attorneys with The Florida Bar have to take the pre licensing course to
eligible for the state sales associate exam?
61J2-3.008(8) states that any active
member in good standing with the Florida Bar who is otherwise qualified
the real estate license law is exempt from the Commission-prescribed
prerequisite education course for licensure as a real estate sales
It appears that there are
realtors doing CMA's and actually calling it that and not appraisals.
charge a fee for that service. Can a realtor do so as long as it is
CMA? How would they get paid? Should the fee go to the broker or to
estate licensees may help potential sellers determine an asking price
preparing a comparative market analysis (CMA). A CMA is a marketing
may not be referred to or be
represented as an appraisal. Section 475.25(1)(t) of the Florida
states that the Commission may discipline a licensee who:
(t) Has violated any
standard for the
development or communication of a real estate appraisal or other
the Uniform Standards of Professional Appraisal Practice, as defined in
as approved and adopted by the Appraisal Standards Board of the
Foundation, as defined in s. 475.611.
This paragraph does not apply to a real estate broker or sales
in the ordinary course of business, performs a comparative market
gives a broker price opinion, or gives an opinion of value of real
However, in no event may this comparative market analysis, broker price
opinion, or opinion of value of real estate be referred to as an
defined in s. 475.611.
may charge a fee for
preparing a CMA, either as part of or in addition to the sale
monies earned by a sales associate for any
real estate service must be paid to the sales associate’s registered
(broker) and not directly by the buyer or seller. It is a violation of
475.42(1)(d) for a sales associate to collect any money in connection
real estate brokerage transaction except in the name of his or her
may not collect any money in connection with any real estate brokerage
transaction, whether as a commission, deposit, payment, rental, or
except in the name of the employer and with the express consent of the
employer; and no real estate sales associate, whether the holder of a
current license or not, shall commence or maintain any action for a
or compensation in connection with a real estate brokerage transaction
any person except a person registered as her or his employer at the
sales associate performed the act or rendered the service for which the
commission or compensation is due.
If a broker in California refers a customer to a broker in Florida,
is the California broker entitled to part of the commission?
A California broker may refer a customer to a Florida broker and for
doing so the California broker is entitled to a referral fee or a share
of the commission. The California broker, however, may not come to
and perform real estate activity (such as show property to the CA
in Florida. Section 475.25 (2)(h), F.S., states “A licensed broker of
state may pay a referral fee or share a real estate brokerage
with a broker licensed or registered under the laws of a foreign state
so long as the foreign broker does not violate the law of this state.
If an attorney refers a customer to a licensee and the licensee doesn't
pay the attorney part of the commission, can the attorney sue the
An attorney must have a valid, active real estate license to receive
compensation in connection with the performance of a real estate
activity such as referring a buyer to a broker. Exempt individuals are
listed on page 24 of PPL (see line 11). Attorneys-at-law are exempt
real estate licensure when acting within the scope of their
duties (i.e., legal representative in a client-attorney relationship),
but this does not mean that they can earn referral fees for simply
customers to brokers. Section 475.25(2)(h), F.S., states that the
may discipline a licensee who “has shared a commission with, or paid a
fee or other compensation to, a person not properly licensed as a
broker-salesperson, or salesperson under the laws of this state, for
referral of real estate business, clients, prospects, or customers, or
for any one or more of the services set forth in s. 475.01(1)(a).
I have noticed that most of the Ratio Analysis in the 23rd edition
of PPL has been eliminated from the 24th edition of PPL (reference
15 'Real Estate Investment Analysis'). Are my students responsible for
knowing these ratios (i.e.: Equity Dividend Ratio, Cash Breakeven; Debt
Coverage Ratio, etc.) for the State Licensing Exam?
The ratios to which you refer were removed from the salesperson's
(Course I) syllabus. The revised syllabus was approved by the FREC and
is available on the Internet as
a 'pdf' file.
The intent was to remove some content (mostly the ratios) from
course and cover them in the broker's course. This was done in part to
allocate time to product knowledge information that you will find in
appendix of the 24th edition of PPL. Students are responsible for the
knowledge information. The Education Section has indicated that they
not test the material removed from the syllabus. Your students are not
responsible for the ratios that have been removed—they are, however,
for the loan-to-value ratio. If students are tested in the future
any of the ratios that have been removed from the Course I syllabus,
let the Education Section, DRE know immediately.
Can a real estate licensee make a claim against the recovery fund if
the licensee acted in the capacity of a buyer or a seller and not as a
Section 475.483(2)(b), F.S., precludes a licensee from collecting from
the Recovery Fund when the licensee acted as a licensee in a real
transaction. However, there is nothing in the law that prevents an
who has a real estate license, but did not act as a licensee in a given
transaction, from seeking relief from the Recovery Fund. According to
Attorney James Mitchell, "Years ago there was a blanket preclusion for
anyone who had a license but the FREC deemed this unfair and had the
changed to reflect that the preclusion only applied when the licensee
Who is issued a group license—the salesperson or the owner-developer?
