Regulations Governing Licensee Activities
This is the most heavily weighted Pennsylvania state topic, covering the rules that govern how licensees conduct business under the Real Estate Licensing and Registration Act (RELRA) and the Commission's regulations in 49 Pa. Code. These rules protect the public and define professional conduct.
Handling of Funds and Escrow
In Pennsylvania a salesperson who receives an earnest money deposit must promptly deliver it to the employing broker, who deposits it into a separate escrow or trust account. Salespersons may not hold consumer funds, and brokers may not commingle escrow money with their own funds. Deposits are held until the transaction closes or the funds are lawfully disbursed. These safeguards protect consumer money and are strictly enforced by the Commission.
Compensation and Supervision
A Pennsylvania salesperson may be paid only by the broker who holds the salesperson's license, never directly by a buyer, seller, or other party. The broker is responsible for supervising affiliated licensees and ensuring their activity complies with the law. Brokers must maintain a fixed office and display licenses as required. This structure places accountability for consumer protection on the broker.
Recordkeeping and Prohibited Conduct
Brokers must keep complete records of each transaction for at least three years and make them available for the Commission's inspection. RELRA prohibits conduct such as misrepresentation, false advertising, commingling of funds, and acting for more than one party without consent. Violations can lead to fines, suspension, or revocation of a license. Understanding these prohibitions is central to lawful practice in Pennsylvania.