Chp 17: Real Estate Careers & License Law Flashcards
License Law
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.
Real Estate Commission
The Real Estate Commission is made up of the Director of the Department of Licensing and six commissioners who advise the Director.
Real Estate Firm
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.
Broker
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.
Managing Broker
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.
Designated Broker
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.
Business Opportunity
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.
Licensing Requirements
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).
Interim License
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.
Renewal
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.
Cancellation
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.
Reinstatement
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.
Inactive License
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.
AGency Relationship
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).
Dual Agency
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.
Vicarious Liability
The liability of a principal for a harm caused by the act or omission of an agent or subagent is called vicarious liability.
Imputed Knowledge
The assumption that a principal has notice of facts known to an agent or subagent is called imputed knowledge.
Termination of Affiliation
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.
Grounds for disciplinary action
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.
Sanctions
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.
Appeal
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.
Gross Misdemeanor
A violation of the license law is a gross misdemeanor, and criminal charges may be filed against a licensee along with any disciplinary action.
Cease and desist order
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.
