WAC 308-124-305 Application of Brief Adjudicative Proceedings +17Washington · Real Estate · English

The director adopts RCW 34.05.482 through 34.05.494 to administer brief adjudicative proceedings. These proceedings may be conducted by request and/or at the director's discretion under RCW 34.05.482 for the categories of matters set forth in WAC 308-09-525.

• ✓RCW 34.05.482 through 34.05.494 govern brief adjudicative proceedings
• ✓Proceedings may be initiated by request or at the director's discretion
• ✓Categories of matters are set forth in WAC 308-09-525

Any person desiring to take a broker or managing broker exam must contact the testing service at least one business day before the desired test date to schedule and pay, after receiving written notice that requirements are met. Applicants who received clock hours in another jurisdiction must submit proof of education to substitute for required clock hours before scheduling.

• ✓Candidates must contact the testing service at least one business day prior to schedule and pay
• ✓Written notice that requirements are met must be received before scheduling
• ✓Out-of-jurisdiction clock hours require proof of education submitted under WAC 308-124A-755

Schools offering mandated real estate training must include 'real estate' in the course title (except business management), use the most recent department-prescribed curriculum, and submit for clock hour approval. Certain prescribed core curricula phrases cannot be used in other course titles.

• ✓Course title must include 'real estate' except for business management courses
• ✓Reserved phrases include: real estate fundamentals, real estate brokerage management, real estate law, advanced real estate law, business management, real estate practices, advanced real estate practices, and Washington real estate fair housing
• ✓Schools must utilize the most recent course curriculum prescribed by the department

The commission consists of the director (chair) and six members serving in an advisory capacity, appointed by the governor for six-year terms. At least two members must come from west of the Cascade range and at least two from east of the range. Members need at least five years' brokerage experience or three years' investigative experience. The governor fills vacancies for the unexpired term.

• ✓Six members appointed by the governor for six-year terms
• ✓At least two members from west and two from east of the Cascade range
• ✓The director is chair; the commission elects a vice chair annually

Members are compensated per RCW 43.03.240 plus travel expenses. The commission meets four times a year or at the call of the director. It holds educational conferences, conducts examinations of license applicants, ensures exams are administered throughout the state, and establishes procedures for home inspector referrals adopted in rule by the director.

• ✓The commission meets four times a year or at the director's call
• ✓The commission conducts license examinations and holds educational conferences

Every licensee must notify the real estate program within twenty days of service or knowledge of certain criminal, civil, or professional licensing actions against them.

• ✓Notification must be made within twenty days after service or knowledge thereof
• ✓Must report any criminal complaint, information, indictment, or conviction (including guilty or nolo contendere pleas) naming the licensee as defendant
• ✓Must report entry of a civil court order, verdict, or judgment involving real estate or business-related activity, regardless of any pending appeal
• ✓Must report any professional license, certification, or permit that was fined, suspended, revoked, or refused by any governmental agency

Trust accounts for real estate sales/business opportunity transactions must be interest-bearing demand deposit accounts established per RCW 18.85.285. A pooled housing trust fund account holds smaller deposits, with interest paid to the department.

• ✓Bank accounts, deposit slips, checks, and signature cards must be designated as trust accounts in the firm or assumed name as licensed
• ✓Trust accounts for real estate/business opportunity transactions must be interest-bearing demand deposit accounts
• ✓A pooled interest-bearing 'housing trust fund account' must be maintained for trust funds of ten thousand dollars or less
• ✓Interest income from the pooled housing account is paid to the department per RCW 18.85.285(8) after deduction of reasonable bank charges (excluding check printing or bookkeeping system fees)

Funds generally may not be disbursed before closing without a written release from both purchaser and seller, with limited exceptions for terminated agreements and delivery to escrow agents.

• ✓No disbursements may be made in advance of closing or before a contract condition occurs without a written release from both purchaser and seller
• ✓Exception: if the agreement terminates by its own terms before closing, funds are disbursed as the agreement provides without a written release
• ✓Exception: funds may be disbursed to the escrow agent designated in writing by both parties reasonably prior to closing to allow checks to clear

For deposits over ten thousand dollars, the licensee must disclose in writing the client's option regarding how interest is handled — a separate account benefiting the party, or the pooled account by written agreement.

