Becoming A Broker And Working In A Brokerage

Side view of stock market broker looking at graphs on multiple screens in office

What is a broker?

A broker is a person who, for another, and for compensation or in anticipation of compensation, appraises, auctions, sells, exchanges, buys, rents or offers, attempts or agrees to appraise, auction, or negotiate any sale, exchange, purchase, or rental of business enterprises or any real property or any interest in or concerning the same or who advertises the same.

What education do you need to become a broker?  

Florida requires that a business broker hold a Florida real estate license. Before sitting for the state exam, you must show proof of course completion of Florida-approved 72-hour pre-license education for brokers. The course is good for two (2) years from the date of completion. An expired course will not be accepted at the exam site and you will not be able to sit for your exam without proof of a valid course completion slip. The course is not required at the time of application submission. You may apply for the state exam approval before taking the pre-license education. 

If you hold a 4-year degree or higher, in real estate you may be exempt from the pre-license education requirement. 

How much experience must you have to become a broker? 

You must show proof of one of the following: 

  1. You have been registered as an active sales associate for at least 24 months during the preceding 5 years under one or more brokers; 
  2. You have held a current and valid real estate sales associate’s license for at least 24 months during the preceding 5 years in the employ of a governmental agency for a salary and performing the duties authorized under Florida law; 
  3. Or you have held a current and valid real estate broker’s license for at least 24 months during the preceding 5 years in any other state, territory, or jurisdiction of the United States, or in any foreign national jurisdiction.

Before becoming a broker, you can become a broker-associate, also called associate-broker, broker-salesperson, or affiliate broker. You would still need a broker’s license but would be working under a managing broker and would not supervise other agents. A sales associate or a broker associate may own a brokerage. However, no sales associate or broker associate may be registered as that brokerage’s officer, director, or general partner. You can be a broker associate in another brokerage, but cannot be registered as an officer, director, or general partner.

What are your liabilities in the brokerage? 

As an officer, director, or manager, you have several duties:

  • Duty of Loyalty: a director must put the interests of the brokerage before its own. 
  • Duty of Obedience portrays a director’s actions have conformed to the corporate charter and by-laws of the corporation.
  • Duty of Diligence in the management of the corporation and done expediently and knowledgeably.

Director’s main liability: 

  • Vicarious liability (they are responsible for their agents) 

Liabilities applying to agents and officers: 

  • Fraudulent misrepresentations and omissions: material misrepresentations 
  • Negligent misrepresentations and omissions
  • Breach of fiduciary duty 
  • Breach of Real Estate Contract 
  • Property Damage & Personal Injury Claims 

How does a brokerage work? 

Each brokerage office has a principal/designated broker who oversees, supervises, and ensures the compliance with state law of all of the brokerage’s licensed real estate agents. Like real estate agents, principal brokers get paid on commission—taking a cut of the commissions of the sales agents they supervise (although many principal brokers receive an annual base salary). 

A brokerage must have at least one broker, and every broker licensed with a brokerage must be registered as one of its officers, directors, or general partners. There is no maximum number of brokers a brokerage can have. 

EPGD Business Law is located in beautiful Coral Gables, West Palm Beach and historic Washington D.C. Call us at (786) 837-6787, or contact us through the website to schedule a consultation.

*Disclaimer: this blog post is not intended to be legal advice. We highly recommend speaking to an attorney if you have any legal concerns. Contacting us through our website does not establish an attorney-client relationship.*

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