Q&A On LFRO (Limited Function Referral Office)

Q: What is Limited Function Referral Office Certification or LFRO Agent Status?

Limited Function Referral Office Certification or LFRO is a designation for real estate licensees that aren’t members of the association of Realtors but want to hang their license with a broker that is a full Realtor member.

Q: Can I still conduct real estate transactions if I am not an association member?

No. The implication is that the non-member agents are considered a “referral agent” and they are not expected to operate as an active agent. Instead, they are expected to refer their clients to “active” Realtors on the team.

Q: Do I have to join association of Realtors to maintain my real estate license?

No. Once a salesperson is licensed with the Department of Real Estate, the salesperson is not required to join an association of realtors.

Q: Do I have to register under a broker to conduct real estate transactions?

Yes. Salesperson licensees must be affiliated with a broker to conduct business or maintain their license as NBA (No Broker Affiliation) under DRE license status if not intending to join any broker.

Q: Can I join a broker as an Inactive Licensee?

Yes. A salesperson might go hang their license with a broker, this is where there may or may not be a requirement to join the association of Realtors.

Q: Do I have to join association member when I join a broker office?

A broker is very likely to be a full Realtor member with an association of Realtors. Now, the distinction is the association requires the broker’s salespersons to be full Realtor members as well.

What is the penalty to the broker if salesperson is not an association member?

If the salesperson doesn’t sign up as a full Realtor member, then the broker will get a notice that they must either pay a fine, or the agent to be moved to LFRO designation upon Limited Function Referral Office Certification.

Q: What if salesperson refuses to join the association and continue conducting the transaction?

The licensee must be terminated from the broker’s employment. The obvious choice is for the salesperson to be moved to the LFRO referral agent status.