Washington Managing Broker Exam — All Questions

In Washington's license structure, which credential identifies the licensee a firm must designate as legally responsible for the firm's operations, records, and trust accounts?

• a.Designated broker✓
• b.Managing broker
• c.Broker
• d.Affiliated licensee

RCW 18.85.091(1)(a) makes it a minimum requirement of a firm license that the firm "designates a managing broker as the 'designated broker' who has authority to act for the firm." RCW 18.85.201 then places responsibility for the conduct of the firm's brokers and managing brokers on that designated broker, and RCW 18.85.285 makes the designated broker keep the firm's transaction records and administer its trust accounts. A Broker holds the entry credential and is the licensee being supervised. A Managing Broker has met additional experience and education and may supervise others, but a firm may have several, and holding the credential alone does not make a licensee answerable for the firm. "Affiliated licensee" is defined in WAC 308-124-300(2) as any broker or managing broker licensed to represent the firm; it describes a position, not a separate license.

To qualify to sit for the Washington managing broker examination, an applicant must generally have:

• a.ten years of licensed brokerage experience, with no further coursework of any kind required
• b.three years of full-time Washington broker experience in the prior five years plus 90 clock hours✓
• c.a four-year college degree in any field, which substitutes for both experience and coursework
• d.a passing score on the entry broker examination and nothing beyond the application fee

RCW 18.85.111(1) sets the minimum requirements: eighteen years of age, a high school diploma or equivalent, "a minimum of three years of licensed experience as a full-time real estate broker in this state or in another jurisdiction having comparable requirements within the five years previous to applying," and ninety hours of instruction that must include real estate brokerage management, business management, and advanced real estate law. WAC 308-124A-750 adds that each of those courses must be at least thirty clock hours, carry a comprehensive examination, and be completed within three years before applying. Experience alone therefore never suffices, however long, and no academic degree waives the licensed-brokerage requirement. Passing the entry broker examination is where the path begins. WAC 308-124A-713 provides the only alternative routes, for practical experience in an allied business.

A person who was unlicensed when he negotiated a sale later sues for the commission he was promised. Under RCW 18.85.331 the suit fails because the plaintiff must allege and prove he held a license:

• a.before offering to perform the transaction or procuring the promise of compensation✓
• b.at some point during the calendar year in which that transaction eventually closed at escrow
• c.by the date of closing, which is when the right to a brokerage commission finally vests
• d.within thirty days after the parties reached mutual acceptance of the agreement

RCW 18.85.331 does two things. It makes it unlawful "for any person to act as a real estate broker, managing broker, or real estate firm without first obtaining a license," and it then bars any suit for compensation "without alleging and proving that the plaintiff was a duly licensed real estate broker, managing broker, or real estate firm before the time of offering to perform any real estate transaction or procuring any promise or contract for the payment of compensation." The statute fixes the moment of licensure at the front of the deal, not at closing and not within the year, so licensing up later cannot cure the defect. Each wrong option moves the test to a later moment the statute does not use. RCW 18.85.411 separately makes acting without a license a gross misdemeanor.

Which task may an unlicensed employee of a Washington firm's property management department lawfully perform?

• a.Negotiating the rent and the lease term with a prospective tenant on the owner's behalf
• b.Signing a listing agreement for the owner's building whenever the broker is unavailable
• c.Showing a rental unit under the direct instruction of the designated or managing broker✓
• d.Accepting a share of the firm's leasing commission for each tenant she personally places

RCW 18.85.151(13) exempts a person employed or retained on behalf of the owner or the designated or managing broker whose property management work is limited to a closed list: delivering or receiving a lease application, lease, amendment, security deposit or rental payment made payable to the firm or owner; "showing a rental unit to any person, or executing leases or rental agreements," while "acting under the direct instruction of the owner or designated or managing broker"; providing information about a unit, lease, application, deposit, or rent amount; and assisting with administrative, clerical, financial, or maintenance tasks. Negotiating terms is not on that list, and signing a listing agreement is brokerage requiring a license. Paying an unlicensed person for brokerage services is separately unlawful under RCW 18.85.301(1).

WAC 308-124A-713 lets an applicant who lacks three years of broker experience qualify for the managing broker examination by showing, among other routes:

• a.five years of full-time licensed appraiser experience in good standing✓
• b.three years of unlicensed assistant work certified by a Washington firm
• c.any two years of work in a real-estate-adjacent field, licensed or not
• d.a passing score on the national portion taken in another state last year

RCW 18.85.111(1)(c) allows an applicant to be "otherwise qualified by reason of practical experience in a business allied with or related to real estate as prescribed by rule," and WAC 308-124A-713 is that rule. Its list is specific: postsecondary education with a major in real estate plus one year as an actively licensed broker; one year of full-time practice as a licensed attorney in real estate transactions; five years as a licensed mortgage broker or loan originator; five years as a licensed limited practice officer or escrow agent; five years as a licensed or certified real property appraiser; or five years managing, leasing, selling, or buying real property for a third-party corporation, limited liability company, or partnership. Each route is defined by a stated number of years in a named, usually licensed, occupation, which is why unlicensed assistant time, a loose two years in an adjacent field, and an out-of-state examination score all fall outside it.

