TITLE 18. PROFESSIONAL AND OCCUPATIONAL LICENSING

REAL ESTATE BOARD

Final Regulation

Title of Regulation: 18VAC135-20. Virginia Real Estate Board Licensing Regulations (amending 18VAC135-20-10, 18VAC135-20-30, 18VAC135-20-60, 18VAC135-20-70, 18VAC135-20-165, 18VAC135-20-225, 18VAC135-20-260).

Statutory Authority: §§ 54.1-201 and 54.1-2105 of the Code of Virginia.

Effective Date: November 5, 2025.

Agency Contact: Anika Coleman, Executive Director, Real Estate Board, 9960 Mayland Drive, Suite 400, Richmond, VA 23233, telephone (804) 367-8552, fax (866) 826-8863, or email reboard@dpor.virginia.gov.

Summary:

Pursuant to Chapters 122 and 129, 463 and 466, 479 and 495, and 505 of the 2025 Acts of Assembly, the amendments (i) add definitions of "brokerage relationship" and "brokerage services"; (ii) replace the term "moral turpitude" with "fraudulent and dishonest acts"; (iii) provide that licensees may transfer individual licenses between branch offices within the same real estate firm or sole proprietorship, as well as to or from the primary place of business or any branch office under the same firm or sole proprietorship, without incurring any transfer fees; (iv) expand the permitted activities for unlicensed employees of licensed real estate brokers to include accepting security deposits, periodic rent, and other payments as specified in the rental agreement and accepting and signing broker-approved rental agreements, state or federal required disclosures, and any documents necessary to comply with Chapter 5.1 (§ 36-96.1 et seq.) of Title 36 of the Code of Virginia related to rental transactions; and (v) stipulate that real estate broker immunity from enforcement actions does not apply when an unlicensed employee negotiates the terms of a rental agreement, which is prohibited under § 54.1-2103 of the Code of Virginia.

18VAC135-20-10. Definitions.

The following words and terms when used in this chapter shall have the following meanings unless a different meaning is provided or is plainly required by the context:

"Active" means any broker or salesperson who is under the supervision of a principal or supervising broker of a firm or sole proprietor and who is performing those activities defined in § 54.1-2100 of the Code of Virginia.

"Actively engaged" means active licensure with a licensed real estate firm or sole proprietorship in performing those activities as defined in § 54.1-2100 of the Code of Virginia for an average of at least 40 hours per week. This requirement may be waived at the discretion of the board in accordance with § 54.1-2105 of the Code of Virginia.

"Actively engaged in the brokerage business" means anyone who holds an active real estate license.

"Another state" means the same as the term is defined in § 54.1-205 of the Code of Virginia.

"Associate broker" means any individual licensee of the board holding a broker's license other than one who has been designated as the principal broker.

"Branch office" means the same as the term is defined in § 54.1-2100 of the Code of Virginia.

"Brokerage relationship" means the same as the term is defined in § 54.1-2130 of the Code of Virginia.

"Brokerage services" means the same as the term is defined in § 54.1-2130 of the Code of Virginia.

"Client" means a person who has entered into a brokerage relationship with a licensee as defined by § 54.1-2130 of the Code of Virginia.

"Firm" means any sole proprietorship (nonbroker owner), partnership, association, limited liability company, or corporation, other than a sole proprietorship (principal broker owner), which that is required by 18VAC135-20-20 B to obtain a separate brokerage firm license. The firm's licensed name may be any assumed or fictitious name properly filed with the board.

"Inactive status" means any broker or salesperson who is not under the supervision of a principal broker or supervising broker, who is not active with a firm or sole proprietorship, and who is not performing any of the activities defined in §§ 54.1-2100 and 54.1-2101 of the Code of Virginia.

"Independent contractor" means a licensee who acts for or represents a client other than as a standard agent and whose duties and obligations are governed by a written contract between the licensee and the client.

"Licensee" means real estate brokers and salespersons as defined in Chapter 21 (§ 54.1-2100 et seq.) of Title 54.1 of the Code of Virginia or real estate firms.

