Real estate brokers, are your licenses still valid?
New York State mandates that most salespeople and brokers take a course within every four-year cycle, explained Andrew A. Felder, a principle of Career Brokerage, a New York City based real estate school. Since the last statutory cycle ran from Nov. 1 to Oct. 31, 1987 Felder said, any brokers or salespeople who did not take a course during that cycle may be technically working with an invalid license.
"The mistake is that they think it runs in conformance with their license and not with this cycle, but they don't run together," he said.
Unfortunately, explained Felder, they could be liable for four times their brokerage fees should their client discover they've been remiss.
"We're finding people who became licensed during the heyday of sales from 1985 to 1988, and they don't know that they are required to have taken the course before Oct. 31, 1991," Felder said.
He said these real estate professionals are going to have to have the course retroactively applied.
"It's part of the requirement," agreed Jay Gurfein, a partner in Gurfein & Graubard who represents many brokers. "A non-licensed broker who is defrocked, so to speak, who receives a commission can be sued for four times the amount of that commission by the party who paid it."
While the courts usually do not award four times the damages to parties aggrieved by an unlicensed broker, Gurfein said, the awards can still be substantial. His firm recently represented a licensed real estate broker who was being sued to return his part of a commission that was paid to him by an unlicensed broker. The unlicensed broker was in turn being sued by the client - who Gurfein believes set this all up - for four times the whole $600,000 commission or $2.4 million. The court said the licensed broker was entitled to his commission but did make the unlicensed broker pay back the commission plus twice the fee to the owner.
But Gurfein said, "While anyone can sue anyone for anything, no one can successfully sue [a broker] for not having the course." Gurfein said the removal of the license requires an actual hearing up in Albany. "It's such a trivial violation that he probably would not be suspended for it," he said. "There are all kinds of reasons why someone didn't take the course."
Even if there is an investigation pending, Gurfein added, the broker is still licensed. The point is, said Felder, that somebody who has not taken it would be more likely to get into trouble. If a license was suspended by failure to have completed the education requirement, he said, and the buyer or seller learns they have been dealing with someone whose license is not in full force and effect and they could avoid the commission they might sue. "And if I were a judge and dealing with a requirement and the person did not keep it in full force and effect, and either negligently or because of oversight failed to maintain the status, I might agree with them," Gurfein said.
"The real danger is that as a consumer," Felder said, "you have to be out of your mind to owe someone $18,000 for a brokerage commission and not take the option of saving that."
Felder admits brokers do not end up in court often but says it is only because the customer is not aware of the license requirements. "But in today's market place, the buyers are coming out of the closet, and the buyers may be losing money, and if they can try to get their commission back, they will, he said. Brokers shouldn't leave themselves vulnerable."
Barbara Corcoran, president of the Corcoran Group which specializes in residential sales, said if the brokers do not take care of the course, they have an expired license. "We have a tickler file scheduled for four months before it expires," she explained. "Brokers don't take that chance. They do take care."
A salesperson may take either the broker or continuing education course, while brokers may only take a continuing ed course, Felder said. All courses are 45-hours. The good news, Felder added, is that once you have been practicing full-time for 15 consecutive years and have a brokers license, you are exempt from further education.
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|Title Annotation:||continuing education courses required by law to validate real estate licenses|
|Publication:||Real Estate Weekly|
|Date:||Apr 8, 1992|
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