Under RELA, a Pennsylvania broker of record, Theresa, operates a brokerage organized as an LLC. Two of the LLC's non-licensee members want to receive a share of the brokerage's commission income as part of their ownership distribution. Is this permissible under RELA?
Correct Answer
D) No, RELA prohibits any entity other than a licensed broker from receiving real estate commissions, but LLC profit distributions to members who are owners may be permissible as returns on business ownership, subject to RELA and SREC interpretation
Under RELA (63 P.S. §455.604), commissions for real estate services must be paid to licensed brokers. However, the question of whether non-licensee owners of a brokerage entity may receive profit distributions (as opposed to direct commission payments) involves nuanced legal analysis under RELA and SREC interpretation. Generally, passive ownership returns may be distinguishable from active commission sharing.
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More Pa Rela Brokerage Rules Questions
Under RELA, a Pennsylvania brokerage must ensure that all licensees affiliated with the brokerage have completed what requirement before practicing real estate?
Under RELA, a Pennsylvania broker of record has a duty to ensure that all affiliated licensees maintain current and active licenses. If the broker discovers that a salesperson's license has expired, what must the broker do?
Under RELA, a Pennsylvania brokerage receives a written complaint from a consumer about one of its salespersons. The broker of record must take what immediate action?
Under RELA, where must a Pennsylvania brokerage display its current real estate license?
Under RELA, a Pennsylvania brokerage employs both salespersons and associate brokers. What is the key difference between a salesperson and an associate broker under RELA?
- → Under RELA, when a Pennsylvania salesperson places their license with a new brokerage, the salesperson is said to be operating under the authority of which individual?
- → Under RELA, a Pennsylvania salesperson, Jake, earns a commission from a closed transaction. How should the commission be paid?
- → Under RELA, a Pennsylvania broker of record must maintain written office policies. Which of the following topics should these policies address?
- → Under RELA, a Pennsylvania broker of record, Sarah, is retiring and wants to close her brokerage. What steps must Sarah take regarding her affiliated salespersons?
- → Under RELA, when a Pennsylvania salesperson terminates their affiliation with a brokerage, what happens to the salesperson's license?
- → Under RELA, a Pennsylvania broker of record, Steve, wants to change the brokerage's physical office location. What must Steve do under RELA?
- → Under RELA, a Pennsylvania salesperson must operate under the supervision of which type of licensee?
- → Under RELA, a Pennsylvania brokerage is required to maintain a physical office location. Which of the following is a requirement for the brokerage office?
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- → Under RELA, how long must a Pennsylvania brokerage retain transaction records?
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Under RELA, a Pennsylvania broker of record, Neil, wants to allow his salespersons to work from home rather than reporting to the brokerage office. Is remote work permitted under RELA?
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