A. A broker shall employ and pay only active licensees, and a licensee shall accept employment and compensation as a licensee only from the legally licensed broker to whom the licensee is licensed. If the licensee is licensed through a professional corporation or a professional limited liability company, the employing broker may pay and the licensee may receive compensation only through the licensed professional corporation of which the licensee is an officer and shareholder or the licensed professional limited liability company of which the licensee is a member or manager.
B. It is unlawful for a person, firm or corporation, whether obligor, escrow holder or otherwise, to pay or deliver to anyone compensation for performing any of the acts specified by this chapter, as a broker, who is not licensed at the time the service is rendered. An identification card or certificate of license issued by the state real estate department showing that the person, firm or corporation holds a license for the year in which the payment is made or earned shall be sufficient proof to relieve from any penalty for a violation of this section the obligor, escrow holder or other person who relied in good faith on the card or certificate.
C. A real estate broker or real estate salesperson shall not collect compensation for rendering services in negotiating loans secured by real property unless all of the following apply:
1. The broker or salesperson is licensed pursuant to title 6, chapter 9 or is an employee, officer or partner of a corporation or partnership licensed pursuant to title 6, chapter 9.
2. The broker or salesperson has disclosed to the person from whom the compensation is collected that the broker or salesperson is receiving compensation both for real estate brokerage, when applicable, and for mortgage broker services.
3. The compensation does not violate any other state or federal law.
D. Notwithstanding subsection A of this section, brokers licensed under this chapter may employ residential leasing agents or managers of residential rental properties, as prescribed by section 32-2121, subsection A, paragraph 6. The exemption of residential leasing agents or managers of residential rental property under article 2 of this chapter shall not be construed to exempt the designated broker from the responsibility to exercise reasonable supervision over these leasing agents or managers.
Last Legislative Year: 1997
CASE NOTES
Analysis
In General.
Construction.
Out-of-State Broker.
Revocation Upheld.
Brokers in Arizona must comply with the licensing requirements to recover sales commissions, as the public interest in the propriety of such tranactions is paramount. Adams Realty Corp. v. Realty Ctr. Invs., 149 Ariz. 405, 719 P.2d 291 (Ct. App. 1986).
This section merely provides that a broker not legally entitled to receive commissions in Arizona may not do indirectly (through an escrow agent or obligor) what the law prohibits it from doing directly (through the seller or buyer); when read in this context, nothing in this section would prohibit an agent of an Arizona licensed realty company from paying a commission to any party who could legally receive a commission from them. Adams Realty Corp. v. Realty Ctr. Invs., 149 Ariz. 405, 719 P.2d 291 (Ct. App. 1986).
Because § 32-2163 was intended to recognize the interstate character of Arizona real estate property transactions, § 32-2152 and this section should not be construed to thwart that recognition. Adams Realty Corp. v. Realty Ctr. Invs., 149 Ariz. 405, 719 P.2d 291 (Ct. App. 1986).
Real estate salesperson is a real estate broker's employee and has to receive her commissions from the broker subdivision A. Sherman v. First Am. Title Ins. Co., 201 Ariz. 564, 365 Ariz. Adv. Rep. 28, 38 P.3d 1229 (Ct. App. 2002).
A buyer of Arizona real estate that agrees to assume an obligation to pay a commission to the buyer's out-of-state broker may not refuse payment on grounds that the out-of-state broker is not licensed in Arizona. Adams Realty Corp. v. Realty Ctr. Invs., 149 Ariz. 405, 719 P.2d 291 (Ct. App. 1986).
Evidence was sufficient to support a finding that broker employed and paid compensation to an unlicensed salesperson in violation of subsection A of this section and § 32-2153, paragraph A6. Brown v. Arizona Dep't of Real Estate, 181 Ariz. 320, 890 P.2d 615 (Ct. App. 1995).