Chapter 45
(Daniel – the pages with titles in red have changes
made) (Insert beginning slide – 00)
WASHINGTON STATE - REAL ESTATE
REGULATIONS
Revised Code of Washington - RCWs - The RCWs are a collection of statutory State
laws. These are a group of laws passed by the State legislature, and are called the Revised
Code of Washington. The codes dealing with the area of real estate law are Chapter 18 of
the RCWs.
: RCW 18.63.135 deals with the responsibility of the broker to provide
services.
1. Protect the Public - The purpose of statutory laws passed regarding real estate is to
protect the rights of the real estate buying and selling general public in the State of
Washington against illegal practices. These laws will deal with land use, subdivision
control, construction standards, licensing qualifications and standards, and the regulations
and discipline of brokers, salespersons, and escrow officers, after they become licensed.
(On the next page please insert – Sect 45 – 001 & 001A)
1
DEPARTMENT OF LICENSING (DOL) – THE
DIRECTOR
2. Department of Licensing (DOL) – The government body that controls and
enforces the real estate code is known as the Department of Licensing. The State
legislature cannot enforce all these rules. They had to create a police force, if you
will, to act as a watchdog to make sure the laws are obeyed. That is the job of the
Department of Licensing.
Business and Professional Licensing Division – To separate from public licensing, the
Department of Licensing (DOL) has a second department called the Business and
Professional Licensing division. Public licensing would be like your driver’s license.
Your real estate license is a professional license and under the Business and Professional
Licensing division. The real estate division is under the Business and Professional
Licensing Division.
Real Estate Division – The real estate division is run by a Governor appointed Director
who is in charge of the staff who runs the department. The Director and staff are
forbidden by law to have any interest in the real estate profession, obviously, as that
would be a conflict of interest.
Administrator – The Director has a real estate program administrator who oversees the
day-to-day operations of the real estate section, which includes discipline, licensing,
education, and community support services. The real estate Director is empowered to
issue rules and interpret statutory law. These administrative rules and regulations are
called the Washington Administrative Code or WACs. They are not laws, but more like
housekeeping rules. To a licensee they might as well be laws, because violations of them
could cost you your license. The WACs are created to interpret and carry out the intent of
the Code, the Revised Code of Washington or RCWs.
2. WACs – In addition to State statutes there are rules and regulations called the
Washington Administrative Code or WACs.
: The State legislature passed an RCW saying there will be a real estate exam;
the problem is that they did not give all the necessary details. Therefore, the Director and
the Real Estate Commission will make reasonable interpretations as to what the
legislators wanted and fill in between the lines. They will fill in such things as how many
questions, what the passing grade is, and where the examinations will be held.
WACs – These administrative rules will also govern professional real estate activity.
They control the acts of licensed people and how one obtains a license. The real estate
Director has the power to hold hearings whenever there is a violation of the Code. He/she
also has the power to suspend or revoke licenses, to set education requirements, and set
the time and place for holding the exam.
(On the next page insert Sect 45 – 002 & 002A)
2
THE REAL ESTATE COMMISSION
R. E. Commission - The State of Washington also established the Real Estate
Commission. They serve as an advisory body to the Director of Licensing and Real
Estate Management Program. The Real Estate Commission is composed of the Director
of The Department of Licensing and six Commissioners who are appointed by the
Governor. They serve six year staggered terms. That is every year in August, the term of
one of the Commissioners expires. That member will have to be replaced. This system is
intended to produce continuity of thinking on the part of the Commission. At least two of
the Commissioners must be from the west side of the Cascade Mountains and at least two
from east of the Cascades so that there is input and thinking from all areas of the State.
They must have at least five years experience in the sale, operation, or management of
real estate in this State or at least three years of experience in investigative work of a
similar nature preferably in connection with the administration of real estate law of this
State or elsewhere.
State Exam - The Commission's main job is to prepare the licensing exam. The law says
the exam must be given monthly. It must be given at least six times every year in each of
the six major geographical areas of the State. Currently they are holding the exam every
month in the more populated areas and every other month in the rest of the State. The
Commission also must approve any required courses. The Commission meets publicly
four times a year. Courses like this one that you are studying must be submitted to them
and approved by them before the course(s) can be used. In summary remember, the
Commission does not determine qualifications for the exam applicants; the Director of
Licensing does this. They do not engage in the enforcement of the Code upon violators or
in any disciplinary action. They are basically there as advisors to the Director, to approve
courses and to administer the exam.
