Real estate news

Using the title “Managing Broker”

In mid-September 2011, the Department of Licensing and the Real Estate Commission received a letter from the Seattle King County Realtors requesting the commission re-examine the application of the title “managing broker.” The letter stated that the title “managing broker” was being misunderstood by clients regarding the professional capacity and the licensee’s activities.

At the September commission meeting in Spokane, the commission decided to form a task force that would address the issues and make recommendations to the full Real Estate Commission and the Department of Licensing.

Commissioner Wright was asked to chair the task force. Commissioner Pilant and Salazar were also asked to be members. Commissioner Wright quickly put together representatives from Eastern Washington, Clark County, Washington Realtors and representatives from the commercial and property management disciplines.

Commissioner Wright will give a detailed report to the full commission meeting on December 6, 2011. However, one aspect of the discussion was to ensure that licensees understood the advertising rules on the use of the title “managing broker.” The task force was fortunate to have Annie Fitzsimmons as one of the representatives, and she was able to address the issue in the Realtors^® Legal Hotline. Below is her question and answer which will help licensees in understanding the current rules regarding using the title of “managing broker:”

Question:
Managing broker is not managing any brokers and believes it is confusing to consumers to use the title “managing broker” on business cards and advertising. First, is it necessary that managing broker use that title as identification on business cards and other advertising? With that said, managing broker is proud of having worked hard to earn the managing broker license. Is there some other title managing broker can use to describe himself on advertising?

Answer:
Managing broker is not required to use the term “managing broker” to identify or describe himself in any advertising or marketing. Licensees have never been required to include their licensing status in marketing or on business cards.

Moreover, every licensee, managing brokers and brokers alike, may use any descriptive term to identify him or herself that is not false, deceptive or misleading. Brokers often use descriptions such as “relocation specialist” or “waterfront sales” or “condominium expert.” So long as the description used is not false, deceptive or misleading, the description can be used.

An example of a false description would be a person licensed only as a broker describing himself as a managing broker. The term “managing broker” is a defined term under the license law, and a person with only a broker’s license does not meet the definition of a “managing broker.” Therefore, use of that term in that situation, would be false.

Reprinted with permission from the Washington Association of REALTORS Legal Hotline. Hotline Attorney Annie Fitzsimmons writes the Legal Hotline Question and Answer of the week, a free service to members of the Washington REALTORS. The Legal Hotline provides legal information and education, not legal representation.

Websites and advertising

The current economic situation can kindle an innovative and creative entrepreneurial spirit in real estate licensees to generate new leads for their business. Along with this entrepreneurial spirit, you have new tools at your disposal. However, you must remember the laws and rules that apply to your activities.

Real estate licensees are also subjected to media, such as YouTube videos encouraging licensees to generate isn’t identified.

The Washington Real Estate Licensing Law (WAC 308-124B-210: Advertising) requires advertising in any manner to include the firm’s name, or assumed name as licensed, in a clear and conspicuous manner. In addition, advertising can’t be false, deceptive, or misleading. A real estate licensee who uses an “unbranded” or misleading website not only subjects their license to disciplinary action, but also the licenses of their delegated managing broker, designated broker, and even the firm.

We’re occasionally asked, “Are URL’s advertising?” The website URL is an internet address and we don’t consider it advertising. However, once the website opens up, the firm name or assumed name must be clear and conspicuous.

Before employing or using a website, we highly recommend you have your delegated managing broker or designated broker review and approve it.

Know your pre-license education requirement

On July 1, 2010, the real estate licensing education requirements changed with the revised RCW 18.85 real estate licensing law. After almost a year since implementation, there’s still confusion regarding the pre-license education requirement for real estate licensing. The following table should clear up the confusion:

Please note: If you take Advanced Real Estate Practices toward the broker pre-license requirement, it won’t be accepted. You must take the Real Estate Practices course as stated above.

Governor Gregoire appoints a new real estate commissioner

We would like to welcome our newest real estate commissioner, David Azose. Governor Gregoire selected the Bellevue real estate managing broker to serve on the Washington Real Estate Commission as of February 16, 2011. His term will expire on August 14, 2013.

David Azose has been involved in the real estate industry since 1977, having worked in all aspects of commercial real estate including purchasing, selling, development, redevelopment, syndication, leasing and management. He has served as a court appointed receiver and an expert witness on various real estate matters.

He has supervised all property management operations for Morris Piha Real Estate Services, and currently oversees a real estate and management staff including property managers, leasing and sales specialists, and secretarial and accounting staff.

Mr. Azose is a member of the Washington State Association of Commercial Realtors and the Rental Housing Association. He is currently serving on the CBA (Commercial Brokers Association), and was a past president of The Samis Board, The Seafair Board, and WSCAR (Washington Commercial Association of Realtors). He has also served on the executive board of the Washington Realtors, and a 4-year term for the Mercer Island Planning Commission. He has been a board member of the local Campfire Board serving as a Vice President. In the past he has been honored in the Puget Sound Business Journal for “Who’s Who in Commercial Real Estate.” Mr. Azose has taught a class in Real Estate Investing at Discovery University in Seattle.

Mr. Azose graduated from the University of Washington with a Bachelor of Arts in Natural Sciences and Education. He was a school teacher for 4 years after graduation. He holds a Washington State Real Estate Managing Broker's License and has completed all of the course work for the CPM (Certified Property Manager) designation. Mr. Azose is an owner and President of Morris Piha Real Estate Services, Inc.

Short sale advisories

As a result of recent economic challenges, many homeowners need to sell their home, but owe more than the home is worth. We’ve partnered with the Department of Financial Institutions to create advisories to help sellers in this situation and provide guidelines for licensees working with short sales. For more information, see:

• Short sales: Guidance for licensees
• Short Sale Seller Advisory

Broker price opinions

We have received many questions from licensees about issuing brokers price opinions and if the licensee can receive direct compensation. A brokers price opinion, often referred to as a comparative market analysis (CMA), is any oral or written report of property value. RCW 18.140.010(4) requires individuals producing brokers price opinions to be licensed under RCW 18.85.

We have determined that an individual must be actively licensed in order to issue a brokers price opinion. Please be advised that it is considered a violation of RCW 18.85.230(19) for a licensee to receive a commission, compensation, or any form of valuable consideration from anyone except the licensed real estate broker with whom he or she is licensed.

Earnest money

Routine audits of broker transaction files still indicate that a large number of firms are not complying with the delivery and/or deposit requirements regarding earnest money.

All earnest money funds must be deposited into the brokers trust bank account not later than the next banking day unless the purchase and sale agreement states the check is to be held for a specific period of time or the occurrence of a specific event. The delivery of the funds to escrow is the broker's responsibility.

We continue to receive complaints from sellers when the transaction fails that the funds were not deposited or never delivered to the escrow company. Not only is the untimely delivery of earnest money a licensing problem, but also not providing this information to the seller that the earnest money was never collected or delivered can be considered failure to disclose.