18 VAC 135-20-220. Disclosure of brokerage relationships +15Virginia · Real Estate · English

A licensee must disclose to an actual/prospective buyer or seller who is not the licensee's client and not represented by another licensee, and with whom the licensee has substantive discussions about specific property, whom the licensee represents. Disclosure must be in writing at the earliest practical time but no later than when specific real estate assistance is first provided.

• ✓Disclosure of who the licensee represents must be made in writing no later than when specific real estate assistance is first provided
• ✓Compliance with § 54.1-2138 A satisfies the disclosure requirement

A licensee acting as a dual or designated agent/representative must obtain written consent of all clients at the earliest practical time. Consent is presumed by signing a compliant disclosure. The buyer must be given disclosure/obtain consent by the time an offer is presented to the listing agent/seller; the seller by the time the offer is presented.

• ✓Dual/designated agents must obtain written consent from all clients to the transaction
• ✓Buyer consent must be obtained by the time an offer is presented to the listing agent/seller; seller consent by the time the offer is presented to the seller

Disclosures may be combined with other information, but if combined, the disclosure must be conspicuous — printed in bold lettering, all capitals, underlined, in a separate box, or as otherwise provided by § 54.1-2138.

• ✓Combined disclosures must be conspicuous (bold, all caps, underlined, or in a separate box)
• ✓Format must comply with § 54.1-2138 of the Code of Virginia

A licensee must disclose in writing to a landlord/tenant who is not their client and not represented by another licensee that the licensee has a brokerage relationship with another party. Disclosure must be in the lease application or lease (whichever first), no later than signing. This does not apply to lease terms under two months.

• ✓Lease brokerage relationship disclosure must be in writing in the lease application or lease, no later than signing
• ✓The lease disclosure requirement does not apply to residential lease terms of less than two months

Licensees may not divert or misuse escrow funds. The Board can petition a court to protect funds when a licensee threatens the interests of persons involved.

• ✓No licensee or agent may divert or misuse any funds held in escrow or otherwise held for another
• ✓The Board may file a petition in a court of record with equity jurisdiction when it has reason to believe the licensee cannot adequately protect interests
• ✓The court may temporarily enjoin activity, appoint a receiver, and take action to conserve/protect/disburse funds
• ✓If the licensee cannot pay receiver fees, the Board determines whether to pay from the Virginia Real Estate Transaction Recovery Fund or Board funds within 30 days of receipt of court-approved invoices

An inactive licensee may activate by completing an activate form; the licensee may not conduct business until the application is processed and license issued. Continuing education must be completed within two years prior to activation if inactive more than 30 days. If inactive greater than three years, the licensee must meet existing prelicense education requirements.

• ✓Cannot conduct business until activate application is processed and license issued
• ✓CE must be completed within two years prior to activation if inactive over 30 days
• ✓If inactive over three years, must meet prelicense education requirements

A licensee may transfer from one firm to another by submitting a transfer application with fee. The application must include the signature of the new principal or supervising broker and is effective upon that broker's execution of the transfer application.

• ✓Transfer requires the new principal/supervising broker's signature
• ✓Transfer is effective upon the broker's execution of the application

An inactive licensee may activate their license with a licensed firm or sole proprietorship by completing a board-prescribed activate form. The licensee may not conduct business until the application is processed and the license issued. Continuing education must be completed within two years prior to activation when inactive for more than 30 days. If inactive for more than three years, the licensee must meet current prelicense education requirements.

• ✓A licensee may not conduct business until the activation is processed and license issued
• ✓CE must be completed within two years prior to activation if inactive more than 30 days
• ✓Inactive over three years requires meeting current prelicense education requirements

A licensee may transfer from one firm/sole proprietorship to another by submitting a transfer application and fee. The application must include the signature of the new principal or supervising broker who will be responsible for the licensee's activities, and is effective upon that broker's execution of the transfer application.

• ✓A transfer application and fee must be submitted to the board
• ✓The new principal or supervising broker must sign the transfer application
• ✓The transfer is effective upon the broker's execution of the application

Key definitions establish class hour length and school types. Proprietary school applicants must show minimum net worth, and prelicense instructors must meet at least two qualifications.

