FLORIDA REAL ESTATE LAW

1923 Florida Real Estate Law Create

1925 FREC was create to oversee the real estate law
Your completion certificate and your application are good for two years.

SALES ASSOCIATE
63-hours for pre-licensing and 45-hours post-license 14 hours continuing education 28 hours for
reactivation must score 70% on exam
If you do not take the 45-hour post-license education your license becomes null and void
If you fail to timely take all future continued education your license becomes involuntary and
inactive you cannot remain in this status for more than two years before becoming null and void
Must complete 14 hours of continued education plus pay a late fee within the 12-months 28
hours of CE plus pay a late fee within 12-months plus up through the 24-month.

BROKER
72-hours for pre-licensing and 60-hours post-license 14 hours continuing education 28 hours for
reactivation must score 70% on exam
If you do not take the 60-hour post-license education your license becomes null and void
If you fail to timely take all future continued education your license becomes involuntary and
inactive you cannot remain in this status for more than two years before becoming null and void
Must complete 14 hours of continued education plus pay a late fee within the 12-months 28
hours of CE plus pay a late fee within 12-months plus up through the 24-month.

Application with state and Pre-license course completion certificate is good for 2 years.

Initial license is good for 18 to 24 months licenses are renewed either on March 31st or September
30th and cannot exceed two years.

Mutual Recognition is granted to non-Florida resident who hold valid real estate licenses from one of
the 8 states that Florida is currently under agreement by taking a 40-question exam, which is solely
related to FL law (must score 75 on exam). You must also execute an IRREVOCABLE CONSENT TO SERVICE
AGREEMENT, which allows lawsuits to be filed against you in the State of Florida.
Alabama, Arkansas, Connecticut, Georgia, Indiana, Mississippi, Nebraska and Oklahoma

A non-Florida resident who does not have a real estate license or does not live in one of the mutual
recognition states can apply for a license and must comply with all the pre-licensing requirements
and will have to execute an irrevocable consent to service agreement, as well.

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APPLIES TO BOTH SALES ASSOCIATE AND BROKERS:
Brokers and Sales Associates can qualify for an equivalent type license in Florida if they meet the
following qualifications: Must be 18 years of age and hold a high school diploma or its equivalent.
NOTE: There are only two types of real estate licenses in Florida: Broker & Sales Associate. In Florida
you can work as a Broker Associate, which is a hybrid type license that allows an individual who has
passed the broker exam and has met all the requirements to open their own brokerage firm.
KEY: You can get a real estate license even if you are not a Florida Resident or a U.S. citizen

Youre considered to be a resident if you have resided or plan to reside in Florida for 4 calendar
months.

If you do not complete your post-licensing education your license will be lost and can only be
regained by taking the pre-licensing courses required by law. Upon completion of post-license
continued education youre required to complete 14-hours continued education. If you do not
complete the required education your license will be placed into involuntary inactive status and can
be held in this status for up to two years. Upon the second year the license will be lost and you must
begin the process all over again.

Within 12 months take your 14-hours continuing education and pay licensing fee plus a late fee. After
12 months less than 24 months take 28-hours of continuing education and pay licensing fee plus a
late fee. After 2 years, the license will become null & void if you take no action.

Florida real estate services consist of the following 8-items A BAR SALE Advertise, Buy, Appraised,
Rents, Sale, Auction, Lease and Exchange. These Real Estate services require that you have an active
license when you are performing such duties for someone else AND for compensation (actually
received, promised, or expected):

If you have a 4 year degree in Real Estate you do not have to take pre-licensing or post education;
however, you must take continued education every 2-year.
If you are an attorney, you are exempt for taking the 63-hour pre-licensing and not required to take
14-hours continued education. Everything else is fair game like post-licensing education and broker
pre-licensing.

Exempt for having a real estate license: salary employee, selling cemetery lots, Attorney in Fact (given
power of attorney), court appointed person.

LICENSE EXEMPTIONS:
Salaried employees who are not paid any type of commission; person selling cemetery lots; Attorneys
in Fact (given the power of attorney) or a court appointed person.

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NOTIFICATION PROCESS:
You have 10-days to notify the DBPR if you change your mailing address. If you move out the State of
Florida (non-resident), you will have 60-days to notify the DBPR; however, the change of address
must be done in 10 days. If you want to maintain your license you must execute an IRREVOCABLE
CONSENT TO SERVICE AGREEMENT.

