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Practice Of Real EstateLicense_lawHARD

Broker Evelyn has her Kentucky real estate license placed on inactive status while she takes a two-year leave from the industry. During the period her license is inactive, a former client contacts her and asks her to help negotiate the purchase of a commercial property, offering to pay her a referral fee. Under Kentucky law, which of the following is most accurate?

Correct Answer

C) Evelyn may not perform any real estate brokerage activities or accept compensation for such activities while her license is inactive

Under KRS Chapter 324, an inactive license does not authorize a licensee to perform any real estate brokerage activities, including negotiating transactions or accepting compensation for real estate services. An inactive licensee has no authority to act as a real estate agent until the license is returned to active status. Performing brokerage activities on an inactive license constitutes unlicensed practice.

Answer Options
A
Evelyn may assist with the negotiation and accept the referral fee because she still holds a Kentucky license, even if inactive
B
Evelyn may accept the referral fee only if she discloses her inactive license status to both parties in writing
C
Evelyn may not perform any real estate brokerage activities or accept compensation for such activities while her license is inactive
D
Evelyn may accept the referral fee because referral fees are not considered brokerage activity under KRS Chapter 324

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Related Topics & Key Terms

Key Terms:

inactive_licenseunlicensed_practicecompensationlicense_status

Related Concepts

Advertising regulations govern how real estate licensees may market properties and services, requiring truthful, non-deceptive advertising that includes proper identification of the brokerage.

Antitrust violations in real estate occur when competing brokerages or agents engage in practices that restrain trade, reduce competition, or harm consumers through collusion. These violations are governed by the Sherman Antitrust Act and can result in severe penalties.

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.

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