Which statement about Washington's designated broker registration is correct?

• a.A designated broker holds a managing broker license and may serve more than one firm✓
• b.A designated broker holds a broker license and may serve only one firm at any time
• c.A designated broker is elected each year by the firm's affiliated licensees by ballot
• d.A designated broker is a separate examination-based license above managing broker

RCW 18.85.121(1) is explicit: "A designated broker must hold a license as a managing broker in accordance with RCW 18.85.111, and may act as a designated broker for more than one firm." The department registers designated brokers, and a managing broker who accepts endorsements from other firms receives a printed endorsement naming every firm served. Contrast RCW 18.85.111(3), which says a managing broker "can be licensed to one firm only at any one time" — one-firm exclusivity is a real Washington rule, but it attaches to the managing broker license, not to the designated broker role. The role is not an election; RCW 18.85.091(1)(a) has the firm designate the person and give the director the names of those with a controlling interest, and RCW 18.85.011(10) requires the designated broker to own or have a controlling interest in the firm. There is no separate designated broker examination — the credential is an endorsement on the managing broker's license.

A Washington individual license expires two years from its issuance date. If the renewal fee is never received, RCW 18.85.191 provides that the license is:

• a.canceled the day after expiration, with no route back except a fresh examination
• b.placed on inactive status indefinitely until the licensee decides to reinstate it
• c.canceled one year after expiration, after which a new license must be obtained✓
• d.renewed automatically for one year if the licensee owes no outstanding fines

RCW 18.85.191 provides that a license "expires two years from the issuance date," that it must be renewed every two years with the biennial fee, that a penalty fee applies if the application arrives after the renewal date, and that "the license of a person whose license renewal fee is not received within one year from the date of expiration is canceled," after which the person "may obtain a new license by satisfying the procedures and requirements as prescribed by the director by rule." So expiry and cancellation are different events a year apart, and WAC 308-124A-780 governs reinstating a license canceled for nonpayment. Firm licenses run on a different clock — they expire when the entity's registration or certificate of authority with the secretary of state expires. Inactive status is a separate thing entirely: under RCW 18.85.265 a licensee chooses it by delivering the license to the director.

A managing broker's license has been inactive for four years. Before it may be returned to active status, RCW 18.85.265 requires the holder to:

• a.retake and pass both portions of the managing broker licensing examination
• b.obtain a written waiver from the director, granted for good cause shown
• c.work six months under heightened supervision by the firm's designated broker
• d.take a thirty clock hour real estate course within the preceding year✓

RCW 18.85.265(3) allows an inactive license to be placed on active status on application and compliance with the chapter, and adds that "if a holder has an inactive license for more than three years, the holder must show proof of successfully completing a thirty clock hour course in real estate within one year before the application for active status." WAC 308-124A-788 lets a broker use a thirty-hour course in advanced real estate practices or real estate law for both that activation and the first active renewal. No re-examination is required, and there is no waiver mechanism. Heightened supervision is a real Washington duty but attaches elsewhere: RCW 18.85.275(6) and WAC 308-124C-145 apply it to brokers during their first two years of licensure. Note too that an inactive license renews on the same terms as an active one except that continuing education is not required while it stays inactive.

To renew an active Washington license, a broker or managing broker must complete thirty clock hours every two years, of which:

• a.all thirty hours must be taken in a live classroom, since distance courses cannot be counted
• b.three hours must be the prescribed core curriculum and three the fair housing curriculum✓
• c.fifteen hours must be a department-written examination sat at an approved PSI testing center
• d.ten hours must be a course in advanced real estate law approved by the commission

RCW 18.85.211(1) requires at least thirty clock hours of approved instruction every two years to renew, and expressly says examinations "shall not be required to fulfill any part of the education requirement." Subsection (2) carves three of those hours out for fair housing education under RCW 49.60.222. WAC 308-124A-790 adds the detail: at least fifteen of the thirty must be completed within twenty-four months of the renewal date, a portion of that fifteen being the three-hour prescribed core curriculum of WAC 308-124A-800 and the prescribed Washington real estate fair housing curriculum of WAC 308-124A-802, with failure to attest to either resulting in denial of renewal. Up to fifteen surplus hours carry forward to the next renewal. The director may limit, but does not forbid, distance education. The advanced real estate law course is a real requirement — of managing broker qualification under WAC 308-124A-750, not of ordinary renewal.