A Colorado broker associate, working under an employing broker, has a signed exclusive buyer agency agreement with a client. Midway through the agreement term, the employing broker's license is revoked by the Colorado Real Estate Commission for misconduct. The broker associate's license is in good standing. Which of the following most accurately describes the status of the buyer agency agreement?
Correct Answer
B) The buyer agency agreement is terminated because a broker associate cannot maintain an active license or enforceable agency without a supervising employing broker.
Under Colorado license law, a broker associate must be affiliated with and supervised by an employing broker to legally practice real estate. When the employing broker's license is revoked, the broker associate loses the legal authority to act as a real estate broker because the broker associate's active status is contingent on having a licensed employing broker. The buyer agency agreement, which was entered into under the umbrella of the employing broker's license, is effectively terminated because the broker associate cannot legally continue to perform under it without a supervising employing broker. The broker associate must affiliate with a new employing broker and, if appropriate, enter into a new agency agreement with the buyer. This is a Colorado-specific rule that flows directly from the state's broker-only license structure under C.R.S. § 12-10-201 et seq.
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Related Topics & Key Terms
Key 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 legal ending of an agency relationship, which can occur through completion, expiration, mutual agreement, breach, death, incapacity, or bankruptcy of either party.
The fiduciary obligation to protect a client's private information and not disclose it to third parties without permission, surviving even after the agency relationship ends.
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