Broker Compliance

Ensuring Ethical Operations

Broker Compliance

Shields Brokers from Transaction Risks

Broker Compliance

At the the Core of Client Protection





What is Broker Compliance?

Broker compliance is a critical element of running a successful real estate brokerage. Compliance refers to the laws, regulations, and policies governing the real estate industry. These regulations protect consumers, maintain transparency, and ensure fair and ethical transactions.

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 ensures fairness by basing member dues on the number of individuals licensed with REALTOR® principals (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®.

Broker Compliance, how to identify your agents

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Choose the option that best applies to you or your agent.

A non-member licensed salesperson is an individual who holds a real estate license but is not a member of the National Association of REALTORS® (NAR) or any affiliated local, state, or national REALTOR® associations. The non-member licensed salesperson operates independently from the REALTOR® community and does not have access to the benefits or services typically offered to members of these associations.

The Designated REALTOR® (Broker), is billed a nonmember assessment of $520 for each individual who is a nonmember licensee. While non-members may work under the supervision of a Designated REALTOR® (Broker), it is essential to note that the non-member licensed salesperson is not considered a REALTOR® and is not privileged to use the REALTOR® trademark.

A REALTOR® licensed salesperson is a professional in the real estate industry who has become a member of the National Association of REALTORS® (NAR). This individual has joined the association, which entails paying the required REALTOR® dues, thus gaining access to a range of exclusive benefits and privileges that come with being a REALTOR®. Join VCCAR today!

Transitioning from a REALTOR® brokerage as an agent signifies the conclusion of your professional affiliation with the brokerage. Below are the critical steps for this process:

  • License Termination: Your Broker will initiate the cancellation of your license within the brokerage. This action does not impact the continued validity of your license issued by the California Department of Real Estate (DRE).
  • Removal from DRE Records: Your Broker is responsible for removing your information from the California

Department of Real Estate (DRE) records.
Termination Method Selection: You can choose to employ the convenient eLicensing system or submit Form 214 to request the formal termination of your license.

No Assessment Fee: Following the successful termination of your license with the DRE, your Broker will not be subject to any assessment fees.

Are you currently working as a licensee under a separate entity owned by the Designated REALTOR® (Broker), primarily focusing on client referrals? If so, congratulations! You may qualify for our Limited Function Referral Office membership status (LFRO), which offers exclusive benefits.

As a Referral Agent, you’ll enjoy several advantages, including exemption from REALTOR® Dues, and your Designated REALTOR® (Broker) won’t be responsible for covering any non-member assessment fees on your behalf.

This membership status acknowledges the unique role and valuable contributions of Referral Agents within the real estate industry. You can take advantage of reduced financial obligations while continuing to excel as a referral agent, contributing to the thriving real estate community.

Submit your LFRO certification

Mortgage Loan Originator (MLO) Membership Exclusion Criteria
If you are a Mortgage Loan Originator (MLO) seeking membership status, it’s important to understand that affiliated MLO licensees may be exempt from association dues. To qualify for this exemption, you must meet the following criteria:

  • MLO License or Endorsement: Each listed licensee must possess a valid Mortgage Loan Originator (MLO) license or endorsement.
  • Limited Real Estate Activities: The listed licensees should exclusively engage in activities requiring an MLO license and must not participate in any real estate licensed activities beyond those requiring an MLO license.
  • Non-Participation in MLS: The listed licensees should not be participants or subscribers in any ‘Multiple Listing Service (MLS).’

To initiate this process, you must submit the MLO Certification Form, provide the necessary information, and ensure compliance with the above-mentioned criteria. This certification will determine your eligibility for dues calculation exclusions, simplifying your membership status as a Mortgage Loan Originator.

Submit your MLO application


What do I have to do to be compliant?

There are 5 possible options:

Pay a Nonmember Assessment
You, as the Designated REALTOR® (Broker), are billed a nonmember assessment of $520 for each individual who is a nonmember licensee. Even when this assessment is paid, the licensee is not a REALTOR® member and there are no association benefits or services provided. Use of the REALTOR® trademark is prohibited.

Licensee Joins as a REALTOR®
The licensee joins and pays REALTOR® dues and receives all the benefits of being a REALTOR®. With this option, you do not pay the nonmember assessment.How to Join

Drop Agent from your Brokerage
You terminate the nonmember licensee by removing the licensee from DRE records. This can be done via eLicensing or submitting Form 214. You will not be charged the nonmember assessment for this licensee.

Exemption for Referral Agents
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. This form needs to be submitted annually.Submit the LFRO Certification Form.

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”)’. This form needs to be submitted annually.Submit the MLO Certification Form  

Why do I need to submit a LFRO form and create a separate entity for Referral Agents?

You must submit the LFRO form because VCCAR’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).

For example, if the name on record for your office is “ABC Realty and Associates” and our records indicate that this is an active real estate office, the LFRO agents can be in the “XYZ Real Estate Group” instead of “ABC Realty and Associates.”

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.

You must resubmit the LFRO and MLO certifications to VCCAR 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 nonmember. If agents are found on the DRE record for a broker’s firm but are not in any of these four categories, VCCAR is required to contact the broker.

What if a Designated REALTOR® (Broker) refuses to pay dues according to the NAR Variable Dues Formula?

Full payment of dues owed is required for membership in a local Association of REALTORS® (AOR). Partial payment does not satisfy the dues obligation. If a Designated REALTOR® (Broker) refuses to pay his or her full dues under the Variable Dues Formula, he or she, along with his or her entire office, will have their local membership suspended—this is will also suspend C.A.R. and NAR membership.

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, your account will be active only until C.A.R. notifies VCCAR to suspend your benefits—this will include access to zipForms®.

I have questions about Broker Compliance, who do I contact?

Contact VCCAR Broker Compliance Department. Email is the preferred method of communication as it provides a record of our correspondence with you on this issue.


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Running a profitable brokerage takes vision, discipline, and stamina—never more so than now.

In addition to the resources available through this page, REALTOR® Magazine’s Broker to Broker Network offers articles with tips for boosting productivity and running your business more effectively.

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