Chapter 1: Real Estate Licensees

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1 Chapter 1: Real Estate Licensees NRS 645 and NAC 645 Learning Goal Understand your opportunities and limitations when working as a real estate licensee in Nevada. Key Ideas Governing Bodies: Licensees must answer to several state agencies. License applications and renewals are submitted to the Nevada Real Estate Division. They are also the front line governing enforcement of Nevada laws and regulations. The Division investigates complaints and inspects records. A second body that governs licensees is the Real Estate Commission. They are a group of professionals in the real estate field, that preside over Commission meetings, conduct disciplinary action hearings, license denial appeals, education approval requests, changes to Nevada Administrative Code 645 (NAC 645) and other matters applicable to real estate business in Nevada. A third governing body is state and local revenue bodies, such as business license departments, and other administrative bodies that may choose to regulate the real estate business. For example local police departments may require a real estate licensee or a property manager to take a drug course, or obtain a special permit in the best interest of the public. Nevada Real Estate Division Nevada Real Estate Division: o Is a state agency. o Prepares and distributes disclosure forms, informational bulletins, and newsletters. o Processes licenses. o Adopts regulations. o Investigates licensees. o Is legally represented by the attorney general. o Can hire advisory committees to help them with investigations and other paperwork. o Grants licensee s 10 days to correct minor deficiencies in areas such as signage, advertising, business location or office operation. The Division head is the Administrator, appointed by the Director of the Department of Business and Industry. The Director of Business and Industry is appointed by the Governor. The Division Administrator can t hold a real estate license. ABC Real Estate School Nevada Law Nov 2009 Page 7

2 Supporting Law/Code: NAC "Division" defined. "Division" means the real estate division of the department of business and industry. NRS "Director" defined. As used in this chapter, "director" means the director of the department of business and industry. (Note: she appoints the head of the Real Estate Division) NRS "Administrator" defined. (NRS ) "Administrator" means the real estate administrator. (Note: The administrator is in charge of the Nevada Real Estate Division and signs all licenses.) NRS Administrator: Qualifications; restrictions. The administrator shall: 1. Possess a broad knowledge of generally accepted real estate practice and be reasonably well informed on laws governing real estate agency contracts. 2. Not be interested in any real estate firm or brokerage firm, nor shall he act as a broker or salesman or agent therefor. (Note: The administrator can not be licensed.) NRS Real estate division to prepare and distribute forms setting forth certain duties owed by licensees. The division shall prepare and distribute to licensees: 1. A form which sets forth the duties owed by a licensee who is acting for only one party to a real estate transaction. 2. A form which sets forth the duties owed by a licensee who is acting for more than one party to a real estate transaction. 3. A form which sets forth the duties owed by a real estate broker who assigns different licensees affiliated with his brokerage to separate parties to a real estate transaction. NAC Time allowed to correct violation of chapter. 1. The division may grant a licensee up to 10 days to correct any deficiency involving advertising, business location, office operation or a broker s sign. A notice of the deficiency and a request to correct the deficiency will be mailed to the licensee. Failure to comply with the request is a ground for suspension or revocation of the license. The notice must state the deficiencies or violations, the recommended action, and the date by which the deficiencies must be corrected. 2. The division may grant an extension for a definite time to correct the deficiency whenever the correction may, practicably, require additional time. NRS Attorney general: Opinions and action as attorney. 1. The attorney general shall render to the division opinions upon all questions of law relating to the construction or interpretation of this chapter, or arising in the administration thereof, that may be submitted to him by the division or the commission. 2. The attorney general shall act as the attorney for the division in all actions and proceedings brought against or by the division pursuant to any of the provisions of this chapter. NRS Real Estate Division to prepare booklet concerning certain disclosures required in sale of residential property. 1. The Division shall prepare a booklet that provides relevant information concerning the disclosures that are required by federal, state and local laws and regulations by a buyer and a seller in a transaction involving the sale of residential property. 2. The Division shall make copies of the booklet prepared pursuant to subsection 1 available to licensees which the licensee must distribute to prospective buyers and sellers in the sale of residential property in accordance with the regulations adopted by the Commission. 3. The Commission shall approve the format and content of the information that must be included in the booklet. 4. As used in this section, residential property has the meaning ascribed to it in NRS ABC Real Estate School Nevada Law Nov 2009 Page 8