• ✓The licensee must disclose in writing to any party depositing more than ten thousand dollars their option between a separate account and the pooled account
• ✓Option (i): funds may be placed in a separate interest-bearing trust account with interest paid to the party(ies)
• ✓Option (ii): funds may go in the pooled interest-bearing account only if the parties agree in writing

Brokers must maintain interest ledgers for pooled and individual accounts and correct any shortfall when bank charges exceed interest earned to keep the account balanced with liability.

• ✓For pooled (housing) accounts, maintain a 'Housing trust account interest' ledger, posting interest credited and debiting when interest is paid to the state or bank fees are charged
• ✓For separate accounts, interest earned or bank fees are posted to the individual ledger
• ✓If bank charges exceed interest earned, causing balance below liability, the designated broker must deposit funds within one banking day to restore balance
• ✓For pooled housing accounts, the broker absorbs the excess bank charges as a business expense; for separate accounts, the broker may be reimbursed if authorized in writing

Commissions may only be withdrawn from the trust account by a separate check after the transaction closes, ensuring funds are not prematurely removed.

• ✓A separate check must be drawn on the trust account, payable to the firm as licensed, for each commission earned
• ✓Commissions may only be withdrawn after the final closing of the real estate or business opportunity transaction
• ✓Each commission check must be identified to the transaction to which it applies

When the agreement designates a party other than the firm to hold earnest money, the licensee must deliver the funds and obtain and retain a dated receipt, with the designated broker ultimately responsible for delivery.

• ✓The licensee must deliver the earnest money to the party designated in the purchase and sale agreement to hold the funds
• ✓The licensee must obtain a dated receipt and deliver it to the designated/responsible managing broker
• ✓The dated receipt must be placed and retained in all participating firms' transaction files
• ✓The designated broker has ultimate responsibility for delivery of the funds

Approved courses must have a minimum of three hours of instruction. A clock hour is defined as 50 minutes of actual instruction. Courses must be offered by an approved private school, a tax-supported public institution certifying clock hours, or the Washington real estate commission.

• ✓A clock hour is a period of 50 minutes of actual instruction
• ✓Courses must have a minimum of three hours of course work or instruction
• ✓Clock hours shall not be awarded for course time devoted to meals or transportation

Courses of 30 clock hours or more must include a comprehensive examination with answer key of no fewer than three questions per clock hour, minimum 90 questions, and require a passing grade of at least 70 percent. Essay examination keys must identify tested material and points per question.

• ✓Courses of 30 clock hours or more require a comprehensive exam of at least three questions per clock hour with a minimum of 90 questions
• ✓Passing course grade must be at least 70 percent
• ✓Only primary providers may be approved to teach the prescribed core curriculum and Washington real estate fair housing

Courses must provide practical information related to real estate practice within approved topic areas. Department prescribed curricula include fundamentals, practices, advanced practices, real estate law, advanced law, brokerage management, business management, and core curriculum. Open curricula covers many topics such as legal aspects, taxation, appraisal, finance, fair housing, and ethics.

• ✓Prescribed curricula include fundamentals, practices, advanced practices, real estate law, advanced law, brokerage/business management, and core curriculum
• ✓Open curricula includes legal aspects, taxation, appraisal, property management, ethics, fair housing, finance, and consumer protection
• ✓Courses must provide practical information related to the practice of real estate

Certain course types cannot be approved: mechanical office/business skills (keyboarding, speed-reading, grammar), standardized software programs, licensee orientation courses, personal/sales motivation courses, courses designed for other professions, personal finance/etiquette/motivational courses, and product-promotion courses.

• ✓Mechanical office skills like keyboarding, speed-reading, and grammar are not approvable
• ✓Courses promoting or selling specific products/services to licensees are prohibited from clock hour approval
• ✓A course teaching how to use a spreadsheet is not acceptable, but using a spreadsheet to demonstrate investment analysis is acceptable

Courses must be under supervision of an approved instructor available to respond to student questions immediately or on a reasonably delayed basis. Textbooks and materials must be approved and current, titles cannot mislead, and applications must identify learning objectives tied to real estate practice.