LICENSE LAW & ADMINISTRATION

Florida Real Estate Commission (FREC)
Consist of 7 members: 4 real estate brokers with at least 5 years of experience, 1 real estate sale
associate or real estate broker with at least 2 years of experience and 2 consumers. One of the 7
members must be 60 years or older. The members are appointed by the Governor and confirmed by
the Senate; they serve a 4-year term and cannot be reelected for more than 2 consecutive terms.

FREC has executive power to regulate and enforce license law.

Quasi-legislative power to enact rules and make revisions to administrative rules (Ch. 61J2)
Quasi-judicial power to grant or deny applications and administer penalties for violating license
law.
FREC cannot put a person in prison as a punishment; will refer the case to the State Attorneys
Office.

Member of U.S. Armed Forces: While on active duty your account is kept in good standings and you
do not have to worry about renewing your real estate license or paying late fees, as long as you are
not practicing real estate in the private sector for profit. Upon completing duty they have 6 months
to renew license. The rule applies to spouses, as well as long as the active duty is out of state. Note,
this is all conditional as long as they are not practicing real estate while on active duty.

Involuntarily Inactive: occurs when a licensee fails to renew license at expiration date; if not
corrected, license becomes NULL AND VOID AFTER 24-MONTHS.
Void license: no longer exists
Ineffective license: it exists, buy you cannot use it (ex. Suspension)

10-day notification to FREC for the following:

Broker or real estate school changes address.
When there is a change of employment for sales or broker associate or instructor.

An ineffective license exist, however, it cannot be used.

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3 GENERAL AGENCIES
Universal Agent Authorized to do anything the client can
General Agent Authorized to do things related to a business.
Special Agent hired to perform a specific act or transactions. Please note, SA or Brokers are
considered to have this type of agency.

3 BROKERAGE RELATIONSHIPS IN FLORIDA

Note: Regardless of which relationship you are engaged under you must always deal honestly,
account for funds, and disclose any known material facts that materially affect the value of the
property.

TRANSACTION BROKER under Florida law it is presumed that you are operating under such a relationship
unless specifically agreed too otherwise non-fiduciary relationship where you must present all
offers, exercise limited confidentiality and disclosure.
Your employer is known as your customer.
Under Transaction Broker you can represent both buyer and seller.

SINGLE AGENT maintains a fiduciary relationship with client. This relationship is one of trust and
confidence, which is offered and accepted. Single Agent must provide the following services that are
referred to as COLD Confident, Obedience, Loyalty, & Disclosure.
Please note that you can move from Single Agent to Transaction Broker by getting both parties
(buyer and seller) to agree and execute a consent to transition agreement between relationship
statuses.
Your employer is known as either your client or principal.
Under Single agency you cannot represent both seller and buyer, which is known as Dual agency:
Is illegal in Florida with the exception of commercial transactions that meet certain criteria.
o You can remedy this by getting both parties to agree to change agency relationship status by
executing a CONSENT TO TRANSITION TO TRANSACTION BROKER to complete the transaction.

NO BROKERAGE you do not represent the buyer or seller.

Written disclosure required in RESIDENTIAL SALES TRANSACTION ONLY, which is given before or at time of
listing agreement, or buyer representation agreement, or before showing property. All disclosure
documents that resulted in a contract MUST BE RETAINED FOR 5 YEARS, REGARDLESS if they did not close.

Designated Sales Associate is utilized for NON-RESIDENTIAL TRANSACTION, both (seller and buyer) must
have over $1 million dollars of assets; both (buyer and seller) must sign a disclosure document. The
broker will designate a sales associate to represent buyer and a sales associate to represent the
seller, both sales associates will have special agent relationship with their assigned client.
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To charge or accuse someone of FRAUD all of the following four items must exist: There existed a
misstatement(s) by the licensee; licensee knew that the information was inaccurate or should have
known, the other party relied on information, and the other party was damaged. CULPABLE NEGLIGENCE
will exist when one of the four items above is missing.

REAL ESTATE BROKERAGE OPERATIONS

Active brokers must maintain an office of stationery construction. Note: SALES ASSOCIATES cannot own
an office and must work out of a brokers office.

Branch offices must be registered every two years with DBPR and are not transferrable. Note: A
temporary shelter is not a branched office if used only for the protection of customers and sales
associates.

BROKERAGE OFFICE ENTRANCE SIGNAGE

Must include the following there things: FULL NAME OF BROKER; the words LICENSED (OR LIC.) REAL ESTATE
BROKER; and TRADE NAME OR CORPORATION NAME (if any)

BROKERAGE ADVERTISING
All advertising must include the name of the brokerage office if not its a blind ad. Note: FALSE
ADVERTISING is a second degree misdemeanor. A LICENSEE can sell their own home, as sell by owner
(FSBO); however, they MUST DISCLOSE that they are a licensed real estate professional AT THE POINT OF
MEANINGFUL NEGOTIATIONS.

