Louisiana Real Estate Broker Exam — All Questions
5 questions
Which agency issues, renews, and disciplines real estate broker licenses in Louisiana?
- a.The Louisiana Department of Insurance
- b.The parish clerk of court where the broker practices
- c.The Louisiana Real Estate Commission (LREC)✓
- d.The Louisiana Association of Realtors
Real estate licensing in Louisiana is a state regulatory function. R.S. 37:1432(A) creates the Louisiana Real Estate Commission within the office of the governor, and R.S. 37:1435(A) gives it the power to regulate the issuance of real estate licenses, registrations and certificates, to censure licensees, and to suspend or revoke what it has issued; R.S. 37:1436(B) makes practicing without its license unlawful. The Louisiana Realtors association is a private trade body: it can set standards for the members who join it, but it cannot grant or revoke the state credential that lets someone practice. The Department of Insurance regulates a different licensed industry entirely, so a real estate licensing matter filed there would have landed in the wrong place. And a parish clerk of court works in a local records-and-courts capacity for one parish — R.S. 37:1434 puts the commission's domicile in Baton Rouge and its jurisdiction over the whole state.
Under R.S. 37:1432, the Louisiana Real Estate Commission is made up of:
- a.Seven brokers elected by the licensees of each supreme court district
- b.Nine members chosen by the Louisiana Realtors association
- c.Five members appointed by the commissioner of insurance
- d.Eleven members appointed by the governor and confirmed by the Senate✓
R.S. 37:1432(A) creates the commission within the office of the governor and fixes it at eleven members whom the governor appoints and submits to the Senate for confirmation, with seats allocated by supreme court district plus at-large and congressional-district appointees; each serves a four-year term and, under Subsection C, must have worked as a broker for at least five years before appointment. Election by the licensees is not how the seats are filled, and the number seven belongs to the supreme court districts from which some members are drawn, not to the size of the body. A private trade association nominates no one to a state regulatory board, so a slate chosen by the Realtors would have no statutory footing. And the commissioner of insurance regulates a different industry entirely; appointment power over real estate regulators lies with the governor.
A commission investigator arrives at a broker's office to examine the firm's transaction records. Under R.S. 37:1435(D), the inspection may take place:
- a.Only under a search warrant from the district court
- b.Between 9:00 a.m. and 4:00 p.m., excluding weekends and holidays✓
- c.Only during an audit noticed thirty days ahead
- d.At any hour, since escrow records are public
R.S. 37:1435(D) authorizes the commission to require licensees to keep records and to inspect them at the licensee's offices through its duly authorized representatives, and it sets the window: between 9:00 a.m. and 4:00 p.m., with Saturdays, Sundays and legal holidays excluded. The same subsection lets the commission subpoena the records, which is why no warrant is needed — records inspection is a condition of holding the license, not a criminal search. Nor does the statute build in an advance-notice period; a month's warning would defeat the point of an unannounced look at trust-account records. And the records are the broker's private business files held for regulatory inspection, not public documents open to anyone at any hour.
The commission finds that a licensee violated the license law. Beyond censure, suspension, or revocation, R.S. 37:1455 lets it levy a civil penalty of up to:
- a.$5,000✓
- b.$1,000
- c.$10,000
- d.$25,000
R.S. 37:1455(A) lists the sanctions in one sentence: the commission may censure, conditionally or unconditionally suspend or revoke a license, impose additional continuing education, and levy fines or civil penalties not to exceed five thousand dollars. One thousand understates the ceiling and would leave the commission unable to reach the more serious conduct the same section describes, such as commingling or converting a client's money. Ten thousand and twenty-five thousand overstate it; the legislature set a single figure and the commission cannot exceed it by treating one course of conduct as several. Note also that a fine is a regulatory penalty paid to the state — compensating a wronged consumer is handled separately, through the recovery fund in R.S. 37:1461.
The commission revokes a sponsoring broker's license. The licenses of the salespersons that broker sponsored are:
- a.Unaffected, because discipline is personal to the broker who committed the violation
- b.Transferred by the commission to the nearest branch office of the same firm
- c.Automatically suspended, and the broker must return them within seventy-two hours✓
- d.Revoked permanently along with the license of the sponsoring broker
R.S. 37:1448(B) makes the consequence automatic: revoking or suspending a broker's license suspends the license of every associate broker and salesperson sponsored by that broker, and the broker has seventy-two hours from notification of the final action to return their licenses to the commission. Treating the discipline as personal misses why sponsorship exists — a sponsored licensee practices only through the broker's license, so when that license stops, the authority it carried stops with it. The commission does not reassign licensees to another office; obtaining a new sponsoring broker is the licensee's own step, made under R.S. 37:1441. And the sponsored licenses are suspended rather than revoked, so a salesperson who did nothing wrong keeps the ability to resume work once a new sponsor is in place.