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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?

Reviewed by Jordan Morley, Editorial Lead at 247SimpleTests. Written by the 247SimpleTests Editorial Team from the official source material cited on every question.

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 Let agents operate completely independently
  4. D Supervise only new agents for one week

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

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About this topic: Broker Supervision and Office Management

Broker supervision and office management questions cover the state's requirements for a designated or managing broker — office location, signage, branch offices, supervision of licensees and handling of transactions. This is one of 13 Broker (State Law) questions on broker supervision and office management, each with a full explanation on a single study page.

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State-specific guides

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