A Montana real estate salesperson, without her broker's knowledge, negotiates a side agreement with a seller to receive an additional $2,000 'bonus' payment directly from the seller at closing, in addition to the commission her broker will receive. The salesperson does not disclose this arrangement to her broker or to the buyer. Under Montana law, which of the following best describes the consequences?
Correct Answer
A) The arrangement violates Montana law because a salesperson may only receive compensation through her employing broker, and the undisclosed payment creates additional disclosure violations.
Under MCA Title 37, Chapter 51, a salesperson may only receive compensation for real estate activities through her employing broker — not directly from a seller, buyer, or any other party. Accepting a direct payment from the seller without routing it through the broker violates this fundamental licensing rule. Additionally, failing to disclose the arrangement to the broker and the buyer creates separate violations related to fiduciary duty, disclosure obligations, and potentially RESPA if the transaction involves a federally related mortgage. This conduct is grounds for MBRR disciplinary action.
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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?
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