WA Real Estate License Law — RCW 18.85 & 18.86

License Types & Requirements — RCW 18.85

RCW 18.85

Requirement

Broker

Managing Broker

Minimum age

18 years old

Education

60-hr Fundamentals + 30-hr Practices = 90 hrs total

90 hrs: 30-hr Adv. RE Law + 30-hr Brokerage Mgmt + 30-hr Business Mgmt (within last 3 yrs)

Experience

None required

3 years active broker within the last 5 years (full-time, 40 hrs/wk)

Exam

Broker's license exam (PSI)

Separate Managing Broker exam

Can supervise others?

Yes

Can be Designated Broker?

Yes — endorsement on MB license

First renewal extra requirement

30-hr Adv. Practices + 30-hr RE Law + 30-hr elective = 90 hrs

Standard 30-hr CE

Fingerprints

At first application + every 6 years on renewal

Same rule

Exam results valid for

1 year — must get licensed within 1 year of passing

1 year

Interim license

Up to 45 days — completed application acts as interim license

None — no interim license for Managing Broker

New broker review period

< 2 yrs experience → all transaction docs reviewed by MB within 5 days of client signature

N/A

Designated Broker & Firm Rules

RCW 18.85

Designated Broker

RULE Not a separate license — it's an endorsement on a Managing Broker license

DUTY Supervises ALL affiliated licensees and is liable for their actions

DUTY May delegate duties to Managing Brokers — must be in writing and signed

ILLEGAL Fee broker — allowing another to operate using your firm's name/license for a fee

DUTY On closing firm: file closing firm affidavit with DOL within 5 days

License Surrender & Termination

RULE On affiliation termination — DB must notify Director and surrender license immediately

KEY Termination date = postmark or hand-delivery date of surrendered license

ILLEGAL DB cannot condition license surrender on repayment of money to the firm

Branch Offices

Branch manager must be Managing Broker

Subdivision exemption: no separate license if within 35 miles of licensed office

Out-of-State Licensees

RULE May handle commercial WA transactions without WA license if they have written cooperation agreement with a WA firm

⏱ Key Day / Number Rules

90 hrs Pre-license education — Broker60 hr Fundamentals + 30 hr Practices

90 hrs Pre-license education — Managing Broker30 RE Law + 30 Brokerage Mgmt + 30 Business Mgmt

30 hrs CE per 2-year renewal cycle3 hrs mandatory core + 27 hrs elective

3 hrs Mandatory core CE — each cycle

2 yrs License renewal cycleExpires on same date as initial issuance

1 yr Late renewal windowPay penalty + back fees to renew

1 yr Exam results validMust get licensed within 1 yr of passing

45 days Interim license duration (Broker only)Completed application = temp license

5 days MB reviews new broker's transaction docsAfter client signature (brokers <2 yrs exp.)

5 days Closing firm affidavit to DOL

3 yrs Transaction records retentionAll files after closing

6 yrs Fingerprint re-submission on renewal

1 biz day Trust funds must be depositedBy the next business day after receipt
Saturday ≠ business day

$10K Pooled account threshold≤$10K must go to pooled; >$10K owner chooses

⏱ RCW 18.86 Agency Timing

1st contact Initial agency disclosureAt first substantial contact

Before offer Written agency agreement requiredBefore or at time of making/presenting offer

3 biz days Form 17 buyer rescission windowAfter receiving Seller Disclosure Statement

⏱ Disciplinary Timelines

20 days Request hearing after statement of charges

30 days Minimum notice before hearing date

30 days File appeal in superior courtAfter Director's decision

$1K Appeal bond required

$5K /violation Maximum DOL fine per violation

20 days Notify DOL of criminal/civil actionAfter licensee learns of complaint/judgment

30 days Cease & desist hearing (temp order)Director must hold within 30 days if requested

⏱ Reinstatement Rules

1 yr Late renewal: pay back fees + penalty only

2 yrs Reinstatement window after cancellation60 hrs courses + back fees + reinstatement penalty

>2 yrs Must re-apply as new applicantRetake exam; satisfy initial requirements

3 yrs Inactive license: reactivate requires 30-hr courseIf inactive for more than 3 years

18 mo Do Not Call: may call existing clientFor 18 months after last transaction

Education Requirements

RCW 18.85

Broker — Pre-License

Course 1 60 hrs — Real Estate Fundamentals

Course 2 30 hrs — Real Estate Practices

Total 90 clock hours

Broker — First Renewal (extra)

