Before a business can begin operating as a real estate business, a principal broker licensee must register the business with the Oregon Real Estate Agency
By Jeff Sorg, OnlineEd Blog
(May 27, 2018)
(PORTLAND, OR) Jeff Sorg, OnlineEd- Before a business can begin operating as a real estate business, a principal broker licensee must register the business with the Oregon Real Estate Agency to operate under the principal broker’s license; only a principal broker can operate a real estate business. A principal broker can engage in real estate activity as an individual or act as a supervisor of other principal brokers, brokers, and property managers whose licenses are associated with the principal broker.
To earn a principal broker license, a broker must have three years real estate experience as a broker and complete a required minimum 40-hour educational course called Brokerage Administration and Sales Supervision (BASS) that is provided by a Real Estate Agency Approved Provider. Also, the licensee must pass a state Principal Broker licensing examination administered by PSI Exam Services.
Once the requirements for becoming a principal broker have been met, the applicant can apply for the appropriate real estate license to operate a business. Oregon law requires that if the applicant is going to conduct a real estate business in a name other than the applicant’s legal name, the applicant must register the name with the Oregon Business Registry. The registration can take any of the organizational forms previously discussed. To comply with REA name registration requirements, the applicant must provide the real estate commissioner with the following:
- The business name under which the licensee wishes to conduct business.
- The written authority by which the licensee is authorized to use the business name (example: a copy of a corporate certificate, a copy of an ABN registration, etc.).
- A statement by the Oregon Secretary of State that if an ABN is used, the name is not the same or deceptively similar to the name of any other real estate business in Oregon.
- Once registered, the REA will place the business name on the license of the principal broker.
The REA requires the annual renewal of registered business names. The Agency has developed administrative rules for the business name renewal process. These rules are found in Oregon Administrative Rules, Chapter 863, Division 14, Sections 0095 and 0097 as they apply to principal real estate brokers, and Chapter 863, Division 24, Section 0095 as they apply to property managers. The next section is a review of these rules.
The statutory requirements the Agency is to use to develop the renewal rules are outlined in the added language of Senate Bill 67 in ORS 696.026, Section 5, (3), (4) and (5), and say the renewal system must establish:
- the form and content of the renewal application;
- the schedule for annual renewals of registered business names; including the date of the registered business name expiration; and
- the procedures for renewing a registered business name.
Failure to renew a registered business name and pay the required fees by the expiration of the registration will result in:
- the expiration of the registered business name;
- the inactivation of all associated licensees; and
- the inactivation of all associated branch offices.
When registering a registered business name, the licensee must provide the name of the principal broker or the property manager who is responsible for:
- maintaining the registered business name;
- registering branch offices;
- notifying the Agency of opening and closing clients’ trust accounts;
- renewing the registered business name; and
The Real Estate Commissioner may by rule provide an opportunity for the late renewal of an expired registered business name.
Note: When the form of business organization is a corporation, the corporation must have at least one principal broker. When the organizational form is a limited liability company, all of its owners must be licensed.
Note: When a nonlicensed person or a broker licensee has an ownership interest in a real estate business, the business must register with the REA under the name of a principal broker. The principal broker cannot allow a non-licensed or licensed broker-owner to control or supervise the professional real estate activity of any affiliated licensees.
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