The following articles are from the Commercial Broker Quarterly. GWCAR members receive this publication quarterly.
The following articles are from the Commercial Broker Quarterly. GWCAR members receive this publication quarterly.
NAR Conducts Study on License
Reciprocity
States Consider Easing
Restrictions on Out-of-State Licensees
The National Association of REALTORS® (NAR) recently released a study on license reciprocity in the various 50 states and the District of Columbia. The research was conducted by NAR’s Legal Affairs Division in conjunction with James Hochman, Senior Counsel for CB Richard Ellis.
The REALTORS® Commercial Alliance Advisory Board, made up of about 50 NAR and non-NAR leaders in commercial real estate brokerage, consulting, property management, appraisal and technology, has also been active with respect to this issue. The Advisory Board has been encouraging states to review their laws in this area with the goal of facilitating out-of-state licensees’ work on real estate transactions within their states.
NAR reviewed each state’s license laws and case law to determine what restrictions were placed on out-of-state real estate licensees when entering another jurisdiction. The goal was to determine what licensed services, if any, a licensee from one jurisdication could perform in each of the other states and District of Columbia in order to receive compensation.
A chart with the results of the study and a comparison of the states is available on NAR’s commercial web site, www.CommercialSource.com (click on the Commercial Alliance logo and go to the research results).
Some states are considering legislation that relaxes the restrictions on out-of-state licensees. Ohio, which is considered one of the most restrictive states, is close to passing a law that will make it one of the most lenient states in the U.S. Currently, an out-of-state licensee may not conduct any business in Ohio, he or she may only refer deals to an Ohio licensee and receive a referral fee.
The proposed legislation would allow a real estate broker not licensed in Ohio to conduct business regarding commercial property in Ohio in cooperation with an Ohio licensed real estate broker. The legislation is expected to be passed this fall and is being strongly supported by the Ohio Association of REALTORS®.
According to NAR, other states, including Maryland, Pennsylvania, Wisconsin, Washington state, and North Carolina are looking into revising their existing statutes.
Closer to home, out-of-state licensees can receive a referral fee in DC, but can not participate in any activities which require a real estate license in the District.
In Maryland, an out-of-state licensee may not perform licensed services on a real estate transaction while physically located in Maryland. The out-of-state licensee may work on the deal and receive part of the commission from the Maryland licensee, provided that all licensed services rendered by the out-of-state licensee are rendered while the out-of-state licensee is physically located in his or her state of licensure.
Virginia has similar requirements. An out-of-state licensee can receive a referral fee or share a commission with a Virginia licensee so long as the out-of-state licensee does not physically enter the state to perform licensed services. A written agrement is not required between the out-of-state licensee and the Virginia licensee.
Visit www.CommercialSource.com for the study results.