• ✓'Class hour/clock hour' means 50 minutes
• ✓Proprietary school applicants must show a minimum net worth of $2,000 with CPA-certified or certified financial documentation
• ✓Prelicense instructor applicants must meet two of six listed qualifications (e.g., broker's license plus experience, professional designation, DREI, teaching credential, VA State Bar attorney)
• ✓Continuing/post license education instructors need expertise in a specific field with at least three years active experience and may teach only in that area

Understand the standard measurements and entity types used for real estate education in Virginia, including the fixed length of a class hour.

• ✓A 'class hour/clock hour' means 50 minutes
• ✓'Proprietary School' means a privately owned school, real estate professional association, or related entity approved by the Real Estate Board (not under the Department of Education)
• ✓'Provider' means an accredited university, college, community college, or high school offering adult distributive education courses, or a proprietary school
• ✓'Equivalent course' means a course encompassing the basic educational curriculum of Virginia courses approved by the board

A principal/supervising broker must conduct or have a third party conduct an audit at least once during each license term under § 54.1-2106.2, documented on a board form. The audit must examine escrow handling, fair housing, advertising, contract drafting, unlicensed individuals, agency, regulatory updates, and disclosures.

• ✓A mandatory audit must be conducted at least once during each license term on a board-developed form
• ✓The audit must examine escrow, fair housing, advertising, contracts, unlicensed individuals, agency, and disclosures

A principal/supervising broker may conduct or have another person conduct an audit of firm practices under § 54.1-2111.1. Methods and findings must be documented. Properly reporting noncompliance provides immunity from board enforcement for the matters reported.

• ✓A signed, properly submitted self-audit report provides immunity from board enforcement for the matters reported
• ✓Audit methods and findings must be documented as described in the section

The broker must notify the board in writing within 30 days of a self audit's conclusion (or 30 days of receiving a third-party audit report) of any believed noncompliance, and submit either a statement of remediation or a plan to correct within 90 days. Failure may result in loss of immunity.

• ✓Noncompliance must be reported in writing to the board within 30 days of the audit conclusion or third-party report receipt
• ✓A remediation statement or a 90-day correction plan must be submitted; failure to complete within 90 days ends immunity

Immunity does not apply if noncompliance was intentional or resulted from gross negligence, and applies only to the broker who conducts the audit and submits the plan — not other brokers or salespersons. Repeated violations may be deemed a failure to complete a prior program.

• ✓Immunity does not apply to intentional violations or gross negligence
• ✓Immunity extends only to the broker who conducts the audit and submits a compliance plan, not to other licensees

Upon request by any investigator or board agent, a broker must cooperate in providing records/documents under 18VAC135-20-240 within 10 days, and for other board requests under 18VAC135-20-250 within 21 days.

• ✓Records and documents under 18VAC135-20-240 must be provided within 10 days of request
• ✓Other board requests under 18VAC135-20-250 must be answered within 21 days

A principal/supervising broker may conduct a self or third-party audit under § 54.1-2111.1. The broker must notify the board in writing within 30 days of noncompliance and submit a remediation statement or a plan to correct within 90 days. A properly submitted report provides immunity from enforcement, unless the noncompliance was intentional or grossly negligent.

• ✓Broker must notify board of noncompliance within 30 days of audit conclusion
• ✓Correction plan must remediate within 90 days
• ✓Immunity does not apply to intentional or grossly negligent noncompliance
• ✓Immunity extends only to the broker conducting the audit

A principal/supervising broker must conduct or have a third party conduct an audit at least once during each license term under § 54.1-2106.2, documented on a board form. The audit examines escrow handling, fair housing compliance, advertising, contract drafting, use of unlicensed individuals, agency relationships, and required disclosures.

• ✓A mandatory audit is required at least once each license term
• ✓Audit must be documented on a board-developed form
• ✓Audit examines escrow, fair housing, advertising, and disclosure compliance

Special rules govern escrow funds, earnest money, security deposits, and rent when property is foreclosed upon. Licensees may use interpleader actions and have specific disbursement duties.

