Managing broker

Key Takeaways

• A Washington managing broker license requires three years of licensed experience as a full-time broker within the previous five years, or an approved alternative qualification (RCW 18.85.111).
• A managing broker may serve clients directly and supervise other licensees, while still working under the firm's designated broker (RCW 18.85.011).
• Anyone who supervises or exercises right of control over other brokers must hold a managing broker license, whatever the firm calls the role (RCW 18.85.275).
• The managing broker education requirement is 90 hours covering real estate brokerage management, business management, and advanced real estate law (RCW 18.85.111).

What It Means

A managing broker holds Washington's supervisory real estate license. RCW 18.85.011 defines a managing broker as a natural person acting on behalf of a real estate firm to perform real estate brokerage services under the supervision of the designated broker, and who may supervise other brokers or managing brokers licensed to the firm. Two powers sit inside that one sentence: the same client work a Broker does, plus authority over other licensees.

The supervision power is the point of the license. RCW 18.85.275 says a broker who supervises or exercises right of control over other brokers must be licensed as a managing broker, so a firm cannot promote a producer into a team-lead role and leave that person on a broker license. The same section lets a designated broker delegate, by written agreement, the safe handling of client funds, Trust Account maintenance, transaction and trust account records, and supervision of brokers to a managing broker licensed to the firm.

Seniority does not mean independence. A managing broker is licensed to one firm only at any one time and still answers to that firm's Designated Broker.

How It Works in Washington

RCW 18.85.111 sets the bar in four parts. An applicant must be at least 18 years old and hold a high school diploma or its equivalent. The applicant must have a minimum of three years of licensed experience as a full-time real estate broker in Washington, or in a comparable jurisdiction, within the previous five years. Next come 90 hours of approved instruction in real estate brokerage management, business management, and advanced real estate law, each course at least 30 clock hours and completed within three years of applying. Last comes a passing score on the managing broker examination.

The experience requirement has an approved side door. WAC 308-124A-713 lets the department accept alternative qualifications in place of three years of full-time broker experience, including postsecondary study with a real estate major plus one year of licensed broker experience, one year of full-time practice as an attorney handling real estate transactions, or five years as a licensed mortgage loan originator, escrow agent, or appraiser. All of that experience must fall within the six years before the application.

After the upgrade, the exposure changes more than the business card does. RCW 18.85.275 puts the duty to supervise brokers and managing brokers for compliance on the designated broker or managing broker, and a managing broker who runs a satellite office becomes the firm's Branch Manager under WAC 308-124-300. RCW 18.85.201 keeps overall responsibility for the firm's licensees with the designated broker, so supervision is layered rather than handed off. Our walkthrough of audit-proofing a Washington real estate practice covers what those records look like when the department asks.

Example

Rick has been a licensed Washington broker for four years, all of it full time, so he meets the three-year experience requirement in RCW 18.85.111. He completes three 30-hour courses (brokerage management, business management, and advanced real estate law) for the required 90 hours, then passes the managing broker exam.

At Cascade Realty, designated broker Ellen signs a written delegation putting Rick in charge of supervising six brokers and maintaining the firm's trust account records. One of those six, Maya, is in her first year, so Rick reviews her $510,000 purchase and sale agreement before it goes to the seller. The 2.5 percent listing-side fee of $12,750 is deposited to Cascade Realty rather than paid to Maya directly. Ellen has delegated the day-to-day work, but under RCW 18.85.201 she is still responsible for every licensee in the firm, Rick included.

Common Mistakes and Exam Traps

• Managing broker and designated broker are not synonyms. The designated broker is a managing broker who owns or holds a controlling interest in the firm and carries a designated broker endorsement (RCW 18.85.011).
• Experience alone does not qualify anyone. RCW 18.85.111 also requires 90 hours of specified coursework and a passing exam score.
• Supervision is the trigger, not the job title. RCW 18.85.275 requires the managing broker license for anyone exercising right of control over other brokers.
• Washington used "associate broker" and "branch manager" as separate license types before July 1, 2010. Those licenses became managing broker licenses (RCW 18.85.481).