A California broker hires a new salesperson and provides the salesperson with a company policy manual covering trust fund handling, advertising rules, and disclosure requirements. Six months later, the salesperson violates trust fund rules. The broker argues that providing the manual satisfies the supervisory duty. Under California law, is the broker correct?
Correct Answer
D) No, the broker must also implement a system of regular review, oversight, and inspection of the salesperson's activities and transactions
Under Commissioner's Regulations §2725, providing a written policy manual is only one component of the broker's supervisory duty. The broker must also implement and maintain a system for regularly reviewing, overseeing, and inspecting the activities and transaction files of salespersons. A manual alone, without active implementation and enforcement, does not satisfy the supervisory requirement.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The legal requirement for real estate agents to inform all parties about who they represent in a transaction, typically provided at first substantive contact.
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 legal ending of an agency relationship, which can occur through completion, expiration, mutual agreement, breach, death, incapacity, or bankruptcy of either party.
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