What is Broker Compliance?
The California Association of REALTORS® (C.A.R.) holds local REALTOR® associations responsible for ensuring broker compliance with the National Association of REALTORS® (NAR) Variable Dues Formula. The formula was crafted in 1972 to ensure fairness by basing member dues on the number of individuals licensed with REALTOR® principals (known as Designated REALTORS®, or DRs).
The premise is that every licensee in a firm benefits from the DR’s membership in the Association, and the DR’s dues payment should reflect all licensees in the firm — even those who are not REALTORS®.
What do I have to do to be compliant?
There are 5 possible options that you can do to comply with the NAR Variable Dues Formula:
- Pay a Non-member Assessment
- As the Designated REALTOR® (Broker), you are billed a non-member assessment for each individual who is a non-member licensee. Even when the assessment is paid, the licensee is not a REALTOR® member and there are no association benefits or services provided; it will not make this agent a member of the Local, State or National Association and this fee will be payable each calendar year. Should the agent decide to become a member, the fees to join the National, State and Local Association will be due and payable at the time of joining even if the assessment has already been paid. Use of the REALTOR® trademark is prohibited if an individual is not a REALTOR® member.
- Licensee Joins as a REALTOR®
- The licensee joins and pays REALTOR® dues and receives all the benefits, provided by NAR and C.A.R. With this option, you do NOT pay the non-member assessment.
- How to Join as a REALTOR® Member
- Terminate the Real Estate Professional from your Brokerage Office
- You terminate the non-member licensee from your brokerage office by removing his/her license from DRE records. This can be done by accessing the DRE Online Licensing System (eLicensing) or submitting the complete Salesperson Change Application (Form 214) to CalBRE. You will not be charged the non-member assessment fee for this licensee.
- CalBRE Mailing Address: P.O. Box 137003, Sacremento, CA 95813-7003
- Exemption for Referral Real Estate Professional
- Licensees working for a separate entity owned by the Designated REALTOR® (Broker), which is exclusively engaged in referring clients, can be excluded from your dues calculation. Any licensees identified on the Limited Function Referral Office (LFRO) Certification Form are excluded from paying REALTOR® Dues and the Designated REALTOR® (Broker) is not responsible for paying the non-member assessment. Submit the LFRO Certification Form to the Association Office to waive the non-member assessment fee.
- Exemption for Mortgage Loan Originators
- Affiliated MLO licensees in your firm may be excluded from your dues calculation. You must provide a list of the affiliated MLO licensees and certify that all of the listed licensees: (1) have an MLO license or endorsement; (2) are not engaged in real estate licensed activities except those for which an MLO is required; and (3) are not participants or subscribers in any 'Multiple Listing Service (“MLS”)'. Submit the MLO Certification Form to the Association Office to waive the non-member assessment fee.
Why do I need to submit a LFRO form and create a separate entity for Referral Agents?
You must submit the LFRO form because WSGVR's records indicate that your office is an active real estate office, and LFROs are required to be in a separate entity or a registered Doing Business As (DBA). If you do not have a separate entity or DBA on file with the DRE, you need to do the paperwork necessary to create another entity and/or file a DBA as soon as possible. Below is the 2-step process to create another entity and file a DBA:
- Registering a Fictitious Business Name in California
- Submitting a DBA to the DRE
You must resubmit the LFRO and MLO certifications to WSGVR every calendar year.
Why do I receive out-of-compliance notices every couple of months?
The tool C.A.R. has provided to track broker compliance is refreshed weekly, when it compares DRE records (the names of agents affiliated with your firm) with those tagged as a paid REALTOR®, a referral agent, Mortgage Loan Originator, or paid non-member. If agents are found on the DRE record for a broker’s firm but are not in any of these four categories, WSGVR is required to contact the broker.
If I don't pay now, when will my services be interrupted?
Because this process has been mandated by C.A.R., if you do not pay now, your account will be active only until C.A.R. notifies WSGVR to suspend your benefits—this will include access to zipForms®, zipForm Mobile, Electronic Signature, zipMLSConnect, Forms Advisor, Forms Tutor, zipValut, zipConsult, zipTMS (the newest Member Benefit), etc.
I have questions about Broker Compliance, who do I contact?
- Review the Broker Compliance Q&A from C.A.R.
- Please contact WSGVR’s Membership Department (626-288-6212 or firstname.lastname@example.org) with any questions.