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Annoying, perhaps. Get the 4-1-1 on Broker’s Duty to Supervise

What are a broker's duties?It’s a funny thing, real estate. Real estate professionals are independent contractors and do run their own business. Yet, at the same time, they are not fully autonomous, and must follow the policies and procedures of their brokerages and the state licensing authority.

Every agent is looking for something a little bit different in a brokerage: from support to training to brand awareness to free leads. But, no matter what you are looking for, the bottom line is that the brokerage only has a few actual duties that he or she owes to his agents (see the honest truth below).

A Broker’s Duty to Supervise

Here’s what the Regulations of the California Real Estate Commissioner have to say about a broker’s duty to supervise his or her agents:

A broker shall exercise reasonable supervision over the activities of his or her salespersons.

Reasonable supervision includes, as appropriate, the establishment of policies, rules, procedures and systems to review, oversee, inspect and manage:

a. Transactions requiring a real estate license.
b.
Documents which may have a material effect upon the rights or obligations of a party to the transaction.
c. Filing, storage and maintenance of such documents.
d. The handling of trust funds.
e. Advertising of any service for which a license is required.
f. Familiarizing salespersons with the requirements of federal and state laws relating to the prohibition of discrimination.
g. Regular and consistent reports of licensed activities of salespersons.

The form and extent of such policies, rules, procedures and systems shall take into consideration the number of salespersons employed and the number and location of branch offices.

A broker shall establish a system for monitoring compliance with such policies, rules, procedures and systems. A broker may use the services of brokers and salespersons to assist in administering the provisions of this section so long as the broker does not relinquish overall responsibility for supervision of the acts of salespersons licensed to the broker.

How Transaction 911 Helps Brokers and Agents

At Transaction 911, we can help agents and brokers create fully compliant office files that meet their brokerage guidelines—whatever those might be. Most brokerages provide their agents with a list of required items for the office file. Other brokerages even have their own online platforms, and our team of transaction coordinators can help not only in the movement of paperwork, but also in getting everything uploaded into the office system.

For those agents or brokers that don’t have their own list, that’s okay. We’ve got one that has been developed based on the rules and regulations of the California Association of Realtors®. And, with the brand new forms updates, we can help you keep up to speed.

Sometimes we meet up with an agent who is looking for a home, an agent who needs a broker. California salespersons need to remember that in order to sell real estate, they need to be affiliated with a brokerage and a broker who will supervise their activities.

At Transaction 911, if you find yourself in a jam and are not sure what to do, we can help. We know lots of agents, brokers, attorneys, and CPAs who may be able to help you. And, of course, if you need help pushing paper, please do not hesitate to give us a call!

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