Advanced Real Estate Practices 30 hrs

Real Estate Law 30 hrs

CE Elective 30 hrs

First renewal total 90 hrs

All Licensees — Ongoing CE

Total per 2-year cycle 30 hrs

Mandatory Core Course 3 hrs (each cycle)

Electives 27 hrs

Must be from DOL-approved providers

License Renewal, Expiration & Reinstatement

RCW 18.85

Normal Renewal

Renewal cycle Every 2 years

Initial expiration 2 years from issuance date

Subsequent renewal date Same date every 2 years

Firm license renewal date Secretary of State registration expiration

Late / Expired

Up to 1 year late Pay back fees + penalty fee

More than 1 year — license Cancelled

Reinstate within 2 yrs of cancellation 60-hr course + all back fees + reinstatement penalty

More than 2 yrs after cancellation Must re-apply as new applicant (retake exam)

Inactive License

Inactive license = license in possession of Director of DOL

Inactive licensee may perform No licensed activities

CE required to renew inactive license? Generally not required

Reactivate after >3 yrs inactive Complete 30-hr RE course first

Trust Accounts — RCW 18.85 / WAC 308-124

WAC 308-124

Core Requirements

RULE Must be a separate account — completely apart from firm's general/personal accounts

RULE Must be in a recognized Washington financial institution

RULE Must be interest-bearing (except property management trust accounts)

RULE Trust funds must be deposited by the next business day after receiptSaturday ≠ business day for this rule

Pooled Account Rules

Deposits ≤ $10,000 Must go into pooled account

Interest on pooled account paid to State treasurer (75% Housing Trust Fund / 25% RE Education)

Deposits > $10,000 Client may choose: pooled or separate (interest to client)

Violations

ILLEGAL Commingling — mixing trust funds with personal or operating funds

ILLEGAL Conversion — using client funds for personal purposes → grounds for revocation + criminal prosecution

ILLEGAL Firm may not pay business expenses directly from trust account

ILLEGAL Accepting earnest money as a promissory note without disclosing form to seller before acceptance

Commission Payments from Trust

OK Commissions to cooperating firms may be paid directly from trust account

NOT OK Commissions to affiliated licensees — must transfer to general business account first

Property management fees — remove from trust at least Once per month

Records retention 3 years after closing

Agency Law — RCW 18.86 (REBRA)

RCW 18.86

Creation of Agency

DEFAULT A licensee who performs brokerage services for a buyer is presumed to be that buyer's agent unless a written agreement states otherwise

RULE Agency must be confirmed in writing — required under REBRA (not just common law)

TIMING Written agency agreement: before or at time of making/presenting an offer

TIMING Initial disclosure: at first substantial contact with potential client

Types of Agency (WA)

Seller's AgentFull fiduciary duty to seller

Buyer's AgentFull fiduciary duty to buyer

Dual AgencyLegal — written consent both parties required

Designated AgencyWA preferred in-house solution

Transaction BrokerNot used in WA — all licensees represent someone

Fiduciary Duties — OLDCAR

OObedience

LLoyalty

DDisclosure

CConfidentiality

AAccountability

RReasonable Care

Duties Owed to ALL Parties (even 3rd party)

ALL Reasonable care & skill · Honesty & good faith · Disclosure of material facts · Accounting · Agency pamphlet · Written agency disclosure

WA-Specific Carve-Outs

KEY Principal NOT vicariously liable for agent's acts (unlike common law)

KEY Agent's knowledge is NOT imputed to the principal in WA

Termination of Agency

BY PARTIESMutual agreement

BY PARTIESRevocation by principal (may be breach)

BY PARTIESRenunciation by agent (may be breach)

BY LAWExpiration of agreement

BY LAWFulfillment of purpose

BY LAWDeath/incapacity of principal

BY LAWDestruction of property

WA NOTEAgent death does NOT terminate — agency is with the firm, not the individual

Disclosure Requirements

RCW 18.86 / 18.85

Form 17 — Seller Disclosure Statement

Required on Most residential sales

Buyer rescission window 3 business days

After receiving Form 17 Without penalty

EXCEPTIONS New construction · Estate sales · Foreclosure sales · Certain involuntary transfers

Material Facts

RULE Must disclose all known material facts that affect value or desirability — even if seller objects

