To become a member of the Arkansas Real Estate Commission a person must be

(a) The recipient of the funds generated by such program shall be such Arkansas nonprofit corporation as the Arkansas Real Estate Commission shall designate. The corporation shall be tax exempt as defined by Section 501(c)(3) of the Internal Revenue Code. Such corporation shall be governed by a board of directors consisting of not fewer than five (5) nor more than fifteen (15) members. At least sixty percent (60%) of the total number of directors shall be appointed by the Arkansas Real Estate Commission and the remainder by the Arkansas Realtors Association.

(b) The funds generated by the program shall be used for economic development, research, education, and such other public service purposes as may be determined by the recipient corporation specified in this section.

(c) The Arkansas Real Estate Commission may promulgate such regulations as it deems necessary for the implementation of §§ 17-35-601 - 17-35-603.

RULES AND REGULATIONS

101. Broker - Application and examination.

(a) Each applicant for an original broker's license must apply on a form furnished by the Arkansas Real Estate Commission accompanied by the official certificate required by Ark. Code Ann. Sec. 17-35-303. The certificate shall state that the applicant has successfully completed within 36 months immediately preceding the date of the application a course or courses of instruction in real estate by actual classroom attendance for not less than 60 hours. This requirement shall apply to all applicants who are examined after April 1, 1992, except those applicants who are retaking only one part of the examination pursuant to paragraph (b) of this regulation, which applicants shall remain subject to the requirement which was in effect at the time the applicant passed the other part of the examination.

The applicant must also pass a written examination to show competency to act as a real estate broker in such a way as to safeguard the interests of the public. Minimum grades of 70 on the uniform portion of the examination and 75 on the Arkansas law part are required. A person who is licensed as a broker may not apply and may not be examined. A person who has passed the Arkansas real estate broker's examination but who is not licensed as a broker may apply. However, in addition to meeting other requirements, such a person will request in writing the reason for applying. Such a person may be examined only after being advised in writing by a representative of the Commission that permission is granted for him to be examined.

(b) If the applicant has taken the broker's examination in Arkansas and has passed either the Arkansas law part or the uniform part but has failed the other, the applicant need not again take the part passed. Such an applicant, however, shall be required to make new application as an original applicant and must pass the part failed within six months following the month in which the applicant first failed that part, but passed the other part, and must furnish such documentation of entitlement thereto as the Commission may require.

(c) If the applicant has passed a uniform or multi-state part of an examination for a broker's license in another state in which the examination is administered by a national testing service recognized by the Arkansas Real Estate Commission, if that state requires a minimum passing grade no lower than that required for the uniform part of the Arkansas examination, and if the applicant at the time of taking the Arkansas examination is a licensed broker in that state, then the applicant will be required to take only the Arkansas law part. However, if the applicant at the time of taking the Arkansas examination is not a licensed broker in that state, he will be required to take only the Arkansas law part provided that applicant passed the uniform or multi-state part of the examination in that state within six months prior to the month in which the applicant passes the Arkansas law part. Such applicant, however, must furnish such documentation of his entitlement thereto as the Commission may require.

102. Office - Sign and photograph.

An applicant for broker's license is required upon being otherwise qualified to furnish a photograph of the front of the applicant's place of business displaying a sign bearing his name or the name of his firm, and the words "real estate" or "realty".

The licensing department shall accept no sign as meeting this requirement until and unless such sign is clearly visible to the public and displayed in such a manner as to clearly indicate to the public that the firm is engaged in the real estate brokerage business.

If a real estate firm shall establish an office within an office building, the licensing department shall require a photograph of the office building directory showing the real estate firm's name, and also a photograph of the firm's office entrance bearing the name of the firm.

If a real estate firm shall move any sign of which a photograph has been filed with the Commission, the firm shall notify the Commission office immediately in writing of the new location and furnish a photograph of the new sign. If the firm's business location shall also change, the broker shall be required to comply with Ark. Code Ann. § 17-35-308 as well.

103. License - Issuance.

Once an applicant has passed the Arkansas real estate salesman's examination, or the Arkansas broker's examination, and has paid the prescribed license fee, the license of the applicant will be automatically placed on inactive status. This license may be activated at any time if the applicant completes a "request for initial issuance of a broker's license" form, or a "request for initial issuance of a salesman's license" form, and files the form with the Commission office.

104. Salesman - Application and examination.

(a) Each applicant for an original salesman's license must apply on a form furnished by the Commission accompanied by the official certificate required by Ark. Code Ann. Sec. 17-35-303(d). The certificate shall state that the applicant has successfully completed a course or courses of instruction, including a course of not less than 30 hours in the basic principles of real estate, by actual classroom attendance for at least 60 hours. This requirement shall apply to all applicants who are examined after April 1, 1992, except those applicants who are re-taking only one part of the examination pursuant to paragraph (b) of this regulation, which applicants shall remain subject to the requirement which was in effect at the time the applicant passed the other part of the examination.

The applicant must also pass a written examination. Minimum grades of 70 on the uniform part of the examination and 70 on the Arkansas law part are required. A person who is licensed as a salesman or as a broker may not apply and may not be examined. A person who has passed the Arkansas real estate salesman's examination but who is not licensed as a salesman may apply. However, in addition to meeting other requirements, such a person will request in writing the reason for applying. Such a person may be examined only after being advised in writing by a representative of the Commission that permission is granted for him to be examined.

