1.1 State Real Estate Commission (SREC) Overview
Key Takeaways
- The State Real Estate Commission (SREC) regulates licensees under the Real Estate Licensing and Registration Act (RELRA), 63 P.S. Sec. 455.101 et seq.
- SREC sits in the Bureau of Professional and Occupational Affairs (BPOA) within the Pennsylvania Department of State, and writes regulations at 49 Pa. Code Chapter 35
- RELRA fixes the Commission at 11 members: 5 real estate brokers, 1 cemetery broker, 3 public members, and 2 ex officio officials
- SREC may issue, suspend, and revoke licenses, investigate complaints, and impose civil penalties up to $1,000 per violation
- The Real Estate Recovery Fund reimburses defrauded consumers up to $20,000 per claim and $100,000 aggregate per licensee
Pennsylvania State Real Estate Commission (SREC)
The State Real Estate Commission (SREC) is the Pennsylvania agency that licenses and regulates brokers, salespersons, cemetery licensees, builder-owner salespersons, rental listing referral agents, and time-share salespersons. It is created and empowered by the Real Estate Licensing and Registration Act (RELRA), codified at 63 P.S. Sec. 455.101 et seq. SREC operates inside the Bureau of Professional and Occupational Affairs (BPOA), which itself sits within the Pennsylvania Department of State. The Bureau supplies administrative and prosecutorial staff; the Commission itself sets policy and decides discipline.
SREC Composition (11 Members)
RELRA fixes the Commission's makeup. "How many members" is a recurring state-portion item, and the common distractors of 7 or 8 members are wrong. (An older diagram floating around prep sites shows 8 members — it is outdated.)
| Member Type | Number | Notes |
|---|---|---|
| Real estate brokers | 5 | Active PA broker, in the real estate business at least 10 years |
| Cemetery broker | 1 | A separate seat; licensed broker/cemetery broker, sold cemetery lots at least 10 years |
| Public (consumer) members | 3 | Not licensed in real estate; represent the public interest |
| Commissioner of Professional & Occupational Affairs | 1 | Ex officio (serves by virtue of office) |
| Director, Bureau of Consumer Protection (or a designee) | 1 | Ex officio; from the Attorney General's office |
| Total | 11 |
Note that the cemetery-broker seat is separate from the five real estate brokers — it is a distinct sixth broker-type member, not one of the five. The broker and public members are appointed by the Governor with the consent of the Senate and serve staggered five-year terms; no appointed member may serve more than two consecutive terms. The two ex officio members serve automatically. Six members constitute a quorum, and Commission action requires a majority vote of those present.
SREC Authority and Functions
| Function | Description |
|---|---|
| Licensing | Issue, renew, deny, suspend, and revoke licenses |
| Education | Approve pre-license and continuing-education (CE) providers, schools, and courses |
| Enforcement | Investigate complaints, hold hearings, impose discipline |
| Rulemaking | Adopt regulations codified at 49 Pa. Code Chapter 35 |
| Standards | Set conduct, escrow handling, recordkeeping, and advertising rules |
| Recovery Fund | Administer the Real Estate Recovery Fund for defrauded consumers |
Where Pennsylvania Real Estate Law Lives
- RELRA (the statute) — 63 P.S. Sec. 455.101 et seq.; written by the legislature.
- 49 Pa. Code Chapter 35 (the regulations) — adopted by SREC to implement RELRA.
- Real Estate Seller Disclosure Law — 68 Pa.C.S. Sec. 7301 et seq.; mandates the residential property disclosure statement.
Worked distinction: RELRA is the law the legislature wrote; Chapter 35 is the rules the Commission wrote to enforce it. If RELRA and a Commission regulation ever conflict, RELRA controls, because a statute outranks a regulation. Exam items love this hierarchy: the Commission cannot adopt a regulation that exceeds the authority RELRA grants it.
Exam Tip: SREC can impose civil penalties up to $1,000 per violation, order education, and suspend or revoke a license. Criminal prosecution — for example, practicing without a license, a misdemeanor of the third degree — runs through the courts, not the Commission. A frequent trap asks who pays consumers defrauded by an agent: the answer is the Real Estate Recovery Fund, not SREC's operating budget.
Who Needs a License (and Who Is Exempt)
RELRA requires a license for anyone who, for another and for compensation, sells, buys, leases, exchanges, auctions, or negotiates real estate, or who lists or solicits such business, or who collects rents. The "for another, for a fee" test is the key — both prongs must be present.
Common exemptions — these parties may act without a real estate license:
- An owner selling, leasing, or managing their own property
- A person acting under a valid power of attorney from the owner (not as a paid vocation)
- An attorney-at-law performing duties within the practice of law
- A court-appointed receiver, trustee, executor, administrator, or guardian acting under court order
- A resident manager of an apartment building employed by the owner or broker
- Banks and lending institutions acting in a fiduciary capacity
- A cemetery company selling its own lots through its own employees
Trap: A homeowner selling their own residence needs no license, but the moment they sell for another person for a fee, RELRA applies. Compensation plus acting for another triggers the requirement — neither prong alone does.
Real Estate Recovery Fund
The Real Estate Recovery Fund reimburses consumers who obtain a final court judgment against a licensee for fraud, misrepresentation, deceit, or conversion of trust funds in a real estate transaction but cannot collect from the licensee. The fund is financed by an assessment on licensees.
| Limit | Amount |
|---|---|
| Maximum per single claim/judgment | $20,000 |
| Maximum aggregate per licensee | $100,000 |
The consumer must first obtain a judgment and exhaust reasonable efforts to collect from the licensee before claiming against the fund. When the fund pays a claim, the responsible licensee's license is automatically suspended until the fund is repaid in full with interest. The fund never covers a claim against a person who was not licensed, and it does not cover an agent's own losses.
Disciplinary Process
A complaint typically proceeds:
- Complaint filed with the Commission or Bureau.
- Investigation by the Bureau of Enforcement and Investigation (BEI).
- Order to Show Cause / formal hearing before a hearing examiner.
- Commission order adopting findings and sanctions.
Sanctions include reprimand, civil penalty (up to $1,000 per violation), required education, suspension, or revocation. A licensee may appeal a Commission order to the Commonwealth Court within 30 days. The Commission may also issue automatic suspensions (for example, when the Recovery Fund pays out, or upon a felony conviction related to real estate).
Scenario: A salesperson commingles a $3,000 earnest-money deposit into a personal account and spends part of it. The buyer wins a $3,000 judgment but the agent has no assets. The buyer may claim against the Recovery Fund (within the $20,000 cap), and the agent's license is suspended until the fund is repaid with interest.
SREC Contact and Online Services
- Mail: P.O. Box 2649, Harrisburg, PA 17105-2649
- Phone: (717) 783-3658
- Online services: PALS — Pennsylvania Licensing System (pals.pa.gov) — used for application, renewal, broker affiliation changes, and address updates
- Website: pa.gov (Department of State, Real Estate Commission)
Knowing that PALS is the portal for nearly every licensing action is itself a testable fact, because procedural questions ask where a licensee files a change or renews.
How many members serve on the Pennsylvania State Real Estate Commission, and how are they composed?
The Real Estate Recovery Fund pays a $15,000 judgment to a consumer defrauded by a licensee. What happens to that licensee's license?
Which Pennsylvania legal source is the STATUTE that the legislature enacted, as opposed to regulations the Commission adopted?