Florida Realtor • November/December 2024 • LEGAL Q&A

Call Florida Realtors® FREE Legal Hotline to speak with an attorney on a range of topics. Or enter your question online at floridarealtors.org/email-legal-hotline. Members will receive a callback from a Legal Hotline attorney. As always, there is no charge for members. Call (407) 438-1409 or log in to floridarealtors.org and click on the “Florida Realtors Legal Hotline” page in the Law & Ethics section.

BROKER BUSINESS
I want to hire a sales associate who passed the exam but has not yet received her real estate license (license number) from the Florida Division of Real Estate (DRE).
May a sales associate be registered with a broker and conduct real estate activity before receiving a license number from DRE? No. According to DRE policy, a new sales associate may not commence engaging in real estate activity until he/she has been issued a license number by DRE and the DBPR database reflects the appropriate information.

DISCLOSURE
I represent an investor who is selling a home. She tells me that since she’s never lived in the property, she isn’t required to provide the buyer with a seller property disclosure statement. Is this true?
A seller isn’t required to fill out a seller’s disclosure statement regardless of whether the seller occupied the property or not.

However, pursuant to the Florida Supreme Court case Johnson vs. Davis, a seller is required to disclose known facts that materially affect the value of the property that are not known and readily observable to the buyer. That disclosure requirement exists whether the seller occupied the property or not. Therefore, if the investor has knowledge of any facts that meet this definition, then they must disclose them.

LANDLORD/TENANT
I know the practice changes imposed because of the National Association of Realtors® (NAR) settlement require multiple listing service (MLS) participants to enter into a written agreement with residential buyers before touring a home. Does this obligation also apply to tenants?
No. The practice changes apply to residential sales transactions only, so there is no obligation to enter into a written tenant brokerage agreement before showing tenants properties for rent. However, MLS rules have changed to remove all offers of compensation, including those for rentals and commercial properties.

Since offers of compensation are no longer an option on the MLS for rentals, is there another way to document compensation with a tenant’s brokerage firm?
Yes. There is a new form titled Compensation Agreement – Owner/Listing Broker to Tenant’s Broker (CAOT-1). This contract has a checkbox to indicate whether the owner (landlord) will be compensating the tenant’s broker or whether the listing broker will be compensating the tenant’s broker.

LICENSE LAW
I’ve heard that people in other professions licensed through the Florida Department of Professional Regulation (DBPR) must report license law violations they know about. I just found out one of my colleagues committed a minor violation. When I explained what they did wrong, they made amends and will never do it again. I don’t want to file a complaint with the DBPR, but am I legally obligated to file one?
No. Section 475.25(1)(a), Florida Statutes, provides that, while other professions licensed through the DBPR have a duty to report, real estate licensees are exempt from this requirement.