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Practice Of Real EstateLicense_lawHARD

Tom works as a sales associate for ABC Realty. He wants to help his neighbor sell her house and split the commission with his neighbor instead of his broker. Is this permissible?

Correct Answer

A) No, commissions must be paid through the employing broker

Correct: A - No, commissions must be paid through the employing broker. All commissions earned by a sales associate must be paid through their employing broker; they cannot receive compensation directly from clients. Why not B: This option is incorrect because "Yes, if the neighbor agrees in writing" does not match the rule tested by the question. The correct answer is "No, commissions must be paid through the employing broker". All commissions earned by a sales associate must be paid through their employing broker; they cannot receive compensation directly from clients. Why not C: This option is incorrect because "Yes, if it's disclosed to all parties" does not match the rule tested by the question. The correct answer is "No, commissions must be paid through the employing broker". All commissions earned by a sales associate must be paid through their employing broker; they cannot receive compensation directly from clients. Why not D: This option is incorrect because "No, unless Tom obtains a broker license first" does not match the rule tested by the question. The correct answer is "No, commissions must be paid through the employing broker". All commissions earned by a sales associate must be paid through their employing broker; they cannot receive compensation directly from clients.

Answer Options
A
No, commissions must be paid through the employing broker
B
Yes, if the neighbor agrees in writing
C
Yes, if it's disclosed to all parties
D
No, unless Tom obtains a broker license first

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Related Topics & Key Terms

Key Terms:

commission_paymentbroker_supervisioncompensation_rules

Related Concepts

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.

Commingling is the illegal act of mixing client trust funds with a broker's personal or business operating funds; conversion is the misappropriation of those funds.

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