1. I am moving to another state. Can I still maintain my Ohio real estate license?
A: Yes. Residency in Ohio is not required to be licensed here.
2. Do real estate agents licensed with my brokerage have to purchase and sell their own property through my company?
A: There is no legal requirement that agents purchase or sell their own property through the broker with whom they are licensed. However, a broker can require this as a condition of working for the brokerage. If a broker wants to impose this requirement upon his agents, it is advised that this be set forth in the independent contractor agreement with the agent and/or in the broker’s policy manual.
3. A salesperson from another brokerage has submitted an application to transfer her license to my company, but it has not been processed yet. Can she go on a listing presentation for my company, if another agent or manager from my company goes with her?
A: No. A salesperson can only act on behalf of a brokerage when the Division of Real Estate has actually issued a license in the name of the new broker. Therefore, the agent should not make listing presentations or do anything on behalf of the new brokerage until her license has actually transferred to that new company.
4. Must a person have a real estate license to sell prefabricated or modular homes?
A: A license is only necessary if real property or an interest therein is being conveyed with the home.
5. Can an Ohio broker hold a real estate sales license in another state?
6. A home is listed but your buyers are excluded from the listing agreement. Must you deal with the listing broker on this home or can you go directly to the sellers?
A: The best way to handle this situation is to contact the listing agent and notify them that you are working with the excluded buyers. As the listing broker will not earn a commission on this sale the listing agent will probably refer you directly to the sellers.
7. One of my sales agents wants to handle the rental of a duplex his father owns. My brokerage doesn’t do property management. Can he do this on his own?
A: The leasing or managing of real estate for a fee, commission or anything of value, is activity that requires a real estate license. Therefore if the agent is being compensated for leasing or managing this duplex, this activity must be done in the name of his broker. The fact that the property is owned by a relative does not matter.
8. An out-of-state broker knows of a seller who has a house in Ohio to sell and has contacted me about co-listing it with him. Can this be done legally?
A: No. The out-of-state broker cannot co-list or handle the sale of residential property in Ohio unless he has a valid Ohio broker’s license. Instead, he can only refer the seller to you and in return you may pay him a referral fee. Without an Ohio license the broker cannot advertise the property, show it, or negotiate the sale of this property. Such conduct would have to be performed by you as the Ohio broker.
9. An out-of-state commercial REALTOR has a client who is looking for commercial space in Ohio. He wants to represent him on the potential lease or purchase. Can he do this if he’s not licensed in Ohio?
A: Under legislation passed in 2002 Ohio license law was amended to allow a broker licensed in another state to represent a client on an Ohio commercial/industrial transaction as long as several requirements are met. Foremost is the need for both the Ohio broker and the out-of-state broker to enter into a written agreement setting forth the terms under which they will work together. The out-of-state broker must also consent to Ohio jurisdiction for all legal proceedings regarding the transaction.
These documents must be signed before an out-of-state broker may perform any acts that would otherwise require an Ohio license. This would include showing property or engaging in negotiations. The out-of-state broker must also provide a copy of a current certificate of good standing from the state in which he or she is licensed.
Below are the necessary forms:
1. Memo of Cooperative Commercial Transactions in Ohio.
2. A Cooperative Agreement (pdf document) setting forth the terms of cooperation and compensation and a statement that the out-of-state broker and its agents agree to adhere to Ohio law.
3. An Irrevocable Consent to Jurisdiction (pdf document) signed by the out-of-state broker.
10. Can I pay a finder’s fee or give a free month’s rent to tenants who refer other prospective tenants to me?
A: No. Referring a prospect for the lease, purchase or sale of real estate for a fee or anything of value is conduct that requires a real estate license. Therefore, this tenant may not legally accept a finder’s fee or free month’s rent and a licensed agent or broker my not pay an unlicensed person for such conduct.
11. Am I responsible or liable for my agent’s personal real estate transactions if they are not “run” through my brokerage? Does my agent have to provide me with copies of the documents involved in these transactions?
A: If the property is not listed with your brokerage and you are not otherwise involved in the sale, rental or purchase of the property, you and/or your company should not have any liability for these transactions. To avoid any claim that your firm is involved with or responsible for these transactions, you should make sure that your agent is not using purchase contracts, leases, etc., that bear your brokerage name, logo, etc., or reference “broker” any way (i.e. earnest money deposit sections). Further, because these transactions are not being handled by your brokerage, the license law does not require you to maintain copies of the documents involved in these transactions.