(On the next page insert Sect 45 – 003 & 003A)
3
NO SLIDES FOR THIS PAGE
WASHINGTON STATE GOVERNMENT
HIERARCHY
4
LICENSING REGULATIONS
License Required - A real estate license is required if a person, partnership, or
corporation acts for another and receives compensation, commission, or promise thereof,
if you get paid in any way, for any of the following acts:
1. Licensee Characteristics - Selling, offering to sell, listing, offering to list, buying,
offering to buy, real estate or a business opportunity. Business opportunity requires a real
estate license even if there is no real estate involved. Remember a business opportunity is
the right to do business. As an example, if you are going to sell someone's videotape
store, they may just be renting the building and there would be no real estate to sell. You
are only selling his/her good will, his/her business name, stock and inventory, all of
which is personal property, but this sale requires a real estate license.
2. Commercial Sales - A real estate license is required if one negotiates or offers to
negotiate, directly or indirectly, the purchase, sale, exchange, rental, or lease of real estate
or a business opportunity or any interest therein for others; anytime you are open to the
public and charging a commission.
3. Mobile Home Sales - Anyone that negotiates or offers to negotiate, either directly or
indirectly, the purchase, sale, or exchange of a used mobile home in conjunction with the
purchase, sale, exchange, lease or rental of the land where it is located. If you are selling
a mobile home on property and you are selling the property and the mobile home, you
must have a real estate license. What if the mobile home is new or you list a used mobile
without land included as one in a mobile park? Real property is the key to the
requirement of a real estate license requirement. A new mobile home including property
requires a real estate license. A new or used mobile home without property does not
require a real estate license, but it does require a mobile home dealer's license.
4. Acts as Licensee - Anyone that advertises or holds himself/herself out to the public by
any oral or printed solicitation or representation and engages in any of those things above
then they are in the business of real estate.
Prospects for Clients - Anyone that engages, directs, or assists in procuring prospects or
in negotiating or closing any transaction that engages in or results in the above. As an
example, it would be totally illegal for you to pay your unlicensed friend a fee for every
person he/she brings in to list with you by canvassing his/her neighborhood for prospects.
That would be compensating an unlicensed person for performing professional real estate
activity.
(On the next page insert Sect 45 – 004 & 004A)
5
EXEMPTED - INDIVIDUALS WHO DON'T NEED A
LICENSE
Exceptions: The following individuals do not need to be licensed:
1. Owner Sells - If you are the owner and selling your own property; the term owner also
includes a corporation, limited liability company, limited liability partnership or
partnership which sells that property belonging to the corporation or partnership. You
don't need a license to sell your own property whether you are a business or an individual
because you are not acting for others. Remember the key is acting for another.
2. Family Members - There is an exemption for residential landlords that pay immediate
family members to manage their property for them. Those family members don't need a
license.
3. Residential Landlord - Residential managers are also exempt for a single group of
residential units. The apartment manager is not open to the public. They are not managing
for several different apartment owners that would be property management. They are
possibly getting a reduction in rent for managing only one apartment, hotel, hotel
complex, or managing and running only one condominium complex and getting paid for
it. They are exempt because they are working for only one owner, and not open to
manage other complexes to the general public, therefore they don't need a real estate
license.
4. For Parents - Persons acting as an attorneys-in-fact or holding the power of attorney
are exempt. If you have the power of attorney for your parents, you would be referred to
as an attorney-in-fact, in the eyes of the law; you would be your parents. You would not
need a real estate license to sell your own real property.
5. Court Ordered - Another exemption is any person acting under a court order, such as
a guardianship or foreclosure. If the court orders you to do something with the real estate
property, you do not need a license.
6. Attorneys - Attorneys while rendering related legal activities do not need a license.
Attorneys that open a real estate business, or property management business and collect
commissions do need a real estate license, the same as anyone rendering real estate
services.
7. Office Staff - Secretaries, bookkeepers, clerks, and office staffs not engaging in
professional real estate activities are exempt.
8. Self-Service Storage - Owners or managers of self-service individual storage facilities
are also exempt.