"Neighboring state" means the same as the term is defined in § 54.1-205 of the Code of Virginia.

"Place of business" means the same as the term is defined in § 54.1-2100 of the Code of Virginia.

"Principal broker" means the individual broker who shall be designated by each firm to ensure compliance with Chapter 21 (§ 54.1-2100 et seq.) of Title 54.1 of the Code of Virginia and this chapter and to receive communications and notices from the board that may affect the firm or any licensee active with the firm. In the case of a sole proprietorship, the licensed broker who is the sole proprietor shall have the responsibilities of the principal broker. The principal broker shall have responsibility for the activities of the firm and all its licensees. The principal broker shall have signatory authority on all escrow accounts maintained by the firm.

"Principal to a transaction" means a party to a real estate transaction, including a seller or buyer, landlord or tenant, optionor or optionee, or licensor or licensee. For the purposes of this chapter, the listing or selling broker, or both, are not by virtue of their brokerage relationship, principals to the transaction.

"Sole proprietor" means any individual, not a corporation, limited liability company, partnership, or association, who is trading under the individual's name or under an assumed or fictitious name pursuant to the provisions of Chapter 5 (§ 59.1-69 et seq.) of Title 59.1 of the Code of Virginia.

"Standard agent" means a licensee who acts for or represents a client in an agency relationship. A standard agent shall have the obligations as provided in Article 3 (§ 54.1-2130 et seq.) of Chapter 21 of Title 54.1 of the Code of Virginia.

"Supervising broker" means (i) the individual broker who shall be designated by the principal broker to supervise the provision of real estate brokerage services by the associate brokers and salespersons assigned to branch offices or real estate teams or (ii) the broker, who may be the principal broker, designated by the principal broker to supervise a designated agent as stated in § 54.1-2130 of the Code of Virginia.

18VAC135-20-30. Qualifications for licensure.

Every applicant to the Real Estate Board for an individual salesperson's or broker's license shall have the following qualifications:

1. The applicant shall have 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 salesperson in such a manner as to safeguard the interests of the public.

2. The applicant shall meet the current educational requirements by achieving a passing grade in all required courses of § 54.1-2105 of the Code of Virginia prior to the time the applicant sits for the licensing examination and applies for licensure.

3. The applicant shall be in good standing as a licensed real estate broker or salesperson in every jurisdiction where licensed and the applicant shall not have had a license as a real estate broker or real estate salesperson which that was suspended, revoked, or surrendered in connection with a disciplinary action or which that has been the subject of discipline in any jurisdiction prior to applying for licensure in Virginia. The applicant shall be in compliance with all the terms of all board orders, including but not limited to paying imposed monetary penalties and costs, plus any accrued interest and other fees, and completing imposed education.

4. In accordance with § 54.1-204 of the Code of Virginia, each applicant shall submit to fingerprinting and shall disclose the following information:

a. All misdemeanor convictions involving moral turpitude fraudulent and dishonest acts, sexual offense, non-marijuana drug distribution, or physical injury within five years of the date of the application; and

b. All felony convictions during his the applicant's lifetime.

Any plea of nolo contendere shall be considered a conviction for purposes of this subsection. The record of a conviction received from a court shall be accepted as prima facie evidence of a conviction or finding of guilt. The board, in its discretion, may deny licensure to any applicant in accordance with § 54.1-204 of the Code of Virginia.

5. The applicant shall be at least 18 years old of age.

6. The applicant shall have a high school diploma or its equivalent.

7. The applicant, within 12 months prior to submitting a complete application for a license, shall have passed a written examination provided by the board or by a testing service acting on behalf of the board.

8. The applicant shall follow all procedures established with regard to conduct at the examination. Failure to comply with all procedures established with regard to conduct at the examination may be grounds for denial of application.

9. Applicants for licensure who do not meet the requirements set forth in subdivisions 3 and 4 of this section may be approved for licensure following consideration by the board.

18VAC135-20-60. Qualifications for licensure by reciprocity.

