Chapter 5 of 1625% of exam

The Louisiana Law of Agency

Area V is worth 13–15 items — another quarter of the state exam. Louisiana's real estate agency law is not the Civil Code's mandate articles but a dedicated chapter, La. R.S. 9:3891–3899, which R.S. 9:3892 applies 'notwithstanding' Civil Code Articles 2985 through 3032. LAC 46:LXVII §§3701–3705 carry the commission's disclosure rules.

Definitions That Decide Cases

R.S. 9:3891 defines the terms the rest of the chapter turns on. Ministerial acts (Paragraph 12) are acts informative in nature — answering inquiries about price, location or availability, conducting an open house, setting an appointment to view property, accompanying an inspector or appraiser, describing a property's condition on inquiry, and referrals. Confidential information (Paragraph 6) is what the client made confidential in writing or what would materially harm his position — but expressly not material information about the physical condition of the property, and it may be shared by a designated agent with his own broker to seek advice for the client. Designated agency (Paragraph 8) is the relationship presumed to exist whenever a licensee works with a client absent a written agreement providing otherwise. Dual agency (Paragraph 10) is working with both buyer and seller, or both landlord and tenant, in the same transaction — but not where the licensee is the seller of property he owns, nor where the property is owned by a real estate business of which he is sole proprietor and agent. Substantive contact (Paragraph 14) is the point in any conversation, including electronic contact, where confidential information is solicited or received.

Clients and Customers

R.S. 9:3892 presumes designated agency: a licensee is considered to represent the person he is working with unless there is a written agreement providing a different relationship or he is performing only ministerial acts. R.S. 9:3893(A) sets the duties owed a client — perform the brokerage agreement, promote the client's best interests by seeking a transaction at the price and terms stated or otherwise acceptable to the client, timely present all offers to and from the client, timely account for money and property, and exercise reasonable skill and care. Subsection B confirms that showing alternative properties, or showing the client's property to other prospects, breaches nothing, and Subsection D shields the licensee from liability for false information supplied by a customer absent knowledge it was false. Toward a customer — a person not represented — R.S. 9:3894 requires only honest and fair treatment, plus the freedom to perform ministerial acts without thereby forming a brokerage agreement. R.S. 9:3895 ends the relationship on termination, expiration or completion, with two survivals: accounting for money and property, and keeping confidential information confidential. R.S. 9:3896 provides that paying or promising compensation does not determine whether an agency relationship exists, and R.S. 9:3898 allows subagency only by written agreement, never by MLS membership alone.

Dual Agency, Vicarious Liability, and Disclosure

R.S. 9:3897(A) permits dual agency only with the informed written consent of all clients, presumed from signing the commission's dual agency disclosure form, whose prescribed language commits the dual agent to treat all clients honestly, disclose latent material defects known to him, disclose the buyer's or tenant's financial qualification to the seller or landlord, explain terms and closing costs, and provide comparable sales to both sides. Subsection B seals only three things: confidential information without that client's permission, the price the seller will take other than the listing price, and the price the buyer is willing to pay. Subsection C requires the written consent when the brokerage agreement is made or at any time before acting as a dual agent, and Subsection F lets the licensee withdraw without liability from a client who will not consent while continuing to represent the other — subject to written disclosure to both if a referral fee is involved. R.S. 9:3899 relieves the client of liability for the licensee's acts or omissions in providing brokerage services. On disclosure, LAC 46:LXVII §3703(C) requires the agency disclosure informational pamphlet or form to be provided at the time when substantive contact is made, and Subsection D requires the recipient to sign and date it, the licensee to sign as witness, and the licensee to retain it for five years; Subsection F prescribes written documentation if the consumer refuses to sign. R.S. 37:1455(A)(21) makes failing to provide the pamphlet, and where applicable the dual agency form, a disciplinary cause.

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State-specific details

State exam facts

Exam vendor
Pearson VUE
Prelicensing education
150 hours (Real Estate 201 – 90h, Real Estate 202 – 30h, Real Estate 203 Broker Responsibilities – 30h)
Passing score
75 scaled (of 100) on each portion
Scored questions
135
Time limit
240 minutes
Who regulates real estate brokers in Louisiana?

The Louisiana Real Estate Commission (LREC) licenses brokers and salespersons under the Louisiana Real Estate License Law, La. R.S. 37:1430 et seq. LREC's exams are delivered by Pearson VUE, which replaced PSI.

What experience do I need before the Louisiana broker exam?

La. R.S. 37:1437(C)(1) requires a broker applicant to have first been licensed for four years, with two of those four years occurring immediately preceding submission of the broker license application, plus 150 hours of approved broker education — at least 30 hours of it on broker responsibilities (the Real Estate 203 course).

How is the Louisiana broker exam structured?

135 scored questions in 240 minutes: an 80-question national portion in 150 minutes and a 55-question Louisiana state portion in 90 minutes, plus 5–10 unscored pretest items. Brokers must reach a scaled score of 75 out of 100 on each portion (salespersons need 70). That scaled score is not a percentage of questions answered correctly.

What does the Louisiana state portion actually test?

Pearson VUE content outline #091901 splits the 55 items five ways: the Commission's duties and powers (4–6), licensing requirements (7–9), statutes governing licensee activities (13–15), the Louisiana civil law system (13–15) and the Louisiana law of agency (13–15). Because Louisiana is a civil-law state, half the exam is civil-law and agency material — immovables, usufruct, servitudes, lesion beyond moiety, redhibition, bond for deed, reconduction, the authentic act and La. R.S. 9:3891–3899.

Sources: https://lrec.gov, https://www.pearsonvue.com/content/dam/VUE/vue/en/documents/publications/091900.pdf, https://www.pearsonvue.com/content/dam/VUE/vue/en/documents/publications/091901.pdf, https://legis.la.gov/legis/Law.aspx?d=93259

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