Broker Compliance

In the United States, the requirements for brokers to have agents listed under their license vary by state. However, there are some common principles:

  1. **State Licensing**: To list real estate for sale or lease in any U.S. jurisdiction, an individual must hold a **real estate license** in the state or territory where the sale or lease is taking place. These licenses are granted by state governments.
  2. **Education Hours**: Often, each state government requires a certain number of **education hours** to obtain and maintain a real estate license. These education requirements can differ from state to state.
  3. **Continuing Education (CE)**: Brokers and agents must also fulfill **continuing education** requirements to keep their licenses active. The specifics of CE can vary by state, so it’s essential to stay informed about any changes or updates.
  4. **License Reciprocity**: Some states have **license reciprocity** agreements, allowing licensed agents from one state to operate in another without obtaining a separate license. However, the details of reciprocity agreements can differ, so it’s crucial to check with the licensing authority in the state where you seek reciprocity.

Remember that state laws and regulations are subject to change, so always consult your state’s licensing authority for the most up-to-date information. If you’re a member of the National Association of REALTORS®, you can access their State Issues Tracker to stay informed about licensing requirements and reciprocity¹[1]. Additionally, broker-dealers in the securities industry must also register in each state where they conduct business and ensure their agents are appropriately licensed.

The NAR Variable Dues Formula is designed to ensure fairness by basing member dues on the number of individuals licensed with REALTOR® principals (also known as “Designated REALTORS®” or “DRs”), or licensed with brokers who are themselves licensed with designated REALTORS®

1. Inclusion Criteria:

o All individuals directly or indirectly licensed with a DR are included in the computation.

o An offsetting credit is given to the DR based on the number of non-principal licensees who hold REALTOR®, REALTOR-ASSOCIATE®, or Institute Affiliate membership in their own right.

2. Licensees Included:

o A licensee is considered “licensed with” a DR if their license is held by the DR, any broker licensed with the DR, or any entity in which the DR has a direct or indirect ownership interest.

o For example, if the DR works under a corporate license and licensees’ licenses are held by the corporate entity, they are included in the dues calculation.

1. Responsibility for Dues Payment:

o The DR (Designated REALTOR®) is responsible for paying the dues to the local association.

2. Exceptions:

o There are two exceptions to the formula:

 Non-REALTOR® Licensees in Referral Companies (LFRO): Agents working for a separate entity engaged solely in referrals are excluded from the dues formula calculation.

 Mortgage Loan Originators (MLOs): Non-REALTOR® licensees providing services requiring an MLO endorsement and having such an endorsement on their license are exempt from the formula.

3. Requirements for Exceptions:

o For the LFRO exception, the DR must certify in writing that LFRO agents work for a separate entity and are engaged only in referrals.

o For the MLO exception, the DR must certify that MLO agents work for an entity where the DR has an ownership interest and provide MLO services exclusively.

The National Association of REALTORS® (NAR) has its Constitution and Bylaws that outline various aspects of membership, including requirements for brokers and real estate professionals. Let’s explore where you can find this information:

  1. NAR Constitution & Bylaws: The NAR Constitution and Bylaws provide a comprehensive overview of the organization’s structure, objectives, and membership criteria.
  2. You can access the 2024 Constitution & Bylaws on the NAR website. These documents incorporate amendments and interpretations effective on or before November 17, 2023.
  3. The Constitution and Bylaws were initially adopted in San Francisco, California, on May 31, 1922, and have undergone revisions over time. To explore the full content, including details related to broker requirements, visit the Constitution & Bylaws
Member Appreciation