An individual who is currently licensed as a real estate salesperson or broker in another jurisdiction may obtain a Virginia real estate license by meeting the following requirements:

1. The applicant shall be at least 18 years of age.

2. The applicant shall have a high school diploma or its equivalent.

3. The applicant shall have received the salesperson's or broker's license by virtue of having passed in the jurisdiction of licensure a written examination deemed to be substantially equivalent to the Virginia examination.

4. The applicant shall sign a statement verifying that the applicant has read and understands the provisions of this chapter and Chapter 21 (§ 54.1-2100 et seq.) of Title 54.1 of the Code of Virginia.

5. The applicant, within 12 months prior to submitting a complete application for a license, shall have passed a written examination provided by the board or by a testing service acting on behalf of the board covering Virginia real estate license law and regulations of the Real Estate Board.

6. The applicant shall follow all procedures established with regard to conduct at the examination. Failure to comply with all procedures established by the board with regard to conduct at the examination may be grounds for denial of application.

7. The applicant shall be in good standing as a licensed real estate broker or salesperson in every jurisdiction where licensed and the applicant shall not have had a license as a real estate broker or real estate salesperson that was suspended, revoked, or surrendered in connection with a disciplinary action or that has been the subject of discipline in any jurisdiction prior to applying for licensure in Virginia. The applicant shall be in compliance with all the terms of all board orders, including paying imposed monetary penalties and costs, plus any accrued interest and other fees, and completing imposed education.

8. At the time of application for a salesperson's license, the applicant must have met educational requirements that are substantially equivalent to those required in Virginia. At the time of application for a broker's license, the applicant must have met educational requirements that are substantially equivalent to those required in Virginia, and the applicant must have been actively engaged as defined by 18VAC135-20-10 for 36 of the preceding 48 months. The broker applicant's experience must be verified by an individual who has direct knowledge of the applicant's activities as defined in § 54.1-2100 of the Code of Virginia. These requirements may be waived at the discretion of the board in accordance with § 54.1-2105 of the Code of Virginia.

9. The applicant shall have a good reputation for honesty, truthfulness, and fair dealing and be competent to transact the business of a real estate salesperson or broker in such a manner as to safeguard the interests of the public.

10. In accordance with § 54.1-204 of the Code of Virginia, each applicant shall submit to fingerprinting and shall disclose the following information:

a. All misdemeanor convictions involving moral turpitude fraudulent and dishonest acts, sexual offense, non-marijuana drug distribution, or physical injury within five years of the date of the application; and

b. All felony convictions during the applicant's lifetime.

Any plea of nolo contendere shall be considered a conviction for purposes of this subsection. The record of a conviction received from a court shall be accepted as prima facie evidence of a conviction or finding of guilt. The board, in its discretion, may deny licensure to any applicant in accordance with § 54.1-204 of the Code of Virginia.

11. Applicants for licensure who do not meet the requirements set forth in subdivisions 7 and 10 of this section may be approved for licensure following consideration by the board.

18VAC135-20-70. Activation or transfer of license.

A. Any inactive licensee may activate that license with a licensed real estate firm or sole proprietorship by completing an activate form prescribed by the board. A licensee who submits an activate application to the board shall not conduct business with the real estate firm or sole proprietorship set forth in the application until the application is processed and the license is issued by the board. Continuing education pursuant to § 54.1-2105.03 of the Code of Virginia shall be completed within two years prior to activation of a license when the license has been inactive for more than 30 days. Any licensee who has not been active with a licensed real estate firm or sole proprietorship for a period of greater than three years shall be required to meet the existing prelicense educational requirements.

B. Any licensee may transfer from one licensed real estate firm or sole proprietorship to another by completing and submitting to the board a transfer application and the fee as set forth in 18VAC135-20-80. The transfer application shall include the signature of the new principal broker or supervising broker with signature authority who will be responsible for the licensee's real estate activities and shall be effective upon the principal broker or supervising broker's execution of the transfer application. For the transfer of a license between branch offices within the same licensed real estate firm or sole proprietorship, including from such firm's or sole proprietorship's primary place of business to one of its branch offices, or from a branch office to another branch office under the same primary place of business, no fee will be charged.

18VAC135-20-165. Duties of supervising broker.

