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Laws and Requirements for Florida Real Estate Brokers and Brokerages

A complete and updated look at all the laws and requirements brokers and brokerages must follow in the state of Florida.

Brokerage ownership and brokers

A brokerage must have at least one broker, and every broker licensed with a brokerage must be registered as one of its officers, directors or general partners. There is no maximum number of brokers a brokerage can have. (Section 61J2-5.016, Florida Administrative Code)

A sales associate or a broker associate may own a brokerage. However, no sales associate or broker associate may be registered as that brokerage’s officer, director or general partner. (Section 61J2-5.016, Florida Administrative Code) 

Office locations

A broker’s office can be in a residence as long as it doesn’t violate local zoning ordinances and is permitted by the homeowners’ association or condominium association. Additionally, all associates must be registered and work out of an office maintained and registered in the name of the broker/brokerage. Home-based brokerages must still meet minimum office requirements and brokers’ signage requirements. (Section 475.22, Florida Statutes, and Section 61J2-10.022, Florida Administrative Code)

A broker’s office must consist of at least one enclosed room in a building of stationary construction, so a broker’s office cannot be in an RV or a houseboat. (Section 475.22 (1), Florida Statutes)

If a broker or his/her sales associates meets buyers, negotiates offers or performs similar activity at a model home for a subdivision, that model home must be registered as a branch office with the Division of Real Estate. (Section 475.24, Florida Statutes)

When a brokerage firm changes its business address, it must notify FREC no later than 10 days after the change, using a form provided by the commission. (Section 475.23, Florida Statutes)

Broker responsibilities regarding sales agents

Brokers may be disciplined for failing to direct, control or manage their associates in conducting their real estate activities. We recommend that all brokers have and maintain a Policy & Procedures manual clearly outlining the brokerage’s practices and functions. (Section 475.25(1)(u), Florida Statutes)

Sales associates may not collect “any money in connection with any real estate brokerage transaction, whether as a commission, deposit, payment, rental, or otherwise, except in the name of the employer and with the express consent on the employer.” (Section 475.42(1)(d), Florida Statutes)

If a broker’s agent or sales associate is convicted of a felony, the broker is not required to terminate the associate or notify the Florida Real Estate Commission (FREC). However, if a licensee pleads guilty or nolo contendere to a crime in any jurisdiction, or is convicted or found guilty of a crime, the licensee must inform FREC of this, in writing, within 30 days. (Section 455.227(1)(t), Florida Statutes)

Multiple licenses

A referral company must be registered as a real estate brokerage with Department of Business and Professional Regulation (DBPR), since being paid for the referral of real estate business is real estate activity. The broker must apply for a multiple license if he or she will be the broker for several real estate brokerages. (Section 475.01(1) (a), Florida Statutes)

To become a broker for another brokerage corporation, a broker must apply for a multiple license. He or she isn’t required to have an ownership interest in the second brokerage corporation, but must be registered as an officer or director of the corporation. (Section 61J2 5.016, Florida Administrative Code)

Branch offices

All branch offices must have the same corporate or trade name as the primary office, regardless of their geographic location within the state of Florida. Also, no individual, partnership or corporation may be registered under more than one trade name. (Rule 61J2-10.034, Florida Administrative Code)

Working with real estate agents outside of Florida

A broker licensed in Florida can share compensation with a broker located outside of Florida as long as that person is properly licensed where he or she is located and does not violate Florida law by physically engaging in real estate activity in Florida. Before paying compensation, the Florida licensed broker should verify that the out-of-state agent is complying with the law regarding real estate services in his or her state or jurisdiction. (Section 475.25(1)(h), Florida Statutes)

Records retention

Brokers do not have to keep paper versions of required business records. Legible copies or electronic versions of the records are sufficient. Brokers may also maintain the required business records outside the office. However, they must be made readily available to DBPR in case of an audit.

Each broker shall keep books, accounts and records to enable to the DBPR to determine whether such broker is in compliance with Section 475 of the Florida Statutes. This can include obvious records like listing agreements, sales contracts and leases, but could also include emails or other forms of communication that an office may have to show why or how certain actions were taken during the course of a transaction. It is recommended that all brokers establish a clear record retention policy for their office(s). (Section 475.5015, Florida Statutes)

Signage

Brokers who have at least 15 employees during at least 20 weeks of the year must display the “Equal Employment Opportunity Is the Law” poster (available to download at www1.eeoc.gov/employers/poster.cfm) on their premises. The notice must be posted prominently, where employees and employment applicants can readily see it. The notice provides information concerning the laws and procedures for filing complaints regarding violations of employment laws. (Code of Federal Regulations (CFR) 1601.30, Federal Code 29)

Selling business enterprises

Brokers are authorized to sell a business opportunity or business enterprise. This applies to businesses that don’t include real property or land – for example, a retail store. The statute’s definition of real property or real estate includes “any interest in business enterprises or business opportunities …”  (Section 475.01(1)(a), Florida Statutes)

Sales associates forming a professional corporation

Sales associates who are married to one another are not permitted to form a single professional corporation (PA) and have commissions from both associates for real estate transactions paid to the PA. However, each one may form an individual PA. (Section 475.161, Florida Statutes)