Under vicarious liability (also called respondeat superior), the supervising broker can be held legally and financially liable for the misconduct of agents working under their supervision. This includes errors, omissions, misrepresentations, and fair housing violations committed by the agent.
An agent working for Broker Jones makes false statements about a property's square footage. Even though Broker Jones didn't know about the misrepresentation, the broker can be held liable for the agent's actions under vicarious liability.
The BROKER is always potentially liable for agent misconduct — even if the broker didn't know about it. This is why brokers must supervise agents. Exam tip: if an agent does something wrong, look for the answer choice that also holds the broker responsible.
Related Terms
Related Concepts
A legal relationship in which one person (the agent) is authorized to act on behalf of another person (the principal) in business transactions with third parties.
The highest legal obligation of trust and confidence owed by an agent to their principal, requiring the agent to act solely in the principal's best interest.
A situation where a single agent or brokerage represents both the buyer and the seller in the same real estate transaction.
An arrangement where a brokerage assigns separate agents within the firm to represent the buyer and seller in the same transaction, allowing each client to have dedicated representation.
A non-agency relationship where the broker facilitates a real estate transaction without representing either party, owing limited duties of honesty, fairness, and competence to both.
Frequently Asked Questions
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