FAQs

What is a designated broker?

1. Virginia Code §54.1-2109 [DEATH OR DISABILITY OF A REAL ESTATE BROKER] was passed in 2019 where the power of attorney of the disabled or deceased broker of a sole proprietorship or of a company with only one broker, could be designated by the Board to wind up the affairs of the company.
2. In 2022 the code was changed to require any licensed broker to designate another licensed broker to carry on the business for up to 180 days for the sole purpose of concluding the business of such designating broker in the event of the designating broker’s death or disability.

Who must make the designation?

A licensed broker engaged in a sole proprietorship or who is the only licensed broker in a business entity, such as LLC, Corp., Partnership or association with an association.

Is the designation revocable?

There is no restriction in the statute to prevent a designating broker from changing his/her mind and name someone else who is a licensed real estate broker.

What does the designated broker do once designated?

Until the designating broker dies or becomes disabled, the designated broker has no duties to perform other than to be the identified designated broker.

What are the duties of and powers given to the designated broker when the client dies or is disabled?

a. The code says that its sole duty is to “conclude the business” within 180 days. It does not say how nor does it provide any guidance.
b. Those duties, in my opinion, include:

1. Arrange to access and control the operational and escrow accounts:
2. Study the situation in order:
   1. to finish the pending transactions under contract;
   2. continue with the existing employees and independent contractors;
   3. Finish the pending listings;
   4. Protect the escrow account and insure that the upcoming deposits into it are accounted for and properly handled;
   5. Pay debts of the company;
   6. If there is litigation decide what happens next;
3. Arrange for the sale or continuation of the company

How much does it cost to designate a broker?

1. If the designated broker is a personal friend, it may be free;
2. If it with someone like our company, $250 per year until death or disability, and an agreed upon hourly rate or commission arrangement similar to what preceded with the former broker.

What if there is no designated broker appointed or one refuses or is not able to proceed when at the death or disability of the designating broker?

a. The code says that the board will appoint:

1. an agent designated in a power of attorney of the deceased or disabled broker, or
2. the executor named in the will, or
3. an adult family member of the deceased or disabled broker, or
4. an employee of or an independent contractor affiliated with the deceased or disabled broker.