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2018 SESSION

18104635D
HOUSE BILL NO. 862
Offered January 10, 2018
Prefiled January 9, 2018
A BILL to amend and reenact §§ 54.1-2100, 54.1-2101, 54.1-2106.1, and 54.1-2110.1 of the Code of Virginia, relating to professions and occupations; real estate licenses; real estate teams.
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Patrons-- Peace, Adams, D.M. and Krizek
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Referred to Committee on General Laws
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Be it enacted by the General Assembly of Virginia:

1. That §§ 54.1-2100, 54.1-2101, 54.1-2106.1, and 54.1-2110.1 of the Code of Virginia are amended and reenacted as follows:

§ 54.1-2100. Definitions.

As used in this chapter:

"Collective name" means the name of a group of real estate licensees working together as one unit within the same brokerage firm as a real estate team.

"Distance learning" means instruction delivered by an approved provider through a medium other than a classroom setting. Such courses shall be those offered by an accredited institution of higher education, high school offering adult distributive education courses, other school or educational institution, or real estate professional association or related entities.

"Real estate broker" means any person individual or business entity, including, but not limited to, a partnership, association, corporation or limited liability company, who, for compensation or valuable consideration (i) sells or offers for sale, buys or offers to buy, or negotiates the purchase or sale or exchange of real estate, including units or interest in condominiums, cooperative interest as defined in § 55-426, or time-shares in a time-share program even though they may be deemed to be securities, or (ii) leases or offers to lease, or rents or offers for rent, any real estate or the improvements thereon for others.

"Real estate team" means two or more real estate salespersons or brokers who engage in licensed real estate activities and who (i) work together as a unit within the same brokerage firm, (ii) represent themselves to the public as working together as one unit, and (iii) designate themselves by a collective name.

§ 54.1-2101. Real estate salesperson defined.

For the purposes of this chapter, "real estate salesperson" means any person individual, or business entity of not more than two persons unless related by blood or marriage, who for compensation or valuable consideration is employed either directly or indirectly by, or affiliated as an independent contractor with, a real estate broker, to sell or offer to sell, or to buy or offer to buy, or to negotiate the purchase, sale or exchange of real estate, or to lease, rent or offer for rent any real estate, or to negotiate leases thereof, or of the improvements thereon.

§ 54.1-2106.1. Licenses required.

A. No business entity, other than a sole proprietorship, shall act, offer to act, or advertise to act, as a real estate firm without a real estate firm license from the Board. Such firm may be granted a license in a fictitious name. No business entity shall be granted a firm license unless (i) every managing member of a limited liability company, officer of a corporation, partner within a partnership, or associate within an association who actively participates in the firm brokerage business holds a license as a real estate broker; and (ii) every employee or independent contractor who acts as a salesperson for such business entity holds a license as a real estate salesperson or broker. An individual holding a broker's license may operate a real estate brokerage firm which he owns as a sole proprietorship without any further licensure by the Board, although such individual shall not operate the brokerage firm in a fictitious name. However, nothing herein shall be construed to prohibit a broker operating a brokerage firm from having a business entity separate from the brokerage firm for such broker's own real estate business, provided that such separate business entity otherwise complies with this section. A non-broker-owned sole proprietorship shall obtain a license from the Board.

B. No individual shall act as a broker without a real estate broker's license from the Board. An individual who holds a broker's license may act as a salesperson for another broker. A broker may be an owner, member, or officer of a business entity salesperson as defined in subsection C.

C. No individual shall act as a salesperson without a salesperson's license from the Board. A business entity may act as a salesperson with a separate business entity salesperson's license from the Board. No business entity shall be granted a business entity salesperson's license unless every owner or officer who actively participates in the brokerage business of such entity holds a license as a salesperson or broker from the Board. The Board shall establish standards in its regulations for the names of business entity salespersons when more than one licensee is an owner or officer.

D. No real estate team shall act as a real estate team without first obtaining a business entity license from the Board. No real estate team shall be granted a business entity license unless every member of the team holds a license as a salesperson or broker from the Board. For purposes of this subsection, "business entity license" means a real estate firm license or business entity salesperson's license.

§ 54.1-2110.1. Duties of supervising broker.

A. Each place of business and, each branch office, and each real estate team shall be supervised by a supervising broker. The supervising broker shall exercise reasonable and adequate supervision of the provision of real estate brokerage services by associate brokers and salespersons assigned to the branch office or real estate team. The supervising broker may designate another broker to assist in administering the provisions required by this section, but such designation shall not relieve the supervising broker of responsibility for the supervision of the acts of all licensees assigned to the branch office or real estate team.

B. As used in this section, "reasonable and adequate supervision" by the supervising broker shall include the following:

1. Being available to all licensees under his supervision at reasonable times to review and approve all documents, including leases, contracts, brokerage agreements, and advertising as may affect the firm's clients and business;

2. Ensuring the availability of training opportunities and that the office has written procedures and policies that provide clear guidance in the following areas:

a. Handling of escrow deposits in compliance with law and regulation;

b. Complying with federal and state fair housing laws and regulations if the firm engages in residential brokerage, residential leasing, or residential property management;

c. Advertising and marketing of the brokerage firm and any affiliated real estate teams or business entities;

d. Negotiating and drafting of contracts, leases, and brokerage agreements;

e. Exercising appropriate oversight and limitations on the use of unlicensed assistants, whether as part of a team arrangement or otherwise;

f. Creating agency or independent contractor relationships and elements thereof;

g. Distributing information on new or amended laws or regulations; and

h. Disclosing required information relating to the physical condition of real property;

3. Ensuring that the brokerage services are carried out competently and in accordance with the provisions of this chapter; and

4. Undertaking reasonable steps to ensure compliance by all licensees assigned to a branch office with the provisions of this chapter and applicable Board regulations, including ensuring that licensees possess a current license issued by the Board;

5. Ensuring that affiliated real estate teams or business entities are operating in accordance with the provisions of this chapter and applicable Board regulations;

6. Ensuring that brokerage agreements include the name and contact information of the supervising broker; and

7. Maintaining the records required by this subsection for three years. The records shall be furnished to the Board's agent upon request.

C. Any supervising broker who resides more than 50 miles from a branch office under his supervision, having licensees who regularly conduct business assigned to such branch office, shall certify in writing quarterly on a form provided by the Board that the supervising broker has complied with the requirements of this section.

D. No later than January 1, 2017 As a condition of the renewal of the license of a supervising broker of a branch office, the supervising broker for a branch office shall provide to the Board the name and license number of the supervising broker for the branch office. Thereafter, upon the renewal of the license of each real estate licensee working in such affiliated with the branch office or upon the transfer of a licensee to such office, the broker shall provide to the Board the name and license number of each real estate licensee working in the branch office on the broker acknowledgement form created at the time of the renewal in a format deemed acceptable by the Board.

2. That the provisions of this act shall become effective on January 1, 2019.