Broker-salesperson Victor works at Jersey Shore Properties under Principal Broker Helen. Victor has been cultivating a relationship with a commercial investor, Mr. Bauer, for two years. Mr. Bauer insists that he will only work with Victor personally and threatens to walk away from a $2 million deal if Victor is not the named agent. Victor believes he can handle the transaction independently without Helen's involvement. Under New Jersey law, which of the following is the most accurate statement about this situation?
Correct Answer
C) Victor must conduct the transaction under Helen's supervision as a broker-salesperson, and all compensation must flow through the brokerage
Under New Jersey law, a broker-salesperson must conduct all real estate activities under the supervision of the principal broker and cannot act independently regardless of client preference, deal size, or relationship history. Furthermore, all compensation earned by a broker-salesperson must flow through the licensed brokerage — Victor cannot receive commissions directly from clients. Mr. Bauer's personal preference for Victor does not create a legal exception to these requirements. Victor's status as a broker-salesperson is a legal condition, not a contractual arrangement that parties can opt out of.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The legal ending of an agency relationship, which can occur through completion, expiration, mutual agreement, breach, death, incapacity, or bankruptcy of either party.
The fiduciary obligation to protect a client's private information and not disclose it to third parties without permission, surviving even after the agency relationship ends.
In real estate, a client is someone to whom the agent owes fiduciary duties through an agency relationship, while a customer is a third party to whom the agent owes only honesty and fair dealing.
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