(b) If the applicant has taken the salesman's examination in Arkansas and has passed either the Arkansas law part or the uniform part but has failed the other, the applicant need not again take the part passed. Such an applicant, however, shall be required to make new application as an original applicant and must pass the part failed within six months following the month in which the applicant first failed that part but passed the other part, and must furnish such documentation of entitlement thereto as the Commission may require.

(c) If the applicant has passed a uniform or multi-state part of an examination for a salesman's license in another state in which the examination is administered by a national testing service recognized by the Arkansas Real Estate Commission; if that state requires a minimum passing grade no lower than that required for the uniform part of the Arkansas examination; and if the applicant at the time of taking the Arkansas examination is a licensed salesman in that state, then the applicant will be required to take only the Arkansas law part. However, if the applicant at the time of taking the Arkansas examination is not a licensed salesman in that state, he will be required to take only the Arkansas law part, provided the applicant passed the uniform or multi-state part of the examination in that state within six months prior to the month in which the applicant passes the Arkansas law part. Such an applicant, however, must furnish such documentation of entitlement thereto as the Commission may require.

105. Examinations - Locations, times, fees.

(a) All broker's and salesman's examinations are held at various locations within the state once each month during every month except December. The examinations are normally held on the fourth Saturday of each month, unless that happens to be a holiday weekend, in which case the examination will be scheduled for another date during that month. Generally, all applications should be received in the Commission office at least thirty days before the examination which the applicant desires to sit for. However, regardless of the date on which the application is received by the Commission, it shall be processed as expeditiously as possible under the circumstances, and the applicant will be scheduled to sit for the exam on the earliest date possible.

(b) Each application for either a salesman's license or a broker's license shall be accompanied by a $50 application fee. In addition, each application for a salesman's license and each application for a broker's license shall be accompanied by an examination fee which shall equal the actual cost of the examination as established by the testing service engaged by the Commission to administer the examination. The examination fee shall be made payable to the Commission unless the applicant is otherwise notified by the Commission to pay the examination fee directly to the testing service. The application fee and the examination fee shall be charged each time an applicant applies to take an examination. However, an applicant who has taken the examination in Arkansas and is to be reexamined under the Walk-In Testing Program prescribed by the Commission and who is being examined on only the Arkansas law part or the uniform part of the examination pursuant to Regulation 101 or Regulation 104 shall not be required to pay an additional application fee when being reexamined within six (6) months following the month in which the applicant first failed either part. Neither the application fee nor the examination fee shall be subject to refund.

(c) An applicant shall receive notice upon passing the examination. Each successful broker applicant shall pay to the Commission, within 90 days from the date of the successful completion of the examination, a $60 license fee and a $25 recovery fund fee; each successful salesman applicant shall pay to the Commission, within 90 days from the date of successful completion of the examination, a $40 license fee and a $25 recovery fund fee. However, the payment of the $25 recovery fund fee shall be waived for any successful applicant who has previously paid such fee. If a successful applicant shall fail to pay the prescribed fee(s) within 90 days following the date of the examination, the examination results shall be null and void, and the applicant shall be required to make new application and retake the examination, as an original applicant.

106. Reputation for honesty - Competency.

In addition to a written examination all applicants must bear a good reputation for honesty, truthfulness and fair dealing and be competent to transact the business of a real estate broker or a real estate salesman in such manner as to safeguard the interests of the public and the Commission may at any time require information pertaining thereto.

Having advance access to a real estate licensing examination which is administered (or scheduled to be administered), or giving or receiving unauthorized assistance during the course of an examination, shall create a presumption of a violation of the real estate license law, and may subject the guilty party to appropriate disciplinary action, including license revocation or suspension.

107. Termination of affiliation - Transfer of license.

(a) When any real estate salesperson, Associate Broker or Executive Broker shall be discharged or shall terminate affiliation with the real estate Principal Broker or Executive Broker, such Principal Broker or Executive Broker shall notify the Commission of such discharge or termination and return to the Commission the license and pocket card of the terminated Broker or salesperson. Such notification shall automatically inactivate the license.

Failure of the Principal Broker or Executive Broker to so notify the Commission of such discharge or termination shall be cause for the suspension or revocation of his/her broker's license.

(b) A broker or salesperson terminated under subsection (a) above may transfer his/her license to another firm, after his/her license and pocket card have been returned to the Commission, by filing with the Commission a transfer application signed by the new Principal Broker or Executive Broker. Such transfer application must be accompanied by (1) a statement that he/she is not taking any listings, management contracts, appraisals, lease agreements, or copies of any such documents, or any other pertinent information belonging to his former Principal Broker or Executive Broker, and (2) a transfer fee. At the time the transfer application and the two accompanying items are filed, the Commission may issue a temporary interim license.

