Broker Chen operates a real estate office in Detroit and employs three licensed salespersons. One of his salespersons, without Chen's knowledge, makes a fraudulent misrepresentation to a buyer during a transaction. Under Michigan law, what is Broker Chen's potential liability?
Correct Answer
B) Chen may be held responsible by LARA-BPL for the actions of his affiliated salesperson, even if he was unaware of the misconduct
Under MCL 339.2506 and the Michigan Occupational Code, a broker is responsible for the real estate activities conducted by affiliated salespersons operating under the broker's license. LARA-BPL can take disciplinary action against a broker for a salesperson's violations, even without the broker's knowledge or participation, because the broker has a supervisory duty over all affiliated licensees.
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Related Topics & Key Terms
Key Terms:
Related Concepts
In real estate, the distinction between an independent contractor and an employee determines tax treatment, liability, and the level of control a broker may exercise over the agent's daily activities. Most real estate agents operate as independent contractors.
Florida real estate licenses must be renewed biennially, and sales associates have specific post-license education requirements for their first renewal.
License requirements are the mandatory qualifications—including pre-licensing education, examination, and background checks—that a person must satisfy before legally practicing real estate. These requirements are established and enforced by each state's real estate commission.
More Practice Of Real Estate Questions
In Wyoming real estate practice, an associate broker or salesperson is not associated with a responsible broker at renewal. What should the licensee remember?
In Wyoming real estate practice, a first-time salesperson applicant completes coursework. What should the licensee remember?
A Wyoming licensee is reviewing an out-of-state salesperson applicant prepares for testing. What is the best answer?
In Wyoming real estate practice, a salesperson applicant age is reviewed. What should the licensee remember?
A responsible broker in Wyoming asks about a nonresident applicant provides home-state evidence. Which answer follows Wyoming law?
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