Cornerstone Realty is a Kentucky brokerage where Principal Broker Alice supervises five affiliated sales associates. Alice designates Sales Associate Ben to represent the seller and Sales Associate Carol to represent the buyer in the same residential transaction. The seller later claims that Ben shared confidential pricing information with Carol, harming the seller's negotiating position. Under Kentucky law, which party bears primary regulatory and supervisory responsibility for the conduct of both Ben and Carol in this transaction?
Correct Answer
B) Alice, as the principal broker, bears primary supervisory responsibility for the conduct of both Ben and Carol under her brokerage.
Under KRS Chapter 324, the principal broker bears primary statutory responsibility for supervising all affiliated licensees and ensuring their compliance with Kentucky real estate law. In a designated agency arrangement, while Ben and Carol each act as single agents for their respective clients, Alice remains the principal broker responsible for their conduct. The principal broker's supervisory duty includes ensuring that confidential information is not improperly shared between designated agents. Alice's failure to establish adequate supervision procedures can result in disciplinary action against her as the principal broker.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Market allocation is an illegal antitrust practice in which competing real estate brokerages agree to divide markets among themselves by geographic area, property type, or price range, thereby eliminating competition.
Price fixing is an illegal antitrust practice in which competing real estate brokerages agree to charge the same commission rates, fees, or other pricing for their services. It is a per se violation of the Sherman Antitrust Act.
Florida brokers are required to maintain transaction records and escrow records for a minimum of five years.
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