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1.4 Regulation and Licensing
- 19 Dec, 2025
- Com 0
Regulation and Licensing in Real Estate
The real estate industry is regulated at every level of government—federal, state, and local. Laws and court decisions (common law) govern how real estate is developed, managed, and transferred. Agents and brokers must be familiar with laws relating to agency, contracts, disclosure, environmental impact, and fair housing.
In addition to government regulation, the industry is self-regulated through codes of ethics from trade organizations. For example, the National Association of Realtors® Code of Ethics sets a high standard of conduct for its members.
Real estate license laws are the main body of laws governing brokerage practice in each state. These laws specify:
- Who must obtain a license and how to do so
- Requirements for maintaining a license
- Procedures for handling escrow deposits and fees
- Advertising guidelines
- How to deal with clients and customers
State real estate commissions administer and enforce these laws, and may add further regulations to clarify state statutes. It’s essential for new practitioners to understand and follow all laws and ethical standards that regulate the industry.
Check-In Questions
- Which level(s) of government regulate the real estate industry?
Show Answer
Correct Answer: All of the above
Real estate is regulated at the federal, state, and local levels. - Who is responsible for administering and enforcing state real estate license laws?
Show Answer
Correct Answer: The State Real Estate Commission
State real estate commissions administer and enforce license laws.