Real Estate · State License Law and Commission

Who is typically responsible for regulating real estate licensees in each state?

Correct answer

A state real estate commission (or department of real estate, real estate board, division of real estate — name varies) appointed under state law, with authority to issue licenses, set rules, investigate complaints, and impose disciplinary action

  1. A Federal government
  2. B A state real estate commission (or department of real estate, real estate board, division of real estate — name varies) appointed under state law, with authority to issue licenses, set rules, investigate complaints, and impose disciplinary action
  3. C Local courts only
  4. D Self-regulation by brokers

Why this is the answer

Every state has a real estate regulatory agency — exact name varies (Real Estate Commission, Department of Real Estate, Real Estate Board, Division of Real Estate). Functions: (1) ISSUE and RENEW licenses for salespersons and brokers; (2) SET RULES (administrative regulations implementing the license law); (3) INVESTIGATE COMPLAINTS from consumers or other licensees; (4) DISCIPLINARY ACTIONS — fines, suspension, revocation, education requirements; (5) APPROVE PRE-LICENSING and CONTINUING education courses and providers; (6) MAINTAIN a public license database. Commission MEMBERS: typically appointed by governor; mix of licensed brokers, salespersons, and public (consumer) members; serve specified terms. STATUTORY AUTHORITY: state license law (state statute) creates the agency, sets minimum requirements, and authorizes the agency to make rules. ADMINISTRATIVE RULES: more specific than statute, easier to update, govern day-to-day practice. KEY EXAM POINTS for state portion: (1) Know your state's commission name; (2) Know the composition (how many members, who appoints, terms); (3) Know basic powers and duties; (4) Know complaint and discipline process; (5) Know who is and isn't required to be licensed. The state portion of the salesperson exam is heavily focused on YOUR specific state's commission rules — this practice gives the framework but the actual exam tests state-specific details.
Source: Real Estate State Portion, License Commission

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