Florida Real Estate Sales Associate Examination Content OutlineReal Estate Brokerage Activities and ProceduresHard
A Florida real estate broker operates a brokerage firm as a sole proprietorship. If the broker dies, what happens to the active listings and pending contracts of the brokerage?
- AAll listings and contracts are automatically terminated.
- BThe sales associates can continue to operate the business for up to 30 days.
- CAll pending contracts must be immediately transferred to another brokerage.
- DThe FREC may issue a temporary broker's license to a qualified individual.
Show answer & explanationAnswer & explanation
Correct answer: D. The FREC may issue a temporary broker's license to a qualified individual.
In the event of a sole proprietor broker's death, the Florida Real Estate Commission (FREC) may issue a temporary broker's license to an individual, such as the spouse, an attorney, or an administrator, to conclude the business for up to six months. This allows for the orderly winding down or transfer of existing business.
Why the other options are wrong
- A. Automatic termination would create chaos and harm clients; this is incorrect.
- B. Sales associates cannot operate a brokerage without a licensed broker; 30 days is not a statutory provision for this scenario.
- C. While contracts may eventually be transferred, immediate mandatory transfer is not the first or only step; a temporary license allows for a more orderly process.
Death of Sole Proprietor Broker
Upon the death of a sole proprietor real estate broker, the FREC may appoint a temporary broker to manage and conclude existing business for up to six months to protect the public and ensure an orderly transition.
- Applies only to sole proprietorship brokerages.
- FREC may issue a temporary license.
- Temporary license is for up to six months.
- Purpose is to conclude existing business.
Memory trick: When the captain falls, FREC charts the course.