Agency Relationships, Employment Agreements and the Brokerage
Area III is 14 of the 177 counted items and covers the law of agency, fiduciary duties, listing and buyer-broker agreements, and running the brokerage itself.
Who may be paid, and by whom
A broker may employ and pay only active licensees, and a licensee may accept compensation only from the broker to whom the licensee is licensed, subject to a narrow W-2 route in A.R.S. 32-2155(A)(2). Payment through a licensed professional corporation or professional limited liability company is allowed where the licensee is licensed through that entity. A.R.S. 32-2152 bars an action to collect compensation unless the plaintiff was licensed when the services were performed.
Real estate employment agreements
Every employment agreement must be in clear language, set out all material terms including compensation, show a definite duration with inception and expiration dates, and be signed by all parties (A.R.S. 32-2151.02(A)). It cannot be assigned to another broker without the express written consent of all parties, and a licensee cannot procure a second agreement from a party already under an exclusive one without a written acknowledgment of the risk of extra commissions. Representation itself does not require a written agreement; being paid does.
Office, records and delegation
Each employing broker must maintain a definite place of business or an active statutory agent, and abandoning it without notice automatically cancels the licence and severs every affiliated licensee (A.R.S. 32-2126). A separate licence is required for each branch office (A.R.S. 32-2127). A designated broker unable to act within twenty-four hours may designate another licensee in writing for no more than thirty days. Listing agreements, purchase contracts and nonresidential leases must be reviewed, initialled and dated within ten business days of execution.
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State-specific details
State exam facts
- State regulator
- Arizona Department of Real Estate (ADRE)
- Exam vendor
- Pearson VUE
- Prelicensing education
- 90 hours of ADRE-approved broker education
- Passing score
- 75%
- Scored questions
- 180
- Time limit
- 315 minutes
Who regulates real estate brokers in Arizona?
The Arizona Department of Real Estate (ADRE) licenses brokers and salespersons. ADRE contracts with Pearson VUE to deliver the licensing exams.
What experience do I need before the Arizona broker exam?
A.R.S. § 32-2124(A)(1) requires an original broker applicant to have been an active licensed real estate salesperson or broker for at least three years during the five years immediately preceding application — the statute counts active licensure, not hours worked, so there is no full-time test. The applicant must also complete a 90-classroom-hour broker course at a commissioner-certified school and pass an examination on it (§ 32-2124(C)); the 27-hour Arizona-specific portion of that course cannot be waived. Under § 32-2136 a broker management clinic consists of three courses of three hours each, and an original broker license applicant must attend one before activating the license.
How is the Arizona broker exam structured?
The Arizona broker exam is administered by Pearson VUE with 180 scored questions (plus 15 unscored pretest items) over about 5 hours 15 minutes, and a score of 75% or higher is required to pass.
Sources: https://azre.gov, https://www.pearsonvue.com/us/en/az/realestate.html
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