All 50 State, DC and all Canadian provinces license and regulate the activities of real estate licensees, broker and sales persons.
Uniform policies and standards for administrating and enforcing state licence laws are promoted by the Association of Real Estate License Law Officials ARELLO
Purpose of License Laws
Laws protect the public by ensuring a standard of competence and professionalism in the real estate industry. The laws achieve this goal by:
Establishing basic requirements for obtaining a real estate license and in many cases, require continuing education to keep a license.
Defining activities for which a license is required
describing acceptable standards of conduct and practice for licensees and
Enforcing those standards through the disciplinary system
Their main objective is to ensure that the rights of purchasers, sellers, tenants and landlords are protected from unscrupulous or sloppy practices.
Real Estate Licensing and Registration Act (RELRA) (The Act)
Adopted in 1980
Statutory law, enacted by the state legislature and signed into law by the governor.
State Legislature can amend or modify the act, not the State Real Estate Commision
State Real Estate Commission
Administers the Act and and supervises the activities of licensees in PA
Rules and Regulation are found in Chapter 35, Title 49.(Professional and Vocational Standards of the Department of State.
Rules and regulations provide procedures for administration the law and set operating guidelines for licensees.
Regulations have the same force and affect as the law
Functions under the Bureau of Professional and Occupational Affairs within PA Department of State.
The Commission is comprised of 11 members that include:
The commissioner of the Bureau of Professional and Occupational Affairs
The director of the Bureau of Consumer Protection or a designee
Three members who represent the public at large, (known as public members)
Five members licensed as real estate brokers, in the business for at least ten years and
One member licenses as a broker or cemetery broker, having been licensed at least five years and sold cemetery lots for at least 10 years.
The Commission annually elects a chairman from it's members
Commissioners are appointed by the governor and confirmed by the senate for five year staggered terms
The are compensated on a per diem basis as stipulated by the act
Meet in Harrisburg
Conducts formal and informal hearings relating to complaints filed against licensees.
Required to hold public meetings to solicit suggestions, comments and objections about real estate practices from members of the public. Held in Philly, Harrisburg and elsewhere in the state.
Are regulated by the State Board of Certified Appraisers not the state Real Estate Commission
The RELRA-PA Real Estate Licensing and Registration Act
Defines activities relating to real estate for which licensure is required and the procedures for obtaining their licensees
Real Estate Commission requires that applicants include a criminal record check completed by the PA State Police with their license application. It must be dated 90 days within of submission of the license application
Candidates for licensure are not required to be either US citizens or residents of PA in order to be licensed
RELRA defines Broker as an individual or entity(corporation, partnership, or association) who, for another or for a fee, commission or other valuable consideration, performs one more more of the following acts:
Negotiates with or aids a person in locating or obtaining for purchase, lease or acquisition any interest in real estate.
Negotiates the listing, sale, purchase, exchange. lease, time-share, financing or option for real estate
Manages Real Estate
Acts as a real estate consultant, counselor, agent of house finder
Undertakes to promote the sale, exchange or rental of real estate
Undertakes to perform comparative market analysis
Attempts to perform those acts.
Licensure Requirements for a Broker
Be at least 21 years of age
Be a high school graduate or equivalent
Have completed 240 hours, (16 credits) of real estate instruction as prescribed by the Commission, instruction for salesperson license does not qualify
Have engaged as a real estate salesperson for at least three years or have experience and/or education that the Commission considers equivalent. The Commission uses a point system as a guide for evaluation the experience of the applicant.
Pass both portions of a written examination within three years of the date of the license application, the national exam and the state exam.
Submit a written application including the name and address under which the applicant will do business and recommendations attesting to the applicant's reputation for honestly, trustworthiness, integrity and competence.
Broker of Record
The individual broker responsible for the real estate transactions of a partnership, association or corporation licensed as a broker
Only one individual may be recognized as the broker of record, regardless of the number of offices the firm operates
Also known as the employing broker.
Within 15 days of the death or incapacity of the broker of record, an authorized must notify the Commission and appoint another qualified person to serve as the broker or broker of record
Individual who has met the broker license requirements, but who is employed by a broker of record.
They may not employ other licensees or engage in the real estate business in their own name or form their own place of business
An associate broker's license is required to manage a branch office on behalf of a licenses broker of record.
An individual who is employed by a licensed broker of record to do one or more of the following:
Sell or offer to sell real estate, or list real estate for sale
Buy or offer to buy real estate
Negotiate the purchase, sale or exchange of real estate
Negotiate a loan on real estate
Lease or rent real estate or offer to lease or rent real estate
Collect, offer or attempt to collect rent for the use or real estate
Assist a broker in managing the property
Perform a comparative market analysis.
Must be at least 18 year of age
Must complete 60 hours of real estate as prescribed by the Commission
Must pass both portions of the examinations prior to being issued a license
Supervised Property Management Activities
Any real estate licensee involved in property management activities must be directly supervised and controlled by the employing broker
The salesperson or associate broker is not permitted to independently negotiate the terms of a lease or execute a lease on behalf of the lessor
Allows real estate licensees who work for the same broker to form qualified associations for the purpose of receiving compensation from their broker.
The broker of record may pay commissions or compensation to this association.
The formation must be reported to the Commission within 30 days.
Qualified Association may consist of a corporation, limited liability partnership, limited partnership or limited liability company.
It may NOT hold a real estate license, may not suggest in any manner that it provides real estate services and must be owned only licensees affiliated with the same broker.
If the owner dies, it may continue for up too 18 months.
An individual or entity who engages in the business in the capacity of a broker, exclusively within the limited field of business that applies to cemetery lots, plots and mausoleum spaces or openings.
Responsible for the business activities and maintenance of an office in the same manner as a licensed broker.
Cemetery Associate Broker
An individual cemetery broker who is employed by another cemetery broker or a broker.
Individual has the same relationship with the employing broker as an associate broker.
An Individual who is employed by a broker or cemetery broker for the exclusive purpose of engaging in the specialized field of cemetery lot sales, as described for the cemetery broker.
Must be 18 years of age
Submit a sworn affidavit from the employing broker or cemetery broker attesting to the applicant's good reputation and that the broker will actively supervise and train the applicant.
There is no education or examination requirement
PA does not builder's to be licensed
Some individuals employed by the builders of single and/or multifamily dwellings must be licensed.
Builder-Owner Salesperson is an individual who is a full-time employee of a builder-owner of single-family and multifamily dwellings and who performs one or more of the following activities:
Lists for sale, sells or offers for sale real estate of the builder-owner
Negotiates the sale or exchange of real estate of the builder-owner
Leases or rents real estate of the builder-owner
Collects or offers or attempts to collect rent for the real estate of the builder-owner.
Must be at least 18 years of age
Must be employed by the builder owner, who is not licensed
Must complete a written exam prior to licensure.
There is no education requirement.
Rental Listing Agent
Individual or entity who owns or manages a business that collects rental information for the purpose of referring prospective tenants to rental units.
Licensee does not show or lease property, but rather sells lists of available rentals
Applicant must satisfy licensing requirements similar to that of salesperson, however the rental agent is not affiliated with a broker.
Responsible for maintaining an office under the same requirements as a broker and a cemetery broker.