• ✓A licensee holding escrow funds for an owner whose property is foreclosed upon may file an interpleader action pursuant to § 16.1-77
• ✓Upon foreclosure of a single-family unit with a purchase contract, foreclosure is deemed a termination and the licensee may disburse earnest money to a non-defaulting purchaser without further consent/notice
• ✓Landlord holding a tenant's security deposit at foreclosure must handle it per applicable law, returning deposit and accrued interest owed regardless of transfer or contractual agreements

Rent, security deposits, and application deposits collected by a managing agent must be placed into escrow within specific timeframes.

• ✓Rent paid to a licensee on behalf of a landlord client must be placed in escrow by the end of the fifth business banking day following receipt unless otherwise agreed in writing
• ✓Security deposits must be placed in escrow by the end of the fifth business banking day following receipt unless otherwise agreed in writing
• ✓Application deposits must be placed in escrow by the end of the fifth business banking day following approval of the rental application by the landlord

When a foreclosed single-family dwelling has a tenant, the successor in interest must give notice depending on intended use. Property management agreements convert to month-to-month.

• ✓Successor acquiring the unit as primary residence must give written notice terminating the lease with at least 90 days to vacate (per § 55.1-1202)
• ✓Successor acquiring for other purposes takes subject to the rental agreement for the remaining lease term, subject to termination rights
• ✓Foreclosure converts a written property management agreement into a month-to-month agreement between successor landlord and managing agent, terminable by either party with 30 days written notice

A managing agent may transfer escrow funds to the landlord when terminating an agreement (except in foreclosure), and has immunity for compliance with statutory provisions.

• ✓Except in foreclosure, a managing agent terminating a property management agreement may transfer escrow funds to the landlord without consent, provided written notice is given to each tenant
• ✓In foreclosure, a licensee shall NOT transfer funds to a landlord client whose property was foreclosed upon
• ✓A managing agent complying with this section has immunity from liability absent gross negligence or intentional misconduct

If a licensee knows or should know that he, a family member, his firm, a member of his firm, or an entity in which he has an ownership interest is acquiring, selling, or leasing property and the licensee is a party, the licensee must disclose in writing his licensee status and the ownership interest to the other parties, upon substantive discussions about the specific property.

• ✓Must disclose in writing licensee status and ownership interest to other parties
• ✓Disclosure required upon substantive discussions about the specific real property

A licensee who is a party to a transaction must disclose in writing that he is a licensee and that he, his family, firm, or an entity he has ownership interest in has or will have an ownership interest.

• ✓Must disclose in writing licensee status and ownership interest (self, family, firm, firm members, or entity) when a party to the transaction
• ✓Disclosure required upon having substantive discussions about the specific real property

Schools must show minimum net worth and courses must meet delivery and time standards. Instructors must satisfy specific qualification combinations depending on whether they teach prelicense or continuing/post-license courses.

• ✓A proprietary school applicant must show a minimum net worth of $2,000 with certified financial documentation
• ✓Prelicense instructors must meet TWO of the six listed qualifications (e.g., broker's license plus experience, professional designations, teaching credentials, or attorney status)
• ✓Prelicense courses require a monitored final written examination; online courses require a 50-minute timer per credit hour
• ✓CE/post-license instructors need at least three years of active experience in a specific field and may teach only in their area of expertise
• ✓The 'Principles' course requires 60 hours of study; each broker-related course requires 45 hours of study

Schools must keep detailed student records, provide completion certificates, and electronically report completion data to the board within tight deadlines. Course approvals expire on a fixed cycle.

• ✓Schools must maintain all student and class records for a minimum of five years
• ✓Course completion documentation must state it is 'Approved by the Real Estate Board' and include student, school, course, approval number, date, and hours
• ✓CE/post-license providers must electronically transmit course completion data to the board within five business days
• ✓Approval of prelicense, CE, and post-license courses expires December 31 three years from the year approval was issued

Application fees: Salesperson (education/exam or reciprocity) $150; Salesperson's/broker's business entity $190; Broker (education/exam or reciprocity) $190; Broker concurrent $140; Firm $250; Branch office $190; Transfer $60; Activate $60. All application fees are nonrefundable.