Each place of business, each branch office, and each real estate team shall be supervised by a supervising broker. The supervising broker shall exercise reasonable and adequate supervision of the provision of real estate brokerage services by associate brokers and salespersons assigned to the branch office or real estate team. The supervising broker may designate another broker to assist in administering the provisions required by this section, but such designation does not relieve the supervising broker of responsibility for the supervision of the acts of all licensees assigned to the branch office or real estate team. Factors to be considered in determining whether the supervision is reasonable and adequate include the following:

1. The availability of the supervising broker to all licensees under the supervision of the broker to review and approve all documents, including leases, contracts affecting the firm's clients, brokerage agreements, and advertising;

2. The availability of training and written procedures and policies that provide, without limitation, clear guidance in the following areas:

a. Proper handling of escrow deposits;

b. Compliance with federal and state fair housing laws and regulations if the firm engages in residential brokerage, residential leasing, or residential property management;

c. Advertising;

d. Negotiating and drafting of contracts, leases, and brokerage agreements;

e. Use of unlicensed individuals;

f. Agency or independent contractor relationships;

g. Distribution of information on new or changed statutory or regulatory requirements;

h. Disclosure of matters relating to the condition of the property; and

i. Such other matters as necessary to assure ensure the competence of licensees to comply with this chapter and Chapter 21 (§ 54.1-2100 et seq.) of Title 54.1 of the Code of Virginia.;

3. The availability of the supervising broker in a timely manner to supervise the management of the brokerage services in a timely manner;

4. The supervising broker ensures the brokerage services are carried out competently and in accordance with the provisions of this chapter and Chapter 21 (§ 54.1-2100 et seq.) of Title 54.1 of the Code of Virginia;

5. The supervising broker undertakes reasonable steps to ensure compliance by all licensees assigned to the branch office, including ensuring the licensees have an active, current license;

6. The supervising broker undertakes reasonable steps to ensure only licensees undertake activities requiring a license, including:

a. Show property;

b. Hold an open house;

c. Answer questions on listings, title, financing, closing, contracts, brokerage agreements, and legal documents;

d. Discuss, explain, interpret, or negotiate a contract, listing, lease agreement, or property management agreement with anyone outside the firm; and

e. Negotiate or agree to any commission, commission split, management fee, or referral fee.

7. The supervising broker shall provide adequate supervision over the unlicensed employees or assistants under the supervision of a broker as they perform the following permitted activities:

a. Perform general clerical duties, including answering the phones, responding by electronic media, and providing information shown on the listing;

b. Submit listings and changes to MLS;

c. Follow up on loan commitments after contracts have been ratified;

d. Have keys made for listings;

e. Compute commission checks;

f. Place signs on properties;

g. Act as a courier service;

h. Schedule appointments;

i. Record and deposit earnest money deposits, security deposits, and advance rents;

j. Accept security deposits, periodic rent, and other payments as contracted for in a rental agreement;

k. Prepare contract forms for approval of the licensee and supervising broker;

k. l. Accept and sign broker-approved rental agreements, state or federal required disclosures, and any documents required for compliance with Chapter 5.1 (§ 36-96.1 et seq.) of Title 36 related to a rental transaction;

m. Prepare promotional materials and advertisements for approval of the licensee and supervising broker;

l. n. Assemble closing documents;

m. o. Obtain required public information from governmental entities;

n. p. Monitor license and personnel files;

o. q. Order routine repairs as directed by licensee;

p. r. Receive compensation for their work at a predetermined rate that is not contingent upon the occurrence of a real estate transaction; and

q. s. Perform any other activities undertaken in the regular course of business for which a license is not required.;

8. If a supervising broker is located more than 50 miles from the place of business or the branch office and there are licensees who regularly conduct business assigned to the branch office or at the place of business, the supervising broker must certify in writing on a quarterly basis on a form provided by the board that the supervising broker complied with the requirements of this section;

9. The supervising broker must maintain the records required in this section for three years. The records must be furnished to the board's agent upon request;

10. The supervising broker ensures that affiliated real estate teams or business entities are operating in accordance with the provisions of this chapter and Chapter 21 (§ 54.1-2100 et seq.) of Title 54.1 of the Code of Virginia; and

11. The supervising broker ensures that all brokerage agreements include the name and contact information of the supervising broker.