ESCROW / TRUST ACCOUNTS

Must be maintained in the State of Florida and they must be a commercial bank, or credit union, or
savings association. Note: If the account is an interest bearing account the broker must get all
parties permission and written approval, as to who shall receive the interest income earned.

Broker must be the signor on the account and can keep NO MORE THAN $1,000 OF PERSONAL FUNDS IN SALES
ESCROW OR $5,000 IN PROPERTY MANAGEMENT ESCROW if the broker chooses to have one account, as
long as they MEET THE REQUIREMENT OF BOTH THEY CAN ONLY HAVE A MAXIMUM OF $5,000 NOT $5K & $1K.
Note: if you exceed any of these limits you will be accused of commingling funds.

Sales Associate must turn earnest money deposits into broker IMMEDIATELY (BY NEXT BUSINESS DAY) and
the Broker must deposit the earnest money deposit by 3 rd business day. Note: Post-dated checks are
okay, AS LONG AS THE SELLER APPROVES THEM and must be kept in a safe place until they become due for
deposit.

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CONFLICTING DEMANDS ON ESCROW
Notify FREC within 15-business days of last demand select 1 of 4 settlement procedures within 30
business days, which are Mediation (Non-Binding), Arbitration (binding), Litigation, and Escrow
Disbursement Order. Note: THERE ARE THREE EXCEPTIONS WITH RESPECT TO NOTIFICATION, as law governs the
exact procedure to follow and they are: SALE OF HUD OWNED PROPERTY, FINANCING CONTINGENCY, RESCISSION
BASED UPON CONDOMINIUM ACT.

If the broker feels he is entitled to a portion of escrow he will file a DECLARATORY JUDGMENT or if he is
not owned he would request a BILL OF INTERPLEADER and walks away.

RENTAL LISTING
DEMAND FOR REFUND MUST BE MADE WITHIN 30-DAYS the customer is entitled to 100% refund if the rental
listing contains errors the customer is entitled to 75% refund if the person cannot find suitable
rental SELLING BAD RENTAL LISTS ARE A 1ST DEGREE MISDEMEANOR VIOLATION.

KICKBACKS
An unearned fee paid to a licensee for non-real estate services are legal, as long as everyone involved
(buyer & seller) are adequately informed (full disclosure). Must not violate RESPA and are not
allowed for title and casualty insurance transaction. Licensee CANNOT SHARE COMMISSION WITH UNLICENSED
PERSON with the EXCEPTION OF BUYER & SELLER OF TRANSACTION.

BROKERAGE ENTITIES
Sole proprietorship: Unlimited liability and easy to create
General Partnership: Each partner is responsible for other parties actions, and all the debt of the
partnership
Limited Partnership (must be filed with the state): at least one general partner who runs the
business (unlimited liability) and has limited partners with limited liability (up to their dollar
investment).
Limited Liability Partnerships: Similar to general except partners are not liable for other partners
act.
Corporations (must be filed with the state): separate legal entity from its owners.
Limited Liability Corporation (must be filed with the state): protects one from business debt.
Sales associates CANNOT BE A GENERAL PARTNER in a general partnership or limited partnership.
Sales associates CAN BE A LIMITED PARTNER in a limited partnership.
Partners who deal with the public and perform real estate services must be licensed as active
brokers.
Sales associates CANNOT BE AN OFFICER OR DIRECTOR IN A CORPORATION.
Officers or directors who deal with the public and perform real estate services must be licensed as
active brokers.
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7 STEP COMPLIANT PROCESS
1. Compliant Filed: must be legally sufficient.
2. Complaint Investigated: DRE does investigation, turns information over to probable cause panel.
3. Probable Cause Panel: Determines if there is enough evidence to proceed with case
4. Formal Complaint: an outline of the charges against the licensee.
5. Informal Hearing or formal hearing: informal if guilty, get penalty issued at normal FREC meeting;
formal if guilty and testify before administrative law judge.
6. Final Order: FREC receives recommended order from administrative law judge; they accept,
reject, or modify it to become the final order
7. Judicial Review (appeal): must be filed within 30-day with District Court of Appeals; Writ of
Supersedes is issued which stops enforcement of penalty.

