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Chapter 2

Broker

Opening a Real Estate Office


Learning Objectives

Describe the characteristics of the various business structures that may be registered as brokerage entities; the characteristics of officers, directors, and partners of real estate brokerage corporations and partnerships; and the statues/rules pertaining to operating under a broker’s own name;

Identify the requirements associated with registering a trade name with the DBPR and the requirements for fictitious name registration

Identify the rules and requirements regarding real estate brokerage offices, branch offices and temporary shelters


Learning Objectives

Identify the rules and requirements related to entrance signs

Identify the accessibility requirements outlined in the Americans with Disabilities Act pertaining to public accommodations and commercial facilities

Explain the statutes and rules pertaining to classified advertising and self-promotion, For Sale signs and Sold signs, and rental lists


Learning Objectives

Explain the Fair Housing Act as it applies to advertising and the display of the fair housing poster

Explain the provisions of the Federal Communications Commission’s (FCC) do-not-call rules and describe the applicable exemptions under the Florida Telemarketing Act

Explain the provisions of the CAN-SPAM Act and the Junk Fax Prevention Act


Business Structures that May be Registered as

Brokerage Entities

Sole Proprietorship Broker

– Only (sole) owner

– Personally liable for business debts and torts

Broker must– Register sole proprietorship with the DRE

– Register trade name (if applicable) with the DRE


General Partnership

2 or more persons joining together to conduct business

Partners share Profit - equal or non equal

Liability - full

Responsibility – full

May be created by contract Written

Oral

Implied


General Brokerage Partnership

Business entity is registered

Partners Must be active or inactive brokers or non-licensed

registered person

At least 1 must be an active broker

– If the only active broker is gone the registration is canceled if not replaced within 14 calendar days

Sales Associate or Broker Associate may not be general partner


Limited Partnership

Created by filing with the Florida Department of

State, Division of Corporations

Requires at least

One general partner - full liability

One limited partner - liability limited to their

investment


Limited Brokerage Partnership

Business entity is registered

General Partners

Must be active or inactive brokers or non-licensed

registered person

At least 1 must be an active broker

– If the only active broker is gone the registration

is canceled if not replaced within 14 calendar

days

Sales or Broker Associate may not be general

partner

Sales or Broker Associate may be limited partner


Limited Liability Partnership

Created by filing with the Florida Department of State

Partners liable for

Errors, Omissions, Negligence or Wrongful Acts

– Created by him or her or under his or her direct

supervision

Name must include Limited Liability Partnership (LLP)


Corporation

An Artificial person

Created by filing with the Florida Deprtment of State

Domestic corporation - under the laws of Florida

Foreign corporation - under the laws of a state other

than Florida

Alien corporation – formed outside the U.S. or its

territories

Managed by a Board of Directors, acting through the

Officers


Corporation

Real Estate Brokerage corporation Business entity is registered

Officers and Directors

– Must be active or inactive brokers or non-licensed

registered person

– At least 1 must be an active broker

❖ If the only active broker is gone the

registration is canceled if not replaced within

14 calendar days

– May not be Sales Associate or Broker Associate


S Corporations

Must be organized under the laws of the

United States

One class of stock

No more then 100 shareholders

Shareholders limited to citizens or residents

of the United States


Limited Liability Company

Limited personal liability

Great flexibility when passing income and

deductions to its members

Name must include Limited Liability Company

(LLC)


Corporation General

Partnership

Limited

Partnership

Registered as brokerage

At least one active broker

14 calendar days to replace loss of only active broker

active or

inactive

Broker or

registered

Officers and

Directors

General Partners General

Partners

Sales

Associate

may not

be

Officers or

Directors

General Partners General

Partners

Brokerage Entities


Business Forms that May Not Register

Corporation Sole

Ecclesiastical or church organization

Do not confuse with not for profit corporation

Title descends to successors in office

Brokers should use caution


Business Forms that May Not Register

Joint Venture

Business Trusts

Cooperative Association


Ostensible (Quasi) Partnership

When no partnership actually exists

Public has reason to believe that one does

Created by legal theory of estoppel


Trade or Fictitious Names

Fictitious Name Act

Register with the Division of Corporations,

– Florida Department of State

– Brokerage sole proprietorships are exempt

❖ If broker’s full name is included in the fictitious name

❖ Register directly with Florida Real Estate Commission

Only 1 trade name per brokerage entity


The Real Estate Office

Principal office Primary office

If local zoning allows, may be in residence

Registration transferable to new location

Branch Offices Any additional location where the business is

conducted Change of location requires a New Registration

– Registration is not Transferable May be reopened with no further action if the

registration has not expired


Real Estate Office Requirements

Brokerage office Building of stationary construction

One enclosed room– Provide privacy for negotiations and closings

Files and records Kept in principal office

May be in residence if local zoning permits

Must have entrance sign

Out-of-State brokerage office Broker agrees in writing to cooperate with DBPR


Real Estate Office Requirements

Sales and Brokers associate may not open own office Must be employer by broker or owner-developer

