Ohio Real Estate Salesperson

Subtopics: general powers and structure of governing bodies; investigations; hearings and appeals; violations and penalties (education sanctions/reprimands); recovery fund.

Key Concepts

Structure and duties of the Commission - The Ohio Real Estate Commission consists of five members appointed by the governor with the advice and consent of the senate. Four must have been engaged in the real estate business as licensed brokers for the ten years immediately preceding appointment; one member represents the public. (ORC 4735.03) - One enumerated statutory duty of the Commission is to adopt canons of ethics for the real estate industry. (ORC 4735.03(A)) - The superintendent's monthly report to the Commission must include the number of all applicants who passed the real estate broker examination and the real estate salesperson examination. (OAC 1301:5-3-01(A)(1))

Investigations - The Commission or the superintendent may investigate complaints concerning violations of the real estate law (ORC 4735.03); the Division and superintendent handle day-to-day investigations (ORC 4735.05(B)(3)-(4)), but the Commission holds ultimate authority over investigation and discipline (ORC 4735.051(G), (I)). - An investigation must be commenced within three years from the date the alleged violation occurred, or it is barred. (ORC 4735.32(A)(1)) - Confidential investigation information released to authorized agencies (the attorney general, the Division of Financial Institutions, law enforcement) remains confidential after release. (ORC 4735.05(E))

Complaint, mediation, hearing, appeal - Within 5 business days after a signed written complaint is filed, the superintendent must acknowledge receipt and notify the licensee of the acts complained of; both parties then have 10 business days to request informal mediation. (ORC 4735.051(A)) - If both parties request it, the informal mediation meeting is scheduled within 20 business days, extendable up to 15 additional business days for good cause. An accommodation closes the complaint file. (ORC 4735.051(B)) - If a licensee fails without good cause to comply with an accommodation agreement, the agreement is null and void, the superintendent may proceed with formal investigation, and the failure is prima facie evidence of misconduct under ORC 4735.18. (OAC 1301:5-5-24(E)) - The hearing examiner files findings of fact and conclusions of law within 25 business days after…

Key Concepts

Activities Requiring a License

• Any person who, for another, in consideration of compensation, does or offers, attempts, or agrees to engage in any single act or transaction contained in the definition of a real estate broker — whether an incidental part of a transaction or the entire transaction — is constituted a real estate broker or salesperson (ORC 4735.01(H)).
• Anyone receiving compensation related to real estate transactions must hold a valid license, including those receiving referral fees (ORC 4735.20(A)).
• An attorney at law is exempt only "in the performance of the attorney's duties" — i.e., legal services incidental to law practice. An attorney does not automatically qualify to operate as a broker or open a brokerage (ORC 4735.01(I)(1)(d)).

License Renewal and Maintenance

• Salesperson licenses are renewed every three years (OAC 1301:5-1-22(A)(B)).
• Renewal is due on the licensee's birthday occurring immediately after the date of initial licensure, and on the licensee's birthday every three years thereafter (OAC 1301:5-1-22(B)).
• The superintendent sends the renewal notice two months prior to the filing deadline to the licensee's electronic mail address on file with the division. A licensee may not renew any earlier than two months prior to the filing deadline (ORC 4735.14(B)).
• Failure to reactivate a suspended license within twelve months of the date of suspension results in automatic revocation without any action by the superintendent (ORC 4735.14(C); OAC 1301:5-1-19(C)).
• Salesperson applicants must achieve a scaled score of at least 70 percent on each portion of the examination (national law and Ohio state law); broker applicants must achieve 75 percent (OAC 1301:5-1-05(E)).

Change in License Status

Key Concepts

Types of listings and agency agreements - An exclusive right to sell listing gives the broker a commission regardless of who sells the property, including the owner (ORC 4735.01(U)). - An exclusive agency listing lets the seller sell the property themselves without paying a commission, while the agent keeps exclusive marketing rights (ORC 4735.01(V)). - An exclusive purchaser agency agreement may authorize the broker to be compensated by the seller or the seller's agent, and may provide the purchaser/tenant owes nothing if they find the property solely through their own efforts (ORC 4735.01(W)). - A nonexclusive agency agreement lets the client obtain services from other brokers or brokerage firms, subject to the agreement's terms (ORC 4735.01(JJ)(1)-(2)). - Exclusive listing agreements must state a definite expiration date (ORC 4735.55(C)(1); ORC 4735.18(A)(28)). - Written agency agreements must contain: a statement defining blockbusting and that it is illegal (ORC 4735.55(C)(3)); whether the agency is exclusive or nonexclusive (ORC 4735.55(C)(5)); and a conspicuous statement that fees/commissions are not set by law, are fully negotiable, and may be paid by seller, buyer, landlord, tenant, or third party, or split between brokers (ORC 4735.55(C)(7)). - A written agency agreement is required before offering to lease residential premises for a tenant when the term exceeds eighteen months (ORC 4735.55(B)(3)). - Working directly with a seller with no required agency agreement: give the brokerage policy on agency before advertising or showing the property (ORC 4735.56(C)).

Advertising and business name - Licensee must be identified by name and must name the affiliated brokerage (ORC 4735.16(B)(1)); brokerage name in equal prominence with the salesperson's (ORC 4735.16(B)(3)). - A preferred first name or maiden name may be used if not misleading and registered with the division (OAC 1301:5-1-02(A)). - "Inc." or "Co." are not required in advertising (OAC 1301:5-1-02(C)(3)). - Outdated/expired website information must be updated within fourteen days (OAC 1301:5-1-02(E)). - Advertising includes business cards, social networking sites, property listing database services, etc. (OAC 1301:5-1-02(H)); it excludes private communications (mail, voicemail, email, password-protected sites) initiated at the client's request (OAC 1301:5-1-02(I)). - Team names may not use…

Ohio Real Estate Salesperson

Key Concepts

Creating agency & agency contracts - Performing any single act in the broker definition for compensation (or expectation of it) makes a person a real estate broker or salesperson — ORC 4735.01(H). - Buyer agency: licensee agrees to represent only the buyer, owing fiduciary duties exclusively to the buyer — ORC 4735.53(A)(2). - Without a signed agency agreement, a buyer being shown property is a customer/non-client; the licensee owes honesty, fair dealing and disclosure of material facts, but not the full fiduciary duties — ORC 4735.69; 4735.53(D). - Exclusive right to sell or lease: broker compensated even if the seller (or anyone else) produces the buyer — ORC 4735.01(U). Exclusive agency: broker not compensated if sold solely through the seller's efforts — ORC 4735.01(V)(2). Exclusive purchaser agency: broker compensated unless the property is specifically exempted in the agreement — ORC 4735.01(W)(2). Nonexclusive agency agreement: client may also obtain services from other brokers — ORC 4735.01(JJ). - A licensee hosting an open house is the seller's agent if, among other conditions, the licensee received confidential information from the listing agent — OAC 1301:5-6-02(A)(3). - Client delegation of authority to appoint other licensees in the brokerage must be in writing, signed, and notify the client of the right to veto any appointment — OAC 1301:5-6-08(A).

Dual agency - Dual agency = representing both buyer and seller in the same transaction — ORC 4735.70; 4735.70(A) — and requires informed written consent of both parties — ORC 4735.71(A). Acting for more than one party otherwise violates ORC 4735.18(A)(4). - A dual agent may not advocate for one party over the other — ORC 4735.72(A)(2); 4735.71(A). - No licensee may be a dual agent while also being a party to the transaction — ORC 4735.71(C). - If a client accepts the brokerage's resignation after a confidentiality breach in dual agency, the brokerage gets no compensation from that client — ORC 4735.72(E)(2).