Real Estate Licensing Law

Question 0

What PA law regulates the real estate industry?

Answer 0

The Real Estate Licensing & Registration Act of 1980 (RELRA)

Question 1

**What is the main purpose of real estate licensing law?

Answer 1

To ensure that the rights of purchasers, sellers, tenants and landlords are protected from unscrupulous or sloppy practices.

Question 2

What is the composition of the State Real Estate Commission?

Answer 2

• Commissioner of the Bureau of Professional and Occupational Affairs
• Director of the Bureau of Consumer Protection
• 3 Members of the public at large
• 5 Members licensed as Real Estate Brokers
• 1 Member licensed as a Cemetery Broker

Question 3

What 2 bodies of law regulate PA’s Real Estate industry?

Answer 3

1) RELRA. (Real Estate Licensing and Registration Act)

2) State Real Estate Commission Rules & Regulations

Question 4

How are commission members appointed?

Answer 4

Commissioners are appointed by the governor and confirmed by the senate for 5-year terms.

Question 5

Which PA government body grants Real Estate Licenses?

Answer 5

PA Department of State

Question 6

How are commissioners paid?

Answer 6

On a per diem basis.

Question 7

Broker of Record (Employing Broker)

Answer 7

The individual BROKER responsible for the real estate transactions of a partnership, association, or corporation licensed as a broker.

Question 8

What is a broker?

Answer 8

A broker is an individual or entity who, in exchange for a fee, commission or other valuable consideration, performs one or more of the following acts for another person (or entity):

1) NEGOTIATES OR AIDS IN LOCATION OF OR ACQUISITION OF ANY INTEREST IN REAL ESTATE
2) NEGOTIATES LISTING, FINANCIAL TRANSACTIONS AND OPTIONS FOR REAL ESTATE
3) MANAGES REAL ESTATE
4) ACTS AS A REAL ESTATE CONSULTANT, COUNSELOR, AGENT OR HOUSE FINDER
5) UNDERTAKES TO PROMOTE SALE, EXCHANGE, PURCHASE, OR RENTAL OF REAL ESTATE
6) UNDERTAKES TO PERFORM A COMPARATIVE MARKET ANALYSIS
7) ATTEMPTS TO PERFORM ANY OF THESE ACTS

Question 9

**What are the requirements to be a broker?

Answer 9

1) Be 21 or older
2) Have High School Diploma or equivalent
3) Complete 240 hours of instruction beyond salesperson license
4) Be a real estate licensee for 3 years 5) Have experience or education commensurate with 3 years of experience (earned on point system)
6) Pass broker’s examination within 3 years of application
7) Submit written application with DBA, business address and references

Question 10

Associate Broker

Answer 10

An individual who has met the BROKER license requirements but is employed by a BROKER OF RECORD.

Question 11

Salesperson

Answer 11

An individual employed by a licensed BROKER OF RECORD to do one or more of the following:

1) SELL OR OFFER TO SELL REAL ESTATE
2) BUY OR OFFER TO BUY REAL ESTATE
3) NEGOTIATE PURCHASE, SALE OR EXCHANGE OF REAL ESTATE
4) NEGOTIATE A LOAN ON REAL ESTATE
5) LEASE OR RENT REAL ESTATE OR OFFER TO LEASE OR RENT REAL ESTATE
6) COLLECT, OFFER OR ATTEMPT TO COLLECT RENT for the use of real estate
7) ASSIST A BROKER IN MANAGING PROPERTY
8) PERFORM A COMPARATIVE MARKET ANALYSIS

Question 12

**What activities must be performed by real estate licensees?

Answer 12

Activities involving the public that are customary in selling real estate.

Question 13

What are the 6 things a Real Estate Salesperson can do?

Answer 13

1) PURCHASE
2) EXCHANGE
3) RENT
4) SELL
5) OFFER
6) NEGOTIATE

Question 14

Supervised Property Manager

Answer 14

Any real estate licensee involved in property management activities. Licensee must be directly supervised and controlled by the employing broker.

Question 15

**Which activities do not have to be affiliated with a broker?

Answer 15

1) Builder-Owner Salesperson

2) Rental Listing Referral Agent

Question 16

**Which activities do not require a licensee examination?

Answer 16

1) Campground Membership Salesperson

2) Time-Share Salesperson

Question 17

**What types of people can sell real estate in PA without a license?

Answer 17

1) OWNERS OF REAL ESTATE
2) EMPLOYEES OF A PUBLIC UTILITY
3) OFFICERS OR EMPLOYEES OF A MINERAL RESOURCES OR ENERGY COMPANY
4) AN ATTORNEY-IN-FACT
5) A PERSON ACTING UNDER AUTHORITY OF COURT ORDER, WILL OR TRUST INSTRUMENT
6) ELECTED OFFICER OR DIRECTOR OF ANY BANKING OR TRUST INSTITUTION OPERATING UNDER LAW INVOLVING PROPERTY OWNED BY THESE INSTITUTIONS
7) A CEMETERY OFFICER OR EMPLOYEE SHOWING LOTS WITHOUT COMPENSATION
8) AN AUCTIONEER
9)
10)

Question 18

**Who issues real estate licenses in PA?

Answer 18

Department of State

Question 19

**How does a license become inactive and how long can it stay in escrow?

Answer 19

When an individual relinquishes it into ESCROW. It can be placed in ESCROW for 5 years.

Question 20

What state body is empowered to suspend or revoke licenses?

Answer 20

The State Real Estate Commission via the Bureau of Professional and Occupational Affairs.

Question 21

**What type of complaints are investigated by the Bureau of Professional & Occupational Affairs?

Answer 21

1) Any violations from routine inspections

2) Any complaints

Question 22

**If a broker loses a license, what must you do?

Answer 22

Cease all license activity.

Question 23

**What is dual agency under the Real Estate Licensing & Registration Act (RELRA)

Answer 23

Acting for more than one party in a transaction without the knowledge of consent in writing from all parties.

Question 24

**To whom does the Real Estate and Registration Act (RELRA) limit payment of commission or other valuable consideration?

Answer 24

A licensed broker.

Question 25

**What is the Real Estate Recovery Fund?

Answer 25

A means for aggrieved persons to collect judgments awarded in civil court, up to:

1) $20,000 per claim
2) $100,000 per license

The fund is created from $10 fee collected from licensees at license renewal.

Question 26

**How does one collect from the Real Estate Recovery Fund?

Answer 26

1) Demonstrate they are not a spouse or personal representative of the licensee
2) Be awarded a final court judgment
3) Demonstrate all reasonable remedies have been exhausted to collect the judgment
4) Apply for funds within 1-year of termination of proceedings

Question 27

**What disclosure must be on an agreement of sale?

Answer 27

Licensee must declare who they represent.

Question 28

**What must be on an exclusive listing contract?

Answer 28

An expiration date.

Question 30

**What are PA’s documentation requirements?

Answer 30

Maintain copies of records post consummation of the transaction for at least 3 years.

Question 31

**How are escrow monies to be held?

Answer 31

In a separate account exclusively for escrow purposes. Escrow monies may not be COMMINGLED with a broker’s business or personal funds.

Question 32

**What must a sales person immediately do upon receiving escrow funds?

Answer 32

Turn the funds over to the employing broker.