3 Real Estate Commissioners Commissioners: Are appointed by the Governor. Are Judge and jury for licensees. Always 5 commissioners. Need 3 of 5 to hold a commission meeting. Are created by the Legislature in NRS 645. Functions are: Advise the Real Estate Division, Adopt regulations (NAC 645), Conduct hearings. Can delegate authority to the Real Estate Division Administrator. Cannot serve more than 2 FULL terms (7 ½ years maximum 1 ½ ). Are eligible for reappointment after 3-years. Qualifications are: United States citizen, 5-year Nevada resident, 3-years of last three as Nevada Broker or 5-years of last 5 as Nevada Broker/Salesperson. Must not only be from one town in Nevada - 2 must be from the north & 2 must be from the south - 5 th from either north or south. Must not only be from one county in Nevada. No more than 2 from any one county. CLEN are southern counties (Clark, Lincoln, Esmeralda, Nye) Officer s term is 1-year. Are appointed for a fiscal/nevada year rather than a calendar year (July 1 - June 30). May be petitioned by any person to adopt, file, amend or repeal any regulation. Administer oaths, certify to all official acts, issue subpoenas for attendance and issue subpoenas for the production of books and papers. May establish advisory committees to assist them with any matter. Earn $150 per day plus expenses when working as a Commissioner. ABC Real Estate School Nevada Law Nov 2009 Page 9

4 Supporting Law/Code: NRS Real estate commission: Creation; number and appointment of members; powers and duties; service of process. 1. The real estate commission is hereby created. The commission consists of five members appointed by the governor. 2. The commission shall act in an advisory capacity to the real estate division, adopt regulations and conduct hearings as provided in this chapter. The commission shall adopt regulations establishing standards for the operation of licensees offices and for their business conduct and ethics. 3. The commission may by regulation delegate any authority conferred upon it by this chapter to the administrator to be exercised pursuant to the regulations of the commission. 4. Service of process and other communications upon the commission may be made at the principal office of the real estate division. NRS Deposit and use of money received by division; compensation of members and employees of commission. 3. Each member of the commission is entitled to receive: (a) A salary of not more than $150 per day, as fixed by the commission, while engaged in the business of the commission; and (b) A per diem allowance and travel expenses at a rate fixed by the commission, while engaged in the business of the commission. The rate must not exceed the rate provided for state officers and employees generally. 4. While engaged in the business of the commission, each employee of the commission is entitled to receive a per diem allowance and travel expenses at a rate fixed by the commission. The rate must not exceed the rate provided for state officers and employees generally. NRS Real estate commission: Qualifications of members. Each member of the commission must: 1. Be a citizen of the United States. 2. Have been a resident of the State of Nevada for not less than 5 years. 3. Have been actively engaged in business as: (a) A real estate broker within the State of Nevada for at least 3 years immediately preceding the date of his appointment; or (b) A real estate broker-salesman within the State of Nevada for at least 5 years immediately preceding the date of his appointment. NRS Real estate commission: Limitation on consecutive service by member. Members are eligible for reappointment, but shall not serve for a period greater than 6 years consecutively, after which time they are not eligible for appointment or reappointment until 3 years have elapsed from any period of previous service. If a successor is appointed to fill the balance of any unexpired term of a member, the time served by the successor shall not apply in computing the 6 years consecutive service unless the balance of the unexpired term exceeds 18 months. NRS Real estate commission: Residency of members; northern and southern districts. 1. At least two members of the commission must be residents of the southern district of Nevada, and at least two members of the commission must be residents of the northern district of Nevada. 2. Not more than two members may be appointed from any one county. 3. The southern district consists of all that portion of the state lying within the boundaries of the counties of Clark, Esmeralda, Lincoln and Nye. (Note: think CLEN) 4. The northern district consists of all that portion of the state lying within the boundaries of Carson City and the counties of Churchill, Douglas, Elko, Eureka, Humboldt, Lander, Lyon, Mineral, Pershing, Storey, Washoe and White Pine. ABC Real Estate School Nevada Law Nov 2009 Page 10

5 NRS Real estate commission: Fiscal year. The commission shall operate on the basis of a fiscal year commencing on July 1 and terminating on June 30. NRS Real estate commission: Meetings. 1. The commission may hold at least two regular meetings annually, one of which must be held in the southern part of the state, and one of which must be held in the northern part of the state, at such place or places as the commission designates for that purpose. 2. Additional meetings of the commission may be held at the call of the president when there is sufficient business to come before the commission to warrant such action, at any place convenient to the commission, or upon written request of two members of the commission. Written notice of the time, place and purpose of all meetings must be given to each member at least 3 working days before the meeting. Government Powers of Licensing and Regulation of licensees Cities and town can tax, license and regulate licensees in addition to state taxes, licenses and regulations. Cities and Towns can also regulate licensees and charge for taxes and licenses. Supporting Law/Code: NRS Power of cities and towns to license and regulate brokers and salesmen not affected. Nothing contained in this chapter shall affect the power of cities and towns to tax, license and regulate real estate brokers or real estate salesmen. The requirements of this chapter shall be in addition to the requirements of any existing or future ordinance of any city or town so taxing, licensing or regulating real estate brokers or real estate salesmen. ABC Real Estate School Nevada Law Nov 2009 Page 11

