Chapter Overview
Every state has a regulatory body
charged with the responsibility of overseeing real estate practices. In
addition, some mechanism exists in each state for providing the necessary administrative
support to that regulatory body in order for it to carry out its duties.
Licensing of individuals, firms and schools involved in real estate activities
is the primary day-to-day effort in license law work.
This chapter describes the Florida
Real Estate Commission, its composition and powers and the relationships
between and among the Department of Business and Professional Regulation, the
Division of Real Estate and the Commission. Registration of proprietary schools
of real estate is covered, as are license requirements, active and inactive
status, license activation, void and ineffective licenses and fee schedules.
Learning Objectives
Upon completion of this chapter, the
student should be able to:
1. Describe the composition and member qualifications
of the Florida Real Estate Commission.
2. Explain how members of the Commission are
appointed.
3. Distinguish between active and inactive
license status.
4. Explain the purpose of multiple and group
licenses.
5. Distinguish between void licenses and
ineffective licenses.
6. Identify situations that cause a license to
cease to be in force.
7. Identify situations that cause a license to be
canceled.
Key Terms
canceled
cease to be in force
current mailing
address
group license
ineffective
involuntarily inactive
multiple licenses
prima facie evidence
void
voluntarily inactive
I. Florida Real Estate Commission (FREC)
A. Purpose of the Commission
1. To protect the public by regulating real estate brokers and brokerage firms, broker-salespersons, salespersons, and real estate schools and instructors
2. To ensure at least minimal competence of licensees
B. Composition and qualifications
1. 7 members: 4 brokers, 1 broker or salesperson, and 2 consumer members; one of the 7 age 60 or older
2. Accountable to the governor for proper performance
3. Members are exempt from civil liability
4. Governor appoints, senate confirms
C. Compensation
1. $50 per day for official business and meetings, plus expenses incurred for official activities
D. Meetings
1. Monthly meetings plus an annual meeting
2. Quorum of 4 Commissioners to conduct business
E. Commission general powers and duties
1. Adopt a seal (certification of rules)
2. Foster the education of applicants and licensees
3. Make determinations of violations
4. Regulate professional practices
5. Create and pass rules and regulations
6. Establish fees
7. Grant or deny applications for licensure
8. Suspend or revoke licenses and impose administrative fines
F. Commission may retain independent legal counsel
G. Commission powers limited to administrative matters
H. Delegation of Commission powers and duties
II. Division of Real Estate
A. The Division of Real Estate (DRE) is one of four divisions within the Department of Business and Professional Regulation (DBPR or BPR)
1. Division of Technology, Licensure and Testing
2. Division of Regulation (legal and investigative)
3. Division of Professions (state boards and commissions)
4. Division of Real Estate (supports Florida Real Estate Commission)
B. Directors of divisions appointed by DBPR Secretary, but DRE Director must also be approved by FREC majority vote
C. Funding
1. The DRE is funded by fees, publication sales and other charges assessed by FREC
2. Funds to be used only for real estate regulation activities
D. Employees
1. DRE personnel are employed by the DBPR
2. FREC members are appointees (not employees)
E. Licensing examinations
1. DBPR has responsibility for providing the services necessary for the preparation and administration of all examinations but must seek advice of FREC
2. FREC specifies areas of competency, relative weights and passing grades
3. DBPR must ensure that exams adequately and reliably measure applicant’s ability to practice real estate
4. Record of all examination documents maintained by DBPR
F. Licenses and fees
1. Application fee (administrative charge) and initial licensing fee
2. Renewal fee
3. Real Estate Recovery Fund fee (when applicable)
4. Schedule of fees
G. Change of address
1. Salespersons must notify the DRE in writing of any change in their mailing addresses within 10 days after the change
H. License renewal periods
1. Current license renewal period is two years
2. Licensees may not practice real estate following the expiration of their licenses
3. It is unlawful to practice real estate with an inactive license
I. License renewal
1. Must renew prior to expiration date or license will revert to involuntarily inactive status
2. 12 months to renew provided licensee does not practice real estate during that period
3. Must complete post-licensing or continuing education
4. Exemption for military licensees and licensed spouses
J. Inactive status
1. Voluntarily inactive—qualified but chooses not to be active; holds an inactive license
a. Voluntarily inactive can activate any time if 14 hours C.E. completed every two years
2. Involuntarily inactive—previously qualified but allowed license to expire
3. Active license not renewed reverts to inactive status (post-licensing exception)
4. Involuntarily inactive more than two years without completing C.E.; status automatically expires without FREC action
5. Involuntarily inactive reactivation:
a. 12 months or less, take FREC-approved C.E. course
b. More than 12 months but less than 24 months, complete 28 hours of FREC Course I
K. Void and ineffective licenses
1. Void
a. Expired
b. Revoked
2. Ineffective
a. Inactive
b. Suspended
c. Canceled
3. Ceases to be in force
a. Change of business address (by broker or school) or employer (by salesperson or instructor)
b. Salespersons’ or instructors’ licenses whose broker (school) changes business address remain effective and in force
4. Broker’s license is suspended or revoked —effect on salespersons, general partners, officers, or directors—licenses and registrations are canceled automatically
L. Multiple and group licenses
1. Broker may hold multiple licenses
2. Salespersons and broker-salespersons employed by an owner-developer may be issued a group license
M. Registration of proprietary real estate schools
1. Registration and permit
2. A proprietary real estate school
a. May not promise or guarantee employment or placement of a student
b. Is not allowed to advertise the school in connection with an ad of an affiliated broker unless there is a distinct separation in the advertisement
c. Is not permitted to make reference to a pass/fail ratio
3. School permits may be suspended for
a. Guaranteeing that students will pass a state exam
b. Offering a refund to students who fail
c. Representing that a state agency endorses the school
d. Obtaining a list of questions that appear on any state exam
e. Representing that the school or an instructor has obtained questions from such an exam
f. Furnishing questions purported to be from a state exam
III. Real Estate Education and Research Foundation
A. Administered by the Florida Real Estate Commission
B. Required priority and purpose
C. Other objectives and duties
Discussion Questions
1. What qualifications must a real estate licensee have to be appointed to the FREC?
2. What is the relationship between the FREC and the DBPR?
3. How may the powers of the Division of Real Estate be expanded or reduced?
4. What is the difference between voluntarily inactive and involuntarily inactive status?
Classroom Exercises
1. Have a student draw an organizational chart on the board showing the interrelationships of the DBPR Secretary, the DBPR divisions and the FREC.
2. Take the class to a Commission meeting, or obtain a copy of the Commission’s agenda for one of its regular monthly meetings, and discuss the items on the agenda, including their impact on prospective and practicing licensees.