Pursuant to Rule 61J2-6.006, F.S., it is the salesperson or
who holds a group license, not the owner-developer. The FREC does
not license owner-developers, only brokers and salespersons. The FREC
owner-developers but only for the purpose of identifying the
or broker-salesperson's employer. Because the rule speaks of a license,
it could only be issued to a salesperson or broker-salesperson, and not
to an entity or a person with whom the Commission has no jurisdiction.
Does the lead based paint law apply to mobile homes?
Yes. Mobile homes (manufactured housing) built before 1978 are included
in the definition of "target housing". Although these units may have
constructed largely of pre-finished materials, some surfaces, both
and exterior, may have been painted with lead-based paint.
EPA and HUD do not exempt mobile homes as a class. Houseboats,
vehicles, etc. are not considered "target housing."
For more information regarding lead-based paint contact the
Lead Information Clearinghouse at 1-800-424-LEAD. The information
mobile homes was found in the "Interpretive Guidance for the Real
Community on the Requirements for Disclosure of Information Concerning
Lead-Based Paint in Housing, Part II", available on the Internet at: http://www.epa.gov/opptintr/lead/igd.pdf
Is an earnest money deposit required to make a contract for the sale
of real estate valid?
Consideration is a necessary element of a contract, however,
can be a promise, act or forbearance bargained for and given over in
for a promise, act or forbearance. A return promise to do something
one was not otherwise obligated to do is sufficient consideration. Most
real estate contracts take the form of a promise for a promise.
What distinguishes a Broker Price Opinion (BPO) from and CMA, and must
a BPO conform to USPAP?
We asked Asst. Attorney James Mitchell to respond to this
A CMA is for the purpose of assisting a seller to arrive at a
price or a buyer to arrive at an offering price. A BPO, or whatever it
may be called, is for the purpose of arriving at a value. Note the
a CMA arrives at a price; a BPO arrives at a value. Anything
a CMA, no matter what it is called, requires compliance to USPAP.
This session of Questions & Answers
the use of Online Sunshine in relation to real estate license
Online Sunshine may be accessed from the links
section of this site.
I want to print a copy of Chapter 475, F.S. How can I print the entire
Chapter without having to print each section separately?
Once you are connected to the Internet, go to Online Sunshine at http://prod.leg.state.fl.us/.
Click on "Statutes and Constitution". Scroll down to "Statutes" and
on "1998 Florida Statutes (Full Volume)." You will open "1998 Florida
Text of Sections". Immediately below the title click on "View Full
Scroll down to Chapter 475 and click on the statute number. The entire
text will come up and can be saved to a file or printed. (Approximately
How can I track the legislative action taking place pertaining the
real estate license law?
Once you are connected to the Internet, go to Online Sunshine at http://prod.leg.state.fl.us/.
This is the official guide of the State of Florida Legislature. Scroll
down and click on "1999 Daily Bill Information Citator" (http://prod.leg.state.fl.us/session/1999/citator/index.html).
The Citator gives you information about legislation filed for the 1999
session. It is available in "as printed" format, using Acrobat
Click on "Statute/Constitution Citations". The Citator in
(see the date in the upper left hand corner.) The Citator is organized
by statute number. For example—go to Chapter 475 which is on page 27.
the scroll bar at the left of your screen to move quickly by page.
to page 27 and click on the page. Bills which have passed both chambers
are underlined. These are the bills of interest. After a bill is
it is signed by the presiding officers of the house and senate as well
as the Secretary of the Senate and Clerk of the House. Once signed, it
is presented to the Governor. The Governor can either sign the bill,
it, or simply let it become law without his signature. When presented
a bill, the Governor has 7 days within which to act if the Legislature
is still in session or 15 days if the Legislature has adjourned. Once
action is taken by the Governor, it will be indicated to the right of
bill number; for example, (VETOED) or (99-7), which indicates that the
bill became law in 1999, Chapter 7).
As of June 4, 1999, three bills pertaining to Chapter 475,
passed both chambers, however, they have not yet become law. The bills
are: H417, S1566 and S2426. Senate bills 1566 and 2426 were signed by
officers on May 25th and May 28th respectively. The Governor has 15
from each of those dates to sign or veto. If he does neither, each will
become law without his signature after the 15 days with the effective
being as specified in each bill, usually the last section of the bill,
in this case, July 1, 1999. House bill 417 was signed by the officers
Friday, June 4th. The Governor has 15 days to act. If bill 417 becomes
law, it will have an effective date of October 1, 1999.
