Q&A

with the State Real Estate Commission

Q:  What are the requirements when there is a change of ownership (but not necessarily a change of broker) for a real estate agency?  Also, does a change in either ownership or broker require that the office be re-inspected?

A:  The answer depends upon the form of the business and the change being made. Where only the partners or officers are changing, all that would need to be submitted is the names of the new officers/partners/members, their titles, a notarized statement from each new officer/partner/member that he/she has not been convicted of any crimes and a criminal record check for each new officer/partner/member completed by the state police in the state where each resides. A new inspection for a change of owner or change of broker is not needed.

          However, if the change of ownership is for a company or sole proprietorship, the company or sole proprietorship would need to submit a new business application and be re-inspected. 

          Note though, where one corporation is being purchased by another existing corporation, an application for a new branch, including the names and licenses for all of the licensees that work in that branch, plus a new inspection is required.

Q:  Can an office practice both Dual Agency and Designated Agency?

A:  Sure and it happens as a matter of course where the listing agent also becomes the selling agent. Also remember, in every designated agency situation, the broker is always a dual agent. Generally, the Listing Agreement or the brokerage relationship agreement provides the consumer with the notice that dual agency is a possibility and by virtue of the consumer’s signature, consent to that possibility. The Agreement of Sale is generally where there is actual written notice that the possibility has come to fruition. 

Q:  May real estate licenses be put into a book and made available for public inspection rather than hanging each license on the wall?

A:  In August, 2005 the Commission amended Section 35.245 of the regulations, 49 Pa. Code §35.245, and removed the requirement that the licenses be “conspicuously displayed” and instead required that the licenses be maintained in the broker’s main office and that each branch office maintain a list of licensees working out of that office. The theory was that because the broker has supervisory responsibility, original licenses should be maintained at the broker/cemetery broker’s main office. However, since clients and inspectors have immediate access to the licensure status of a licensee and because some real estate companies have so many licensees, there is no longer a need to display the licenses. Licenses may be kept in book or be accessible at the main office.

Q:   Is it still a requirement that a real estate company name must end with “real estate,” “realty,” or, if appropriate, “REALTOR®?”

A:  Section 604(a)(4) of the RELRA, 63 P.S. §455.604(a)(4), prohibits licensees from using or making any misleading or untruthful advertising or using any other trade name or insignia or membership in any real estate association or organization which the licensee is not a member. The Commission has reviewed its regulations and cannot find a provision requiring the use of “real estate,” “realty,” or, if appropriate, “REALTOR®.” (Members are reminded that the use of the term REALTOR® is governed by NAR trademark rules, which are available on the NAR Web site at www.realtor.org.)

Q:   The Commission recently increased the biennial renewal fees which will take effect during the 2006-2008 renewal. Is this money kept separate from the rest of the Commissions/Boards under the Bureau of Professional and Occupational Affairs, and for use only by the Commission?

A:  As a matter of background, understand that license renewal fees are the most substantial revenue-generators of all the fees charged by the Commission. These fees had not been raised since May 20, 1994. 

          The revenue for each of the Bureau of Professional Affairs’ 27 licensing Boards is kept in a restricted account for each separate Board/Commission.  By statute, only the interest on that money can be used in the General Fund. Note that while the principle is strictly the Commission’s, the Commission cannot spend that money without approval of the Department of State and the Office of Budget.  n