Can A Broker Hire An Agent Who Is Not A Board Member?

I am asked so many times about what a real estate broker can or can’t do with licensees who have no board membership. Board membership refers to a local real estate board. In Orlando, our primary board is the Orlando Regional Realtor Association (ORRA). Some of our friends in Osceola County may be a member of the Osceola County Association of Realtors (OSCAR).

Either way, you are a member of a local Real Estate Board, MLS, and the National Association of Realtors. All real estate licensees are real estate sales associates, but only board members can call themselves Realtors.

Local boards have specific rules stating whether brokerages can have non-members as licensees with their company. In some circumstances it is possible, but the liability to the broker can be enormous.

Local boards are bound by the National Association of Realtors (NAR) rules. These rules say that Brokers hold dues-related responsibilities for the non-member agents who are licensed with their firms. The NAR dues formula, which ORRA and others are bound by its charter to enforce, states that a broker’s personal dues must be increased by an amount equal to the annual dues for each non-member the broker allows to be licensed with their firm.

Here's an example of how to calculate the dues of a broker with 10 licensees, four of whom hold board memberships and six of whom do not. For argument’s sake, lets say the annual broker dues are $600 and individual agent dues are $500.

• Broker’s individual dues - $600 • Broker’s increased assessment based on six non-members - $ 3000 • Broker’s total dues - $3600. The non-member assessment fee must be paid by the Broker.

Payment of non-member dues assessment does not make a non-member a member. If a Broker does not pay the increased assessment dues for all non-member salespersons with his or her office, the ORRA Board of Directors must suspend the Broker until the non-members join ORRA. Other liabilities could apply as well.

To all you brokers who are board members, be very careful to only hire licensees who are also board members. If you are a non-board member licensee who has joined a brokerage with board membership, be careful to not get involved in any legal issues with your broker or the local board. If you need any further information about this subject matter, I recommend you contact your local board with questions.