KEY Includes: known defects, environmental hazards, boundary disputes, anything affecting a reasonable buyer's decision

Licensee Acting as Principal

RULE Must disclose: (1) they are a licensee, (2) purchasing/selling for own benefit, (3) intend to make a profit

Advertising Rules

ILLEGAL Blind ads — ads that don't include the firm's name as licensed

RULE Online ads must disclose: licensee name, firm name, city/state, states licensed

EXCEPTION Licensee advertising own property: firm name not required, but must disclose they hold a license

Prohibited Practices & Illegal Acts

RCW 18.85 · WAC 308-124

Fair Housing Violations

ILLEGALBlockbusting — inducing sales by predicting a protected class is moving in

ILLEGALSteering — directing buyers to/from areas based on protected class status

ILLEGALRedlining — refusing services in areas based on demographics

ILLEGALMisrepresentation — false statements about a property

ILLEGALFraud — intentional deception to induce a transaction

Listings

ILLEGALNet listings in Washington — broker keeps everything above seller's net

ILLEGALContingent appraisals — compensation conditioned on predetermined value

ILLEGALAppraising property in which you have an interest without disclosing that interest

Financial Violations

ILLEGALCommingling — mixing trust funds with personal/operating funds

ILLEGALConversion — using client funds for personal use → revocation + criminal charges

ILLEGALKickbacks — accepting/soliciting anything of value from title insurance company or agent

Conduct Violations (URBPA)

VIOLDeceptive advertising (blind ads)

VIOLMoral turpitude relating to RE activities

VIOLIncompetence, negligence, or malpractice harming a consumer

VIOLFailing to adequately supervise staff

VIOLAiding unlicensed person in performing licensed activities

VIOLFailing to disclose licensee status when buying/selling own property

Discipline, Sanctions & Procedures

RCW 18.85

Available Sanctions (Director)

SANCTIONLicense suspension or revocation

SANCTIONFine up to $5,000 per violation (placed in RE Education Account)

SANCTIONRequired education / training

SANCTIONCensure or reprimand

SANCTIONDenial of initial or renewal license

SANCTIONCease and desist order

NOTEDirector CANNOT attach a licensee's future earnings

Procedure Steps

1Director issues statement of charges

2Licensee must request hearing within 20 days

3Hearing scheduled — at least 30 days after charges

4Sanctions take effect immediately upon receipt of order (not stayed by appeal)

5Appeal in superior court: must file within 30 days + post $1,000 bond

Criminal Liability

CRIMINALViolations are gross misdemeanors — prosecuted by county or state AG

NOTELicensee must notify DOL within 20 days of any criminal/civil action involving RE activities

Fair Housing — Federal (7) + WA Additional (5) = 12 Protected Classes

RCW 49.60

Federal Fair Housing Act — 7 Classes

1Race

2Color

3National Origin

4Religion

5Sex

6Disability

7Familial Status

Washington Additional — RCW 49.60

8Sexual Orientation

9Gender Identity

10Veteran / Military Status

11Marital Status

12Source of Income (Section 8 voucher)

WA statute RCW 49.60 — Law Against Discrimination

Antitrust — Sherman Act

Sherman Act

Four Prohibited Conspiracies

ILLEGALPrice fixing — agents from competing brokerages agreeing on commission ratesTwo agents from different firms must NEVER discuss commission rates

ILLEGALGroup boycotts — agreeing to exclude other licensees from participation

ILLEGALTie-in arrangements — conditioning sale on buyer purchasing a different product

ILLEGALMarket allocation — competitors agreeing not to operate in designated areas

NOTEMLS may NOT publish commission schedules or "recommended" rates

When a License is NOT Required

RCW 18.85

EXEMPTPersons acting for themselves (buying/selling own property)

EXEMPTAttorneys-in-fact (power of attorney) — without compensation

EXEMPTAttorneys at law — performing legal duties

EXEMPTCourt-appointed persons (receiver, trustee, executor, guardian)

EXEMPTClerical staff — secretary, bookkeeper, office personnel doing purely clerical duties

EXEMPTReferrals — if not involved in negotiation and compensation not contingent on licensee's compensation

EXEMPTProperty management employees — limited tasks under direct supervision (showing units, collecting rent)

Commissions

RULECommission is earned when the sale is made — NOT at closing. Licensee is still entitled to commission even if they're no longer with the firm at closing.

ILLEGALCannot sue for commission without proof of being properly licensed at time of service