6 Introduction Nevada Licensees A common definition of real estate is: How does Nevada define real estate? Real estate is land and anything permanently affixed to the land, including the air above it and the ground below it. Nevada s definition is more specific than the common definition. In NRS 645, Nevada defines real estate as every interest or estate in real property including but not limited to freeholds, leaseholds and interests in condominiums, townhouses or planned unit developments (PUD s). The real estate can be visible/tangible 1 or invisible/intangible 2 ; the bundle of legal rights. It can reside in Nevada, or in another location. In other words, when it is advertised in Nevada, it is considered Nevada real estate for the purposes of the Nevada definition. Supporting Statute: NRS "Real estate" defined. Real Estate means every interest or estate in real property including but not limited to freeholds, leaseholds and interests in condominiums, town houses or planned unit developments, whether corporeal or incorporeal, and whether the real property is situated in this state or elsewhere. 1 Tangible real estate includes building, fences, driveways, etc. 2 Intangible real estate includes easements, rights, restrictions, etc. ABC Real Estate School Nevada Law Nov 2009 Page 12

7 There are 3 different titles under the title licensee. Nevada issues 3 different types of real estate licenses: 1) Broker (Needs an office in Nevada. Shows financials, needs liquid funds, credit report. Needs 2 years licensed experience. Needs 64- college credits or equivalent experience. Passes Brokers state real estate exam. Responsible for office and agents. Nevada Law and Broker Management courses are always required.) 2) Broker-Salesperson (Hangs license under broker. Needs 64- college credits or equivalent experience. Passes Brokers state real estate exam. Can manage an office after experience. Can apply for broker s license without retesting. Nevada Law and Broker Management courses are always required.) 3) Salesperson (Hangs license under broker. Passes Salespersons state real estate exam. Needs 90-hour pre-licensing course.) Basic Definitions: NRS Use of terms "salesman," "saleswoman" and "salesperson" authorized. 1. A person licensed as a real estate salesman may use the term "real estate salesman," "real estate saleswoman" or "real estate salesperson" in the course of doing business. 2. A person licensed as a real estate broker-salesman may use the term "real estate brokersalesman," "real estate broker-saleswoman" or "real estate broker-salesperson" in the course of doing business. ABC Real Estate School Nevada Law Nov 2009 Page 13

8 Key Idea: Who is a Licensee? Anyone who has a Nevada real estate license. The term includes Nevada licensed real estate brokers, broker-salespeople, and salespeople. The title licensee is not used to describe Owner-Developers, Time Share Sales Agents, etc only real estate brokers, broker-salespeople, and salespeople. After a licensee joins the Association of Realtors, they may be referred to as a Realtor and a licensee. Without membership in the Association of Realtors, they are a licensee only. Supporting Code: NAC "Licensee" defined. "Licensee" means any person who holds a license as a real estate broker, broker-salesman or salesman pursuant to chapter 645 of NRS. ABC Real Estate School Nevada Law Nov 2009 Page 14

9 Key Ideas Who is a Broker? A broker creates a real estate company that can be labeled as a limitedliability, partnership, corporation, or sole proprietorship entity. The name of the real estate company needs to be approved by Real Estate Division and recorded with the County Clerk. A broker manages, educates, and monitors salespeople. A broker is responsible for the actions of his employees. A broker may hold two broker s licenses 1 corporate and 1 individual. A broker is responsible for all office paperwork for a minimum of 5 years. Brokers must establish an office in Nevada. Brokers may live anywhere, but they need to visit their office at least once every 30 days. If a broker has more than 1 office, he/she needs a manager at any and all branches. A broker is always personally liable for their own behavior and not legally protected under the corporate veil. If a licensee, who has their license hanging at the broker s office, violates a law/regulation that the broker knew about - or should have known about; the broker is also liable for the licensee s behavior. Brokers are responsible for creating and enforcing all office procedures/policies. Brokers are responsible for all money that the office generates and distributes. ABC Real Estate School Nevada Law Nov 2009 Page 15

10 Supporting Law: NRS "Real estate broker" defined. 1. "Real estate broker" means a person who, for another and for compensation or with the intention or expectation of receiving compensation: (a) Sells, exchanges, options, purchases, rents or leases, or negotiates or offers, attempts or agrees to negotiate the sale, exchange, option, purchase, rental or lease of, or lists or solicits prospective purchasers, lessees or renters of, any real estate or the improvements thereon or any modular homes, used manufactured homes, used mobile homes or other housing offered or conveyed with any interest in real estate; (b) Engages in or offers to engage in the business of claiming, demanding, charging, receiving, collecting or contracting for the collection of an advance fee in connection with any employment undertaken to promote the sale or lease of business opportunities or real estate by advance fee listing advertising or other offerings to sell, lease, exchange or rent property; (c) Engages in or offers to engage in the business of property management; or (d) Engages in or offers to engage in the business of business brokerage. 2. Any person who, for another and for compensation, aids, assists, solicits or negotiates the procurement, sale, purchase, rental or lease of public lands is a real estate broker within the meaning of this chapter. 3. The term does not include a person who is employed by a licensed real estate broker to accept reservations on behalf of a person engaged in the business of the rental of lodging for 31 days or less, if the employee does not perform any tasks related to the sale or other transfer of an interest in real estate. (Note: Does not need a license for weekly rentals.) ABC Real Estate School Nevada Law Nov 2009 Page 16

