Chen is a Washington Designated Broker who also holds a Managing Broker license from a prior application. He affiliates one of his Managing Brokers, Lisa, as the branch manager of a second office. Lisa's license lapses due to non-renewal. Chen does not immediately appoint a replacement and allows three Brokers to continue working out of the branch for two weeks. Which of the following best describes the legal consequences under Washington law?
Correct Answer
D) Chen may face disciplinary action for failing to ensure the branch office had a licensed Managing Broker in charge, and the Brokers may have conducted unlicensed activity.
Under RCW 18.85, the Designated Broker is responsible for ensuring that every branch office has a licensed Managing Broker or Designated Broker in charge at all times. When Lisa's license lapsed, Chen had a duty to immediately address the supervision gap. By allowing Brokers to continue working in an unsupervised branch for two weeks, Chen failed his supervisory duty and may face DOL disciplinary action. The Brokers working without a licensed supervisor may also have engaged in activities that violate the supervision requirements of Washington license law.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Broker supervision is the legal obligation of a designated or managing broker to oversee and be accountable for the real estate activities of all salespersons and associate brokers operating under their license.
Commingling is the illegal act of mixing client funds with a broker's personal or business operating funds, while conversion is the unauthorized use of client funds for the broker's own benefit. Both are serious violations that can result in license revocation.
Commingling is the illegal act of mixing client trust funds with a broker's personal or business operating funds; conversion is the misappropriation of those funds.
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