Chapter 3 Key Terms

Active (License)

The licensee is "clear to play." They have a broker, all education is current, and they can legally perform real estate services for compensation.

Inactive

The individual holds a license, but they cannot perform real estate services or collect a commission.

Voluntary Inactive

You choose to not practice. You still pay fees and do Continuing Education (CE), but you don’t have a broker. You can stay here indefinitely.

Involuntary Inactive

You forgot something (didn't renew on time or didn't do CE). You have 2 years to fix this before the license expires forever.

Null and Void

The license is dead. This happens if you stay Involuntary Inactive for more than 2 years, or if you fail to do your Post-License education before your first renewal.

Canceled

This happens if the DBPR discovers a mistake on your application or if you voluntarily surrender your license because you want to quit the business.

Current Status

This simply means your license is up to date in the DBPR system (it could be "Current/Active" or "Current/Inactive")

Cease to Be in Force

The license is still "Good," but you can't use it right now because of an administrative change.
Example: You change brokers or change your business address and haven't notified the DBPR yet. You have 10 days to fix this.

License Authority Voided

A technical term usually meaning the legal right to practice has been stripped, often due to a disciplinary order or the expiration of the license.

Current Mailing Address

The address where you receive official mail from the DBPR. You must notify them of a change within 10 days or face a $500 fine.

Probation

A penalty where the FREC allows you to keep working, but you are being "watched" (often requiring extra classes or inspections) for a period of 90 days to 2 years.

Promulgates

A fancy legal word for "to make a rule." The FREC promulgates the rules (61J2) that we all have to follow.

Group License

For Sales Associates/Broker Associates working for an Owner-Developer. It allows the associate to sell for all the developer's different "entities" (like different subdivisions) under one license.

Multiple Licenses

For Brokers ONLY. A broker can have a separate license for each brokerage firm they manage. A sales associate can never have multiple licenses.

How many members are on the FREC

7 members.

The Breakdown:

• 4 Brokers: Must have held an active license for at least 5 years.

• 1 Member: Can be a Broker OR a Sales Associate (active for at least 2 years).

• 2 Consumer Members: "Lay members" who have never been licensed.

What is the age requirement for the FREC

At least one member must be 60 years of age or older.

How are FREC members appointed and for how long?

• Appointed by the Governor, confirmed by the Senate.

• Term Length: 4-year terms (staggered so they don't all leave at once)

Division of Real Estate (DRE) (475.021)

• The Relationship: The DRE provides the "muscle" (investigators, lawyers, recordkeepers) for the FREC.

• Funding: Funded entirely by the fees you pay (application, renewal, etc.).

The Commission's Powers (475.03 - 475.05)

• The Seal: The FREC has a "Seal." If a document has this seal and a signature, it is Prima Facie Evidence (valid on its face) in court.

• Education: The FREC has a legal duty to educate licensees. They can publish handbooks and textbooks.

• Rule Making: They have the power to create rules (61J2) to implement the laws

4. License Fees (475.125)

Fee Limits: Application fees cannot exceed $100. Initial/Renewal fees cannot exceed $50 per year ($100 per two-year cycle).
Refunds: If the state decides you aren't entitled to a license before they process the app, you can get a refund.

Brokerage Registration (475.15)

• General Rule: Corporations and partnerships must register.

What happens to a brokerage if the only active broker dies or resigns? (The "Broker Down" Rule)

The registration is automatically canceled (until a new broker is appointed). (The firm has a short "emergency" window of 14 Days to find a new broker).

To become a broker, you must have held an active sales associate license for at least

24 months in the last 5 years.

Post-Licensing Education:

• Sales Associates: 45 hours before the first renewal.

• Brokers: 60 hours before the first renewal.

What is the penalty for failing to complete the 45-hour post-license course before the first renewal?

The license becomes Null and Void.

What is the maximum time a Temporary Broker may be registered with a brokerage?

60 days.

The "One Active Broker" Rule

Every brokerage (Partnership or Corp) must have at least one active broker at all times.

Can a Sales Associate or Broker Associate serve as a General Partner in a brokerage partnership?

No. They are strictly prohibited from being general partners, officers, or directors.

What percentage of voting stock ownership constitutes "control" of a brokerage corporation?

More than 40% (includes stock owned by a spouse or children).

What is the limit for Guest Lecturers in a real estate pre-license course?

They may provide no more than 20% of the total course hours.

What are the requirements for a FREC Probable Cause Panel?

At least 2 members. At least one must be a current member of the Commission.

Where is the principal office of the Florida Real Estate Commission located?

Orlando, Florida.

What happens to a FREC member who has three consecutive unexcused absences from meetings?

Their membership becomes void and the position is considered vacant.

Can the FREC deny a corporation's registration based on a majority stockholder's history?

Yes. If a person in control (>40% voting stock) has been convicted of a felony or had a license revoked, registration can be denied.

How many days does a brokerage have to fill a vacancy if the only active broker dies or resigns?

14 calendar days.

Who is the Chief Administrator (Head) of the DBPR?

The Secretary of the DBPR.

