Most Important Legal Requirements for Florida Real Estate Brokers

What are the Most Important Legal Requirements for Florida Real Estate Brokers?

In this article, you will learn what steps you can take to meet some of the most important legal requirements for Florida real estate brokers.

The Most Important Legal Requirements for Florida Real Estate Brokers

Brokerage Ownership

Every broker in a brokerage must be legally registered as an officer, director, or general partner. While a broker associate or a sales associate may own a brokerage in Florida, they cannot be legally registered as one of the brokerage’s directors, officers, or general partners. When it comes to the number of brokers a brokerage can have in Florida, there is no limit.

A Broker’s Office Location

All brokers in the State of Florida must maintain an office. An office is defined as a room in a building of statutory construction, which means your office cannot be a houseboat or an RV, for example. However, your office can be located in a residence as long as it does not violate any local zoning ordinances and is approved by the homeowners’ or condominium association. All associates of a brokerage must work out of an office that is registered in the name of the broker or brokerage.

Licenses

If you have a referral-only company, you must register it with the Department of Business and Professional Regulation as a real estate brokerage because making money for the referral of a real estate business is considered real estate activity. If you will be the broker for several brokerages, then you must apply for multiple licenses. Similarly, to become a broker for another brokerage corporation, you must apply for multiple licenses. While you are not required to have an ownership interest in the second company, you must be registered as either an officer or director.

Recordkeeping

In Florida, real estate brokers are not required to keep paper versions of business records, as electronic versions of the documents or even legible copies are sufficient. Also, Florida real estate brokers may keep the required business records outside their office. However, these records must be made readily available to the Department of Business and Professional Regulation in case they decide to conduct an audit. If you choose to maintain electronic versions of your records, you should make sure to keep a backup. 

The required records include obvious documents like sales contracts, leases, and listing agreements but also less obvious documents such as emails and other forms of communication, which can serve as evidence of why or how a brokerage took certain actions during a transaction. As a broker, a strong recordkeeping policy can keep you out of legal trouble.

Responsibilities Regarding Associates

Florida brokers can be legally penalized for failing to control, manage, or direct their associates, so it is highly advisable that all Florida brokers create a policy and procedure manual. Under Florida law, sales associates are not allowed to collect any money in connection with any transaction involving a real estate brokerage except in the name of their employer and with the employer’s express consent. If a Florida broker’s sales associate or agent is convicted of a felony, the broker does not have to terminate the convicted associate or notify the Florida Real Estate

Commission. However, if a licensee is found guilty of a crime or convicted, or either pleads nolo contendere or guilty to a crime, then that licensee must inform the Commission of this within 30 days, in writing.

To learn more about legal requirements for Florida real estate brokers, contact Marina Title today by calling (305) 901-5628 or by emailing us at Info@MarinaTitle.com.