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Real Estate · Supervision of Licensees

If a salesperson affiliated with a broker commits a license-law violation, what is the broker's potential exposure?

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Correct answer

The broker may face disciplinary action for failure to supervise, even if the broker did not personally participate in the violation

  1. A The broker is never affected
  2. B The broker is automatically cleared if unaware
  3. C The broker may face disciplinary action for failure to supervise, even if the broker did not personally participate in the violation
  4. D Only the salesperson can ever be disciplined

Why this is the answer

Because the broker is responsible for supervising affiliated licensees, the broker can be held accountable when an agent violates license law — particularly where inadequate supervision allowed the violation to occur. A broker who had no reasonable system to oversee transactions, advertising, and trust funds may be disciplined for failure to supervise even without personal involvement in the act. This is why brokers maintain written policies, review files, and monitor trust accounts. The principle reflects the broker's gatekeeping role: the license law places the duty to ensure compliance on the broker, not solely on the individual agent.
Source: ARELLO Broker Supervision

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About this topic: Supervision of Licensees

Supervision of licensees questions cover the broker's responsibility for the acts of affiliated licensees, training and oversight requirements, reviewing contracts and advertising, and handling complaints. This is one of 6 Broker (National) questions on supervision of licensees, each with a full explanation on a single study page.

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