Unit 5: Key Points

Brokerage Offices

• A broker’s office must be of permanent, stationary construction with at least one enclosed room.
• Sales associates may not open their own offices. They must work at an office registered in the name of a broker or owner-employer.
• Every place of a broker’s business must be registered with FREC as a branch office.
• Branch office licenses are not transferable. Old branches are simply closed; a new branch license must be issued.
• A broker’s entrance sign must have the name of an active broker, and the words “licensed (or lic.) real estate broker.”

Advertising

• Persons may not advertise property or personal qualifications in a false, misleading, or deceptive manner.
• All advertising by a brokerage firm must include the name of the firm or it will be a violation called a “blind ad.”
• When licensees use their personal names in an ad, they must use their last name as registered with FREC.
• The brokerage firm’s name must appear below, above or adjacent to the point of contact information in the web site where it first appears.
• “Team or group advertising” shall mean a name or logo used by one or more real estate licensees who represent themselves to the public as a team or group. FREC rules prohibit the use of certain words in the group names.
• The National Do Not Call Registry is a list of phone numbers of consumers who may not be contacted by commercial telemarketers. Telemarketers who violate the law face substantial fines.

Escrow Accounts

• Brokers must hold customer’s funds in an escrow account not commingled with any of the broker’s personal or business funds.
• A broker may put up to $1,000 of the broker’s funds into a sales escrow account, or up to $5,000 into a property management account. 
• A broker’s escrow account must be in a Florida commercial bank, credit union, or savings association.
• Brokers may also place deposits with a title insurance company or with an attorney.
• Funds received by a sales associate must be given to the broker by the end of the next business day.
• Brokers must deposit the funds no later than the end of business on the third business day after the customer has given the funds.
• Brokers must ensure that the escrow account is reconciled and sign and date the reconciliation each month.
• A broker may not hold escrow funds in an interest-bearing account without the written consent of the parties.

Disputes Over Escrowed Funds

• Buyers have legal control over escrowed funds until the offer is accepted, when both parties have control.
• When both parties claim the deposit, it is called conflicting demands.
• If a transaction has not closed and the broker doesn’t know who the deposit belongs to, it is called good-faith doubt.
• If a broker has good-faith doubt, or there are conflicting demands for the escrowed funds, the broker must, within 15 business days, give written notice to the FREC.
• A broker who has notified the FREC about good-faith doubt or conflicting demands has 30 days to institute the FREC settlement procedures (MEAL):
  • Mediation, a process that helps the party find agreement, but is not binding.
  • Escrow disbursement order is issued by the FREC directing the broker on who is entitled to the deposit.
  • Arbitration results are legally binding on the parties.
  • Litigation lets the courts sort it out.
• A broker may legally disburse the funds without notifying the FREC in only three situations
  • The 3-day condominium cooling-off period.
  • If a buyer can’t get the financing that was required in the contract.
  • HUD’s Agreement to Abide in a contract.
• Brokers must retain brokerage records for at least five years.

Rental Lists

• Persons who sell rental lists must be brokers and provide a contract for a refund of:
  • 75% of the fee if the buyer of the list fails to find a rental, or
  • 100% of the fee if the list is not current or accurate.

Real Estate Commissions

• All commissions must be paid to the broker.
• Sales associates can receive a commission only from the broker and cannot sue a customer for a commission.
• Licensees may not pay any part of a real estate commission to an unlicensed person, unless it is the seller or buyer of the property.
• Unlicensed persons who receive a payment for performing a real estate service may be charged with a third-degree felony.