Chp 17: Real Estate Careers & License Law

Question 1

License Law

Answer 1

The license law consists of the state statute that governs the licensing and business practices of real estate agents and real estate firms.

It also includes the regulations issued by the Director of the Department of Licensing to implement that statute.

Question 2

Real Estate Commission

Answer 2

The Real Estate Commission is made up of the Director of the Department of Licensing and six commissioners who advise the Director.

Question 3

Real Estate Firm

Answer 3

A business entity that conducts real estate brokerage services must have a firm license and a designated broker.

Individuals licensed as brokers or managing brokers may provide real estate services only while affiliated with a licensed firm.

Question 4

Broker

Answer 4

An individual licensed as a broker may provide real estate services only under the supervision of the firm’s designated broker or another managing broker.

Question 5

Managing Broker

Answer 5

A managing broker may be authorized to represent the firm, manage other licensees, and act as a designated broker or branch manager.

Alternatively, he may simply perform traditional broker duties.

Question 6

Designated Broker

Answer 6

A firm’s designated broker must have a managing broker’s license and have the ability to control the firm’s operational and financial decisions.

The designated broker has ultimate authority over and responsibility for all of the firm’s transactions and affiliated licensees, although she may delegate some of her authority to other managing brokers in a written delegation agreement.

Question 7

Business Opportunity

Answer 7

A business opportunity is the sale of a business. If the transaction includes real property (along with the inventory, equipment, and goodwill), an agent representing the seller or a buyer is required to have a real estate license.

Question 8

Licensing Requirements

Answer 8

License applicants must be at least 18 years old, have a high school diploma or the equivalent, and pass the appropriate exam.

Broker applicants must have completed 90 hours of prelicense education, while managing broker applicants must have completed 90 hours of education and have three years of broker-level experience in the last five years (or a satisfactory substitute).

Question 9

Interim License

Answer 9

An interim license consists of the completed application for a broker’s license.

It serves as a temporary license for up to 45 days, until the applicant’s permanent license is issued.

Question 10

Renewal

Answer 10

A real estate license must be renewed every two years.

To renew, a licensee must submit proof that she has completed 30 hours of approved real estate courses.

A broker renewing her license for the first time must complete 60 additional hours of prescribed coursework.

Question 11

Cancellation

Answer 11

If a license hasn’t been renewed within one year after it expired, it is canceled.

Once the license has been canceled, if the former licensee wants to engage in real estate activities again, she will have to apply to have the license reinstated.

Question 12

Reinstatement

Answer 12

A license can be reinstated within two years after cancellation if the former licensee pays all back renewal fees and penalties, plus a reinstatement fee.

The licensee must also complete the education requirement.

Question 13

Inactive License

Answer 13

An inactive license is one that is in the possession of the Director of the Department of Licensing. An inactive licensee may not perform any activities that require licensure.

Question 14

AGency Relationship

Answer 14

Under Washington real estate agency law (the Real Estate Brokerage Relationships Act), an agency relationship is formed with the seller when the listing agreement is signed.

As soon as a licensee starts performing brokerage services for the buyer, a buyer agency relationship automatically forms (unless the agent has signed a listing agreement with the seller).

Question 15

Dual Agency

Answer 15

If the seller’s agent and the buyer’s agent in the same transaction are affiliated with the same brokerage firm, that brokerage firm is a dual agent.

Dual agency is unlawful without the written consent of both parties.

Question 16

Vicarious Liability

Answer 16

The liability of a principal for a harm caused by the act or omission of an agent or subagent is called vicarious liability.

Question 17

Imputed Knowledge

Answer 17

The assumption that a principal has notice of facts known to an agent or subagent is called imputed knowledge.

Question 18

Termination of Affiliation

Answer 18

A licensee’s affiliation with a brokerage firm may be terminated by either party at any time.

When an affiliation is terminated, the licensee is on placed inactive status immediately.

Question 19

Grounds for disciplinary action

Answer 19

xA real estate licensee is subject to disciplinary action if she engages in any act listed as unprofessional conduct in the Uniform Regulation of Business and Professions Act (URBPA).

The real estate license law also has a specific list of acts that are grounds for disciplinary action.

Question 20

Sanctions

Answer 20

After taking disciplinary action against a licensee, the Director of the Department of Licensing may impose any of the following sanctions: license suspension, license revocation, denial of a license application or renewal, restriction of real estate activities, remedial education, monitoring of real estate activities, a probationary period, censure or reprimand, a fine of up to $5,000 for each violation, or other corrective action.

Question 21

Appeal

Answer 21

A licensee may file an appeal of a disciplinary action within 30 days after the date of the Director’s order.

Any sanctions imposed by the Director go into effect immediately, regardless of the appeal.

Question 22

Gross Misdemeanor

Answer 22

A violation of the license law is a gross misdemeanor, and criminal charges may be filed against a licensee along with any disciplinary action.

Question 23

Cease and desist order

Answer 23

In connection with a disciplinary action, the Director may issue a cease and desist order.

The purpose of a cease and desist order is to stop an ongoing violation of the license law.