September 2022
To protect their estate, clients, and associated licensees, owners of real estate businesses should ensure that they have succession plans in place. This is especially important for licensees who are the sole owners of their businesses.
When the sole owner of a real estate business becomes incapacitated or dies, the Real Estate Commissioner has the authority to temporarily licensed an individual to conduct professional real estate activity so that business can be wrapped up per Oregon Revised Statute (ORS) 696.205. But if there is not another member of the business, or an identified executor, administrator, or personal representative of the licensee's estate, it could result in a detrimental situation for the business's clients and licensees.
When notified of a death, the bank holding the clients' trust funds might freeze the accounts, blocking the temporary licensee and the business's clients from accessing the funds. In this scenario, the Agency does not have the authority or jurisdiction to compel a bank to release the funds.
The National Association of Realtors provides some guidance on Succession Planning for Real Estate Brokerages.
The Oregon Real Estate Agency recommends seeking the advice of an attorney to properly protect your business and estate.