiration of their initial broker’s license. However, a broker may choose to revert to a licensed sales associate by completing the 14-hr Continuing Education within 6 months of their broker’s license becoming null and void.

Question 47

Subsequent (Biennial) Renewals

Answer 47

14-hr continuing education

Question 48

Involuntary Inactive Status

Answer 48

Failure to renew a license prior to the expiration, in other than the initial license period, will put the license into involuntary inactive status. The licensee may not practice real estate while their license is in this status. The license can remain in this status for up to two years.

Question 49

Reissue

Answer 49

A reissue is required any time the information related to a licensee on the record with the Department is no longer correct. This applies to changes in a licensee’s name, or if a license is lost or destroyed. The licensee must notify the Department of any change no later than ten days after the change has occurred, and request a license reissue.

Question 50

In the event of the loss or destruction of a license

Answer 50

an affidavit attesting to the circumstances must be included with the request for the replacement. If the license is recovered, it must be returned to the Department.

Question 51

To request a license reissue

Answer 51

a licensee must complete the appropriate DBPR transaction form and submit it to the Department. The effective date of a reissue is the date the Department receives the properly completed form. The license is reissued for the remainder of the licensee’s license period with the expiration date in accordance with the expiration schedule. If a licensee wishes to reinstate a license following a period of suspension, a request must be submitted along with proof that the terms of the suspension have been fulfilled.

Question 52

Active License Status

Answer 52

A licensee must have an active license to perform the services of real estate. If an active license is desired, a sales associate must obtain employment with either a broker or owner-developer. To maintain active status, a licensee must complete the required post-license education or continuing education as necessary, pay renewal fee, and submit a request for renewal prior to expiration of the current license. When a sales associate changes employers, the license “ceases to be in force.” The sales associate must notify the Commission of the change no later than 10 days after the change, on a form provided by the Commission.

Question 53

Inactive License Status

Answer 53

There are 2 types of inactive status.

1. Voluntary inactive
2. Involuntary Inactive

Question 54

Voluntary Inactive

Answer 54

An individual who as attained license status but does not wish to actively engage in the real estate business. A licensee with a voluntary inactive license must pay the required fees, complete the Commission’s prescribed education, and renew the license prior to expiration to maintain a current license. A license may remain in this status indefinitely. If desired an employed licensee may activate their license at any time without the payment of an additional fee by filing a completed DBPR transaction form.

Question 55

Involuntary Inactive

Answer 55

an individual who does not request renewal of their second or subsequent license, pay the required fees, or maintain their continuing education requirements will have their license automatically placed in an involuntary inactive status. A license may remain in an involuntary inactive status for no more than two years. A licensee may change the status to voluntary inactive or active at any time during the first 12 months by completing the required 14-hour continuing education course and pay an additional fee. If a licensee does not change the involuntary inactive status of their license within the first year, the licensee must complete a 28-hour reactivation course and pay an additional fee within months 13 through 24. If the license is not brought current within two years, the license automatically expires.

Question 56

Void & Ineffective Licenses

Answer 56

A license may appear to be valid and effective when in fact it is not. No real estate service may be performed for compensation under a license that is void or ineffective. If a broker’s license is suspended, revoked, or otherwise void or ineffective, the licenses of all persons employed under such broker become automatically inactive.

Question 57

Canceled license

Answer 57

If a licensee decides to no longer practice real estate, they could return the license to the Department, canceling it.

Question 58

Current vs. Ineffective (not current)

Answer 58

A license is current when the license expiry date has not yet been reached. The license will remain current if it is renewed prior to the expiry date. After the expiry date, the license is sometimes referred to as ineffective, or not current, if it was not renewed.

Question 59

Active vs. Inactive

Answer 59

A sales associate license is active if it is current and the licensee is employed by a broker or owner-developer to practice real estate. The license may become inactive by losing employment or failing to renew prior to the license expiry. A licensee may also choose to be voluntarily inactive.

Question 60

Disciplinary Actions

Answer 60

Suspended

Revoked

Question 61

Suspended

Answer 61

the licensee is prohibited from practicing real estate for a period-of-time.

Question 62

Revoked

Answer 62

the license is permanently removed; the licensee is no longer licensed as a real estate professional.

Question 63

Group license

Answer 63

is a single real estate license that can be obtained if the sales associate or broker associate works for one owner-developer with affiliated organizations, which provides real estate services in different geographic areas. The owner-developer must submit proof that various properties are owned in the name of different entities, but that the real estate ownership is connected and essentially the same.

Question 64

Multiple licenses

Answer 64

A broker can be issued additional licenses in two or more capacities by requesting multiple licenses. The broker must show that the additional licenses are necessary for legitimate business reasons. The request for issuance of multiple licenses cannot be prejudicial to the broker’s business associates or the public. Multiple licenses are not available to sales associates or broker associates.

Question 65

The Department of Legal Affairs office

Answer 65

which is part of the Florida Office of the Attorney General, provides legal advice to the Department, the Commission, and the Division. Assistant Attorneys may be assigned to the Division in Orlando. The primary purpose of the Department of Legal Affairs is to represent the interests of the citizens of this state. Advice and legal assistance provided serves as protection to the public. Outside counsel and investigative services can be obtained when necessary. However, outside personnel cannot offer advice and provide legal services in the same matter.