• ✓Courses must be supervised by an instructor approved to teach the topic area
• ✓Course titles must not mislead the public as to subject matter
• ✓The application must identify learning objectives and demonstrate their relation to real estate practice

The director, with commission advice/approval, issues rules governing brokers, managing brokers, designated brokers, and firms. The director enforces licensing laws, grants/denies licenses (including temporary), holds hearings, approves real estate schools/instructors/courses, sets reciprocity standards, may require criminal background checks (applicant pays fees), and adopts advertising standards.

• ✓The director issues rules with the advice and approval of the commission
• ✓The director may require applicants to submit to a criminal background check at the applicant's expense
• ✓The director sets standards for reciprocity and out-of-state licensure

The director may discipline real estate schools, administrators, and instructors, imposing sanctions: withdrawal or suspension of certificate of approval, stayed suspension, censure/reprimand, fines up to $1,000 per day per violation, denial of application, and other corrective action. Each day a violation continues is a separate violation.

• ✓Fines against schools may not exceed $1,000 per day per violation
• ✓Each day a violation continues or occurs is a separate violation

The director and department employees who administer or enforce real estate laws must relinquish interest in any regulated real estate business. If a licensee becomes such an employee, their license is placed on inactive status until employment ends.

• ✓Regulatory employees must relinquish interest in regulated real estate businesses
• ✓A licensee employed by the director has their license placed inactive until employment ceases

Licensees employed by a town, city, or county who conduct real estate transactions on behalf of that government may hold active licenses, and their designated/managing brokers are not responsible for those governmental transactions.

• ✓Government-employed licensees may hold active licenses for government transactions
• ✓Designated/managing brokers are not responsible for the licensee's government transactions

For applications involving an original or renewal license, approval of education courses/curriculum, or issuance of a cease and desist order, the preliminary record consists of the application (or cease and desist order) and associated documents, all documents relied upon by the program to deny or issue, and all correspondence between the applicant/respondent and the program.

• ✓Record includes the application or cease and desist order plus associated documents
• ✓Record includes all documents the program relied upon to propose denial or issuance
• ✓Record includes all correspondence between the applicant/respondent and the program

For determining compliance with a previously issued final order or agreement, the preliminary record includes the prior final order or agreement, all reports/documents submitted by or at the direction of the license holder in fulfillment of terms, all correspondence regarding compliance, and all documents showing failure to comply.

• ✓Record includes the previously issued final order or agreement
• ✓Record includes reports submitted by the license holder toward fulfillment
• ✓Record includes correspondence about compliance and documents proving noncompliance

For all other issues subject to a brief adjudicative hearing, the preliminary record consists of all documents the program relied upon in proposing disciplinary action under RCW 18.235.110 and all correspondence between the license holder and the program regarding alleged violations.

• ✓Record includes documents relied upon in proposing disciplinary action under RCW 18.235.110
• ✓Record includes all correspondence regarding alleged violations

Candidates requesting a morning or afternoon exam are scheduled immediately and given a registration number confirming their reservation. A candidate is assessed the full examination fee if they fail to give two days' notice to change an exam date, or fail to arrive and take the exam at the scheduled time.

• ✓Candidates receive a registration number confirming reservation
• ✓Two days' notice is required to change an exam date to avoid the full fee
• ✓Failure to appear at the scheduled time results in forfeiture of the full exam fee

Every firm or branch office must display its identifying name in a location visible to the public. The displayed name must be either the firm's licensed name or the licensed assumed name, and it must appear at the address shown on the license.

• ✓The firm or branch office name must be visible to the public
• ✓The displayed name must be the firm name or assumed name exactly as licensed
• ✓Identification must appear at the address appearing on the license

A real estate licensee must perform all acts required under a real estate agreement as expeditiously as possible. Intentional or negligent delays are considered detrimental to the public interest and constitute a statutory violation.

• ✓Licensees must perform all required acts under a real estate agreement as expeditiously as possible
• ✓Intentional or negligent delays are detrimental to the public interest in violation of RCW 18.85.361(23)

During an investigation or audit, licensees may be required to provide written statements and/or explanations. Only an authorized representative of the director may issue such requests.

