Real Estate · General

Under state law, what must a broker generally do when a salesperson affiliates with or leaves the brokerage?

Correct answer

Notify the state commission and follow the proper procedures to add or release the licensee — the broker holds/sponsors the salesperson's license while affiliated, and proper notification/transfer procedures must be followed when the affiliation begins or ends

  1. A Nothing
  2. B Notify the state commission and follow the proper procedures to add or release the licensee — the broker holds/sponsors the salesperson's license while affiliated, and proper notification/transfer procedures must be followed when the affiliation begins or ends
  3. C Hide it from the state
  4. D Keep the license forever

Why this is the answer

AFFILIATION CHANGES: When a salesperson AFFILIATES WITH or LEAVES a brokerage, the broker must follow state procedures. WHEN A SALESPERSON JOINS: The broker sponsors/holds the salesperson's license; proper notification to the commission and any required paperwork must be completed to activate the affiliation; WHEN A SALESPERSON LEAVES: The broker must release the license / notify the commission per state procedure; the salesperson cannot practice until affiliated with a new broker; LICENSE CUSTODY: While affiliated, the broker typically holds the salesperson's license (physically or in the state system); upon departure, it is returned/released; NOTIFICATION: States require notification of affiliation changes (often within a specified time) so the commission's records are accurate; SUPERVISION: The broker supervises the salesperson only while affiliated; PENDING TRANSACTIONS: Agreements address commissions on pending deals when an agent leaves; RECORDS: Transaction records remain with the brokerage; STATE-SPECIFIC: Exact procedures, forms, and timeframes vary; the requirement to properly notify the commission and follow procedures when licensees join or leave (with the broker sponsoring the license while affiliated) is important broker office-management/state-law content tested on the exam.
Source: Real Estate Broker State — License Law, Affiliation Changes

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