Real Estate · Broker Supervision and Office Management

In most states, what is an employing or designated broker generally required to do regarding the licensees in the office?

Correct answer

Actively and reasonably supervise affiliated licensees' real estate activities, including transactions, trust funds, and advertising, to ensure compliance with license law

  1. A Nothing beyond hiring them
  2. B Actively and reasonably supervise affiliated licensees' real estate activities, including transactions, trust funds, and advertising, to ensure compliance with license law
  3. C Supervise only new agents for one week
  4. D Let agents operate completely independently

Why this is the answer

State license laws place a duty on the employing or designated broker to reasonably supervise the licensees affiliated with the brokerage. This generally means overseeing how agents conduct transactions, handle and account for trust funds, advertise, and disclose agency, and taking steps to ensure compliance with the law. The broker can be disciplined for failure to supervise even when not personally involved in a violation. The required degree and method of supervision vary by state, and some states specify maximum agent-to-broker ratios or documentation requirements, but the underlying duty to supervise is a defining feature of the state broker portion.
Source: Broker Supervisory Duties