108. Office display of sign and license - Branch office.

A real estate broker must maintain an office and display a real estate sign and his broker's license, and the licenses of any salesman licensed under him. If more than one office is maintained, a real estate sign and a duplicate broker's license shall be displayed at each branch office maintained. Brokers who wish to secure a branch office license shall furnish the Commission a photograph of the office sign bearing the name of the company and the words "Branch Office". If salesmen are to be assigned to that branch office, a second duly qualified and licensed full time broker, in addition to the main office broker, must be in charge of said branch office. Such broker shall be viewed as if he were a separate firm and shall be responsible for any salesman licensed with such branch office. Any salesman employed or affiliated with such branch office shall perform only the acts contemplated to be done as a salesman under a salesman's license and the preparation of instruments in connection with a real estate sale and the closing of such a sale are functions of a broker which must be performed by or under the constant supervision of either the branch office broker or the main office broker.

If such branch office shall be located outside the community of the main office, the branch office shall be required to maintain its own escrow account and the branch office broker shall be responsible for such account. The main office broker may, however, be a signatory on such an account, and may if desired direct handling of the account. It is further understood that a license will not be granted to a salesman who operates in a different county, city or town from that of his employing broker, and that if a salesman is assigned to operate in a different town other than that of the main office broker, then the provisions of this regulation with regard to the establishment of a branch office shall apply.

109. Change of name or address - Lost license.

Upon any change of name or address shown on any license issued by the Commission, or upon the loss or misplacement of a license or pocket card, the licensee shall promptly notify the Commission of such change or loss on a form prescribed by the Commission. Failure to notify the Commission shall automatically cancel any license heretofore issued. Upon receipt of such notice and other information as may be necessary to issue a new license, the Commission shall issue a new license for the unexpired period of the license upon the payment of a $30 license reissuance fee.

110. Duplicate license.

If a real estate broker maintains more than one (1) place of business within the state, a duplicate license shall be issued to that broker upon payment of a $30 initial fee and thereafter payment of a $30 annual renewal fee. However, notwithstanding the payment of the required fee, such a duplicate license shall not be issued to a supervising broker for any additional office at which salesmen will be assigned unless such other office has another supervising broker responsible for any such salesmen.

111. Broker employed as salesman.

A licensed broker who desires to be in the employ of another broker may do so either as a broker or as a salesman, but if it is as a salesman, he must file his or her broker's license and pocket card on inactive status with the Commission, and apply for a salesman's license under such broker.

112. Renewal of license - Fees, deadlines.

(a) The fee for the annual renewal of each broker's license shall be $60. The fee for the annual renewal of each salesman's license shall be $40.

(b) Notice to renew with renewal application blanks will be sent by mail about July 15 of each year to each actively licensed broker or salesman, at the last business address furnished to the Commission, and to each person who maintains his inactive status pursuant to Regulation 113 at the last address furnished to the Commission. Renewal applications accompanied by the required fee must be filed with the Commission no later than September 30. In order to be considered filed with the Commission by the deadline, the renewal applications must bear a U.S. Postal Service postmark of September 30, or be received in the Commission's office on September 30. If September 30 shall fall on a Saturday, Sunday or legal holiday, the Commission shall accept as meeting the filing deadline those renewal applications that bear a U.S. Postal Service postmark of September 30, and those applications received in the Commission office on the first day the office is open to the public after such Saturday, Sunday or legal holiday. In the event an application for renewal of a license is filed after September 30, then such application shall be treated as an application to renew a lapsed license.

113. Inactive license.

(a) Any broker or salesman who does not wish to engage in the real estate business at the time of renewal shall apply for inactive status on renewal forms furnished by the Commission. The fee for inactive status for each renewal period shall be $60 for brokers and $40 for salesmen. Any person who shall renew his license on inactive status may do so for six (6) consecutive renewals. If he shall not activate his license before the seventh (7th) renewal, he shall be required to sit for the examination in the same manner as an original applicant. However, there shall be no limitation on the renewal of an inactive broker's license, if the individual holds an active license as a salesman at any time during the same renewal period. Also there shall be no limitation on the renewal of an inactive license if the individual holds an active license in another state. There shall also be no limitation on the renewal of an inactive license by an employee of the federal, state, county or local government if the holding of an active license would not be in the public interest. Likewise, there shall be no limitation on the renewal of an inactive license by a full-time instructor of real estate at a college, university, or business school whose course of instruction is deemed by the Commission to satisfy the educational requirements of the real estate license law.

It shall be the responsibility of any person who renews his license on inactive status to promptly notify the Commission in writing of any change of name or address.

(b) If an actively licensed broker or actively licensed salesman does not wish to continue to engage in the real estate business, such broker or salesman shall return any license and pocket card in his possession to his sponsoring broker who shall then return these items to the Commission for inactive status. If a broker shall close his firm, such broker shall remove all signs reflecting the company name and shall return all licenses and pocket cards issued to the firm to the Commission office for cancellation. If a real estate firm shall close its office, any real estate salesman licensed with such firm shall be entitled to transfer to a new firm upon compliance with Regulation 107.

114. Lapsed license.

In the event that an application for the renewal of a license, either active or inactive, is not filed prior to the renewal deadline, such license is deemed to have lapsed at the end of the renewal period. Upon reapplication within five (5) years, a person formerly licensed by the Commission may be relicensed without submitting to any examination if the applicant furnishes the information required in the Ark. Code Ann. § 17-35-304 and pays the required fees. The fee for renewal of a lapsed broker's license is $90 per year of lapse or fraction thereof and a $25 recovery fund fee; renewal of a lapsed salesman's license is $60 per year of lapse or fraction thereof and a $25 recovery fund fee. However, the payment of the $25 recovery fund fee shall be waived for any person who has previously paid such fee. A former licensee who fails to apply for renewal of a lapsed license within five (5) years shall be regarded as an original applicant.