11 Broker s responsibility to licensees and employees Brokers are responsible for supervising their employees activities in addition to the activities of their associated licensees. The following regulation also insists that brokers consider the number of employees that they employ when they establish policies, rules, procedures and systems. An office with 500 licensees would not establish the same type of rules that an office with only 2 licensees would need. Supporting Law/Code: NAC Employment" defined. "Employment" means the relationship between a salesman and the broker with whom he is associated. It includes any employee- employer relationship as well as any independent contractor relationship. NAC Responsibilities of broker regarding associated licensees: Teaching of fundamentals of practice and ethics of profession; establishment of policies, rules, procedures and systems for supervision; optional agreement with licensee. 1. Every real estate broker shall teach the licensees associated with him the fundamentals of real estate or time-share practice, or both, and the ethics of the profession. The broker shall supervise the activities of those licensees, the activities of his employees and the operation of his business. 2. The supervision described in subsection 1 includes, without limitation, the establishment of policies, rules, procedures and systems that allow the real estate broker to review, oversee and manage: (a) The real estate transactions performed by a licensee who is associated with him; (b) Documents that may have a material effect upon the rights or obligations of a party to such a real estate transaction; (c) The filing, storage and maintenance of such documents; (d) The handling of money received on behalf of a real estate broker; (e) The advertising of any service for which a real estate license is required; and (f) The familiarization by the licensee of the requirements of federal and state law governing real estate transactions, including, without limitation, prohibitions against discrimination. 3. In establishing such policies, rules, procedures and systems, the real estate broker shall consider the number of licensees associated with the real estate broker, the number of employees employed by the real estate broker and the number and location of branch offices operated by the real estate broker. ABC Real Estate School Nevada Law Nov 2009 Page 17

12 4. A real estate broker shall establish a system for monitoring compliance with such policies, rules, procedures and systems. The real estate broker may use a real estate broker-salesman to assist in administering the provisions of this section so long as the real estate broker does not relinquish overall responsibility for the supervision of the acts of the licensees associated with the real estate broker. 5. A real estate broker may enter into a written agreement with each licensee associated with the real estate broker to retain the licensee as an independent contractor. If such an agreement is entered into, it must: (a) Be signed and dated by the real estate broker and the licensee; and (b) Include the material aspects of the relationship between the real estate broker and the licensee, including, without limitation, the supervision by the real estate broker of the activities of the licensee for which a real estate license is required NAC Use of fictitious name. 1. A broker shall not operate under a fictitious name unless he complies with chapter 602 of NRS and files with the division a certified copy of the certificate issued by the county clerk. The division shall not issue more than one license nor register more than one owner-developer under the same name. 2. If a broker changes or assumes a fictitious name under which business is conducted, he shall file a certified copy of the certificate issued by the county clerk to the division within 10 days after the certificate is issued. 3. A broker may not use more than one name for each license under which he operates. NRS Inspection of records of broker and owner-developer by division; regulations. 1. The division shall regularly inspect the transaction files, trust records and pertinent real estate business accounts of all real estate brokers and owner-developers to ensure compliance with the provisions of this chapter. 2. The commission shall adopt regulations pertaining to those inspections. Note: The division can inspect offices at any time, without notice or cause. ABC Real Estate School Nevada Law Nov 2009 Page 18