How does the DBPR Secretary get their position?

Appointed by the Governor, subject to confirmation by the State Senate.

What is the term limit for the Secretary of the DBPR?

There is no set term limit; they serve at the pleasure of the Governor.

Where is the main (principal) office of the DBPR located?

Tallahassee, Florida. (Note: Don't confuse this with the FREC/DRE office, which is in Orlando).

The secretary of DBPR is responsible for

planning, directing, coordinating, and executing the powers, duties, and functions vested in the Department, its divisions, bureaus, and other subunits.

Quasi-legislative power (FREC)

power to enact rules. Rules become effective after 20 days when filed with the Department of State. The legislature does not have to approve the rules since the legislature has already established the power of the FREC to adopt rules. Rules are reviewed annually to ensure that they follow statutes and are enforceable.

Quasi-judicial Power (FREC)

the power to issue subpoenas, impose disciplinary actions and mandate training for remediation. Applicants may be denied licenses, and licensees may be reprimanded, fined, placed on probation, suspended for up to 10 years, or have their license revoked.

How often does the FREC elect its Chairperson and Vice Chairperson?

Annually (Once a year) from among its own members.

How many members of the Commission constitute a quorum to conduct official business?

Four (4) members.

quorum

the minimum number of members of a group or organization who must be present at a meeting for it to officially conduct business or make binding decisions

What is the length of a single term of office for a FREC commissioner?

Four (4) years.

What is the limit on how many consecutive terms a FREC member may serve?

No more than two (2) consecutive terms. (Note: They can serve again later as many times, just not three in a row).

Who has the authority to remove a Commission member from their post?

The Governor. (Members serve until relieved by the Governor or removed for cause).

Does the FREC have its own staff or employees?

No. The Division of Real Estate (DRE) provides all office functions and support staff for the Commission.

How are FREC members compensated for their time?

They earn no salary. They are paid a per diem (daily rate) plus expenses for days spent on Commission business.

What is the FREC’s primary responsibility regarding licensees?

Fostering the education of associates, brokers, and instructors concerning ethical, legal, and business principles.

What is the maximum administrative fine the FREC can impose for a single violation of Chapter 475?

$5,000.

Can the FREC imprison a licensee for violating real estate law?

No. The FREC only has administrative authority. Criminal violations must be reported to the state attorney for prosecution.

What does it mean if a license is considered prima facie evidence?

It is legally sufficient evidence that the person is licensed and has the necessary skills, unless proven otherwise.

What is the maximum length of time the FREC can suspend a license?

10 years.

Does the FREC have the authority to order a broker to pay restitution (money back) to a buyer or seller?

No. Restitution is a civil matter handled in court. The FREC can only fine, suspend, or revoke.

Which Division has oversight over the Condominium Act, the Cooperative Act, and the Florida Mobile Home Act?

The Division of Florida Condominiums, Timeshares, and Mobile Homes.

What must the FREC do if it takes disciplinary action against a licensee regarding a timeshare sale?

The FREC must inform the Division of Florida Condominiums, Timeshares, and Mobile Homes of the action taken.

Which Division provides a mediation and arbitration program for Homeowners Associations (HOAs)?

The Division of Florida Condominiums, Timeshares, and Mobile Homes

Does the Yacht and Ship Brokers Act fall under the FREC's authority?

No. It falls under the authority of the Division of Florida Condominiums, Timeshares, and Mobile Homes.

Who appoints the Director of the Division of Real Estate (DRE)?

The Secretary of the DBPR, but they must be confirmed by a majority vote of the FREC.

Does the Director of the DRE have a vote on the Florida Real Estate Commission?

No. They are not a member of the Commission and have no voting capacity.

How is the Division of Real Estate (DRE) funded?

By fees, fines, and assessments collected from real estate licensees.

Which Bureau within the DBPR oversees the real estate examination process?

The Bureau of Education and Testing (BET).

To whom does the Director of the DRE directly report?

The Deputy Secretary of Professional Regulation.

How long can a license remain in Involuntary Inactive status before it becomes Null and Void?

Two (2) years. (After 2 years of inactivity, the license "expires" and is gone forever). It’s canceled.

What are the three most common reasons an individual licensee's status changes to Involuntary Inactive?

1. Failure to renew the license before the expiration date.
2. Failure to pay the required renewal fee.
3. Failure to complete the required 14-hour Continuing Education (CE).

If a Sales Associate is working under a broker whose license is suspended, revoked, or expires, what is the status of the Sales Associate’s license?

Involuntary Inactive.

While an inactive licensee holds a license, they may not

practice real estate, collect referrals, commissions, or fees while their license remains in a voluntary inactive status.

How many years must a former licensee wait before they can reapply for a license after it has been revoked?

Five (5) years.

Does the five-year reapplication period guarantee the individual will be reapproved for a license?

No. Reapplication does not mean reapproval; the FREC reviews each situation on a case-by-case basis.

All real estate schools except colleges, universities, community colleges, and area technical schools must have a ______ to operate as a proprietary real estate school.

Permit

grace period after discharge from the military to renew a license

2 years