18VAC135-20-225. Audits.

A. Procedures for voluntary compliance, self audit, or third-party audit; broker immunity.

1. A principal broker or supervising broker may conduct, or may have another person conduct, an audit of the practices, policies, and procedures of his firm or sole proprietorship in accordance with § 54.1-2111.1 of the Code of Virginia. The methods and findings of the audit shall be documented as described in this subsection.

2. A principal broker or supervising broker shall notify the board in writing within 30 days following the conclusion of a self audit, or within 30 days from the receipt of the final report of a third-party audit, of any matter he believes to constitute noncompliance with the provisions of Real Estate Board regulations or law. The principal broker or supervising broker shall also submit (i) a statement that such noncompliance has been remediated or (ii) a plan to correct such noncompliance within 90 days. Failure to comply with these requirements may result in loss of immunity from regulatory enforcement action.

3. A principal broker or supervising broker shall sign and date any report made pursuant to subdivision 2 of this subsection. Such report, properly submitted, shall provide immunity from enforcement against the principal broker or supervising broker by the board for the matters reported therein in the report.

4. Immunity from enforcement action provided by this section shall not apply if the noncompliance with provisions of Real Estate Board regulations or law by the principal broker or supervising broker was intentional or was the result of gross negligence by the principal broker or supervising broker, including any actions by an unlicensed employee negotiating the provisions of a rental agreement as prohibited under § 54.1-2103 C of the Code of Virginia.

5. Immunity from enforcement action provided by this section shall apply only to the principal broker and supervising broker who conduct an audit and submit a voluntary compliance plan in accordance with this section and shall not extend to any other broker or salesperson who may not be in compliance with Real Estate Board regulations or law.

6. Failure to complete the voluntary compliance program within 90 days from the date of plan submission shall result in the loss of immunity from regulatory enforcement action. Repeated instances of a violation found as a result of an audit that was subject to the voluntary compliance program may be deemed by the board to constitute a failure to complete the prior voluntary compliance program.

B. Procedures for mandatory audit.

1. A principal broker or supervising broker shall conduct or have a third party conduct an audit at least once during each license term in accordance with § 54.1-2106.2 of the Code of Virginia. Such audit shall be documented on a form developed by the board.

2. In conducting an audit of practices, policies, and procedures of the firm or sole proprietorship, the principal broker or supervising broker or a third party shall examine and document all matters regarding the compliance by the firm or sole proprietorship with law and regulation regarding:

a. Proper handling of escrow deposits and maintenance of a complete record of financial transactions;

b. Compliance with federal and state fair housing laws and regulations if the firm or sole proprietorship engages in residential brokerage, residential leasing, or residential property management;

c. Advertising in all forms and media;

d. Negotiation and drafting of contracts, leases, and brokerage agreements;

e. Use of unlicensed individuals;

f. Agency or independent contractor relationships;

g. Distribution of information on new or changed statutory or regulatory requirements;

h. Proper documentation of required disclosures; and

i. Such other matters as necessary to assure ensure the competence of licensees to comply with this chapter and Chapter 21 (§ 54.1-2100 et seq.) of Title 54.1 of the Code of Virginia.

3. If at the conclusion of a mandatory audit the principal broker or supervising broker or third party believes there is noncompliance with the provisions of the Real Estate Board regulations or law, the principal broker or supervising broker may avail himself of use the procedures for voluntary compliance described in subsection A of this section.

Upon request by any investigator, or by another agent of the board, a broker shall cooperate in the provision of records and documents pursuant to 18VAC135-20-240 within 10 days of receipt of the request, and for other requests by the board and its agents pursuant to 18VAC135-20-250, within 21 days of receipt.

18VAC135-20-260. Prohibited acts.

