Iowa Real Estate Broker Exam — All Questions

Iowa real estate broker licenses are issued for a term that:

• a.Runs two years and expires on the anniversary of the date the license issued
• b.Runs one year and expires on December 31 of the year the license issued
• c.Runs four years and expires on June 30 of the fourth year of the term
• d.Runs three years and expires on December 31 of the third year of the term✓

Rule 481-2003.3(2) issues broker, salesperson, trade name, branch office and firm licenses "for a three-year term, counting the remaining portion of the year issued as a full year," and rule 481-2016.4(1) repeats that all individual licenses expire on December 31 of the third year of the term. That is why the renewal deadline is a calendar date shared by every licensee rather than a personal anniversary, so a term keyed to the issue date describes a different state's system. Iowa has no four-year term and no mid-year expiration date. A one-year term would collide with the 36-hour continuing education requirement, which is measured across the whole three-year period. Branch office and trade name licenses run with, and expire with, the license they are assigned to.

An Iowa broker misses the December 31 renewal deadline. Under Iowa Code section 543B.28 and rule 481-2003.5, the broker may:

• a.Renew through March 31 by paying the renewal fee plus a $50 penalty
• b.Keep practicing for 90 days while a late renewal application is pending
• c.Renew through January 30 by paying the renewal fee plus a $25 penalty✓
• d.Renew at any time within one year with no fee beyond the renewal fee

Section 543B.28 lets a licensee who misses the expiration date renew "within thirty days following its expiration," with a reasonable penalty, and rule 481-2003.5(2)"b" fixes that penalty at $25 for an application received after midnight December 31 but before midnight January 30. Applications arriving after January 30 are treated as reinstatement under rule 481-2003.6, which costs the regular renewal fee plus $25 for each partial or full month since expiration and is available for three years; a broker who has not reinstated by December 31 of the third year following expiration is treated as never having been licensed and starts over by qualifying for a salesperson license. March 31 and the $50 figure appear nowhere in the Iowa rules. There is no grace period for practice: from the date of expiration to the date of reinstatement the broker is not authorized to act as a broker, and a lapse also terminates the authority of every salesperson assigned to that broker.

An Iowa broker files a timely, complete renewal with the proper fee but has not finished the required continuing education. The commission will:

• a.Deny the renewal and require the broker to retake the broker license examination
• b.Renew the license in active status and allow one year to make up the shortfall
• c.Suspend the license for the length of the continuing education deficiency
• d.Renew the license in inactive status until the deficient hours are completed✓

Rule 481-2003.5(4) provides that renewal applications which do not report completion of the required continuing education, but are otherwise timely and sufficient and accompanied by the proper fee, "are renewed in inactive status," and rules 481-2003.4(3) and 481-2016.6 require the licensee to submit evidence that all deficient hours have been completed before the license can be reactivated. Retaking the examination is the alternative to completing the hours only when reinstating a license that has already expired (rule 481-2003.6(1)), not when a live license is being renewed. There is no active renewal with a make-up year: an inactive licensee may not engage in any act requiring a license, which is what protects the public in the meantime. Suspension is a disciplinary sanction imposed after a contested case, and an education shortfall alone is handled as a status change instead.

Iowa's mandatory errors and omissions insurance requirement applies to:

• a.All active licensees, and self-insurance does not satisfy the requirement✓
• b.Only firms with eleven or more licensees, which may satisfy it by bond
• c.All licensees, whether active or inactive, unless the firm carries a bond
• d.Only designated brokers, who may self-insure the firm and its licensees

Section 543B.47(1) requires as a condition of licensure that all real estate licensees "except those who hold inactive licenses" carry errors and omissions insurance covering all activities under chapter 543B, and rule 481-2019.3(10) states flatly that "self-insurance does not comply with the provisions of the Iowa errors and omissions insurance law." The duty is not limited to designated brokers; every active broker, broker associate, salesperson and firm must be covered. Rule 481-2019.2(2) confirms that inactive licensees do not need coverage, so a rule reaching them as well misstates who is exempt. Firm size affects only the aggregate limit for an independently carried umbrella policy, not whether coverage is required, and a surety bond is not an accepted substitute. Independently obtained coverage must carry a per claim limit of at least $100,000, and failure to furnish proof within 20 calendar days of a commission request is prima facie evidence of a violation and grounds to deny, suspend or revoke a license (section 543B.47(6), rule 481-2019.6(6)).