13 Please read the following if you will become a broker for a corporation: NRS Issuance of license to certain organizations doing business as broker; restrictions. 1. Each limited-liability company doing business as a real estate broker must designate its manager, each partnership doing business as a real estate broker must designate one of its members, and each corporation doing business as a real estate broker must designate one of its officers, to submit an application for a broker s license. 2. Upon such manager s, member s or officer s successfully passing the examination, and upon compliance with all other requirements of law by the limited-liability company, partnership or corporation, as well as by the designated manager, member or officer, the division shall issue a broker s license to the manager, member or officer on behalf of the limited-liability company, corporation or partnership, and thereupon the manager, member or officer so designated is entitled to perform all the acts of a real estate broker contemplated by this chapter; except: (a) That the license entitles the manager, member or officer so designated to act as a real estate broker only as officer or agent of the limited-liability company, partnership or corporation, and not on his own behalf, except as otherwise provided in NRS ; and (b) That if in any case the person so designated is refused a license by the real estate division, or in case he ceases to be connected with the limited-liability company, partnership or corporation, the limited-liability company, partnership or corporation may designate another person who must apply and qualify as in the first instance. NRS Effect on limited-liability company, partnership or corporation of revocation or suspension of license of manager, partner or officer; termination of suspension or reinstatement of license. In the event of the revocation or suspension of the license issued to a manager of a limited-liability company, a member of a partnership or to any officer of a corporation, the limited-liability company, partnership or corporation shall not conduct business unless the manager or member whose license has been revoked is severed and his interest in the limited-liability company or partnership and his share in its activities brought to an end, or if a corporation, the offending officer is discharged and has no further participation in its activities. The discharged or withdrawing manager, member or officer of such a limited-liability company, partnership or corporation may reassume his connection with, or be reengaged by the limited-liability company, partnership or corporation, upon termination of the suspension or upon reinstatement of his license. NAC Application by a partnership or corporation. If an applicant for a license is a partnership, limited-liability company or corporation, the applicant must file with the division a certified or verified copy of the partnership agreement, articles of organization or articles of incorporation, as appropriate. ABC Real Estate School Nevada Law Nov 2009 Page 19

14 Key Ideas What are the qualifications for a Broker s license? A Broker must have a good reputation for honesty, trustworthiness and integrity (THEY MUST TELL THE TRUTH ON THEIR APPLICATION!). A Broker must have passed the state portion of the Nevada real estate broker s exam and either the national portion of the Nevada real estate broker s exam or a comparable exam in another state within 1 year before application with Nevada. A Broker cannot owe back child support. The state may deny a broker s license if the applicant has been charged with or convicted of a crime. The state shall not issue a license until 3 years after a court fine, restitution or expiration of applicant s parole, probation or sentence; whichever is later. The state may deny a license if an applicant has had their license suspended or revoked in another state. All brokers must have been an active, full-time licensee for at least 2 of the last 4 years (not necessarily consecutive), and be presently licensed. Broker applicants must show a financial statement, credit report and funds to maintain an office for at least 180 days (6 times monthly lease payment); on deposit for 90 days minimum. He/she must have acquired a commercial location for an office that will store the office files, hang all licenses conspicuously, and follow the signage requirements. Required broker education consists of 64 total college credits (45 hours = 3 credits) including: o 3 credits in real estate law including 18 hours of Nevada law; o 3 credits in real estate principles; o 3 credits in real estate appraisal; o 3 credits in broker management; o and 15 credits in other real estate, business, economics, accounting; o 37 other credits in anything. ABC Real Estate School Nevada Law Nov 2009 Page 20

15 2 years active, full-time licensed experience (limited to 10 years immediately preceding the date of application) is equivalent to 16 of any college credits, except Broker Management and Nevada Law. Active experience is defined as 48 weeks per year, 30 hours per week; proved be having the applicant s previous broker fill out and notarize an experience verification form provided by the Real Estate Division. Proof of active experience is not required for experience gained as a broker (called a primary broker in some states), only for experience acquired as a broker-salesperson or salesperson. A broker may have both a Principal office and Branch offices; and they are responsible for all offices. Brokers must hire a manager to supervise all branch offices, and each manager may only manage 1 office. That manager must have a minimum of 2 years licensed experience. Having a trust account is not mandatory, but if one is established for a branch office, the manager must be a signer on the account. The real estate office sign showing the approved company name must be proved by photo if requested by the Division, maintained conspicuously, posted at all office locations and: o Readable from the nearest public sidewalk, street or highway. If the office is located in an office building, hotel or apartment, the real estate office sign must be posted on the building directory or exterior of the business entrance. The broker is responsible for transaction paperwork for a minimum of 5 years after the date of the closing or the last activity involving the property; including offers that were not accepted and transactions not completed. The broker may also be required to purchase additional licenses from the city, town or county where the real estate office resides. If a broker will be absent from his office for 30 days or more, he must designate an office manager to be in charge of the office or make other advance arrangements with the Division. A licensee s current broker of record and the broker of record at the time the licensee broke a law must attend any disciplinary hearings concerning that licensee or face a $2,000 fine. Employee s activities need to be supervised by a broker. Brokers must consider the number of employees that they employ when they establish policies, rules, procedures, and systems. ABC Real Estate School Nevada Law Nov 2009 Page 21