The following are prohibited acts:

1. Furnishing substantially inaccurate or incomplete information to the board in obtaining, renewing, reinstating, or maintaining a license;

2. Holding more than one license as a real estate broker or salesperson in Virginia, except as provided in this chapter;

3. As a currently licensed real estate salesperson, sitting for the licensing examination for a salesperson's license;

4. As a currently licensed real estate broker, sitting for a real estate licensing examination;

5. Signing an experience verification form without direct supervision or actual knowledge of the applicant's activities as defined in § 54.1-2100 of the Code of Virginia or unreasonably refusing to sign an experience verification form;

6. Having been convicted or found guilty regardless of the manner of adjudication in any jurisdiction of the United States of a misdemeanor involving moral turpitude fraudulent and dishonest acts, sexual offense, non-marijuana drug distribution, or physical injury, or any felony, there being no appeal pending therefrom or the time for appeal having elapsed. Review of convictions shall be subject to the requirements of § 54.1-204 of the Code of Virginia. Any plea of nolo contendere shall be considered a conviction for the purposes of this subdivision;

7. Failing to inform the board in writing within 30 days of pleading guilty or nolo contendere or being convicted or found guilty regardless of adjudication of any convictions as stated in subdivision 6 of this section;

8. Having had a license as a real estate broker or real estate salesperson that was suspended, revoked, or surrendered in connection with a disciplinary action or that has been the subject of discipline in any jurisdiction;

9. Failing to inform the board in writing within 30 days of a disciplinary action as stated in subdivision 8 of this section;

10. Having been found in a court or an administrative body of competent jurisdiction to have violated the Virginia Fair Housing Act, the Fair Housing Laws of any jurisdiction of the United States, including Title VIII of the Civil Rights Act of 1968 (82 Stat. 73) or the Civil Rights Act of 1866 (14 Stat. 27), there being no appeal therefrom or the time for appeal having elapsed;

11. Actions constituting failing to act as a real estate broker or salesperson in such a manner as to safeguard the interests of the public, including the following:

a. A principal broker or supervising broker failing to ensure proper supervision and accountability over the firm's day-to-day financial dealings, escrow account, and daily operations;

b. A broker failing to disburse funds from an escrow account according to the regulations or failing to properly retain documents relating to the basis for disbursal;

c. A broker failing to ensure the licensees for whom the broker has oversight responsibility hold active licenses while practicing real estate;

d. A broker failing to provide accurate and timely reports to the board about a licensee's compliance with the board's laws and regulations;

e. A broker failing to have signatory authority on all accounts;

f. A broker failing to account for or remit any moneys coming into a licensee's possession that belong to another;

g. A licensee failing to submit to the broker in a timely manner, all earnest money deposits, contracts, listing agreements, deeds of lease, or any other documents for which the broker has oversight responsibility;

h. A licensee negotiating leases for a third party through an unlicensed firm or without a principal broker;

i. A licensee operating an unlicensed firm or acting as a principal broker;

j. A licensee practicing real estate with an inactive or expired license;

k. A licensee knowingly providing the broker with an earnest money deposit check from an account with insufficient funds;

l. A licensee allowing unsupervised access to a home without the owner's authorization;

m. A licensee failing to inform the broker of a transaction; and

n. A licensee submitting unauthorized altered copies of a contract to the broker; and

12. Actions constituting engaging in improper, fraudulent, or dishonest conduct, including the following:

a. A licensee attempting to divert commission from the firm or sole proprietorship and direct payment to a licensee or an unlicensed individual who is not a party to the transaction;

b. A licensee fabricating or altering any document with the intent to mislead;

c. A licensee signing any documents on a client's behalf without first obtaining a client's proper written permission or authorization to sign said documents on the client's behalf;

d. A licensee making an earnest money deposit payable to himself or negotiating the check without written authority;

e. A licensee misrepresenting ownership of a property;

f. A licensee submitting copies of the same earnest money deposit check for inclusion with multiple offers;

g. A licensee entering into agreements to be compensated for real estate services while the licensee's license is inactive;

h. A licensee representing in offers that the licensee received the earnest money deposit when the licensee has not or knows the check is worthless; and

i. A licensee misrepresenting who is holding the earnest money deposit.