(On the next page insert Sect 45 – 005 & 005A)
6
LICENSING - SALESPERSON LICENSE
Salesperson License - The salesperson license is usually the first license someone would
obtain. The requirements for this license are:
1. Individual 18 - A person must be 18 years of age or older and a natural person, not a
corporation or partnership.
2. Honest - You must be honest, truthful, and of good reputation, which may require an
affidavit for proof.
3. No Fingerprinting - The requirement for fingerprinting of all applicants has been
repealed unless an applicant has a conviction within the prior 10 years of application.
4. Fingerprinting - Fingerprints are required if convicted of a crime within 10 years of
application.
5. 60 Hours - The Real Estate Fundamentals course of at least 60 clock hours must be
successfully completed prior to the examination application.
6. 70% on Exam - The salesperson's exam must be successfully completed. The passing
score of 70% must be obtained on each of the State and national sections of the
examination.
No Residency Requirement - Licensees are not required to reside in the State of
Washington (broker must have records here) as a requirement for a license.
(On the next page insert Sect 45 – 006 & 006A)
7
LICENSING - BROKER LICENSE
Broker License Qualifications:
1. Applicants - Successful applicants can become a sole proprietor broker, associate
broker, or designated broker. To qualify for this license one must be at least 18 years of
age.
2. H. S. Grad - A high school diploma or equivalent is required.
3. Two Year's Experience - An applicant must have at least two years of full-time
experience as a real estate salesperson in last five years or its equivalent. A person
seeking equivalence experience must submit their work history to the DOL for the
approval of equivalence.
4. Honesty - The applicant must be honest, truthful, and of good reputation. The State
may require proof of a good business reputation by affidavit or fingerprints.
5. Fingerprinting - Fingerprint identification is required if the applicant has been
convicted of a crime within 10 years of the application for a broker license.
6. Credit Check - A credit report at Director's option may be required to show financial
stability.
(On the next page insert Sect 45 – 007 & 007A)
8
LICENSING – MORE ON BROKER LICENSE
To sit for the Broker Examination, a person must fulfill the following additional
requirements:
1. 120 Hours - The applicant must furnish proof of successfully completing the required
120 clock hours of approved education.
2. Required Courses - The required 120 clock hours must include a 30-clock hour
Brokerage Management course, a 30-clock hour Business Management course, a 30clock hour Law course, and one additional 30-hour course approved by the Department
of Licensing.
Out-of-State Applicant - A broker from out-of-state that moves to Washington or wants
a Washington Broker's license must successfully pass the Washington Broker Exam. The
required score to pass the broker's exam is at least 75%. The national portion may be
waived if the applicant came from a State that the Department of Licenses has determined
has license standards of equal quality. The required 120 clock hours of courses may be
waived if the applicant can prove completion of equal or greater education requirements
in previous State within the past five years of application.
Broker's Exam - All applicants must pass the broker's exam composed of the same
number of State and national questions as the salesperson's exam, but of more detailed
content. The passing score on each section of the exam must be at least 75%.
(On the next page insert Sect 45 – 008 & 008A)
9
BROKER LICENSE - DIFFERENT TYPES OF
BROKERS
Broker License - When a person obtains a Broker's License, the following are the
different forms of a licensed broker.
1. Associate Broker - The associate broker has qualified to act as a broker. They have
met the same qualifications and passed the same examination, but they do not run a real
estate business. The one that runs a real estate business is a sole proprietor or designated
broker.
2. Branch Manager - The associate broker may manage a branch office for his/her
designated broker.
3. Licensee Entity - The associate broker may be a natural person or corporation. If they
are an incorporated associate broker they must have a designated broker and only one
natural person may be licensed to act for that corporation; the associate broker.
4. Designated/Acting Broker - The acting brokers (sole proprietor or designated broker)
must organize, operate, and control the real estate brokerage firm or property
management firm. The designated broker must be in charge and in control of the real
estate business.
a. Responsibility - The designated broker is responsible for acts of associate
brokers and salespersons licensed to work for their brokerage.
b. Manage Agents/Employees - The designated broker must control the real
estate agents and employees of the brokerage at all times.
c. Liability - The designated broker is responsible for any wrongful losses of their
clients caused by the real estate agents or employees working for the brokerage.
