Designated Broker Carol announces she is retiring and closing her Arkansas brokerage. Her two broker-associates, Mike and Lisa, want to continue practicing real estate. Mike wants to open his own brokerage immediately. Lisa wants to join another brokerage as a broker-associate. Which of the following correctly describes the steps each must take under Arkansas law?
Correct Answer
A) Mike must apply for a designated broker license with AREC before opening his own brokerage; Lisa may transfer her broker-associate license to another designated broker.
Under Arkansas Real Estate License Law, a broker-associate license does NOT authorize independent brokerage operation. Mike, who wants to open his own brokerage, must apply for and obtain a designated broker license from AREC — his broker-associate license is insufficient for independent operation. Lisa, who wants to continue working under another designated broker, may transfer her broker-associate license to a new designated broker through the proper AREC transfer process, without any need to downgrade her license category. The closure of Carol's brokerage affects the affiliation but does not void or downgrade the individual licenses.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Broker supervision is the legal obligation of a designated or managing broker to oversee and be accountable for the real estate activities of all salespersons and associate brokers operating under their license.
Commingling is the illegal act of mixing client funds with a broker's personal or business operating funds, while conversion is the unauthorized use of client funds for the broker's own benefit. Both are serious violations that can result in license revocation.
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.
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