Sales and Broker associates may not be registered or licensed with a real estate brokerage as a: General partner

Member

Manager

Officer

Director


Sales and Broker Associates

May not use fictitious name

Must register under legal name

Income tax purposes – form a professional corp. Professional corporation (PA)

Professional limited liability company (PLLC)

Limited liability company (LLC)

Commissions paid to professional corporation


Temporary Shelters

Located in a subdivision For protection of customers and sales associates

Not a branch office if: Sales associates not assigned there

Sales transactions not closed there

Determination if shelter must be registered as branch office: Permanance

Use

Character of activities


Entrance Signs

Sign must include the trade name (if applicable)

Broker's name

Words, "Licensed (or Lic.) Real Estate Broker"


Sign Contents

John SmithLicensed Real Estate Broker

Jane Smith, Sales Associate

John Doe, Broker Associate


Americans with Disabilities Act (ADA)

Locations that must be accessible to persons with physical or mental disabilities

Places of Public accommodations and Commercial facilities

Brokerage offices are consider to be both

Must be newly constructed or renovated if readily achievable

ADA’s accessibility guidelines mandates the location and dimensions of accessible parking spaces


Advertising

Must contain the name of the Brokerage Firm

Blind Ad

Contains only a phone number or address

Does not disclose the name of the brokerage firm

Illegal

Sales Associate’s name

Not required

If used in the advertising

– Last Name must appear

– As registered with DBPR


Advertising Internet advertising

Point of contact must be adjacent or above or below

brokerage firm name

Any means to contact

Keep listings up-to-date

Current information – sales associates

Financing

Be cautious of violations of Truth in Lending


Rental Lists Must receive written contract or receipt

Refund within 30 days

75% if rental is not obtained

100% if not current or is inaccurate

$1,000 fine

1 year prison term

Violation

is a 1st

Degree

Misdemeanor


Fair Housing (Title VIII) Prohibits discrimination in sales, leasing,

advertising, financing or brokerage services based on: Race

Color

Religion

Sex

National Origin

Handicap

Family Status

HUD Fair Housing Poster Not displayed

Discrimination charges filed against brokerage

Guilty until proven innocent

Summary of Protected Classes

Year Addedand legislation

Protected Classes

Memory Aid

1866Civil Rights Act

Race Realtors

1968Title VIII of the Civil Rights Act

(Fair Housing Act)

Color Can

Religion Really

Sex Sell

National Origin Nice

1988Fair Housing Amendment

Act

Handicap Houses

Family Status Fast


Telephone Consumer Protection Act Federal Communication Commission

Calls can only be made with prior written consent

Applies to residential calls

Hours for calling 8 a.m. – 9 p.m.

Must maintain company-specific do-not-call lists

Must honor National Do Not Call Registry

Must provide name, company name, telephone

number or address

Prohibits artificial voice or recording to residences

Prohibits calls using automated telephone equipment

Prohibits unsolicited advertising faxes


Telephone Consumer Protection Act Exceptions

Political solicitations

Telephone surveys

Charitable solicitations

Permissible Call FSBO seller for interested buyer

Call Persons with whom the licensee has not engaged in a business relationship with in the last 18 months

Contact customer for 3 months after business inquiry or application– Example: open house register signed, FSBO

seller requests information


Telephone Consumer Protection Act Florida law Federal law

Differences $10,000 fine $40,000 fine

May solicit FSBO May not solicit FSBO


Email Advertising CAN-SPAM Act

Applies to businesses

Unwanted commercial email to computers

email message must include Include valid physical postal address

Provide clear “opt out”

Unsubscribe within 10 days

Clear “to” and “reply to”

Domain name

Email address

Fax solicitation Date and time fax is sent

Name of company sending fax

Phone # of company fax or sending fax #

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