Division of Real Estate Adopts New Administrative Rules
March 15, 2019 |
The Division of Real Estate has adopted a series of rule changes that went in to effect February 10, 2019. The rules address implementation of HB 532, which among other things established Principal Brokers, Associate Brokers, and Management Level Brokers & Salespersons. The rules also provide a series of other changes affecting advertising, continuing education, disciplinary sanctions, and trust account records. The rules changes will also necessitate the use of new forms, including the Agency Disclosure Form, Consumer Guide to Agency Relationships, Company Policy on Agency and Minimum Duties Statement. Below is a review of the more noteworthy changes.
Licensees may now advertise in a name other than the name on their license, or in their maiden name, provided the name is not misleading and the name is registered with the Division. Brokerages may utilize multiple trade names, specifically up to 5. The brokerage must apply to the Division for approval and must advertise in at least one of the approved trade names. The name must be distinguishable from an existing brokerage and not likely to mislead the public. The Division withdrew a proposed rule change that would have prohibited the use of the words “realty” or “associates” in a team name.
A principal broker may now serve as the principal broker for more than one brokerage. The Superintendent must approve the principal broker’s application. The principal broker must demonstrate commonality in the name of the brokerages with which the principal broker seeks to affiliate and be an officer, shareholder, member or general partner of both brokerages. If there are owners of a brokerage that are not licensed as the principal broker, must sign an affidavit stating they will not act as a principal broker for the brokerage.
All brokers and management level licensees are now required to take an additional 3-hour class on the duties of a principal broker and issues involved in operating a real estate brokerage. An exception for licensees over the age of 70 was repealed.
The Commission’s sanctions may be published in the Division’s newsletter or by other methods. The Superintendent may extend the time for licensees to pay fines or complete disciplinary education. If a licensee fails to timely pay fines or complete education, their license will be automatically suspended. If not reactivated within 12 months, the license will be automatically revoked.
Brokerage Company Policy on Agency
All brokerages are required to develop and maintain a Company Policy on Agency. It must be available to all licensees and provided to clients upon request. At a minimum it must address the types of agency relationships the brokerage offers, a list of all principal brokers and management level licensees, the appointment of licensees, transactions with personal, business or family members, agent/owner transactions, policy on confidentiality, dual agency, types of cooperation with other brokerages, a list of other brokerages with which the principal broker is affiliate and a list of all brokerage trade names. The principal broker must document the receipt of the Brokerage Company Policy on Agency by all employees, independent contractors and affiliated licensees.
The rules are not yet updated on the Ohio.Gov website but a complete copy of the new rules can be viewed at the Register of Ohio.