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 review and inspect what the salesperson actually does
A manual states the policy. Supervision is the checking that the policy is followed, so the broker needs a system of regular review and inspection on top of it. Other choices: handing over a manual is not a system, and a signed acknowledgement only records that it was handed over; and the duty does not go so far as personally reviewing every transaction before closing.
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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.
More Laws Of Agency Fiduciary Duties Questions
Under California law, the agency disclosure requirements apply to which types of property?
Under California law, when must a buyer's agent give the agency disclosure form to the buyer?
A broker who fails to promptly disclose their dual agency status is subject to:
A broker’s fiduciary obligation to protect a seller’s confidential information continues:
A broker has an exclusive agency listing on a property. If the owner sells the property, the broker is entitled to:
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