No Recovery Fund - Some States have a "Recovery Fund." Some States require bonds,
and some States require professional malpractice insurance, or error and omission
insurance for the brokerage. Washington does not require any of the above.
(On the next page insert Sect 45 – 009 & 009A)
10
LICENSED BROKER - FORMS OF PRACTICING
REAL ESTATE
A real estate broker can conduct business in any manner desired. Also, some businesses
will be allowed a real estate license.
1. Sole Proprietor - A real estate business operating as a Sole Proprietorship, is one that
the broker owns and operates. It is solely owned and operated and is not a corporation or
partnership. It is called a brokerage and the sole proprietor is the broker. The brokerage
may operate as a D.B.A. (doing business as).
2. Corporation/Partnership - A designated broker that manages a real estate corporation
or real estate partnership.
a. Designated Broker - A designated broker of a corporation (a legal entity),
must be a corporate officer and must furnish a list of all the corporate officers and
directors to the Department of Licensing including their addresses, and a copy of
corporate articles. The State may require a background affidavit or fingerprints of
all the corporate officers.
b. Partner - In a partnership (the legal entity), the designated broker must be a
partner in the partnership. The broker must furnish a list of partners, their
addresses, partnership agreement, and may require a background affidavit and
fingerprints of all the partners.
c. Broker License - A broker may be a natural person, partnership, or
corporation. Hiring Agents - The broker is responsible for acts of his/her agents,
therefore he/she is free to refuse to hire any person and free to terminate any
person, as long as it is not based on discriminatory grounds. The broker must
notify the Department of Licensing when terminating a licensee. The real estate
license has a space for broker to sign "terminated." The license must then be
returned to the Department of Licensing in Olympia. The termination date is the
postmark date or the date the license is hand delivered to the Department of
Licensing in Olympia. The broker must send the terminated license to Olympia
immediately if requested by the agent involved. The broker cannot refuse to
return an agent's license to Olympia as a means of collection of debt the licensee
may owe the brokerage.
(On the next page insert Sect 45 – 010 & 010A)
11
REAL ESTATE LICENSES - OTHER TYPES
1. Non-Residency License - Washington State no longer requires residency of real estate
salespersons or brokers. Sole proprietor and designated brokers are not required to be
residents of the State, but they must maintain all their real estate records and trust account
records of their Washington transactions within the State of Washington. Brokers without
an office in Washington may maintain their real estate records with a Washington
attorney, escrow company, title company or another broker. Nonresident salespersons
and associate brokers must be licensed with a broker who is licensed by Washington.
Their Washington real estate license does not allow them to sell real property in any other
State. They must be licensed in the State the real property is located.
2. Temporary License - The temporary broker's permit may be issued at the Director of
License's discretion. It would be issued to the representative of a deceased or
incapacitated broker in an emergency situation. It may be issued to a person not qualified
as a broker, but the permit is not to exceed four months.
3. Land Representative - A person can obtain a Land Development Representative
registration rather than a license. This registration is for land salespeople working in a
single development of land for a single brokerage. They must work for a single
Washington broker and be at least 18 years of age. They are required to furnish proof of
honesty, good reputation, and pay an annual renewal fee. The registration is not
transferable to another broker. The registration is issued to and retained by the employing
broker of the land being sold. There is no exam and the representative is limited in their
sales activity. They cannot act like a regular real estate salesperson or associate broker.
The definition of "Land Development" is land divided into 10 or more parcels on which
no residential structure exists. The representative can disseminate information about the
land development and can contact prospective purchasers of the lots. They can transport
prospective buyers to the specific land development site; but they may not engage in any
selling, negotiation, or bind the broker, or receive or handle funds. They are not allowed
to assist in preparation of any of the real estate sale documents.
(On the next page insert Sect 45 – 011 & 011A)
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STATE APPRAISAL LICENSE - 2 TYPES
The appraisal licenses (certifications) are regulated by the Department of Licensing. The
appraisal license is not a responsibility of the Real Estate Programs Department. A
market analysis by a real estate broker is not an appraisal. There were no license
requirements in Washington previous to 1991. The Federal government required a
licensed appraiser on any Federally related transactions.
Two Appraisal Licenses - There are two appraisal license types (certifications)
recognized in the State of Washington.
