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Education and Licensing Requirements Set to Change for Real Estate Brokers and Salespersons

Amendments to Ohio’s law for real estate brokers or salespersons take effect on April 6.

Kyle D. Tucker
3/27/17

    Under the new Ohio Revised Code Chapter 4735, significant improvements will strengthen pre-licensing education and the licensing structure.  As a result, the availability and accessibility to pre-licensure real estate education has been modernized and the law governing licensees has been updated.  The following is a brief summary of the amendments.   

    Before an individual may be licensed as a real estate broker or salesperson the pre-licensure education requirements must be met.  Current Ohio law does not require credit eligibility of pre-licensure real estate education courses.  The new law requires more curriculum oversight before courses may be offered by an institution of higher education and those courses must be eligible for academic credit that may be applied toward a degree.  Additionally, under the new law, an aspiring real estate salesperson will be able to complete 120 hours of pre-licensure coursework in the classroom or online before qualifying for the real estate sales examination.  This modifies the current requirement that requires an applicant to take 120 hours of classroom education at an institution of higher education prior to testing to become an Ohio real estate salesperson.  Once licensed by the Ohio Real Estate Commission, the new law increases the post-licensure education requirement for newly licensed salespersons from 10 to 20 hours and requires that brokers and managers attend specific three hour continuing education class concentrating on their duties. 

    The new law creates broker license categories and permits the Ohio real estate commission to discipline licensees acting as a broker without a license.  ORC 4735.081 will require each brokerage to designate at least one affiliated broker to act as the principal broker of the brokerage.  All other brokers not designated will be either an associate broker or a management level licensee for that brokerage.  Those respective terms are defined as follows: 

    Pursuant to ORC 4735.081, the duties of the principal broker will include the following, all of which may be assigned to a management level licensee:

  1. Oversee and direct the operations of the brokerage; 
  2. Comply with the office requirements set forth in the ORC;
  3. Display the fair housing statement in the brokerage offices and on the pamphlets; 
  4. Renew the licenses of the brokerage and any branch offices and pay the fee required; 
  5. Maintain the licenses of the brokerage and affiliated salespersons and brokers; 
  6. Return the license of terminated salespersons and brokers; 
  7. Comply with the trust or special bank account requirements; 
  8. Maintain complete and accurate trust account records and transaction records; 
  9. Develop and maintain a written company policy on agency relationships; 
  10. Develop a written brokerage policy on agency; 
  11. Pay affiliate licensees; 
  12. Establish practices and procedures to assure that only affiliated licensees perform and are compensated for performing the licensed activity; 
  13. Establish practices and procedures to assure compliance with the advertising requirements; 
  14. Generally oversee the licensed activity of affiliated licensees and to assure that affiliated licensees are providing real estate services within their area of competency or are working with another affiliated licensee who possesses such a competency.

    Further, under ORC 4735.081, a licensed broker may be permitted to act as the principal broker for more than one brokerage.  This paves the way for brokerages to better manage risk by creating separate entities to house various service functions without the need to assign a different principal broker for each entity.  These new provisions greatly enhance Ohio license law for the realtor community. 

    For any questions you may have, please contact one of our real estate attorneys

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    Disclaimer:  The article in this publication has been prepared by Eastman & Smith Ltd. for informational purposes only and should not be considered legal advice. This information is not intended to create, and receipt of it does not constitute, an attorney/client relationship.

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