Passage of Senate Bill 131 brings license reciprocity to Ohio

By Todd Book, Ohio REALTORS Vice President of Legal & Legislative Affairs, & Andrew Huffman, Ohio REALTORS Director of Government Affairs

Remember Paul Revere? He is the founding father best remembered for his midnight ride warning the colonists of approaching British forces before the Battles of Lexington and Concord in 1775. His cries of “the British are coming” provided valuable time for the Minutemen to prepare for the invading force. Consider this your warning that “Senate Bill 131 is coming” and soon non-Ohioans can more easily engage in the Ohio real estate profession.

Historically, to be a real estate professional in Ohio you had to take the prescribed training and pass the necessary exams. For those out-of-state licensees wanting a shortcut they had to be from a state that allowed for reciprocity with Ohio and satisfy the dictates of the Division of Real Estate before they could practice in Ohio. The passage of S.B. 131 completely changes that process.

For the last several years the legislature has been working on a proposal to require Ohio licensing authorities to recognize out of state licenses. This approach of allowing licensing portability has been adopted by several states and is considered a national priority for some policy groups. With the passage of S.B. 131 during lame duck session, Ohio joins the growing number of states authorizing easier license portability.

Notes (source - IJ.com):

Occupational licensing affects nearly 1 in 5 American workers and can be a substantial barrier to interstate mobility. Many states are enacting universal recognition for out-of-state licensees. Under universal license recognition, eligible applicants must hold a license in good standing in their home state. Applicants also cannot have any pending disciplinary action from the relevant board or a criminal record that would disqualify them from obtaining the license in the recognizing state. Applicants may still be required to pay fees or take exams administered by the board in the recognizing state. Universal recognition does not affect interstate compacts.

(1) 19 states have enacted universal license recognition. However, universal recognition laws can differ quite drastically from state to state. Multiple states have imposed additional rules and requirements that thwart license portability and workforce mobility, undermining the main goals of universal license recognition.

(2) Five states limit universal license recognition to residents.

(3) In 11 states, boards only grant licensure if the home state license requires “substantially equivalent” education, experience, or training.

(4) Seven states allow universal recognition of a home state license if it has a similar “scope of practice” or “at the same practice level” to the recognizing state’s license. This means a board does not have to compare and contrast the license requirements between the two states.

(5) In three states, applicants from states that didn’t license the occupation can still obtain a license to work if they have at least three years of experience in that occupation.

The law applies to many types of state licenses, and it states that if the person was licensed or certified in another state the Ohio licensing authority must also license them in Ohio. For most state licenses that is the end of the discussion, but as you well know, Ohio has robust real estate licensing requirements. To make sure out-of-staters are up to snuff the OR legislative team was successful in adding a few more hurdles before non-Ohio licensees can freely practice in the state. First, out-of-state agents are required to pass the state law portion of the licensing exam before they can get their Ohio license. Next out-of-state brokers must show that they have been acting as a broker for at least 2 years, completed at least 20 transactions as a broker and pass the Ohio real estate law portion of the broker exam.  

The silver lining of this cloud is that as more and more states pass their version of S.B. 131 you will be able to take your license more easily across state lines. S.B. 131 will be fully implemented by the end of 2023; consider yourself warned.

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