Market Allocation
Definition
Market allocation is an illegal antitrust practice in which competing real estate brokerages agree to divide markets among themselves by geographic area, property type, or price range, thereby eliminating competition.
Example
If Broker A and Broker B agree that Broker A will only list properties in the downtown area while Broker B will only list properties in the suburbs, they have committed market allocation. Consumers in each area are denied the benefit of competition.
Exam Tip
On the exam, market allocation questions often present scenarios where brokers agree to stay out of each other's territories or specialties. Remember that any agreement between competitors to divide markets is illegal. A single broker choosing to specialize in one area is perfectly legal.
Related Practice Terms
Escrow Account Management
Brokers in Florida have strict responsibilities for managing escrow accounts, including monthly reconciliation and proper handling of trust funds.
Record Keeping Requirements
Florida brokers are required to maintain transaction records and escrow records for a minimum of five years.
Commingling and Conversion
Commingling is the illegal act of mixing client trust funds with a broker's personal or business operating funds; conversion is the misappropriation of those funds.
License Renewal Requirements
Florida real estate licenses must be renewed biennially, and sales associates have specific post-license education requirements for their first renewal.
FREC Disciplinary Authority
FREC has the authority to impose fines and other disciplinary actions on licensees who violate real estate laws and rules.
License Requirements
License requirements are the mandatory qualifications—including pre-licensing education, examination, and background checks—that a person must satisfy before legally practicing real estate. These requirements are established and enforced by each state's real estate commission.
Frequently Asked Questions
Test Your Practice Knowledge
Practice with exam-style questions to make sure you can apply Market Allocation and other practice concepts.