• ✓Licensees may be required to provide written statements and/or explanations during investigations or audits
• ✓A request for a written statement or explanation can only be issued by an authorized representative of the director (investigator, auditor, program staff, or other designee)

Examination results are valid for one year only. Any person who passed the broker or managing broker exam must become licensed within one year from the date of the exam, or they must retake and pass another examination.

• ✓Examination results are valid for one year only
• ✓A person must become licensed within one year of passing the exam
• ✓Failure to become licensed within one year requires retaking and passing the exam

A firm must operate and advertise under its licensed firm name or a licensed assumed name. This applies to all advertising and solicitations for brokerage services without limitation, including internet-based advertising, web pages, email, newspaper, and other visual media. Each such advertisement must include the firm name or licensed assumed name.

• ✓A firm must operate under its licensed firm name or licensed assumed name
• ✓All advertising and solicitations for brokerage services must include the firm name or assumed name as licensed
• ✓Internet advertising, web pages, email, newspaper, and other visual media are all covered

Brokers and managing brokers who advertise using a name, title, or brand without obtaining a separate assumed name license must follow specific restrictions. They must always display the firm's licensed name or licensed assumed name clearly and conspicuously alongside the name, title, or brand. They may not use terms that suggest a separate legal entity or that are commonly understood to reference a firm or office. Advance written approval from the designated broker is required to use an unlicensed title or brand.

• ✓Must always use and display the firm's licensed name or assumed name in a clear and conspicuous manner in conjunction with the name, title, or brand
• ✓May not use terms suggesting a separate legal entity such as 'Inc.,' 'LLC,' 'LLP,' 'Corp.,' 'firm,' or 'company'
• ✓May not use terms commonly understood to reference a firm or office such as 'realty,' 'realtors,' 'firm,' or 'real estate'
• ✓Must receive advance written approval from the firm's designated broker to use an unlicensed title or brand

The designated broker holds primary responsibility for ensuring all firm brokerage services comply with law, cooperating with the department, and maintaining accessibility of firm offices and records.

• ✓Must assure all brokerage services comply with chapters 18.85, 18.86, and 18.235 RCW and rules
• ✓Must cooperate with the department in any investigation, audit, or licensing matter
• ✓Must ensure accessibility of firm offices and records and provide copies of required records upon demand
• ✓Must be knowledgeable of chapters 18.85, 18.86, and 18.235 RCW and related rules
• ✓Must ensure all persons performing brokerage services and the firm itself are appropriately licensed

The designated broker must ensure trust bank accounts are properly reconciled and balanced monthly, and that policies exist for safe handling of client funds and property.

• ✓Must ensure monthly reconciliation of trust bank accounts is completed, up-to-date, and accurate
• ✓Must ensure monthly trial balances are completed, accurate, and up-to-date
• ✓Must ensure the trial balance and reconciliation show the account(s) are in balance
• ✓Must ensure policies or procedures are in place for safe handling of customer or client funds or property

The designated broker may delegate duties to managing brokers but must maintain up-to-date written, signed delegation agreements covering specific responsibilities.

• ✓Delegations may only be made to managing brokers licensed to the firm
• ✓Delegation agreements must be signed by all parties
• ✓Delegations must address record maintenance, advertising, trust accounting, safe handling of funds/property, authority to bind, contract review/modification/termination, supervision, and heightened supervision of new brokers
• ✓Delegations must address hiring, transferring, and releasing licensees to or from the firm

The designated broker must maintain, implement, and follow written policies addressing home inspector referrals, supervision levels, and contract review for new brokers.

• ✓Policy must address procedures for referring home inspectors, protecting the consumer's right to freely pick an inspector and preventing collusion
• ✓Full written disclosure is required if a licensee refers a home inspector with whom they have a business or familial relationship
• ✓Policy must address levels of supervision of all brokers, managing brokers, and branch managers
• ✓Policy must require review of all brokerage service contracts involving brokers licensed less than two years, completed within five business days of mutual acceptance with documented proof

The designated broker must ensure timely submission of transaction documents and handle specific obligations when closing the firm, all within defined timeframes.