PENALTIES
Administrative
o Deny Application
o Citations ranging from $100 to $1,000
o Administrative fine up to $5,000
o Suspension up to 10 years maximum
o Revocation
Criminal FREC must report to state attorney; FREC cannot impose prison term as a punishment.
o 1st Degree Misdemeanor: failing to provide current and accurate rental list for a fee; fine up to
$1,000 and/or up to 1 year in prison.
o 2nd Degree Misdemeanor: all other violations of chapter 475 fall in this category; fine up to
$500 and/or up to 60 days in prison.
o 3rd Degree Felony: unlicensed practice of real estate for compensation.

RECOVERY FUND
Account used to reimburse people who have suffered a monetary loss as a result of a licensee
Maximum payout of $50,000 per transaction.
Maximum of $150,000 paid out for per licensee.
Fees are collected from licensees to fund the account when it reaches a balance of $150,000. At
$1,000,000 fees stop. (1.50 per year for sales associates, 3.50 per year for brokers)
Reimbursement cannot be sought from the recovery fund in the following situations:
Spouse of the person the judgment is against.
Licensee who was part of transaction cannot make a claim for commission.
Transaction where licensee was not acting as a licensee, but instead for their own account.
Transactions where the licensee had an inactive real license.
The judgment was issued against a business, not an individual.

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CIVIL RIGHTS ACTS OF 1866
Prohibits RACIAL DISCRIMINATION in all real estate transaction

CIVIL RIGHTS ACTS OF 1968

Established PROTECTED CLASSES from discrimination including: race, color, religion, sex (gender),
national origin, familial status, and handicap.
Prohibited Activities
o Steering: directing homebuyers away from areas that do not include their race, into areas that
do.
o Blockbusting: getting existing homeowners to sell their home by claiming members in the
protected class are moving in.
o Redlining: denying loans or quoting different rates for home in a certain neighborhood.

FAIR HOUSING ACT

Housing for elderly exempt from familial status protection if all units occupied by persons 62
years or older; or at least 80% of units are occupied by persons 55 years or older
Religious organizations can restrict housing to members on as long as they do not discriminate on
membership.
Must post equal opportunity poster which is obtained from HUD
HUD prosecutes Fair Housing complaints

CONSUMER CREDIT PROTECTION ACT (TRUTH IN LENDING ACT)

Regulation Z
Requires lenders to disclose the annual percentage rate (APR) AND all costs associated with
credit.
Triggering Terms: (ex. Amount or percentage of down payment): if ad contains them, then the
following information must also be disclosed.
o Amount or percentage of down payment
o Terms or repayment
o Annual percentage rate

REAL ESTATE SETTLEMENT PROCEDURE ACT (RESPA)

Purpose is to ensure buyers know the type and amount of closing costs they will pay.
Requires: HUD 1 (settlement statement at or before closing); Information booklet about the
settlement costs at time of loan application or within 3 business days; and estimate of settlement
cost at time of loan application or within 3 business days.

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OTHER ACTS
Equal Credit Opportunity Act (ECOA)
Prohibits discrimination on basis of: race, color, religion, sex, national origin, MARITAL STATUS, AGE, OR
RECEIPT OF PUBLIC ASSISTANCE.
Florida Residential Landlord and Tenant Act
Laws concerning maintaining security deposits and advance rents: 3 Options
o Separate non-interest bearing account
o Separate interest bearing account and pay 5% interest or 75% of interest earned
o No separate account, but post surety bond for lesser of the funds or $50,000, and pay 5%
interest.
REAL PROPERTY
Defined as real estate plus the bundle of rights that come with it
Bundle of rights: Disposition, Use, Possession, Exclusion
Riparian: land close to the river
Littoral: land close to lake
Personal property (chattel): anything that is not real property

FREEHOLD ESTATES
Ownership type estate
Fee Simple: most comprehensive, inheritable
Life Estate: measured by a persons life time
Remainder Estate: goes to a 3rd party when original person dies
o Reversion Estate: property goes back to grantor
o Bundle of rights: Disposition, Use, Possession, Exclusion

NON FREEHOLD ESTATES (LEASEHOLDS)

Leasing or renting
Estate for Years: written lease agreement with start and end date
Tenancy at Will: lease agreement with start date, but no fixed end date
Tenancy at Sufferance (holdover tenant): situation that occurs when the lease end date has
passed, but the tenant remains in the property.

CO-OWNERSHIP
Tenancy in common: take title at the same or different time, equal or unequal interest, heirs
inherit (no right of survivorship)
Joint Tenancy: take title at same time, equal interest, and right of survivorship (must be expressly
stated)
Tenancy by the entireties: husband and wife only, right of survivorship is implied