Key Takeaways
- Ohio salespersons must work under a licensed broker who sponsors their license and supervises all activities
- The sponsoring broker is legally responsible for the actions of affiliated salespersons
- Ohio recognizes salesperson, broker, and foreign real estate dealer license types
- Brokers must maintain written supervisory policies and procedures
- All commissions must be paid through the sponsoring broker - never directly to salespersons
Ohio License Types and Broker Supervision
Ohio recognizes several types of real estate licenses with specific requirements and authorities.
License Types
Individual Licenses
| License Type | Authority | Supervision Required |
|---|---|---|
| Salesperson | Must work under broker | Yes - by sponsoring broker |
| Broker | Can operate independently | No - supervises others |
| Foreign Real Estate Dealer | Out-of-state subdivisions | Must register with Division |
Salesperson
A salesperson is licensed to perform real estate activities but must work under a licensed broker. Salespersons cannot:
- Operate independently
- Receive compensation directly from the public
- Supervise other licensees
- Operate their own real estate company
Broker
A broker can operate independently and supervise salespersons. Ohio brokers may:
- Operate their own real estate company
- Supervise affiliated salespersons
- Collect and distribute commissions
- Operate branch offices (with notification)
Broker Sponsorship Requirement
Critical Rule: In Ohio, you cannot obtain or maintain a salesperson license without broker sponsorship.
Sponsorship Process
- Find a broker willing to sponsor you
- Broker submits activation request to Division
- License becomes active upon approval
- Broker supervises all licensed activities
Without Sponsorship
| Status | Consequence |
|---|---|
| New applicant | Cannot receive license without broker |
| Licensed salesperson loses broker | License goes INACTIVE |
| Inactive status | Cannot perform any licensed activities |
| To reactivate | Must find new sponsoring broker |
Broker Supervision Requirements
Ohio law places significant responsibility on brokers for supervising their affiliated licensees.
Written Policies Required
Brokers must establish and maintain written policies covering:
- Supervision of all licensed activities
- Trust fund handling procedures
- Advertising and marketing guidelines
- Transaction review processes
- Record retention requirements
Broker Responsibilities
| Responsibility | Description |
|---|---|
| Supervision | Ensure salespersons follow all laws and rules |
| Training | Provide guidance on procedures and compliance |
| Review | Review transactions and advertising |
| Trust Funds | Oversee all trust account activity |
| Records | Maintain records for required retention period |
Broker Liability
The broker is responsible for:
- Actions of affiliated salespersons acting within scope
- Trust account compliance
- Advertising compliance
- Proper handling of client funds
- Timely response to complaints
Key Point: Even if a broker was unaware of a salesperson's misconduct, the broker can be held responsible if the conduct resulted from inadequate supervision.
Commission Payment Rules
The Cardinal Rule
Salespersons can ONLY receive compensation from their sponsoring broker.
| From | To | Permitted? |
|---|---|---|
| Client | Sponsoring Broker | Yes |
| Broker | Salesperson | Yes |
| Client | Salesperson directly | NO |
| Cooperating Broker | Salesperson directly | NO |
| Other Broker | Salesperson directly | NO |
Consequences of Direct Payment
A salesperson who receives compensation directly from anyone other than their broker:
- Violates Ohio license law
- Subject to disciplinary action
- May face license suspension or revocation
Transferring Between Brokers
When a salesperson changes sponsoring brokers:
- Notify current broker of intent to transfer
- Current broker releases the license
- New broker submits activation to Division
- Salesperson cannot practice during the gap
- License reactivates when new broker completes process
Important: Any pending transactions should be addressed before transfer.
In Ohio, what happens to a salesperson's license if their sponsoring broker terminates the relationship?
An Ohio real estate salesperson may receive commission payment from: