Virginia License Types and Broker Supervision

Virginia recognizes several types of real estate licenses, each with specific requirements and authorities.

License Types

Individual Licenses

Salesperson

A salesperson is licensed to perform real estate activities but must work under a principal broker. Salespersons cannot:

• Operate independently
• Collect commissions directly from clients
• Supervise other licensees

Broker

A broker can operate independently and supervise salespersons and associate brokers. The broker who supervises a brokerage is called the principal broker.

Associate Broker

An associate broker holds a broker license but chooses to work under another broker. They have the same supervision requirements as salespersons while working in this capacity.

Professional Corporation (PC)

Virginia allows salespersons and brokers to form Professional Corporations (PCs) to receive compensation. However:

• The PC cannot hold a real estate license
• The licensee remains responsible for activities
• Used primarily for tax and liability purposes

Principal Broker Responsibilities

The principal broker must:

1. Supervise all licensees affiliated with the brokerage
2. Maintain written policies for supervision and compliance
3. Handle escrow funds in accordance with REB regulations
4. Review advertising and marketing materials
5. Retain records for required periods (3 years)
6. Respond to REB inquiries and investigations

Supervision Requirements

Written Policies

Principal brokers must establish written policies covering:

• Supervision of licensed activities
• Escrow fund handling procedures
• Advertising guidelines
• Transaction review processes
• Record retention (minimum 3 years)
• Compensation arrangements

Broker Liability

The principal broker is responsible for:

• Acts of affiliated licensees within scope of license
• Escrow account compliance
• Proper supervision
• Timely response to complaints

Key Point: The principal broker can be disciplined for the acts of affiliated licensees if those acts result from inadequate supervision.

Business Entity Licensing

Virginia permits real estate brokerage through various business structures:

Corporation or LLC

• Must have a principal broker who holds individual broker license
• The entity itself must be licensed by the REB
• Principal broker is responsible for supervision and compliance

Branch Offices

Brokers operating from multiple locations must:

1. Notify REB of each branch office location
2. Designate a supervising broker for each branch
3. Maintain records at the branch or main office

License Transfers

When a salesperson changes employing brokers:

1. Terminating broker releases the salesperson in writing
2. New broker submits association documents to REB
3. Salesperson cannot practice during the gap
4. License remains valid but inactive until new association is filed

Compensation Rules

In Virginia:

• Salespersons receive compensation only from their principal broker
• No direct payment from clients to salespersons
• Commission splits are negotiable between broker and salesperson
• Referral fees to licensed parties only (with proper disclosure)
• Salespersons may receive compensation through a PC they own