16 If a broker fails to adequate supervise any of his salesman or brokersalesman and that person commits any unlawful act or violates any provision of NRS 645 or NAC 645, or if the broker knew or should have known about an unlawful act or violation committed by that person; the Commission may suspend, revoke or deny the renewal of the broker s license and fine him up to $5,000. Supporting Law: NRS General qualifications of applicant; grounds for denial of application; eligibility for licensing as broker. 1. Except as otherwise provided by a specific statute, the Division may approve an application for a license for a person who meets all the following requirements: (a) Has a good reputation for honesty, trustworthiness and integrity and who offers proof of those qualifications satisfactory to the Division. (b) Has not made a false statement of material fact on his application. (You must be brutally honest on the application if charged or arrested (EVEN IF NOT CONVICTED OR YOUR RECORD HAS BEEN EXPUNGED, YOU MUST ANSWER TRUTHFULLY!!!! THE BACKGROUND INVESTIGATION IS COMPREHENSIVE!!! IT WILL UNCOVER AN EXPUNGED RECORD!!!!!) (c) Is competent to transact the business of a real estate broker, broker-salesman or salesman in a manner which will safeguard the interests of the public. (d) Has passed the examination. (e) Has submitted all information required to complete the application. 2. The Division: (a) May deny a license to any person who has been convicted of, or entered a plea of guilty, guilty but mentally ill or nolo contendere to, forgery, embezzlement, obtaining money under false pretenses, larceny, extortion, conspiracy to defraud, engaging in a real estate business without a license, possessing for the purpose of sale any controlled substance or any crime involving moral turpitude, in any court of competent jurisdiction in the United States or elsewhere; and (b) Shall not issue a license to such a person until at least 3 years after: (1) The person pays any fine or restitution ordered by the court; or (2) The expiration of the period of the person s parole, probation or sentence, whichever is later. 3. Suspension or revocation of a license pursuant to this chapter or any prior revocation or current suspension in this or any other state, district or territory of the United States or any foreign country within 10 years before the date of the application is grounds for refusal to grant a license. ABC Real Estate School Nevada Law Nov 2009 Page 22

17 4. Except as otherwise provided in NRS , a person may not be licensed as a real estate broker unless he has been actively engaged as a full-time licensed real estate broker-salesman or salesman in this State, or actively engaged as a full-time licensed real estate broker, brokersalesman or salesman in another state or the District of Columbia, for at least 2 of the 4 years immediately preceding the issuance of a broker s license. Upon application, brokers need to be able to prove that they can financially maintain an office for 180 days. The liquid funds must have been on deposit for a minimum of 90 days before application. Supporting Code for 180 day requirement: NAC Investigation of financial responsibility; proof of good character. 1. The division may investigate the financial responsibility of each applicant. If the division determines that an applicant is not financially responsible, it may require that the applicant be licensed as a real estate broker-salesman until he meets the requirements of financial responsibility as determined by the commission. An applicant for a real estate broker s license may be required to submit a credit report to the division at his own expense. 2. An applicant for a real estate broker s license shall be deemed financially responsible if he can show liquid assets sufficient to maintain an office for 180 days. The applicant s cash on hand must be on deposit at least 90 days before the date of the application. Anyone denied a license for lack of financial responsibility does not waive his right to appeal pursuant to NRS by acceptance of a real estate broker-salesman s license. 3. The administrator may require other proof of the honesty, truthfulness and good reputation of any applicant, including the officers and directors of any corporation, or the members of any partnership or association making an application, before accepting an application for a license. NAC Investigation of financial responsibility; proof of good character. 1. The division may investigate the financial responsibility of each applicant for a license as a real estate broker. If the division determines that an applicant is not financially responsible, it may require that the applicant be licensed as a broker-salesman until he meets the requirements of financial responsibility as determined by the commission. The Division may require an applicant for a license as a broker to submit a credit report to the division at his own expense. 2. An applicant for a license as a real estate broker shall be deemed financially responsible if he can show assets or income sufficient to maintain an office for at least 180 days. The applicant s cash on hand must be on deposit at least 90 days before the date of the application. Anyone denied a license for lack of financial responsibility does not waive his right to appeal pursuant to NRS by acceptance of a license as a real estate broker-salesperson. 3. The administrator may require other proof of the honesty, truthfulness and good reputation of any applicant, including the officers and directors of any corporation, or the members of any partnership or association making an application, before accepting an application for license. NAC Financial condition of applicant for broker s license. The division shall consider the financial condition of each applicant for a license as a real estate broker and require the following financial information with his application: 1. The applicant s current employer and the employer s address; 2. The applicant s current financial obligations, including charge accounts; 3. The applicant s cash on hand; 4. The applicant s checking accounts with amounts; 5. The applicant s savings accounts with amounts; 6. The names and values of securities and stocks held by the applicant; 7. The value and identification of any other assets; and 8. Such other information concerning the applicant s finances as the division deems pertinent. ABC Real Estate School Nevada Law Nov 2009 Page 23

