Can a broker receive compensation if their license is inactive but was active when the contract was earned?

Can a broker receive compensation if their license is inactive but was active when the contract was earned?

• A. Yes, as long as the contract was earned while active
• B. No, compensation is not allowed
• C. Yes, but only under special circumstances
• D. Only if they reactivate the license immediately

Answer: (A)

The correct answer is that a broker can receive compensation if their license was active when the contract was earned. The principle behind this is that the broker performed the services and entered into a legally binding agreement while their license was in good standing. Thus, they are entitled to the commissions or fees from transactions completed during that period of active licensure, even if their license becomes inactive afterward. This underscores the importance of maintaining an active license for brokers who want to engage in real estate transactions. However, earning compensation for work done while the license was active remains valid even if the license status changes subsequently. It’s important to remember that receiving compensation for services performed while inactive would breach real estate regulations, as all real estate activities must align with licensing laws. This distinction is critical in ensuring compliance with the state regulations governing real estate practice.

The correct answer is that a broker can receive compensation if their license was active when the contract was earned. The principle behind this is that the broker performed the services and entered into a legally binding agreement while their license was in good standing. Thus, they are entitled to the commissions or fees from transactions completed during that period of active licensure, even if their license becomes inactive afterward.

This underscores the importance of maintaining an active license for brokers who want to engage in real estate transactions. However, earning compensation for work done while the license was active remains valid even if the license status changes subsequently.

It’s important to remember that receiving compensation for services performed while inactive would breach real estate regulations, as all real estate activities must align with licensing laws. This distinction is critical in ensuring compliance with the state regulations governing real estate practice.