Need to Know: New Law Regulating Real Estate Teams – Effective 1/1/19
Are you working as a real estate team? A new law approved during 2018 Virginia General Assembly session, and supported by the Virginia REALTORS®, as part of their legislative agenda, clarifies the definition of teams, requires teams to obtain a business entity license and requires brokerage agreements to include the name and contact information of the supervising broker.
Effective January 1st, 2019, a real estate team will be defined, per Virginia Code 54.1-2100, as “two or more real estate salespersons or brokers who engage in licensed real estate activities and who: (i) work together as a unit within the same brokerage firm; (ii) represent themselves to the public as working together as one unit; and (iii) designate themselves by a collective name.”
Further, the new law requires real estate teams to obtain a business entity license which will allow consumers to search on-line at DPOR. Virginia Code 54.1-2106.1, new subsection D reads “No group of individuals consisting of one or more real estate brokers or real estate salespersons, or a combination thereof, shall act as a real estate team without first obtaining a business entity salesperson’s license from the Board. A real estate team may hire one or more unlicensed assistants as otherwise provided by law.” The Business Entity License application can be found here.
Finally, the new law requires brokerage agreements (buyer’s and seller’s agreements) to include the name and contact information of the supervising broker. Virginia Code 54.1-2110.1, Duties of Supervising Broker is revised, “reasonable and adequate supervision by the supervising broker shall include . . . [e]nsuring that affiliated real estate teams or business entities are operating in accordance with the provisions of this chapter and applicable Board regulations” and “[e]nsuring that brokerage agreements include the name and contact information of the supervising broker.”
For more information, view the Virginia REALTORS® Business Entities: Creating & Licensing Teams and Companies Webinar (40 minutes):
- Virginia REALTORS® Business Entities: Creating & Licensing Teams and Companies Webinar Slide Deck
- Business Entities: Creating and Licensing Teams and Companies Q&A
Questions about this and any other legal issue?
Please consider using the Virginia REALTORS® Legal Hotline available to all DAAR REALTOR® members. To submit a question, you’ll need to be logged in here with your Username (NRDS ID) and Password (Last Name). Your broker will receive notification of your question and the Virginia REALTORS® Legal Team will address questions efficiently in the order received. Fore more information, view the flyer.