REAL ESTATE ‑- BROKER'S LICENSES

REAL ESTATE ‑- BROKER'S LICENSES

Real estate brokers, licensed as individual brokers, but operating under the control of and being responsible to, the designated broker of a licensed corporation, should be licensed as associate brokers rather than individual brokers.

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                                                                    May 3, 1957

Honorable George C. Starlund
Assistant Director
Department of Licenses
Olympia, Washington                                                                                                                Cite as:  AGO 57-58 No. 56

Dear Sir:

            Your office has inquired whether real estate brokers, licensed as individual brokers, but operating under the control of, and being responsible to, the designated broker of a licensed corporation, should be licensed as associate brokers rather than individual brokers.

            We answer your question in the affirmative.

                                                                     ANALYSIS

            You have stated that in the corporation concerned, eight of the brokers are presently licensed as associate brokers and twelve are licensed as individual brokers.  The work of all the brokers is substantially the same and their real estate sales and transactions are handled in accordance with the same accounting and banking procedure.  You have also supplied us with a copy of the agreement which is entered into between this corporation and both types of brokers.  We have reviewed the licensing statutes (contained in RCW chapter 18.85) and the agreement.

            RCW 18.85.010 (1953 Supp.) contains the following definitions:

             [[Orig. Op. Page 2]]

            "(1) 'Real estate broker,' or 'broker,' means a natural or artificial personacting independently, who for commissions or other compensation, engages in the purchase, sale, exchange, rental, or negotiation therefor, of real estate, or interests therein, and for business opportunities or interest therein, belonging to others, or holds himself out to the public as being so engaged;

            "(3) An 'associate real estate broker' is a person who has qualified as a 'real estate broker' who works with a designated broker and whose license states that he is associated with a designated broker;"  (Emphasis supplied.)

            Although there is no definition in the statute of the term "designated broker," we understand it to mean the officer of a corporation who is named by the corporation to act on its behalf in accordance with RCW 18.85.170.

            An analysis of the agreement entered into between the corporation and its brokers suggests that the latter come more properly within the definition of "associate real estate broker" than within that of "real estate broker" or "broker."  Thus paragraph (5) of the agreement provides that the broker agrees:

            ". . . to work diligently and to exert his best efforts to sell, lease or rent any and all real estate listed with [the corporation] and available to [the broker] under [the agreement], to solicit additional listings and customers in the name of the corporation, and otherwise to promote the business of serving the public in real estate transactions to the end that each of the parties hereto may derive the greatest profit possible."  (Emphasis supplied.)

            Paragraph (8) makes the status of the brokers even clearer when it states that the corporation "reserves the right to assign particular prospects of the office to a broker or brokers associated" with it.

             [[Orig. Op. Page 3]]

            Provisions for the licensing of "associate real estate brokers" first appeared in the amendments to chapter 18.23 RCW contained in chapter 222, Laws of 1951.  We believe that when the legislature set up these provisions for licensing "associate real estate brokers," it had in mind the type of broker referred to in your question.

            In support of our conclusion that all the brokers here involved should be licensed as associate brokers, we call attention to the provision in RCW 18.85.310 requiring every real estate broker to keep separate real estate fund accounts.  In the corporation here involved, the transactions of all the brokers are handled in accordance with the same accounting and banking procedure, and no separate real estate fund accounts are kept.

            We trust the foregoing will prove helpful.

Very truly yours,

JOHN J. O'CONNELL
Attorney General

ROBERT O'GORMAN
Assistant Attorney General