Commercial Cooperation Agreements
Did you know that brokers and salespeople that are not licensed in Ohio can practice real estate in Ohio .. legally? It’s true, but as with everything, there are exceptions. A little known law permits out-of-state licensees to practice in Ohio without licensure provided certain criteria are met:
- The out-of-state agent may only practice with respect to commercial property. Commercial property is defined as all real estate except real estate containing one to four residential units. Single family homes, condominiums, townhouses, manufactured homes are not commercial property.
- The agent enters into a Commercial Cooperation Agreement with an Ohio Broker. The Commercial Cooperation Agreement must include the terms of cooperation and compensation and contain a statement that the out-of-state broker and its agents will agree to adhere to Ohio laws.
- The out-of-state agent must file with the Ohio Broker a certificate of good standing from his/her jurisdiction of licensure, include the Ohio Broker on all advertising, consent to service of process and place all escrow money in the Ohio Broker’s trust account.
- For his/her part, the Ohio Broker must maintain copies of all transactional documentation for 3 years.
You might wonder when it would be necessary to navigate the process to permit an out-of-state broker/salesperson to practice in Ohio. In transactions involving commercial property, a national company may have a relationship with an agent that unfortunately is not licensed in Ohio. The Commercial Co-broke Law permits that agent to continue to represent his/her commercial client in Ohio, without that agent having to actually become licensed in Ohio. Alternatively, if the out-of-state agent prefers to make a referral to an Ohio agent (thereby not actually coming to Ohio or practicing in Ohio) the out-of-state agent would not need to complete the above process.
Remember, Ohio licensure or complying with the Commercial Co-broke Law is only necessary when dealing in transactions involving Ohio real estate. If the property that is the subject of the transaction is located outside of Ohio, that state’s jurisdiction will govern whether or not out-of-state licensees will be permitted to practice in that jurisdiction.