Broker Patricia manages a real estate firm in Virginia. One of her salespersons, Tom, has been conducting real estate transactions without informing Patricia and has been keeping earnest money deposits in his personal bank account. Under Virginia law, what is Patricia's potential liability for Tom's conduct?
Correct Answer
A) Patricia may be held responsible by VREB for failing to properly supervise Tom, and may face disciplinary action
Under Va. Code § 54.1-2105 and 18 VAC 135-20-165, a principal broker has a legal duty to supervise all licensed salespersons affiliated with the firm. VREB can impose disciplinary action on the broker for failure to supervise, even if the broker did not directly participate in the misconduct. Proper supervision includes ensuring trust account compliance.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A tie-in arrangement is an illegal antitrust practice in which a seller conditions the purchase of one product or service on the buyer's agreement to purchase a separate product or service.
A trust account, also called an escrow account, is a separate bank account maintained by a broker to hold funds belonging to others, such as earnest money deposits, security deposits, or other client funds.
Advertising regulations govern how real estate licensees may market properties and services, requiring truthful, non-deceptive advertising that includes proper identification of the brokerage.
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?
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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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