To view the bills, return to the Online Sunshine home page.
the graphic "House" and "Bills". This will take you to "Florida
Online Sunshine". Under House Bills 1999, click on "Bills". At the top
of the page a green ruler bar of numbers will appear. To find H417,
on "4." Scroll down to H0417, entitled Relating to Real Estate Brokers
and Salespersons. Last Action: 4/27/99 H Ordered enrolled - HJ01479.
Now click on "H0417" which will take you to the bill
To see the bill text, scroll down to "Bill Text". Go to HB0417er (the
version). This will take you to the bill text with a strike out version
of Chapter 475, F.S. changes. You can save the text version of the bill
to a file or print it from here.
This issue of Questions and
escrow management. At the FREC Instructor Seminar held in West Palm
several questions were posed by real estate instructors regarding
management. We have asked Asst. Attorney James Mitchell to respond to
questions so that we could share his responses with you.
If a broker receives a post-dated check as an earnest money deposit,
does the broker have to report the amount in his or her trust
And if the check has not yet been deposited at the end of the banking
period, would the amount be identified as a shortage on the bank
statement? (Of course, the broker must first secure the seller's
to accept the post-dated check.)
The postdated check needs to be shown in the broker's trust
Even though it will appear as a shortage in the BANK escrow account,
broker's TRUST account (which encompasses items not necessarily in the
bank, i.e., safe, safe deposit box, etc.) will not be short.
Is it reasonable to assume that when 61J2 refers to a shortage in the
escrow account that results in a citation, that it means an
shortage or an actual shortage of funds that have been received, and
a shortage resulting from a post-dated check or other trust liability
either has not or cannot be deposited into an escrow account?
The broker should note on the monthly reconciliation why the bank
appears short and no citation should be issued.
Once the post-dated check becomes payable, does the broker have three
business days to deposit the check, or must the broker deposit the
check on the date indicated on the instrument?
If the date on the check is beyond the original three day period, then
the broker must deposit the check on the date indicated on the check,
is not given an additional three days.
If a broker receives something like a title to a car to hold, can the
broker list the item on his or her trust liability with a nominal cash
value or does the broker need to determine the estimated value?
Neither the rules or statute address how a broker is to account for
the value, however, I (Jim Mitchell) would say that the value would be
equivalent to the deposit amount shown on the contract and that would
the trust liability. This assumes, of course, that the actual value
or exceeds the amount of deposit shown on the contract. The broker will
need to ascertain the value for purposes of determining whether it will
cover the deposit at the appropriate time. Then the broker, once this
done, would only need to show the value equal to the trust
Question 15 in Chapter 10 of Florida Real Estate
Principles, Practices and Law (PPL),
22nd edition, concerns real estate commission. I think the
is A, however, your answer key indicates that the correct answer is D.
Can you explain this question?
We asked Assistant Attorney General James (Jim) Mitchell to review
this question for us, and here is his interpretation of the review
Regarding my reasons for the answer D; The stem of the
not state that the buyer was ready, willing and able to purchase the
Unless and until that is shown, the broker would not be entitled to a
on the full term offer. This is what the broker would have to
in a civil court to be able to recover the full commission. With
that element missing, we cannot say the broker is entitled to a
from the first offer. That being said, the more correct and
answer is D. (Asst. Attorney General James Mitchell)
Why are open listings unilateral, and exclusive right of sale listings
A unilateral contract obligates only one party to an agreement without
any obligation on the other party. With an open listing, the seller is
saying to one or more brokers, if you bring a ready, willing and able
I will pay you a commission. So the seller is making a promise
however, the broker is not obligated to perform any contractual
If the broker finds a ready, willing an able buyer, the seller has
to pay a commission; but the seller cannot complain (in the legal
against the broker if he or she does not find (or even seek) a buyer.
contrast, an exclusive right of sale listing is generally a written
signed by both parties wherein both parties (seller and broker) have
the broker promises to do certain acts in an attempt to find a buyer
the seller agrees to pay a commission if the broker performs. And so an
exclusive right of sale listing is a bilateral agreement (obligates
sides) between the seller and broker.
The textbook (PPL) states that exclusive
right of sale listings must be in writing. Is there a statute that
There is no law or rule that requires exclusive right of sale listings
to be in writing, however, according to Carolyn Gardner at FAR, the MLS
will only accept exclusive right of sale and exclusive agency listings
which have been signed by the seller.
We used to teach that a contract required valuable consideration, while
good or valuable consideration would be acceptable on a deed. The
latest edition of your book (PPL) says
good or valuable consideration is acceptable for a contract. Is
a change, or were we wrong in the past?
PPL was revised to reflect that a contract requires good or valuable
consideration based on conversations with Asst. Attorney Generals
Oliver and James Mitchell. According to James Mitchell, a contract
requires consideration, therefore, it is appropriate to say good or
consideration. A contract does not require money or something measured
by money to form the consideration.