A salesperson discovers that a buyer's earnest money check has bounced twice. Without informing her broker or the seller, she continues moving the transaction toward closing. Under ORC Chapter 4735, which of the following correctly describes the potential disciplinary exposure?

Correct Answer

D) Both the salesperson and the broker may face discipline — the salesperson for concealing material information, and the broker if the Division finds the brokerage's supervisory procedures were inadequate to detect or prevent the concealment

Under ORC §4735.18(A)(6), a licensee is subject to discipline for any conduct that constitutes dishonest or fraudulent dealing, which includes concealing a material fact such as a bounced earnest money check from the broker and the seller. Separately, ORC §4735.18(A)(6) and the broker's statutory duty of supervision require that brokers maintain systems reasonably designed to oversee licensee conduct and trust account activity. If the Ohio Division of Real Estate determines that the broker's supervisory framework was deficient — for example, lacking procedures to reconcile or flag trust account irregularities — the broker may independently face discipline even without actual knowledge of the salesperson's concealment. Liability flows from the failure of oversight, not solely from personal participation in the misconduct.