• ✓All application fees are nonrefundable
• ✓Firm license application fee is $250 (highest)
• ✓Transfer and activate applications are $60 each

Application fees are nonrefundable. Fees are: Salesperson by education/exam $150; Salesperson by reciprocity $150; Salesperson/broker business entity $190; Broker by education/exam $190; Broker by reciprocity $190; Broker concurrent license $140; Firm license $250; Branch office license $190; Transfer application $60; Activate application $60. Exam fees are subject to vendor contract charges under the Virginia Public Procurement Act.

• ✓All application fees are nonrefundable
• ✓Firm license fee is $250 and branch office license fee is $190
• ✓Transfer and activate applications each cost $60

Prelicense courses require monitored final exams and specific study hours. Schools must keep student records, provide completion certificates, and transmit CE completion data electronically.

• ✓Principles course requires 60 hours of study; each broker-related course requires 45 hours
• ✓Online distance learning requires a timer of at least 50 minutes of active engagement per hour of credit
• ✓Schools must maintain all student and class records for a minimum of five years
• ✓Course approval expires December 31 three years from the year approval was issued
• ✓CE/post license providers must electronically transmit completion data within five business days

Licenses for salespersons, brokers, and firms expire two years from the last day of the month in which they were issued, except concurrent broker licenses which expire on the same date as the original broker license.

• ✓Licenses expire two years from the last day of the issuance month
• ✓Concurrent broker licenses expire with the original broker license

As a renewal condition, active salespersons must complete 16 hours of CE per term (first-time renewals require 30 hours post-license education). Active brokers must complete 24 hours per term. Inactive licensees are not required to complete CE for renewal.

• ✓Active salespersons: 16 CE hours per term
• ✓First-time salesperson renewal: 30 hours post-license education
• ✓Active brokers: 24 CE hours per term
• ✓Inactive licensees exempt from CE for renewal

Salespersons' 16 hours must include 2 hours fair housing, 3 hours ethics/standards, and minimum 1 hour each in legal updates/emerging trends, real estate agency, and real estate contracts. Brokers' 24 hours must include 8 hours in supervision/management (2 of which cover broker supervision requirements), plus the same required topics as salespersons.

• ✓Salespersons: 2 hours fair housing, 3 hours ethics required
• ✓Brokers: 8 hours supervision/management required (2 hours broker supervision)
• ✓Both must include legal updates, agency, and contracts hours

Licensees must retain proof of CE for three years and provide it on a board-prescribed form. CE credits earned in excess of requirements in the six months immediately prior to expiration carry over into the next two-year renewal period.

• ✓Must retain proof of CE for three years
• ✓Excess CE in the last six months before expiration carries over one term

Renewal fees: Salesperson $65; business entity $90; Broker $80; Concurrent Broker $80; Firm $160; Branch Office $90. All renewal fees are nonrefundable and date of receipt determines timeliness. Failure to receive board notices does not relieve the renewal obligation.

• ✓All renewal fees are nonrefundable
• ✓Failure to receive renewal notice does not relieve renewal obligation
• ✓Firm renewal fee is $160

A licensee may not act as a dual agent or dual representative in a residential transaction without first obtaining written consent from all parties after written disclosure of the consequences. A dual agent has an agency relationship; a dual representative has an independent contractor relationship. Disclosure must be in writing and given before the dual agency/representation begins.

• ✓Written consent of all parties required after written disclosure of consequences
• ✓Dual agent = agency relationship; dual representative = independent contractor relationship
• ✓Disclosure must be in writing and given prior to commencement of dual agency/representation

Disclosures are invalid if not signed by the client or if given in a purchase agreement, lease, or other transaction document. A licensee may withdraw without liability from a client who refuses to consent, terminating that relationship without prejudicing representation of the other client. No cause of action arises against a dual agent for required disclosures.

