As is the case every year, the Virginia General Assembly meets for Regular Session and proposes bills for approval by the Governor. Sometimes bills which are approved affect the real estate industry in some measure. Most approved bills become effective on the first day of July following adjournment of the Regular Session, unless another date is specified.
This year, among the approved bills, is one that revises Title 54.1 – Professions and Occupations, Chapter 21 – Real Estate Brokers, Sales Persons and Rental Location Agents.
Specifically, Virginia Code 54.1-2100 has been amended to include a definition for “Real estate team”, which is defined as “two or more individuals, one or more of whom is a real estate salesperson or broker, who (i) work together as a unit within the same brokerage firm, (ii) represent themselves to the public as working together as one unit, and (iii) designate themselves by a fictitious name.” Additionally, “Supervising broker” is defined as meaning “a real estate broker who has been designated by a principal broker to supervise the provision of real estate brokerage services by associate brokers and salespersons assigned to a branch office or a real estate team.”
Virginia Code 54.1-2106.1 was revised to add new requirements for a real estate team. New subsection D reads, “No group of individuals consisting of one or more real estate brokers or real estate salespersons, or a combination thereof, shall act as a real estate team without first obtaining a business entity salesperson's license from the Board. A real estate team may hire one or more unlicensed assistants as otherwise provided by law.” Virginia Code 54.1-2110.1, Duties of Supervising Broker was also revised to state, “reasonable and adequate supervision by the supervising broker shall include . . . [e]nsuring that affiliated real estate teams or business entities are operating in accordance with the provisions of this chapter and applicable Board regulations” and “[e]nsuring that brokerage agreements include the name and contact information of the supervising broker.” The effective date for these revisions is January 1, 2019.
The popularity and prevalence of teams in real estate has grown over the years. Real estate teams across Virginia come in many shapes and sizes. While having many benefits, the differing size, structure and operations of teams can also create some uncertainty in terms of agency rules, management and the overarching goals of risk management for licensees and consumer protection for the public. This legislation may be a small step toward addressing some of these issues, however, brokers and supervising brokers require additional guidance on the operations of real estate teams if they are to truly fulfill their statutory duty to ensure that real estate teams are operating in accordance with relevant statutory provisions.
Is your team in need of a Business Entity License – start the process here: Business Entity License Application.