Florida Real Estate Agent Commission
The Florida Real Estate Agent Commission, properly called 'the Florida Real Estate Commission' (FREC), is a seven-member body within the Florida Division of Real Estate that administers and enforces real estate licensing law. The Florida Division of Real Estate also contains the Florida Real Estate Appraisal Board (FREAB) which is similar to the Real Estate Commission except its focus is on real estate appraisers licensing law.
1. The Task of the Florida Real Estate Commission
To understand the job of the Florida Real Estate Commission, it is necessary to step back and consider briefly the way regulatory agencies work in general. Laws passed by legislative bodies on any level of government would have no effect if there were not a further body devoted to putting those laws into practice and enforcing them. These further bodies are called, generally, 'regulatory agencies'.
Like all regulatory agencies, the Florida Real Estate Commission has a specific area of law that it is charged with putting into practice and enforcing. This is the section of state law governing businesses and professions that is concerned with real estate licensure. One task of the Florida Real Estate Commission, therefore, is to manage the system whereby individuals and businesses can attain and renew licenses to practice real estate. This includes managing a database of licensees and certifying schools as valid institutions to meet educational requirements of real estate licensing.
Because the privileges granted by real estate licensure would be vacuous if abuses of those privileges by licensees were not punished, and if non-licensees acting in the scope of such privileges were not detected and stopped, the other major task of the Florida Real Estate Commission is to detect license-related violations and to administer appropriate action by the state. The primary means the Florida Real Estate Commission has to detect license-related violations is the complaint system. When a non-frivolous complaint is received by the Florida Real Estate Commission, the supposed violation is investigated and if evidence of a genuine violation is found, the supposed violator is given a hearing. While actions against non-licensees who have acted, or are acting, in a manner requiring a real estate license ranges from cease and desist orders to fines and imprisonment, licensees who abuse the privileges of licensure, or violate the conditions of licensure, face a loss or suspension of licensure as well as other penalties. For most real estate professionals, loss of licensure would be professionally and personally devastating, so generally speaking real estate professionals tend to be a very careful and conscientious group.
As a final point on this, violations by real estate licensees may count as torts, that is, a wrong requiring some form of compensation from the violator to injured parties, as well as crimes. Because a real estate licensee losing a civil trial may not have the funds to fulfill a monetary award to injured parties, the Florida Division of Real Estate has set up a Real Estate Recovery Fund that pays monetary damages awarded to parties injured by real estate licensees. Generally, the licensee, or former licensee, will be required to reimburse the Recovery Fund.
2. Real Estate Licensing and the Mission of the Florida Real Estate Commission
Real estate agency is not a phenomenon brought into existence by real estate licensure. It existed long before a real estate licensing system emerged in the United States in the first half of the twentieth century. In essence, real estate agency occurs whenever one person represent another to third parties in real estate matters.
In Florida, as in other states, there two levels to real estate licensure: the real estate broker license and the real estate sales associate license. The real estate broker license, which requires more education, more experience or its equivalent, and a tougher exam than the real estate sales associate license requires, is the license for real estate agents in the strict sense. By 'in the strict sense' it is meant that only licensed real estate brokers can represent general members of the public in real estate matters for compensation in the form of an ongoing business. Even attorneys and accountants may only represent general members of the public in real estate matters to the extent necessary in the course of their proper legal and accounting work, respectively. Real estate sales associate licensees, who must always work under a licensed real estate broker, are not real estate agents in the strict sense, but rather agents of the broker who carry out duties the broker owes to principals. Despite this, sale agents frequently call themselves 'real estate agents'.
Prior to the establishment of real estate licensure, consumers were in a very vulnerable position when seeking to buy or rent real estate. While a claim of ownership by someone one is dealing with in buying or renting real estate can be verified at the relevant county recorder's office, how can a claim to be representing the owner be verified? This is an important question because maybe that down payment, rent or security deposit is going to someone whom the owner of the real estate knows nothing about. While it still can be difficult to verify for certain that a real estate agent in fact represents the owner of the real estate that one is considering buying or renting, real estate licensure enables consumers to verify that the ostensive real estate agent is in fact authorized by the state to act as such. Given this, if the real estate agent does not in fact represent the owner, the identity of the supposed real estate agent is known, and clear measures can be taken through the Florida Real Estate Commission to remedy any wrongs caused by the agent and to subject the agent to appropriate disciplinary measures.
Though still too few consumers appreciate the fraud-resistant system the Florida Real Estate Commission, and similar commissions in other states, have established, a wise real estate consumer can now safeguard against grief by noting that each person or entity they deal with in a real estate transaction should be either an owner of the real estate, a real estate licensee or some other kind of licensed professional, such an attorney, an accountant, a lender or an escrow holder. Anyone in the transaction who does not meet this condition is likely to be acting illegally, if not with fraudulent intent.
The mission of the Florida Real Estate Commission to protect real estate consumers from fraud is joined by a mission to insure that all real estate practitioners meet a certain minimum level of competence. It is because incompetence can cause as much harm as fraud that the Florida Real Estate Commission places substantial educational requirements on licensure and license renewal.
3. The Composition of the Florida Real Estate Commission
As with most governmental bodies, the members of the Florida Real Estate commission are assembled in a way designed to minimize the chance that the Commission itself will become corrupt or incompetent. Each member of the seven-member body is appointed by the Governor and confirmed by the Senate for overlapping terms. Of the seven members, four must be real estate brokers, a fifth must be either a real estate broker or a real estate sales associate, and two must be citizens who have never had a real estate license in any state. While overlapping terms fosters a continuity of experience and concern, requiring two members to be citizens working outside the real estate profession lowers the chance that regulations will begin to favor the interests of the real estate profession over those of consumers.
In conclusion, the Florida Real Estate Commission exists primarily to protect consumers in real estate transactions from fraud and incompetence. The association benefits many groups of people beyond florida real estate agents. Everyone except those with fraudulent intent benefits by understanding and making the fullest use of this system.