Broker Chapter 2 Opening a Real Estate Office 1
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 2
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 3
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) donot-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 4
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 5
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 6
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 7
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 8
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 9
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) 10
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 11
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 12
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 13
Limited Liability Company Limited personal liability Great flexibility when passing income and deductions to its members Name must include Limited Liability Company (LLC) 14
Brokerage Entities active or inactive Broker or registered Corporation General Partnership Registered as brokerage At least one active broker Limited Partnership 14 calendar days to replace loss of only active broker Officers and Directors General Partners General Partners Sales Associate may not be Officers or Directors General Partners General Partners 15
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 16
Business Forms that May Not Register Joint Venture Business Trusts Cooperative Association 17
Ostensible (Quasi) Partnership When no partnership actually exists Public has reason to believe that one does Created by legal theory of estoppel 18
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 19
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 20
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 21
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 22
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 23
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 24
Entrance Signs Sign must include the trade name (if applicable) Broker's name Words, "Licensed (or Lic.) Real Estate Broker" 25
Sign Contents John Smith Licensed Real Estate Broker Jane Smith, Sales Associate John Doe, Broker Associate 26
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 27
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 28
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 29
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 Violation is a 1 st Degree Misdemeanor $1,000 fine 1 year prison term 30
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 31
Summary of Protected Classes Year Added and legislation 1866 Civil Rights Act 1968 Title VIII of the Civil Rights Act (Fair Housing Act) 1988 Fair Housing Amendment Act Race Color Protected Classes Religion Sex National Origin Handicap Family Status Memory Aid Realtors Can Really Sell Nice Houses 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 33
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 34
Telephone Consumer Protection Act Florida law Federal law Differences $10,000 fine $40,000 fine May solicit FSBO May not solicit FSBO 35
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 # 36