Pennsylvania Real Estate Salesperson Licensing Examination

Key Concepts

Duties and Powers of the Commission

The Pennsylvania State Real Estate Commission operates under the Real Estate Licensing and Registration Act (RELRA), 63 P.S. §§ 455.101–455.902. Key powers include:

• Issuing, suspending, and revoking licenses for brokers, salespersons, and rental listing referral agents
• Promulgating regulations governing conduct, education, and practice standards (codified in 49 Pa. Code Chapter 35)
• Investigating complaints against licensees and conducting formal hearings
• Prescribing continuing education requirements for license renewal
• Approving pre-licensure education providers and course content
• Establishing standards of conduct and practice (Subchapter E, §§ 35.281 et seq.)
• The Commission has 6 members: 5 licensed real estate brokers (with at least 5 years' experience) and 1 consumer member, all appointed by the Governor

Complaints, Investigations, Hearings, and Appeals

• Anyone may file a complaint with the Commission against a licensee
• The Commission has authority to subpoena witnesses and documents during investigations
• Disciplinary actions include: censure, probation, suspension, revocation, civil penalties up to $1,000 per violation, and required restitution
• Licensees are entitled to a formal hearing before any disciplinary action is imposed
• Appeals follow the Administrative Agency Law — a licensee may appeal a Commission order to Commonwealth Court
• The Commission may act on its own motion (without a complaint) if it has reason to believe a violation occurred
• Grounds for discipline include: fraud, misrepresentation, violation of RELRA, conviction of a felony or crime of moral turpitude, and commingling client funds

Key Concepts

Qualifications for Licensure (§ 35.221)

• Must be 18 years of age or older
• Must be a person of good reputation for honesty, trustworthiness, and fair dealing
• Must complete 75 hours of pre-licensure education from a Commission-approved provider
• Must pass the state licensing examination
• Must be sponsored by a licensed Pennsylvania broker — a salesperson cannot hold a license independently
• Criminal history does not automatically disqualify an applicant; the Commission evaluates on a case-by-case basis

Activities Requiring a License

A license is required for any person who, for compensation or with the intent to receive compensation, performs real estate activities on behalf of another, including: - Selling, buying, exchanging, or renting real estate - Negotiating the sale, purchase, or lease of real estate - Listing real estate for sale or lease - Offering to perform any of the above acts

Acting without a license when one is required is a violation of the Real Estate Licensing and Registration Act (RELRA).

License Renewal and Reactivation

• Pennsylvania salesperson licenses renew on a two-year cycle
• Renewal requires 14 hours of continuing education (CE) per cycle, including mandatory topics set by the Commission
• CE must be completed through a Commission-approved provider
• A license that has lapsed (not renewed on time) is inactive and cannot be used to conduct real estate activities
• To reactivate a lapsed license, the licensee must complete CE requirements and pay applicable fees; if lapsed for an extended period, additional requirements may apply
• Licensees must notify the Commission of any change in name or address within 10 days

Weight: 10 questions | 25% of exam — this topic alone can make or break your score.

Key Concepts

Agency Relationships in Pennsylvania

Pennsylvania recognizes the following agency relationships under the Real Estate Licensing and Registration Act (RELRA), 63 P.S. § 455:

• Seller's Agent (Listing Agent): Owes fiduciary duties exclusively to the seller. All licensees at the listing brokerage represent the seller by default.
• Buyer's Agent: Represents the buyer. Must have a written Buyer Agency Agreement to establish this relationship.
• Dual Agent: Represents both buyer and seller in the same transaction. Requires informed written consent from both parties. Dual agents owe limited fiduciary duties to each — they cannot advocate exclusively for either side.
• Designated Agent: The broker assigns specific licensees within the same firm to represent each party separately. This avoids full dual agency. Each designated agent owes full duties to their respective client.
• Transaction Licensee: No agency relationship with either party. Performs ministerial acts only. Must still be honest and disclose known material defects.

The Consumer Notice (49 Pa. Code § 35.336)

• Pennsylvania requires licensees to provide the Consumer Notice (formerly called the "agency disclosure") at the first substantive contact with a consumer.
• "First substantive contact" means the first meeting or communication where real estate needs, financial qualifications, or motivation are discussed — not when giving out a business card or answering a basic question.
• The consumer must sign the Consumer Notice acknowledging receipt. If they refuse, the licensee must document the refusal.
• The Consumer Notice explains the types of agency relationships available — it does not create an agency relationship by itself.

Key Concepts

Advertising (49 Pa. Code § 35.305)

• All advertising must be under the broker's name as licensed — a salesperson may never advertise independently under their own name alone.
• "Blind ads" (ads that do not identify the broker) are prohibited.
• Internet advertising and team names must still include the licensed broker name.
• A salesperson cannot advertise their own services or list their own property without the broker's name appearing.

Broker/Salesperson Relations (49 Pa. Code §§ 35.281–35.292)

• A salesperson is licensed under a specific broker — they cannot perform real estate services for any other broker without proper transfer of license.
• Salespersons may only receive compensation from their employing broker, never directly from a buyer, seller, or another licensee.
• A broker is responsible for the acts of their salespersons performed within the scope of employment.
• If the broker-salesperson relationship ends, the salesperson must immediately cease activity until licensed under a new broker.
• Employment agreements between broker and salesperson must be in writing.

Funds and Accounts (49 Pa. Code § 35.325)

• All funds received by a salesperson must be turned over to the broker immediately (without delay).
• Brokers must deposit client/customer funds (earnest money, deposits) into an escrow or trust account separate from the broker's operating funds.
• Commingling — mixing client funds with the broker's own business or personal funds — is strictly prohibited and grounds for discipline.
• Brokers must maintain escrow records for 3 years and make them available for inspection by the Commission.
• Interest on escrow accounts belongs to the parties to the transaction unless otherwise agreed in writing.

Key Concepts

Property Disclosures (RESDL — Real Estate Seller Disclosure Law)

• Sellers of residential property (1–4 units) must complete a written disclosure statement before an agreement of sale is signed.
• Disclosure covers: structural/roof condition, plumbing, electrical, HVAC, water/sewer, hazardous substances (lead, radon, asbestos), zoning violations, and pending legal actions.
• Buyer has the right to rescind the agreement within 3 calendar days of receiving the disclosure, or before settlement if received at settlement.
• Licensees are not required to verify disclosure accuracy but must disclose known material defects regardless.
• Exempt transactions include: foreclosure sales, transfers between co-owners, court-ordered sales, and estate sales to certain family members.

Pennsylvania Human Relations Act (PHRA)

• Covers housing discrimination based on: race, color, religion, ancestry, national origin, sex, disability, and familial status.
• Applies to housing with 4 or more units (unlike federal Fair Housing Act, which applies to most housing with limited exemptions).
• The Pennsylvania Human Relations Commission (PHRC) enforces the act.
• Complaints must be filed within 180 days of the discriminatory act.
• Licensees violating the PHRA also risk license suspension or revocation by the Real Estate Commission.