Sandra is a Colorado Broker Associate who, without her employing broker's knowledge, accepts a cash payment directly from a buyer as a 'thank you' bonus outside of the transaction. Her employing broker later discovers the payment. Under Colorado law, which party or parties may face disciplinary action from CREC?
Correct Answer
C) Both Sandra and the employing broker may face disciplinary action depending on the circumstances.
Under C.R.S. § 12-10-217, CREC may discipline both a broker associate who engages in prohibited conduct and an employing broker who fails to adequately supervise associates. Sandra's acceptance of undisclosed compensation outside the transaction violates Colorado's prohibition on secret profits and undisclosed compensation. The employing broker may also face disciplinary action for supervisory failures, even without direct knowledge, if CREC finds the supervision was inadequate.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Antitrust violations in real estate occur when competing brokerages or agents engage in practices that restrain trade, reduce competition, or harm consumers through collusion. These violations are governed by the Sherman Antitrust Act and can result in severe penalties.
Broker supervision is the legal obligation of a designated or managing broker to oversee and be accountable for the real estate activities of all salespersons and associate brokers operating under their license.
Commingling is the illegal act of mixing client funds with a broker's personal or business operating funds, while conversion is the unauthorized use of client funds for the broker's own benefit. Both are serious violations that can result in license revocation.
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