1. State-Certified Residential Appraiser - Licensed for appraisals of non-complex one
to four residential units with a value less than $1,000,000 and residences less than
$250,000 in value.
a. Requirements - The required qualifications are 24 months appraisal
experiences with at least 3000 hours of appraisal work within the past five years.
b. 120 Hours - The State-Certified Residential Appraiser must successfully
complete 120 clock hours of approved classroom hours on appraisal, which
includes 30 hours on basic principals of appraisal. They must include 15 hours on
Uniform Standards of Professional Appraisal Practices as part of their hours.
2. State-Certified General Real Estate Appraiser - This classification applies to all
types of real property appraisals. The qualifications are the same as the State-Certified
Residential Appraiser but 3,000 of the appraisal hours must be obtained continuously
over 30 months and 1,500 hours of nonresidential appraisal experience.
a. 180 Hours - They must successfully complete 180 clock hours of classroom
courses on basic real estate appraisal including 30 clock hours of Basic Principals
of Real Estate Appraisal and complete 15 clock hours of Uniform Standards of
Professional Appraisal Practice course.
(On the next page insert Sect 45 – 012 & 012A)
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LICENSE EXAMINATION
LICENSING EXAMINATIONS
1. Real Estate Commission Responsible - The State of Washington RCWs holds the
Real Estate Commission responsible for preparation of the real estate license exam. They
do not actually prepare the exam. There are several good testing services in the United
States that will contract, compile, correct, and administer real estate license examinations
in any State. Washington Real Estate Commission hires these companies and then
oversees their work. The current contract is with Applied Measurement Professionals,
Inc. of Olathe, Kansas.
2. Applied Measurement Professionals, Inc. or AMP - The information currently is not
Washington law but AMP guidelines for test applicants. AMP has prepared a Candidate
Handbook that serves as an instructional guide to the AMP systems. It requires a 60clock hour or 120-clock hour course completion certificate and application for the
examination. A Candidate Handbook is available from your school and your school has
one for you when you need it. Read it carefully and follow the directions specifically.
Once you have completed your required course work you must call AMP to schedule
your examination. Your reservations may be made up to one day prior to your
appointment for examination. AMP assigns each student a number by phone or on-line
which is required when you arrive to take your examination. A broker license applicant
must seek approval from Department of Licensing prior to calling AMP to schedule their
examination.
a. Exam Requirements - No cash is accepted at the exam site. You must bring to the test
site one form of signature I.D. with photograph, your confirmation number from AMP
which you will be given at the time of registration for the exam, the properly completed
"Candidate Examination Document" found in the Candidate Handbook, two sharpened
pencils, and the exact examination fee of $138.25, in the form of a credit card, personal
check, certified check, cashier's check, or money order payable to "AMP".
b. Exam Scheduling - The schedules for AMP Testing locations are provided in the
Candidates Handbook.
(On the next page insert Sect 45 – 013 & 013A & 013B)
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EXAMINATION RESULTS
The results from your examination are given immediately after the exam, at the test
site. The testing program is set up in the following manner:
1. Pass/Fail - The exam results will show "pass" only or "fail" plus score.
2. Retake Exam - A candidate must retake only the sections failed within six months of
the original examination. The passed sections are valid for six months.
3. Exam Fee - A full fee is required for a candidate to retake the examination. The
procedure is the same as the registration for the original examination.
4. Re-Register - One can register to take another exam with "fail" results. The
registration procedure is the same as the original registration.
5. Results Good for 1 Year - The results of the successful completion of both sections
passed are valid for one year for a person to apply for their real estate salesperson license.
Pass vs. Licensing - Passing the exam entitles a person to apply for their real estate
license. The pass notice is valid as an interim license for 45 days while the first license is
being processed by the Department of Licensing in Olympia.
(On the next page insert Sect 45 – 014 & 014A)
15
ACTIVATING YOUR LICENSE - ALLOWED TO
SELL REAL ESTATE
1. Activation of Your License - A candidate that successfully passes the State exam
must act within one year from the date of the examination. A license fee must be paid to
the Department of Licensing along with a completed application form. The licensee must
have the employing broker sign and submit the signed form to the Department of
Licensing in Olympia before engaging in any activities that require a real estate license.