• ✓Must ensure affiliated licensees submit transaction documents within two business days of mutual acceptance
• ✓Within five business days, must provide the department a closing firm affidavit when closing the firm
• ✓Within five business days, must ensure all brokerage service contracts are terminated or transferred with written authorization
• ✓Within five business days, must notify all parties to pending transactions of the firm closing and how the transaction will be completed or transferred

All properties managed by the firm must be supported by a written management agreement signed by both the owner and the designated broker, and the agreement must be retained. The agreement must include specified minimum contents.

• ✓A written management agreement signed by the owner and designated broker is required and must be retained
• ✓The agreement must state the firm's compensation and the type and number of units (or square footage if non-residential)
• ✓The agreement must state whether the firm may collect and disburse funds and for what purposes, authorization to hold security deposits and how they may be disbursed, and the frequency of summary statements to the owner

Each owner of a firm-managed property must be provided a summary statement (as provided in the management agreement) for each property managed. The designated broker must retain a true copy of each statement, and it must include specified financial details.

• ✓A summary statement must be provided to each owner for each managed property, and the designated broker must retain a true copy
• ✓The statement must show balance carried forward, total rent receipts, owner contributions, and other itemized receipts
• ✓The statement must show itemization of all expenses paid, ending balance, and number of units rented or square footage if non-residential

All properties rented or leased by the firm must be supported by a written rental or lease agreement.

• ✓Every property rented or leased by the firm requires a written rental or lease agreement
• ✓This is a distinct requirement separate from the management agreement

The firm may provide other services to owners of managed properties only if it makes full written disclosure of the broker's relationship with any persons providing such services, discloses fees charged in advance, and obtains the owner's permission.

• ✓Full written disclosure of the broker's relationship with any service providers is required
• ✓Prior disclosure of fees charged and the owner's granted permission are required before providing other services

Any amendment or modification to a property management agreement must be made in written form, signed by both the owner and the designated broker, and retained.

• ✓All amendments or modifications must be in writing
• ✓Amendments must be signed by both the owner and the designated broker and retained

Damage or security deposits may not be disbursed to the owner or others prematurely; they must be held until the end of tenancy and disbursed per the lease terms unless the tenant agrees in writing.

• ✓No disbursements of damage/security deposit funds to the owner or any other person without the tenant's written agreement
• ✓Deposits must be held until the end of tenancy and then disbursed to the person(s) entitled per the rental/lease agreement

Property management trust accounts are exempt from the mandatory interest-bearing requirement, but interest-bearing accounts may be established under specified conditions, with interest accruing to owners or the firm depending on written agreements.

• ✓Property management trust accounts are exempt from the interest-bearing requirement of RCW 18.85.285
• ✓Interest-bearing accounts for an individual owner's income property may be established by written agreement/directive, with all interest accruing to the owner
• ✓Interest-bearing accounts holding only tenant damage/security deposits may be established, with interest paid to owner if the firm is designated a 'representative of the landlord' under RCW 59.18.270
• ✓Individual interest-bearing accounts are not required when all owners assign the interest to the firm; a common 'clearing account' may be established but must be a trust account

The property management accounting system must reflect actual cash received and disbursed through the firm's trust account, with any other accounting methods being supplementary.

• ✓The property management accounting system must be an accounting of cash received and disbursed
• ✓Any other accounting method offered to owners must be supplementary to the firm's accounting of all cash received/disbursed through the trust account
• ✓All owners' summary statements must include this cash accounting

Automatic recurring disbursements by the financial institution are restricted when the account holds funds belonging to more than one client or tenant security deposits.

• ✓Preauthorization of recurring disbursements (e.g., mortgage payments) by the financial institution is not permitted if the account contains tenant security deposits
• ✓Such preauthorization is not permitted if the account contains funds belonging to more than one client

Management fees and commissions may be paid via a single supported check and must be withdrawn on a regular monthly basis.

• ✓A single check payable to the firm may be drawn for all property management fees/commissions if supported by a schedule of commissions identified to each individual client
• ✓Property management commissions must be withdrawn at least once monthly

Upon termination of a management agreement, owner funds and security deposits must be disbursed according to the agreement and applicable landlord-tenant law, with tenants notified.

• ✓Upon termination, owner funds must be disbursed according to the management agreement
• ✓Damage/security deposits must be disbursed to the owner or successor property manager, with tenants notified by the disbursing firm consistent with RCW 59.18.270 (Residential Landlord-Tenant Act)