Washington Managing Broker Exam — All Questions

Washington real estate licensing, including the managing broker credential, is administered under RCW 18.85 by the:

• a.Washington State Department of Licensing (DOL)✓
• b.Washington State Bar Association
• c.Washington Utilities and Transportation Commission
• d.Washington Association of Realtors

RCW 18.85.041 charges the director of the Department of Licensing with enforcing all laws and rules relating to the licensing of real estate firms, brokers, managing brokers, and designated brokers, and with granting or denying those licenses and holding hearings. The real estate commission created by RCW 18.85.021 sits alongside the director in an advisory capacity; the department is the licensing agency. The state bar association governs admission to and the practice of law rather than the licensing of real estate brokers. The commission that oversees utilities and transportation companies regulates an entirely different set of industries. The statewide association of Realtors is a private trade and membership group: it may set standards for its own members, but it cannot issue, deny, suspend, or revoke a state license.

Under the definitions in RCW 18.85.011, "commercial real estate" in Washington means any parcel of real estate in this state other than one that:

• a.lies outside the boundaries of an incorporated city
• b.is titled in the name of a corporation rather than a person
• c.contains one to four residential units✓
• d.has never previously been offered for lease or rent

RCW 18.85.011(6) defines commercial real estate as "any parcel of real estate in this state other than real estate containing one to four residential units," and the same subsection excludes a single-family residential lot or single-family units such as condominiums, townhouses, manufactured homes, or homes in a subdivision when sold or leased unit by unit, unless the property is sold or leased for a commercial purpose. The line is therefore drawn by the number of residential units and by the purpose of the deal, not by municipal boundaries, by who holds title, or by the property's rental history. The definition carries real weight: RCW 18.86.020(3) excuses a firm from having a services agreement when its broker acts as a buyer's agent solely for commercial real estate, and RCW 18.86.080(8) lets that broker give a written "Compensation Disclosure" instead.

The Washington real estate commission created by RCW 18.85.021 consists of:

• a.seven members elected by the state's licensees, who issue and revoke licenses themselves
• b.the director as chair plus six governor-appointed members who advise the director✓
• c.nine members appointed by the attorney general, who hear every license appeal de novo
• d.five members named by the state Realtor association, who set the fee schedule

RCW 18.85.021 establishes the real estate commission "consisting of the director who is the chair of the commission and six commission members who shall act in an advisory capacity to the director." The governor appoints those six for six-year terms, and the statute requires at least two from west of the Cascade mountain range and at least two from east of it; a member must have at least five years' experience performing real estate brokerage services in the state, or three years in investigative work of a similar nature. Because the members advise, the commission does not issue or revoke licenses — RCW 18.85.041 gives that to the director — and it neither hears appeals, which go to superior court under RCW 18.85.390, nor sets fees, which the director fixes under RCW 43.24.086. No private association appoints any member.

A Washington licensee wants to appeal the director's disciplinary order to superior court. RCW 18.85.390 requires the appellant to:

• a.give a $5,000 surety bond and file it with notice within 10 days of the decision
• b.give a $1,000 cash bond and file it with notice within 30 days of the decision✓
• c.post no bond at all, because the department bears the costs of every appeal
• d.obtain the real estate commission's written permission before filing a notice

RCW 18.85.390 provides that "upon instituting appeal in the superior court, the appellant shall give a cash bond to the state of Washington... in the sum of one thousand dollars," conditioned to pay costs awarded against the appellant, "the bond and notice to be filed within thirty days from the date of the director's decision." The figure is a cash bond of $1,000 and the clock is thirty days; a $5,000 surety within ten days invents both numbers. The appellant, not the department, bears cost: RCW 18.85.401 then makes the appellant pay for the certified transcript within fifteen days of notice, and failure to pay dismisses the appeal. The advisory commission has no gatekeeping role over an appeal. Note that $5,000 is a real Washington figure — it is the maximum fine per violation under RCW 18.235.110(1)(h) — but it is not an appeal bond.

RCW 18.85.361 lets the director impose on a licensee the sanctions and fines specified in RCW 18.235.110, under which a fine may not exceed:

• a.$1,000 per violation, and only after a criminal conviction has been entered
• b.$250 per violation, which is the ceiling for every profession the act covers
• c.$25,000 per violation, but only against a firm and never against a licensee
• d.$5,000 per violation, with aggravating and mitigating circumstances weighed✓

RCW 18.85.361 authorizes the director to "impose any of the sanctions and fines specified in RCW 18.235.110," and RCW 18.235.110(1)(h) permits "payment of a fine for each violation found by the disciplinary authority, not to exceed five thousand dollars per violation," adding that the disciplinary authority "must consider aggravating or mitigating circumstances in assessing any fine." The same subsection lists revocation, suspension, restriction of practice, remedial education, practice monitoring, censure or reprimand, probation, denial of an application, and other corrective action. No conviction is a precondition — discipline is administrative and runs on a preponderance of the evidence under RCW 18.85.380. The $1,000-a-day figure is real but belongs elsewhere: RCW 18.85.041(8)(e) applies it to approved real estate schools, administrators, and instructors, not to licensees. Separately, RCW 18.85.411 makes unlicensed practice a gross misdemeanor.

The $20 fee assessed on every original and renewal broker and managing broker license by RCW 18.85.451 is deposited into the:

• a.Washington real estate research account, used only for the research center✓
• b.real estate education program account, spendable only on licensee discipline
• c.state general fund, spendable on whatever purpose the legislature appropriates
• d.state housing trust fund, spendable only on affordable-housing construction

RCW 18.85.451 creates a fee of twenty dollars "assessed on each real estate broker and managing broker's original license and upon each renewal of a license," including renewals of inactive licenses. RCW 18.85.461 then creates the Washington real estate research account, provides that all receipts from that fee are deposited into it, and limits expenditures to "the purposes of RCW 18.85.471" — the real estate research center, which the director establishes by memorandum of understanding with an institution of higher learning. All three sections carry an expiration date of September 30, 2035, extended there by 2025 c 362. Each distractor names a real Washington fund with the wrong money: fines imposed under the chapter go to the real estate education program account (RCW 18.85.061 and 18.85.321), and the interest on pooled trust accounts is split under RCW 18.85.311, seventy-five percent to the housing trust fund and twenty-five percent to the education account.