If a successful candidate elects not to activate a real estate license, they must submit the
completed form to Department of Licensing with the fee for a license and request the
license remain inactive. An inactive license may be activated at any time by submitting
the license fee with a signed broker request of issuance of the license. The active license
is issued to the employing broker. The inactive license is held in Olympia until such time
an active license is requested. A candidate that fails to act within one year from the date
of their examination will be dropped from the records and lose all of their education
hours and their exam scores. They will be required to begin the education courses, as if
they had never taken them and will have to retake the State examination as if it had never
been taken.
2. Non-Activation - A person with an unissued license, expired license, or inactive
license is deemed to be the same as not licensed to practice real estate. They may not be
involved in any professional real estate activity. It should be remembered, however, that
"Inactive" is a license status, and subject to the Real Estate Division's jurisdiction. The
payment of the license fee for reinstatement of an inactive license reinstates the license
for future professional real estate activity, not past acts. A person that inactivates their
real estate license for a period of more than 3 years will have to prove they have
completed an approved 30-clock hour class and pay the appropriate fees to activate their
license with a broker. A license renewal fee is required to be paid even when the license
is placed on inactive status in Olympia.
(On the next page insert Sect 45 – 015 & 015A)
16
STATE LICENSE ADMINISTRATION
Broker Requirement - All real estate licenses are issued to a single designated broker of
a specific brokerage. A licensee may not be licensed with more than one broker at a time.
1. Display Licenses - The broker must display all licenses issued to their brokerage in a
prominent place in their brokerage.
2. Pocket Card - All licensees receive a "pocket license card" to be carried with them in
the event they must show proof of being licensed to perform professional real estate
services.
All License Renewals - Brokers, associate brokers, and salesperson's real estate license
expire and are renewable every other year on the licensee's birthday. The corporate real
estate license and partnership real estate license expire biannually from their date of
issuance.
1. 1st Renewal - The first real estate license a salesperson receives will normally renew
in less than two years. Their license will expire on their birthday the second year
following the year they successfully pass the State examination. There is no prorate or
reduction in fees for this first license. A salesperson may use a "nickname" instead of
their actual name on their real estate license if licensee receives written consent from the
Director of Licensing.
2. Real Estate Practices Course - The first renewal of a salespersons real estate license
requires the salesperson to successfully complete a 30 clock hour course in real estate
practices, in addition to 30 clock hours of continuing real estate education. These courses
must commence after the issuance of the original real estate license. All additional
renewals require the successful completion of 30 clock hours of approved real estate
courses and every 2 years thereafter. A salesperson may utilize up to fifteen excess hours
of real estate continuing education courses for a subsequent renewal providing the
courses commenced within 36 months of the renewal date for which they are utilized.
(On the next page insert Sect 45 – 016 & 016A)
17
SALESPERSON - CHANGING BROKERS/LEAVING
THE BUSINESS
When a licensee leaves the employ of their broker, the following procedures apply:
1. Return License to DOL - The return of a real estate license or the change of broker
requires the salesperson's real estate license and pocket card be returned to the Real
Estate Department of Licensing signed by the broker. The licensee is out-of-business
until the license is reissued to a new broker. An aggrieved broker may not refuse to return
salesperson's license even if the licensee owes money to the brokerage. The broker must
file a complaint with the Real Estate Division claiming a breach of honest, or
untrustworthiness if the licensee owes the broker money or property.
2. Fee Distribution - The fee charged by the Department of Licensing is divided; five
dollars to the State General fund and the balance to the Real Estate Commission Account.
The fees from fines are used for education of real estate licensees.
Denial of License - The denial of a real estate license may not be arbitrary. The denial
must be based on reasonable evidence, like false information of the license application or
not disclosing a prior conviction of a crime in the prior 10 years to the time of
application, which would require fingerprints submitted with the application for the real
estate license.
