Unlicensed activity: BMC #3 – Supervision

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Unlicensed activity:

imagesIn addition to ARS 32-2130, Arizona Administrative Code addresses unlicensed activity and renewal requirements in R4-28-306, as follows:

R4-28-306. Unlawful License Activity

A. Unlawful license activity is:

1.  The performance of acts requiring a license under A.R.S. § 32-2122 by a person who does not hold a current and active license;

2.  The performance of acts requiring a license by a person on behalf of a broker other than the person’s employing broker; or

3.  A broker’s employment of a person as a salesperson or broker if the person does not hold a current and active license issued to the person under that employing broker.

Quick Quiz

Fill in the Blank:
The of acts requiring a license under A.R.S. § 32-2122 by a person who does not hold a current and license.

B. A person who conducts unlawful license activity shall submit to the Department, as soon as the person becomes aware that the activity has occurred, the following:

1.  A written explanation of why the unlawful license activity occurred;

2.  A signed statement from the person that the person will not conduct activities requiring licensure under A.R.S. § 32-2122 unless the person holds a current and active license to perform those acts;

3.  A signed statement from the employing broker’s designated broker, identifying all unlawful activity by the person on behalf of the employing broker;

4.  AND Upon request by the Department:

A.   A copy of all listing and employment agreements, offers or contract to buy, sell, lease, exchange, transfer, or manage real estate, cemetery property, or membership camping contracts prepared, negotiated or executed by the person while the person was not properly licensed under the employing broker;

B. Documentation listing all compensation received or to be received by the person based on transactions that occurred while the person was not properly licensed; c. Documentation listing all compensation received or to be received by the person’s employing broker and designated broker, if any, resulting from transactions that occurred while the person was not properly licensed if not provided in response to subsection (B)(4)(b); and d. A signed statement from the person stating that the information provided under subsection (B)(4) is true and complete and that the copies provided are true copies of all contracts, agreements, statements, and leases and no relevant documents are omitted.

Quick Quiz

Fill in the Blank:
A copy of all and employment agreements, offers or contract to buy, sell, lease, exchange, transfer, or manage real estate, cemetery ,

C. A person who has no prior history of engaging in unlawful license activity under this Section, who conducted unlawful license activity for not more than 30 days and against whom there are no pending complaints may apply to renew the person’s license or for a license change to active status. The Department shall not delay processing the application based on the unlawfully licensed activity. The Department shall issue an Advisory Letter of Concern to the person.

D. The Commissioner may take disciplinary action under A.R.S. § 32-2153 against a person who engages in unlawful license activity under this Section for longer than 30 days, has previously conducted unlawful license activity, or is the subject of a pending complaint.

To review, a licensee must renew their license prior to the expiration date of the license.  If they do not, they must not conduct any real estate activity requiring a real estate license.  A licensee has one year to complete the required continuing education after the expiration of their license to apply for renewal without any additional testing, however, after one year, the expired license shall terminate.

Quick Quiz

Fill in the Blank:
To review, a licensee must renew their license prior to the expiration date of the .

Licensees are required to renew their license every 2 years and must complete 24 hours of continuing education during each 24 month period.  Designated and managing brokers (delegated associated brokers) must take 30 hours of approved continuing education every 24 months of which 9 of the hours imagesare specifically the Broker Management Clinic courses (BMC #1, BMC #2 and BMC #3).  These three courses are approved for 3 hours each of Commissioner’s Standards credit and can be taken by licensed salespersons and non-managing associate brokers for Commissioner’s Standards credit or elective credit.  The Arizona Department of Real Estate now provides tools online for licensees to record and verify their continuing education as they take it.

If a licensee has conducted real estate activity while their license is expired, the Department requires specific documentation related to the unlicensed activity, as well as an explanation as to why the unlicensed activity occurred.  If the licensee’s unlicensed activity took place for less than 30 days, the Department will often issue an Advisory Letter of Concern or impose a small fine.  However, if the unlicensed activity did occur the Commissioner may take disciplinary action against the licensee, which may include suspension or  revocation of a license, denial of the issuance of a license, issuance of a letter of concern to a licensee, issuance of a provisional license, or denial of  the renewal or the right of renewal of a license.  A more severe penalty will usually result if the unlicensed activity occurred for more than 30 days.

Violations concerning unlicensed activity are also addressed in A.R.S. §32-2153, which was addressed earlier in this session.  Section (A)(10) and (A)(14), and (B)(6) state that the following are all violations and are subject to disciplinary actions as discussed previously.

Quick Quiz

Fill in the Blank:
The Department of Real Estate now provides tools online for licensees to record and verify their continuing as they take it.

Excerpt from A.R.S. §32-2153:

(A) 10. Paid or received any rebate, profit, compensation or commission in violation of this chapter.

(A) 14. Failed to pay to the commissioner the renewal fee as specified in this chapter promptly and before the time specified.

(B) 6. Engaged in the business of a real estate, cemetery or membership camping broker or real estate, cemetery or membership camping salesperson without holding a license as prescribed in this chapter.

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