• ✓Disclosure invalid if not signed or if contained in a purchase agreement/lease/transaction document
• ✓Licensee may withdraw without liability from a client who refuses to consent
• ✓No cause of action arises for making required dual agency disclosures

A licensee may not act as a dual agent or dual representative in residential transactions without prior written consent of all parties given after written disclosure of the consequences.

• ✓Written consent of all parties required, obtained after written disclosure, before commencement
• ✓A dual agent has an agency relationship; a dual representative has an independent contractor relationship under the brokerage agreements
• ✓Disclosures are invalid if not signed by the client or if given in a purchase agreement/lease/other transaction document
• ✓Consent is presumed against any client who signs the required disclosure

After dual agency begins, the licensee cannot advise either party on terms to offer/accept, cannot advise the buyer on property suitability or condition (beyond required disclosures) or on repairs, and cannot advise either party in disputes. The disclosure informs parties they may engage another licensee at additional cost.

• ✓Licensee cannot advise on terms to offer or accept after dual agency commences
• ✓Licensee cannot advise on property suitability, condition, repairs, or disputes
• ✓Parties may engage another licensee at additional cost

A licensee may withdraw without liability from a client who refuses to consent to disclosed dual agency, and may continue representing the other client.

• ✓Licensee may withdraw without liability, terminating the relationship with the refusing client
• ✓Withdrawal does not prejudice continued representation of the other client or future representation of the refusing client in unrelated transactions
• ✓No cause of action arises against a dual agent/representative for making required disclosures

The disclosure form must identify parties represented, agency type, and inform parties of the limitations of dual representation, especially when representing one existing and one new client.

• ✓Must state whether firm represents two existing clients or one existing and one new client
• ✓Licensee cannot advise on terms to offer/accept after dual agency begins
• ✓Licensee cannot advise on suitability, condition (beyond required disclosures), repairs, or disputes
• ✓Must inform parties they may engage another licensee at additional cost

Unless otherwise specified or per § 54.1-2108, a licensee must produce to the board or its agents within 10 days evidence of signature cards, bank records, or any document/book/record concerning a real estate transaction. The board may extend upon showing extenuating circumstances.

• ✓Records must be produced to the board or its agents within 10 days of the request
• ✓The board may extend the 10-day period upon a showing of extenuating circumstances

Earnest money deposits in purchase transactions must be placed in escrow within a set time and held until the transaction is consummated or terminated.

• ✓Earnest money must be placed in escrow by the end of the fifth business banking day following ratification unless otherwise agreed in writing
• ✓Funds must remain in the account until the transaction is consummated or terminated
• ✓If not consummated, funds are held until written agreement of principals, court order, successful interpleader, or release per the clear/explicit contract terms

A broker may send written notice of intent to release funds unless a written protest is received. Brokers who comply are immune from liability and may use interpleader.

• ✓Broker may send written notice that funds will be released unless a written protest is received within 15 calendar days
• ✓Acceptable notice methods include hand delivery, US mail with proof, electronic means with proof, or overnight delivery
• ✓A broker complying with this section is immune from liability to any of the parties; no broker is required to determine the party entitled to the deposit except per clear/explicit contract terms
• ✓A broker may seek court custody of disputed/unclaimed funds via interpleader action pursuant to § 16.1-77

Establishes application, renewal, and reinstatement fees for proprietary schools and prelicense instructor certificates, with a one-year reinstatement limit.

• ✓Proprietary school original certificate fee is $190; renewal is $90; reinstatement is $135
• ✓Prelicense instructor original certificate fee is $190; renewal is $75; reinstatement is $110
• ✓Reinstatement is available for up to one year after expiration; after one year the applicant must apply as new
• ✓Reinstatement fees apply when renewal is not completed within 30 days of expiration

Specific fees apply to proprietary school and prelicense instructor certificates, with reinstatement windows and consequences for lapsed renewals.

• ✓Original proprietary school certificate application fee is $190; renewal is $90 (every two years)
• ✓Proprietary school reinstatement fee is $135; instructor reinstatement fee is $110
• ✓Original prelicense instructor certificate is $190; renewal is $75
• ✓A certificate may be reinstated up to one year after expiration; after one year it cannot be reinstated and the applicant must reapply as new