(On the next page insert Sect 45 – 017 & 017A)
18
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PROFESSIONAL LICENSING SERVICES FEE
Fee schedule as of July 2009
If you have any questions regarding the following fees, please call (360) 753-2250 for information on Salesperson
Fees and (360) 753-2262 for Brokers
Real Estate Fees
TITLE OF FEE
Real Estate Broker:
Application/examination
Reexamination
Original license
License renewal
Late with penalty
Duplicate license
Certification
Name or address change, transfer or license activation
Real Estate Broker - Branch Office:
Original license
License renewal
Late renewal with penalty
Duplicate license
Name or address change
Real Estate Sales Person:
Application/examination
Reexamination
Original license
License renewal
Late renewal with penalty
Duplicate license
Certification
Name or address change, transfer or license activation
The following fee shall be charged annually for land development representatives:
Land Development Representative
19
FEE
$138.2
$138.2
$210.0
$210.0
$236.5
$26.50
$26.50
No cha
$189.5
$189.5
$226.5
$26.50
No Cha
$138.2
$138.2
$146.2
$146.2
$172.7
$26.50
$26.50
No Cha
$26.50
VIOLATIONS - ILLEGAL ACTS
There are illegal acts that a real estate licensee needs to know.
1. MLS Discrimination - A multiple listing service association guilty of discrimination
and unfair monopoly is an illegal act. Most multiple listing associations admit only
brokers and exclude salespersons. Washington State requires the approval of multiple
listing association membership rules to prevent any abuses. Washington lists the
membership limitations allowed, such as license status, error and omission insurance
requirements, territorial requirements, and the fair and equal application of all restrictions
to all members. They have also limited the initiation fees to a maximum of $2,500.
2. No Fees - Any unlicensed person charging a fee for professional real estate activities
could be found guilty of a Gross Misdemeanor. The Department of Licensing could deny
the issuance of a future real estate license to a person guilty of a Gross Misdemeanor.
Any offender cannot use courts to collect a fee or commission if they are licensed. To file
a court action for the collection of fees or commissions requires the proof of a current real
estate license at the time professional real estate activities occurred. Any licensed person
involved in a transaction involving an unlicensed person is in jeopardy and could also be
sanctioned.
DOL/R.E. Division Action - The violation of licensing law is grounds for disciplinary
action against a licensee.
Violations - The following are specific violations from Washington Real Estate License
Law:
1. Fraud - Obtaining a license by fraud, misrepresentation, concealment, or by mistake
or inadvertence of the Director of Licensing.
2. Code - Violations of The Real Estate Code (State Statutes/Laws) or the Administrative
Rules of the Director (Rules and Regulations).
3. Conviction - A conviction for or pleading "Nolo Contendere" to forgery,
embezzlement, obtaining money under false pretenses, bribery, larceny, extortion,
conspiracy, or similar offense.
(On the next page insert Sect 45 – 018 & 018A)
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VIOLATIONS – MORE ILLEGAL ACTS
The following are additional acts and practices that are violations of the Real Estate
Code:
1. False Statements - A licensee may not make, publish, distribute, or cause a false
statement or promise to be made or published.
2. Fraudulent Sales - The committing of or being party to fraud or misrepresentation or
concealment or trick or scheme that another relies upon to make a decision in regard to
the buying or selling of real estate.
3. Dealing with Revoked Licensees - The involvement with a person whose license as
been revoked, suspended, or which has never been issued.
4. Embezzlement - The conversion of money, deed, contract, note, mortgage, or abstract
of title to any purpose other than originally intended. The failure to deliver within 30 days
after the owner is entitled to their documents is prima facie evidence of conversion
5. Failure to Respond to Director - It is a violation if the licensee fails, upon demand, to
produce documents, records, or information in the licensee's possession for inspection of
the Director or his/her representative.
6. Noncompliance to Director - An agent's noncompliance of the Director's written
order of objection in reference to a marketing or sales plan felt to be detrimental to the
general public.
7. Any Fraud Conviction - A license could be taken if the licensee has a final conviction
for a crime of fraudulent acts, dishonest dealing, or moral turpitude.
8. Advertising w/o Broker Name - Any advertising without using the broker's name as
the broker is licensed.
9. Cash E/M Only - The acceptance of anything other than cash as earnest money is a
violation. Cash is not required if the owner/seller knows the actual consideration at time
of signing the acceptance.
10. Not Divulging Personal Involvement - When you or a close relative (once removed)
is involved as a principal (buyer or seller), you must divulge this to the other principal.
Not doing so is violation of the State Code.
(On the next page insert Sect 45 – 019 & 019A)
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VIOLATIONS - MORE ILLEGAL ACTS
The following are additional acts and practices that are a violation of the Real Estate
Code:
1. Commission Violation - It is illegal for a licensee to be charging or accepting
commission from more than one party in a transaction unless all parties agree to it in
writing (dual agency).