115. Pocket card - Temporary license.

No licensee may presume that a valid license has been issued by the Commission office until such time as the licensee shall actually receive a pocket card issued by the Commission, and it shall be unlawful for any person to act as a real estate broker or salesman in this state unless said person shall possess a current valid pocket card evidencing the fact that the person holds an active real estate license and stating the firm with which the licensee is affiliated. However, the Commission may issue a temporary interim license pending issuance of the permanent license and pocket card, which temporary interim license shall be valid for a period of not more than thirty (30) days.

116. Salesperson dealing independently - Disciplinary proceedings.

If a Principal Broker or Executive Broker learns a salesperson, Associate Broker or Executive Broker licensed under him/her has, without his/her permission, engaged in real estate activities independently or through some other broker, it is his/her duty to immediately notify the Commission in writing and forward such licensee's license and pocket card to the Commission. The Commission may initiate disciplinary proceedings against the licensee under A.C.A. § 17-35-309(5), (6), (8), (10), and/or any other sections of the license law or regulations which may have been violated.

117. Change of address - Failure to notify - Cancellation of license.

Failure to notify the Commission of a change in business location shall automatically cancel any license heretofore issued. Notice of such cancellation will be sent by certified mail to the last address furnished the Commission, and if the license and pocket cards are not returned to the Commission immediately, such cancellation will be announced in at least one publication.

118. Procurement of listings without a license.

The procurement of or an attempt to procure a listing contract, either oral or written, without a real estate license is held by the Commission to be acting or assuming to act as a real estate broker or salesman and a violation of the real estate license law.

119. Specific expiration date on listing contract.

A licensee's failure to put a specific, determinable duration, or a specific expiration date on a written listing contract, or any extension thereof, shall be considered presumptive evidence of violation of Ark. Code Ann. § 17-35-309(8) and (10).

120. Regular meetings of Commission.

Regular meetings of the Arkansas Real Estate Commission shall generally be held on the Monday immediately preceding the second Tuesday of each month, and will continue in session until its business is completed insofar as is possible; provided, however, that any regular meeting of the Commission may be set forward, postponed, cancelled or adjourned to another day.

121. Place of regular meetings.

All regular meetings of the Arkansas Real Estate Commission shall be held in the Commission's offices unless otherwise specified.

122. Special meetings.

Special meetings of the Commission may be called at any time by a majority of the Commission.

123. Appearance before Commission.

Any person desiring to appear before the Commission at any of its regular meetings, to take up any business within the jurisdiction of the Commission shall, at least 15 days prior to such meeting, file with the Secretary a written request therefor, in which the nature and purpose of the appearance shall be clearly and concisely stated with sufficient details to fully apprise the Commission of the basis and extent of such business. Provided, however, that a person may not appear before the Commission in connection with any matter pending before the Commission for administrative adjudication except upon notice and opportunity for all parties to participate.

124. Commission Secretary to prepare agenda.

The Secretary of the Commission shall arrange the order of business of all meetings of the Commission and shall at least ten days prior thereto, notify all persons who are to appear before any such meeting the place and approximate time he or she is to appear before the Commission.

125. Appearance at special meeting - Voluntary.

Appearances before any special meeting of the Commission shall be voluntary on the part of any person and they must file with the Secretary, prior to any such appearance, a signed statement to the effect that such appearance is voluntary.

126. Complaints - Form.

Any and all complaints within the jurisdiction of the Commission must be in writing, dated and signed by the complainant, notarized, and filed with the Secretary. The Secretary, upon receiving any such complaint, may proceed to investigate said complaint and may take statements from any person thought to have any knowledge of any facts pertaining thereto.

127. Complaints - Procedure.

Any and every complaint which establishes reasonable cause to believe a violation of the real estate license law or Commission regulations has occurred shall be presented to and reasonably disposed of by the Commission, giving due consideration to sufficient and necessary time to investigate and consider the complaint. Any person whose complaint is dismissed by the Executive Secretary without a hearing may appeal such dismissal to the Commission in the following manner:

(a) The request for appeal must be in writing and received in the offices of the Commission not later than sixty (60) days following the date of dismissal by the Executive Secretary; and

(b) The request for appeal must be accompanied by the filing fee of $100; and

(c) The Commission staff shall determine the cost of preparing the record for the Commission's review, which cost shall be paid by the appellant prior to submission of the appeal to the Commission.

Upon submission of the appeal, the Commission shall review the written record and either uphold or overrule the Executive Secretary's decision. If the decision is overruled, the Commission may either order a hearing or request further investigation or documentation of the complaint. If the Commission review results in a hearing being ordered on the complaint, both the filing fee and the cost of preparing the record shall be refunded to the appellant.

Provided, however, that a person may not appear before the Commission in connection with any matter pending before the Commission for administrative adjudication except upon notice and opportunity for all parties to participate.

128. Licensee to be notified of complaint.

The Secretary shall notify, in writing, every licensee complained against, provided the complaint has been determined to have established reasonable cause to believe a violation of the real estate license law or Commission regulations has occurred.

129. Notice sent by mail.

Any and every Notice, Order or other instrument herein required to be forwarded or sent to any person shall be deemed sufficient if addressed to the person at his or her address as last furnished to the Commission, in a sealed envelope, and deposited in the United States Mail service, postage prepaid.

130. Hearings - Testimony under oath and recorded.

Any and every person appearing before the Commission at any of its hearings shall be first placed under oath. All testimony given or statements made to or before the Commission shall be stenographically reported and made a part of the record in such case.

131. Hearings - Procedure.

(a) At any and all meetings of the Commission at which a hearing is to be held on any complaint previously filed, the same shall be set down for a day certain by the Commission, at least 30 days prior to any such hearing date.

(b) The Secretary shall, at least 30 days prior to any such hearing date, send notice to all persons entitled to notice thereof of the place and approximate time of said hearing, a brief and concise statement of the facts forming the basis of the complaint, and the provisions of the law or the rules and regulations thought to be involved therein.

(c) Any licensee complained against and to be heard, or any complaining witness, may, by written petition, signed and dated, invoke the aid of the Commission in the procurement of any witness or document he or she may desire to be present and testify at such hearing, provided such petition is filed with the Secretary at least 7 days prior to such hearing date. Any and all costs anticipated must be deposited with the Secretary at the time of any such request.

(d) Every complaint filed with the Secretary which shall be determined to have established reasonable cause to believe a violation has occurred shall be given a file number by the Secretary and thereafter all written documents pertaining thereto shall bear that assigned file number.

(e) Each and every hearing of the Commission, after being duly called to order, shall begin with a statement by the Chairman or Vice-chairman, as to the nature of the cause to be heard, an inquiry of the parties present as to whether each is prepared to proceed, and thereafter the cause shall proceed with the presentation of evidence for and on behalf of the complainant. At the conclusion of such evidence the person complained against may then proceed to introduce evidence in contradiction, after which rebuttal testimony may be offered.

(f) Either oral or written argument of the issues raised may be called for or dispensed with at the discretion of the Commission.

(g) The Commission shall file with the Secretary its findings and conclusions as to all hearings and an appropriate Order shall be sent to the licensee involved.

(h) At any hearing both the respondent licensee and complainant may be present in the hearing room during the entire hearing and the respondent licensee shall have the right to cross examine any witness and to examine any document or evidence submitted.

(i) The Commission will receive into evidence all affidavits, depositions, certified copies of documents, photocopies of official records and exhibits therewith introduced, together with such other evidence as may be admissible by law. The Commission shall give to such evidence such weight as the Commission shall determine just and proper.

(j) Every pleading, motion or other document, and every request to the Commission must be filed with the Secretary in writing, signed, dated and in quintuplicate.

(k) No attorney shall withdraw his appearance in any cause before this Commission except by leave of the Commission after notice served by him on his client and counsel for the Commission.

132. Use of trade name or insignia.

The use of the term "REALTOR", "REALTIST" or any trade name or insignia of membership of any real estate organization of which the licensee is not a member shall be held by the Commission to be prima facie evidence of violation of Ark. Code Ann. § 17-35-309(1).

133. Broker responsibilities - Instructing and supervising salespersons and brokers.

Principal Brokers and Executive Brokers have the duty and responsibility to instruct those brokers and salespersons licensed under them with regard to the fundamentals of real estate practice and the ethics of the profession, and to keep them informed and abreast of all changes and developments pertaining to the Arkansas Real Estate License Law and Commission Regulations. They shall also exercise strict supervision of the real estate activities of all those licensed under them and for whom they have supervisory responsibility.

Whether or not a Principal Broker or Executive Broker has discharged these responsibilities for those licensed under him/her will depend on various factors and circumstances, including, without limitation, the following:

1. Frequency and manner of contact and communication;

2. Type and frequency of educational and instructional activities;

3. Method and frequency of monitoring sales activities.

134. Advertisements to include firm name.

The holder of a real estate license may not advertise for sale or rent, or display a real estate sign without including in that advertisement or sign the name of the firm with whom that licensee is affiliated.

135. Knowledge of property offered for sale.

A licensee shall exert reasonable efforts to ascertain those facts which are material to the value or desirability of every property for which the licensee accepts the agency, so that in offering the property the licensee will be informed about its condition, and thus able to avoid intentional or negligent misrepresentation to the public concerning such property.

136. Detrimental character of property or use.

A licensee shall not be instrumental in introducing into a neighborhood a character of property or use which will clearly be detrimental to property values in that neighborhood.

137. Handling of funds - Maintenance of records.

(a)

(1) A broker shall not commingle with his own personal funds or place in his own personal bank account moneys coming into his hands which belong to others such as escrows, trust funds, client's moneys, earnest moneys, rents, advance fees, and other items; and he shall also maintain at all times an accurate and detailed record of any such moneys coming into his possession and belonging to others. Such records shall be maintained by the broker for three years or for such time as may be required by law, whichever shall be greater.

(2) A broker shall deposit all advance fees in the broker's trust account and shall disburse such funds only in accordance with the terms of a written agreement signed by the owner of the funds. If such written agreement is not received within a reasonable time after payment of the advance fee, the fee shall be refunded to the owner.

(b) Each firm shall maintain complete records of each transaction conducted by that firm. It shall be required for each firm to maintain a file of each listing that firm shall take. It shall also be required of each firm that the firm maintain signed copies of all offers, offer and acceptance contracts, signed copies of all closing statements, and any additional documents as may be necessary to make a complete record of each transaction effected by such firms. A file shall be maintained by each firm of each transaction effected by such firms. Complete records and copies of all instruments, contracts and all financial transactions with regard to property managed for others shall be maintained by such firms. All such records shall be maintained by the firm for three years or such time as may be required by law whichever shall be greater. Such records shall be open to inspection by the investigative staff of the Arkansas Real Estate Commission.

(c) When a real estate firm ceases to do business and to maintain an office, the last real estate broker remaining with the firm shall be responsible for all records of the firm, including the firm's real estate trust account and transaction records, and he shall at the time the real estate firm's office is closed, immediately notify the Commission of the address and phone number of the place where those records are being maintained; and, if for any reason that broker delivers custody or responsibility for those records to another person or firm, he shall immediately notify the Commission of such transfer and furnish the name, address and phone number of such person or firm. A violation of this regulation shall be deemed by the Commission to be prima facie evidence of violation of Ark. Code Ann. § 17-35-309(8) and (10).

138. Trust account - Earnest money.

(a) Each firm shall maintain a separate trust account for all funds belonging to others. The principal broker of the firm shall be held solely responsible and accountable for any and all disbursements from the trust account. Except as authorized by subsection (f) of this regulation, the trust account shall be non-interest bearing and it shall not contain any funds belonging to the broker, firm, or any member of the firm. However, the broker may maintain a sufficient fixed amount of personal funds to insure that the bank will not charge a service or maintenance fee for the account. The name on the account should include either "trust" or "escrow" and must be located in an institution insured by either the FDIC or some other insuring agency of the federal government.

(b) With regard to each separate trust account, the principal broker shall submit to the Commission in writing the following:

1. Name and number of the account.

2. Name and address of the bank.

3. Date the account was opened.

(c) The information referred to in the immediately preceding paragraph shall be submitted to the Commission within ninety days after the effective date of this regulation, and thereafter it shall be submitted immediately upon any of the following events or occurrences:

1. Commission approval of real estate firm name.

2. Change of real estate firm name.

3. Designation of new principal broker.

4. The account is changed in any respect.

(d) Within one working day following acceptance of an offer by the seller, all earnest money funds shall be (1) deposited in the trust account, or (2) delivered to the broker's escrow agent. All other funds delivered to the broker pending performance of any act shall be, within one working day (1) deposited in the trust account, or (2) delivered to the broker's escrow agent. If the broker shall deliver funds to an escrow agent, he shall maintain an accounting of all such funds and shall keep in his file a signed receipt from the escrow agent for such funds. Likewise, a broker shall at all times keep detailed records of all funds coming into his possession and all disbursements made by him. Such records shall be open to inspection by the investigative staff of the Commission.

(e) All security deposits made under a rental or lease agreement shall be deposited in the principal broker's trust account, including those deposits made on property owned by any broker or salesperson licensed under the principal broker unless the broker or salesperson who owns the property has a written agreement with the tenant providing that he/she may keep the security deposit in his/her separate account. A copy of any such agreement shall be furnished to the Principal Broker.

Provided, however, that the Principal Broker shall not be responsible for the failure of those licensed under him/her to comply with this subsection (e) as long as he/she is in compliance with Regulation 133.

(f) Nothing in this regulation shall be deemed to prohibit a broker from maintaining certain funds or deposits in particular transactions in an interest-bearing account when required to do so by law or valid regulation of any governmental agency, nor shall it prohibit a broker from maintaining an interest-bearing account while participating in the Interest on Real Estate Brokers' Trust Account program authorized by Act 340 of 1989.

139. Advertising - Full disclosure.

(a) A real estate brokerage firm shall not advertise or otherwise conduct real estate brokerage business under any name other than the name in which the firm's real estate license has been issued.

(b) A broker in his public advertising shall be especially careful to present a true picture and should not indulge in the practice of blind ads or permit salesmen to use individual names or telephone numbers, unless the salesmen's connection with the broker is obvious in the advertisement.

140. Contracts and financial obligation in writing - Copies to all parties.

(a) Except as provided in subparagraph (b) below, a licensee, for the protection of the public and of all parties with whom he deals, shall see that financial obligations and commitments regarding real estate are in writing, expressing the exact agreement of the parties, and that copies of such agreements are placed in the hands of all parties involved. (Examples: Offer and acceptance contracts, closing statements, lease agreements, management agreements, etc.) If a real estate broker or salesperson shall fail to voluntarily place copies of such contracts and statements into the hands of all affected parties such action shall be deemed by the Commission to be prima facie evidence of violation of Ark. Code Ann. § 17-35-309(8) and (10).

(b) It is strongly recommended that listing agreements be in writing.

141. Fidelity to client - Fairness to all parties.

In accepting employment as an agent, a broker pledges himself to protect and promote, as he would his own, the interests of the client he had undertaken to represent; this obligation of absolute fidelity to the client's interest is primary, but does not relieve a broker from the equally binding obligation of dealing fairly with all parties to the transaction.

142. Dual agency - Full disclosure required.

Since a broker presumptively is representing one or another party to a transaction, he shall not accept compensation from more than one party without the full knowledge of all parties to the transaction.

143. Self-dealing - Full disclosure required.

Licensees shall not buy or sell property for themselves or for a corporation or partnership in which they have an interest without first making full disclosure to the buyer or seller, as the case may be, of the exact facts that they are licensed as a real estate broker or salesperson and are buying the property for their own account or have an interest in the property which they are selling. All such disclosures must be made in writing before the contract of sale is entered into.

144. Sale or management of property - No secret profits.

When acting as agent in the sale or management of property, a licensee shall not accept any commission, rebate, profit or payment from any source in connection with the property without full written disclosure to the party represented by the licensee.

145. Appraisals.

When asked for a formal appraisal of real property, a licensee should never give an unconsidered answer; his counsel constitutes a professional service which he should render only after having ascertained and weighed the facts, and then in writing over his signature; for this service he should make a fair charge. A licensee must not undertake to make an appraisal on any property in which he is in any way financially interested, unless such interest is specifically disclosed in the appraisal report; under no circumstances should he undertake to make a formal appraisal when his employment is contingent upon the amount of his appraisal.

146. Property offered as agreed with owner.

A broker shall not submit or advertise property without authority and in any offering the price quoted must not be other than that agreed upon with the owners as the offering price.

147. Offer and Acceptance.

(a) Subject to the provisions of Regulation 148, any formal offer received on a specific property shall promptly be presented by the listing broker or listing salesperson to the seller for his consideration. In the event that more than one formal offer is made before the seller has accepted a proposal, all offers shall be presented to the seller for his decision.

(b) Every offer received must be signed by the salesperson or Associate Broker who receives it and by either the Principal Broker or the Executive Broker who is responsible for supervising the salesperson or Associate Broker. Every acceptance must bear the names, but not necessarily the signatures, of the salesperson, Associate Broker or Executive Broker who takes the listing and of either the Principal Broker or the supervising Executive Broker. (It is desirable for the Principal or supervising Executive Broker to review and sign each offer before it is submitted to the seller, although that is not always possible. However, the Principal or supervising Executive Broker shall review and sign the offer as soon as possible after it is received, and, in all cases, prior to closing.)

148. Exclusive listing and management contracts - No circumvention.

If a firm shall hold an exclusive listing contract on a parcel of property, all other firms shall present any offer they shall receive on that property to the firm holding the exclusive listing contract not later than the close of the next business day after the receipt of the offer. Likewise, all earnest moneys and deposits shall be forwarded to the listing firm for deposit in the listing firm's trust account. The listing firm shall then present the offer to the seller. The selling broker or salesperson may accompany the listing broker or salesperson with his/her permission, but he/she shall not contact the seller alone unless he/she shall have prior written permission from the listing broker. Under no circumstances may a broker or salesperson negotiate with a seller/owner who has an exclusive listing or management contract with another firm without prior permission from the listing/managing firm. A licensee who knowingly circumvents an exclusive listing or management contract or who negotiates directly with a seller/owner without permission will have presumptively violated Ark. Code Ann. § 17-35-309(8) and (10).

149. Signs.

Signs offering or advertising a property may be on the property only during the existence of a listing agreement, unless otherwise authorized by the owner.

150. Reporting violations.

It is the duty of each licensee to report in writing to this Commission any information coming to his or her knowledge which is or may be (1) a violation of the real estate license law; or (2) a violation of the Commission rules and regulations.

151. Out of state property.

Brokers who propose to engage in sales of a promotional nature in Arkansas of property located outside of Arkansas, must submit to the Commission full particulars regarding such property and the proposed terms of sale, and they and their salesmen must comply with such rules, restrictions, and conditions pertaining thereto as the Commission may impose. All expenses incurred by the Commission in investigating such property and the proposed sale thereof in Arkansas, shall be paid by the applying broker to the State of Arkansas. No broker or salesman shall in any manner refer to the Arkansas Real Estate Commission, or to any officer or employee thereof in selling, offering for sale, or advertising, or otherwise promoting the sale, mortgage or lease of any such property, nor make any representation whatsoever that such property has been inspected or approved or otherwise passed by said Commission or by Commission official or employee.

152. Criminal convictions - Disciplinary actions.

(a) Conviction of, or a plea of guilty or nolo contendere to, a crime involving moral turpitude or which involves dishonesty, untruthfulness or untrustworthiness shall be deemed noncompliance with and a prima facie violation of A.C.A. § 17-35-302 and § 17-35-309(8) and (10).

(b) A licensee convicted of any crime other than a traffic violation shall make written report thereof to the Commission within thirty (30) days after the conviction. The report shall include the date of the offense and of the conviction, the name and address of the convicting court, the specific crime for which convicted, the fine, penalty and/or other sanctions imposed, and copies of the charging document and judgment of conviction. The report shall also include the licensee's explanation of the circumstances which led to the charge and conviction, along with any other information which the licensee wishes to submit.

(c) A licensee who has a real estate broker's or salesperson's license denied, revoked or suspended shall make written report thereof to the Commission within thirty (30) days after such denial, revocation or suspension. The report shall include the date of the action, the name and address of the regulatory agency which has taken the action and copies of documents pertaining thereto. The report shall also include the licensee's explanation of the circumstances which led to the denial, revocation or suspension, along with any additional information the licensee wishes to submit.

(d) An applicant for a real estate license who has been convicted of or pleaded guilty or nolo contendere to any crime other than a traffic violation or who has had a real estate broker's or salesperson's license denied, revoked or suspended shall furnish the written report referred to in subsection (b) and/or (c) hereof to the Commission at the time his/her application is submitted if such conviction, plea, denial, suspension or revocation has already occurred; otherwise such report shall be made immediately after the conviction, plea, denial, suspension or revocation occurs.

153. Approval of company name.

The Arkansas Real Estate Commission shall issue no broker's license to a firm where the issuance of such license shall be confusing to the public. It shall be the duty of the person requesting a broker's license to inquire of the Commission concerning the acceptability of the proposed company name.

154. Part-time brokers.

No broker who is gainfully employed, or who is engaged in a non-real estate related field, may employ any salesman to work under the broker's license issued to such broker. A broker who is employed or who is engaged in any field other than real estate will be presumed to be gainfully employed, or engaged in a non-real estate related field. This presumption may be overcome by proof that such employment, or the affiliation is (1) proven to be in a real estate related field; and (2) conducted in the same office as the broker's real estate business.

155. Dishonored checks.

Any applicant or licensee who shall submit to the Commission a check or bank draft which is not honored by the bank shall not be eligible to take any examination, or receive any grade or license from the Commission until such time as such check is honored. The Commission in its discretion may order any such applicant or licensee to appear before it for the purpose of determining whether or not he/she has the necessary qualifications for licensure, including a good reputation for truthfulness and fair dealing and competency to act in such manner as to safeguard the interests of the public.

The Commission shall charge a fee not to exceed $25.00 for a dishonored check or bank draft and shall also require such check or bank draft to be made good immediately by the maker. If such person shall be a real estate salesperson, Associate Broker or Executive Broker, and shall fail to make such check or bank draft good, the Commission may require such funds from the Principal Broker under whom such person is licensed.

156. Overpayment of fees.

In the event that an applicant or licensee shall submit to the Commission any funds which are in excess of the funds required by the Commission pursuant to Commission rule or state law, the Commission shall refund such overpayment according to the following schedule: If the overpayment is at least $0.01, and not more than $10.00, no refund shall be made; if the overpayment shall exceed $10.00, the Commission shall first deduct $10.-00 for processing the refund check, and shall refund the remainder of the overpayment.

157. Syndication of real estate.

A real estate license does not empower the bearer to engage in the business of syndication of real estate or marketing of real estate securities, or to act as a securities broker dealer in this state. Similarly, a real estate license does not empower the bearer to act as mortgage loan company or a mortgage loan broker in this state. Any real estate licensee wishing to engage in such practices shall be properly registered or exempted from registration with the Arkansas Securities Department. Any finding by a court of competent jurisdiction or the Arkansas Securities Commissioner that a real estate licensee has violated either the Arkansas Securities Act or the Arkansas Mortgage Loan Brokers Act shall be taken by the Commission to be presumptive evidence of violation of Ark. Code Ann. § 17-35-309(8) and (10).

158. Real estate closings.

It is generally the responsibility of the Principal Broker of the listing firm to ensure that the real estate closing is conducted properly and in accordance with the agreement of the buyer and seller. In those cases where the listing Principal Broker is excluded from participating in the closing, he/she must nevertheless make all reasonable efforts to fulfill this responsibility.

159. Death or incapacity of broker - Continuation of business.

Upon the death or incapacity of a principal broker or the closing of a real estate company for any reason, including bankruptcy, the Commission may in its discretion, based upon the merits and circumstances of each case, permit the real estate company to continue operating for a period of time not to exceed one hundred eighty (18 0) days under the supervision of a person approved by the Commission and subject to conditions prescribed by the Commission.

CONTINUING EDUCATION REGULATIONS

201. Delegation of authority - Appeal.

The Commission may delegate any of its authority or responsibility under Act 453 of 1987 and these regulations to its Secretary. Any person who considers himself aggrieved by any decision of the Secretary may, upon written request, appeal such decision to the Commission. The Commission shall then review the written record and sustain or overrule the Secretary's decision.

202. Waiver - Procedure.

Each request for a waiver shall be in writing and shall be supported by clear and convincing evidence. The Commission shall acknowledge each such request and shall announce its decision in writing, along with any terms and conditions to which the waiver, if granted, is subject.

203. Lapsed license.

A person who applies to renew a lapsed license under Ark. Code Ann. § 17-35-307(c) will be considered to be in the same status as a person holding an inactive license.

204. Certificate of Attendance.

The certificate of attendance required by Section 8 of Act 453 of 1987 [Ark. Code Ann. § 17-35-508 ] shall be in such form and shall contain such information as the Commission shall prescribe.

205. Approval of continuing education courses by State Board of Private Career Education.

Only those courses which are approved by the State Board of Private Career Education or which are exempted from such approval by Section 5(a) of Act 814 of 1991 [Ark. Code Ann. § 17-35-506(a) ] shall be accepted by the Commission for continuing education credit.

How are the members on the Arkansas Real Estate Commission selected?

What are the requirements to be a realtor in Arkansas?

What disqualifies you from being a real estate agent in Arkansas?

What is the CE requirement for new licensees in Arkansas?