18 Minimum Educational Requirements for Licensees are as follows: Educational Requirements for Licensees License Type Minimum Real Estate Ed Experience College Credits Broker Broker Mgmt and Nevada Law 2 Years 64-credits or 8 years exp Broker Salesperson Broker Mgmt and Nevada Law 64-credits or 8 years exp Salesperson 90-hour Pre-licensing Supporting Law: NRS Educational requirements; waiver of requirements; regulations of commission concerning standards of education. 1. For brokers, broker-salespeople and salespeople: 90 hour pre-licensing course in real estate principles, practices, procedures, law and ethics, including at least 18 hours of Nevada law. Classroom or correspondence courses are acceptable from any accredited college or university or an approved school. 2. For brokers and broker-salespeople; 64 total college credits (semester units or equivalent quarter units) 27 specified credits: 3 credits in real estate law including 18 classroom hours of Nevada law; 3 credits in real estate principles; 3 credits in real estate appraisal; 3 credits in broker management; and 15 credits in other real estate, business, economics (including accounting); and 37 other credits in anything. 3. Experience offset against college credits. Every 2 full years of full time experience offsets 16-credits. Any of these courses may be offset except the 18 classroom hours of Nevada law and 45 hours in broker management. ABC Real Estate School Nevada Law Nov 2009 Page 24

19 Various laws/regulations establishing educational requirements: NRS Educational requirements; regulations of Commission concerning standards of education. 1. In addition to the other requirements contained in this chapter, an applicant for an original real estate salesman s license must furnish proof satisfactory to the Real Estate Division that he has successfully completed a course of instruction in the principles, practices, procedures, law and ethics of real estate, which course may be an extension or correspondence course offered by the Nevada System of Higher Education, by any other accredited college or university or by any other college or school approved by the Commission. The course of instruction must include the subject of disclosure of required information in real estate transactions, including instruction on methods a seller may use to obtain the required information. 2. An applicant for an original real estate broker s or broker-salesman s license must furnish proof satisfactory to the Real Estate Division that he has successfully completed 45 semester units or the equivalent in quarter units of college level courses which include: (a) Three semester units or an equivalent number of quarter units in real estate law, including at least 18 classroom hours of the real estate law of Nevada and another course of equal length in the principles of real estate; (b) Nine semester units or the equivalent in quarter units of college level courses in real estate appraisal and business or economics; (c) Nine semester units or the equivalent in quarter units of college level courses in real estate, business or economics; and (d) Three semester units or an equivalent number of quarter units in broker management. 3. On and after January 1, 1986, in addition to other requirements contained in this chapter, an applicant for an original real estate broker s or broker-salesman s license must furnish proof satisfactory to the Real Estate Division that he has completed 64 semester units or the equivalent in quarter units of college level courses. This educational requirement includes and is not in addition to the requirements listed in subsection For the purposes of this section, each person who holds a license as a real estate broker, broker-salesman or salesman, or an equivalent license, issued by a state or territory of the United States, or the District of Columbia, is entitled to receive credit for the equivalent of 16 semester units of college level courses for each 2 years of active experience that, during the immediately preceding 10 years, he has obtained while he has held such a license, not to exceed 8 years of active experience. This credit may not be applied against the requirement in subsection 2 for three semester units or an equivalent number of quarter units in broker management or 18 classroom hours of the real estate law of Nevada. 5. An applicant for a broker s license pursuant to NRS must meet the educational prerequisites applicable on the date his application is received by the Real Estate Division. 6. As used in this section, college level courses are courses offered by any accredited college or university or by any other institution which meet the standards of education established by the Commission. The Commission may adopt regulations setting forth standards of education which are equivalent to the college level courses outlined in this subsection. The regulations may take into account the standard of instructors, the scope and content of the instruction, hours of instruction and such other criteria as the Commission requires. NRS Educational requirements; waiver of requirements; regulations of commission concerning standards of education. 1. In addition to the other requirements contained in this chapter, an applicant for an original real estate salesman s license must furnish proof satisfactory to the real estate division that he has successfully completed a course of instruction in the principles, practices, procedures, law and ethics of real estate, which course may be an extension or correspondence course offered by the University and Community College System of Nevada, by any other accredited college or university or by any other college or school approved by the commission. The course of instruction must include the subject of disclosure of required information in real estate transactions, including instruction on methods a seller may use to obtain the required information. 2. An applicant for an original real estate broker s or broker-salesman s license must furnish proof satisfactory to the real estate division that he has successfully completed 45 semester units or the equivalent in quarter units of college level courses which include: (a) Three semester units or an equivalent number of quarter units in real estate law, including at least 18 classroom hours of the real estate law of Nevada and another course of equal length in the principles of real estate; ABC Real Estate School Nevada Law Nov 2009 Page 25