2. Undisclosed Commission - The accepting, taking, or charging any undisclosed
commission, rebate, or direct profit on expenditures made for a principal (secret profits).
3. Predetermined Appraisal Value - A licensed agent receiving compensation for an
appraisal based on a predetermined value of the real property being appraised is a
violation.
a. Predatory Lending Laws - This practice is a Federal offense subject to Federal
action. This is regulated under the Predatory Lending Laws of the Federal government
and policed by HUD and the Justice Department.
4. Interest in Property - The issuing of an appraisal report by a licensee on any property
where they have an interest unless their interest is clearly stated in the appraisal report.
5. Misrepresenting Affiliation - A licensee that misrepresents their membership in any
State or national organization.
6. No Discrimination - It is illegal for a licensee, broker, or associate broker to
discriminate at any level in their sales activity or hiring of personnel.
7. Records 3 Years - The failure to keep the required escrow or trust account records for
3 years, and to make them available to the Director upon demand. The failure to keep all
appropriate records relating to any real estate transaction for 3 years after consummation
of a transaction.
8. Mandatory Copies - The failure by a licensee to give a copy of any signed contract
relevant to a real estate transaction to the signatories at time of the signature.
9. Illegal Commissions - It is illegal for a licensee accepting compensation from any
person except the licensed real estate broker with whom they are licensed with. This
includes a licensee receiving or expecting to receive a kickback or rebate from a bank or
escrow company without disclosing such expectation to their principal.
(On the next page insert Sect 45 – 020 & 020A)
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VIOLATIONS – OTHER ILLEGAL ACTS
Gifts from Title Insurance Companies
Licensees CANNOT receive any gifts worth more than $25 a year from a title insurance
company. Acceptable gifts that not worth more than $25 include:
• Gift Cards • Advertising • Time • Handing out flyers • Charities • Golf
tournaments • Hosting events
Be sure you to track all “things of value” you receive from title companies or their
agents.
The following are additional acts and practices that are a violation of the Real Estate
Code:
1. Must Disclose Interests - A licensee buying, selling, or leasing - directly or indirectly
- any interest in real property without disclosing their license status in writing is a
violation.
2. Failure to Supervise - The failure by a broker to supervise employees, associate
brokers, or salespersons licensed with their brokerage is a violation.
3. Director Discretion - Any conduct demonstrating bad faith, dishonesty,
untrustworthiness, or incompetency by a real estate licensee.
4. No Dealer License - A real estate licensee acting as a mobile home or travel trailer
dealer or salesperson without the proper vehicle dealer license.
5. No Title for Vehicle - A broker failing to assure that title to a mobile home is properly
transferred at the closing of a mobile home transaction where the sale of real property is
not involved.
6. Must Cease & Desist - Any licensee in violation of an order to cease and desist which
is issued by the Director or for a violation of an order to cease and desist issued by the
Director. A cease and desist order is the first step in an investigation of wrong doing.
: A broker converted trust funds to pay for business expenses. This would be
ruled “commingling ". The Director would immediately order a cease and desist order of
this practice and begin an investigation.
7. Non-Payment of Child Support - If a licensee fails to pay child support AND court
action orders him/her to do so, payments must be carried out as ordered by the court. If
not doing such action, the license would be taken by the Director.
(On the next page insert Sect 45 – 021 & 021A)
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NO SLIDES FOR THIS PAGE
STATE DIAGRAM - DISCIPLINARY AUTHORITY
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ACTION TAKEN BY THE DIRECTOR/STATE
The following are requirements of the licensees and penalties associated with them:
1. Director Penalties - The enforcement powers of the Director of Licensing are to
investigate and order hearings, suspend, revoke, or deny issuance of a real estate license,
and to levy fines of up to $5,000.00 per offense. The director may require completion of
an educational course. The Director may issue cease and desist orders before, during, or
after a hearing or without a hearing.
2. Criminal Notification to R. E. Dept. - Every licensee must notify the real estate
program manager within twenty days after service or knowledge of any criminal situation
in which the licensee is named defendant or the entry of a civil court decision against a
licensee regarding real estate or business activity.
3. Always Notify - A pending appeal does not change the requirement for notification by
the licensee.
(On the next page insert Sect 45 – 022 & 022A)
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