OREC's proposed rules dealing with associates' trust accounts and the Education Recovery Fund have been approved by the Governor with an effective date of November 1. The rule changes include:
- A new rule specifying procedures in the event licensees must be assessed to replenish the Education Recovery Fund. Currently, if the fund is unable to fulfill any valid claim, each licensee may be assessed up to $5.00 each fiscal year. The new rule specifies that such a levy must be paid within sixty (60) days of the assessment, or the license will be placed on inactive status. The Oklahoma Education Recovery Fund has paid out record amounts over the past three years due to three cases that had a significant impact on Oklahoma real estate consumers. While the fund maintains a healthy balance, it's necessary to look ahead and be prepared to ensure that consumers financially harmed by licensees will always have funding available for valid claims.
- Current OREC rules prohibit an associate from opening, maintaining, or being a signer on a trust account when providing licensed activities; however, the Commission has long held that if the associate is performing an activity that doesn't require a license – for instance, an associate managing personally-owned rental property – then the associate may have their own trust account. There has been confusion regarding this rule in that some brokers have interpreted it to mean associates may never operate their own trust accounts. The proposed rules clarify this exception for associates' opening, maintaining or signing on trust accounts only on personally-owned rental property.
You can view a complete copy of the proposed rule changes by clicking here.
New Disclosure Form Effective November 1
Along with the new rule changes taking effect, a new Residential Property Condition Disclosure Form will go into effect November 1. USE OF THIS FORM PRIOR TO NOVEMBER 1, 2017 WILL CONSTITUTE A VIOLATION OF THE Residential Property Condition Disclosure Act. Changes to the form are as follows:
- Updated Question 4 will now read "Are you aware if the property is located in a floodway as defined in the Oklahoma Floodplain Management Act?" and will be answered with the yes/no check boxes.
- New Question 37 will read "Are you aware of any wells located on the property?"
- New Question 38 will read "Are you aware of any dams located on the property? If yes, are you responsible for the maintenance of that dam?"
The new disclosure form will be available on the OREC Web site on November 1.
Team Registration to Begin November 1
Real estate team names have become a common marketing tool within the real estate industry, but also becoming common are the many consumers who cannot tell you the name of the actual real estate office they are working with, because they only know the team name. SB 266, with an effective date of November 1, creates a registration process for teams, and all team names will be searchable on the OREC website. All teams will be required to register and pay a fee for registering with the Commission. A few quick clarification on how the process will work under proposed emergency rules:
What is a Team?
A team is any two or more licensees who work under the supervision of the same broker, work together on real estate transactions to provide brokerage services, represent themselves to the public as being part of team and designated by a team name.
When should teams register with the Commission?
The team name registration process will begin November 1. If a team name is currently being used, it should be registered on November 1. Please do not register any team name with the Commission prior to November 1. The team registration form will be available on that date, and no team registration will be accepted without the official form. If you attempt to register a team prior to November 1, your registration and fee will be returned to you. If a team is created after November 1, 2017, the team name should be registered before any licensed activities are performed by the team (including marketing and/or advertising.) The broker is responsible for making sure that all team names within their brokerages are registered with the Commission.
I've already registered my team name with the Commission as a Trade Name, do I still need to register it as a team name?
Yes. If your team meets the definition above, you will need to register your team name with the Commission.
Are there restrictions on team names?
All team names must be approved by the broker, and any team name advertising must always include a broker reference in close proximity to the team name. The broker's reference must be prominent, conspicuous and easily identifiable. Current restrictions do not allow a team name that can be construed as that of a firm's name; however, with team names now being registered, this restriction will be removed through the emergency rulemaking process. Additionally, the broker shall not allow any team name identical to an associate's corporation or association formed for the purpose of receiving compensation, and no team name may be identical to a licensed real estate entity (an office that's an association, corporation or partnership licensed by the Commission.)
How much will team registration cost?
The registration fee proposed in emergency rules is $100 per team.
How often should teams register?
The team registration process is one-time only.
What if two different teams register the same name?
Team names must be unique, and no two teams may have the same name.
What if a competitor tries to steal my team name?
It shall be a violation of the Code & Rules for a broker to knowingly register a team name that is not used within the brokerage.
Does OREC need a listing of team members or team leader(s)?
No. OREC's main objective is to unite team names with their brokerages – the registration process will include identifying the entity (brokerage) the team is associated with, and the managing broker. Team members and team leads do not need to be identified. Consumers and other licensees will be able to search a database of team names to determine which brokerage the team is associated with.
How do we terminate a team registration?
The broker is responsible for notifying the Commission when a team name is no longer being used, and an appropriate form will be provided by the Commission.
Written and Published by: VanEd