20 (b) Nine semester units or the equivalent in quarter units of college level courses in real estate appraisal and business or economics; (c) Nine semester units or the equivalent in quarter units of college level courses in real estate, business or economics; and (d) Three semester units or an equivalent number of quarter units in broker management 3. On and after January 1, 1986, in addition to other requirements contained in this chapter, an applicant for an original real estate broker s or broker-salesman s license must furnish proof satisfactory to the real estate division that he has completed 64 semester units or the equivalent in quarter units of college level courses. This educational requirement includes and is not in addition to the requirements listed in subsection For the purposes of this section, each person holding a valid real estate salesman s license under the provisions of this chapter is entitled to receive credit for the equivalent of 16 semester units of college level courses for each 2 years of active experience he has as a licensed real estate salesman. This credit may not be applied against the requirement in subsection 2 for three semester units or an equivalent number of quarter units in broker management (Jan ) or 18 classroom hours of the real estate law of Nevada (18 hours always must be taken now). 5. An applicant for a broker s license pursuant to NRS must meet the educational prerequisites applicable on the date his application is received by the real estate division. 6. As used in this section, "college level courses" are courses offered by any accredited college or university or by any other institution which meet the standards of education established by the commission. The commission may adopt regulations setting forth standards of education which are equivalent to the college level courses outlined in this subsection. The regulations may take into account the standard of instructors, the scope and content of the instruction, hours of instruction and such other criteria as the commission requires. NAC Requirement of instruction. 1. An applicant for an original license must submit a certificate from an accredited educational institution or an institution approved by the commission as proof that he has successfully completed the course or courses of instruction required in NRS If the applicant states in his application that he has completed any of the courses at a university or community college he must have the college or university furnish the division with a transcript of his record. The division may allow substitution of those courses already completed and may require additional instruction as is necessary to complete the course of instruction required in NRS Mere attendance in a classroom does not constitute successful completion of a course. 3. Proof of active experience as a real estate salesman must be made on a form provided by the division and attested by the applicant s broker or brokers. 4. For the purposes of subsection 4 of NRS , the substitution of each 2 years active experience for 16 semester units of college level courses applies to experience as a real estate salesman or broker in this state, any other state or the District of Columbia. No substitution may be made for any period which is less than 2 years. NAC Satisfaction of requirement for course in principles of real estate to obtain broker s or brokersalesman s license. The course in principles, practices, ethics, law and procedures which is required for a salesman s license under subsection 1 of NRS and was approved by the commission before November 1, 1977, fulfills the requirement under subsection 2 of NRS for a course of 3 semester units in the principles of real estate for an original broker s or broker-salesman s license. ABC Real Estate School Nevada Law Nov 2009 Page 26

21 What is Active Experience? Experience used for applicants of a broker or broker-salesperson s license needs to be full time; also called active experience. Applicants who are licensed as a salesperson or broker-salesperson (or equivalent) in another state need to prove to the Real Estate Division that they were full time by submitting a certified license history issued by their previous state licensing agency and an experience verification form filled in by their previous broker. Active experience is defined as 30 hours per week for 48 weeks per year. (See next page for form.) Supporting Code: NAC Requirement of active experience. 1. The division will require a verified statement from an employing broker indicating extended experience of any licensee associated with him in order to determine the extent of experience the licensee has gained while associated with the broker. 2. This information must be reported on a form provided by the division which must request the following information: (a) The period of association with the broker. (b) The average number of hours worked per week for the broker. (c) Any other information concerning the activities of the licensee which should be considered as contributing towards his experience while associated with the broker. NAC "Active experience" defined. (NRS ) Active experience for the purposes of NRS means experience gained while engaged in those activities described in subsections 1 and 2 of NRS , NRS and for at least 30 hours a week during at least 48 weeks of any 12-month period. NAC "Active status" defined. "Active status" means that a person holds a current license, is otherwise in good standing with the division and may engage in the real estate business. ABC Real Estate School Nevada Law Nov 2009 Page 27

22 ABC Real Estate School Nevada Law Nov 2009 Page 28 NRS 645 and NAC 645

23 License Display A salesperson s or broker-salesperson s license is sent to and hangs in the office where he works. If he works in a branch office - an office different from his broker - it will hang in the branch office, not in the same office as his broker s real estate license. Since the license needs to be displayed conspicuously, it usually resides near the front door of the office, not in anyone s private office. Supporting Law: NRS Delivery; display. 1. The license of each real estate broker-salesman or salesman must be delivered or mailed to the real estate broker with whom the licensee is associated or to the owner-developer by whom he is employed and must be kept in the custody and control of the broker or owner-developer. 2. Each real estate broker shall: (a) Display his license conspicuously in his place of business. If a real estate broker maintains more than one place of business within the state, an additional license must be issued to the broker for each branch office so maintained by him, and the additional license must be displayed conspicuously in each branch office. (b) Prominently display in his place of business the licenses of all real estate broker-salesmen and salesmen associated with him therein or in connection therewith. 3. Each owner-developer shall prominently display in his place of business the license of each real estate broker-salesman and salesman employed by him. ABC Real Estate School Nevada Law Nov 2009 Page 29