12. Are attorneys exempt from the real estate licensing requirements?
A: Ohio Revised Code Section 47235.01 (K) provides that an attorney is exempt from the requirements to be licensed if the conduct he is engaged in is part of the performance of his duties as an attorney. Examples of situations that would fall under the exemption would be an attorney who is selling property that is part of an estate or liquidating property as an asset in a bankruptcy proceeding.
13. Can a brokerage be licensed as a limited liability company?
A: Yes, the Division of Real Estate will issue a broker’s license to a limited liability company. At least one person who is licensed as a broker must be associated with the limited liability company.
14. Can a broker who is a sole proprietor have another broker licensed with the brokerage?
A: No. Only one broker can be licensed with a sole proprietorship brokerage. Another individual with a broker’s license would have to place his broker’s license on deposit and activate their sales license to be licensed with this brokerage. A brokerage licensed as a partnership, association, corporation or limited liability company/partnership can have more than one broker licensed with the brokerage.
15. Can an agent or non-licensed person be an owner of a real estate company?
A: Yes. A corporation or a partnership licensed as a broker must have at least one broker affiliated with it, but it may be owned in whole or in part by licensed agents or non-licensed persons.
16. The broker of a real estate company dies. Who should handle the pending transactions and conclude the business affairs of the company?
A: An ancillary trustee can be appointed to conclude the business affairs of the broker. The Division of Real Estate will recommend an individual to act as ancillary trustee which is subject to approval of the probate court. The ancillary trustee duties are limited to winding up the affairs of the brokerage; no new business can be initiated. The forms needed to have an ancillary trustee appointed can be obtained from the Division of Real Estate.
17. A broker who is retiring at the end of the year has a $500 earnest money deposit in his trust account from a transaction which failed to close six years ago. What should be done with the $500?
A: When the parties to a real estate transaction can not agree on who gets the earnest money the courts have to resolve the issue. The broker should file an interpleader action with the local small claims court. In this action, the broker is the plaintiff and the buyer and seller are the defendants. The court will determine who is entitled to the earnest money and will order disbursement accordingly.
18. Is it unethical or illegal for one broker to solicit the salespersons of another broker?
A: No. While at one time this was a violation of the NAR Code of Ethics, it has not been part of the Code for several years, and was never a violation of the license law.
19. Is there any limitation on the number of continuing education hours a licensee can take dealing with computer training?
A: Yes. Ohio Administrative Code Section 1301:5-7-02 limits the number of continuing education hours devoted to computer training to no more than a total of fifteen hours during each three-year reporting period. Of these fifteen hours, no more than six hours can be on basic instruction or computer training.
20. I am holding an open house and a buyer shows up who is interested in writing an offer. Must I ask the buyer if he is working with another agent?
A: The issue is addressed by both the license law and the REALTOR Code of Ethics. The license law provides that a licensee is not required to ask buyers if they are working with another agent unless there is reasonable cause to believe the buyer may be represented by another licensee. In that case, a licensee would be required to inquire as to the nature of the relationship.
However, NAR’s Standard of Practice provides that REALTORS must ask prospects if they are a party to an exclusive representation agreement before providing any substantive services. This would include writing an offer. Thus, under the REALTOR Code of Ethics, you must ask the buyer this question before writing an offer.
21. A buyer wants to write an offer on my listing. The buyer has told me he has seen properties with other agents but has said that he did not sign a buyer representation agreement. Must I get confirmation of this before I write the offer for the buyer?
A: No. If a buyer represents that he is not currently subject to a written exclusive agency agreement with another licensee Ohio Administrative Code Section 1301:5-6-09 provides that no further inquiry is required and you may write the offer for the buyer. However, if the buyer had said that he is not sure whether he had entered into such a relationship, no negotiations can take place until such time as it can be verified he is not subject to an exclusive agreement with another licensee.
22. I wrote a contract for a buyer client that is scheduled to close next week. I just found out my client has an outstanding exclusive agency agreement with another licensee. When the buyer first came to me I asked if he had entered into an exclusive agency agreement with another licensee and he said no. Did I violate Ohio license law?
A: It is a license law violation for a licensee to negotiate the sale of real estate with a buyer knowing the buyer has entered into a written, exclusive buyer agency agreement with another licensee. To violate license law the licensee had to knowingly negotiate with a buyer exclusively represented. In this case, you did not know of the representation as the buyer stated he had not entered into an exclusive buyer agency agreement.