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Practice Of Real EstateLicense LawMEDIUM

Tom is a Wyoming real estate broker who manages a small brokerage. One of his salespersons, Amy, has been operating her own separate real estate business on the side without Tom's knowledge or the WREC's approval. Under Wyoming law, which of the following best describes Tom's potential liability in this situation?

Correct Answer

D) Tom may face disciplinary action because a supervising broker is responsible for the licensed activities of salespersons under their supervision.

Under Wyoming's Real Estate License Act and WREC Rules, a supervising broker is responsible for the supervision and oversight of all licensees working under their license. A broker's failure to adequately supervise a salesperson can itself be grounds for disciplinary action by the WREC, even if the broker did not directly participate in or benefit from the improper conduct. The broker has an affirmative duty to supervise.

Answer Options
A
Tom is automatically liable for all of Amy's actions because Wyoming law imposes strict vicarious liability on all brokers.
B
Tom is only liable if he received financial benefit from Amy's unauthorized activities.
C
Tom has no liability because Amy acted without his knowledge or authorization.
D
Tom may face disciplinary action because a supervising broker is responsible for the licensed activities of salespersons under their supervision.

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Related Topics & Key Terms

Key Terms:

supervising_brokerbroker_liabilitysupervision_dutydisciplinary_action

Related Concepts

FREC has the authority to impose fines and other disciplinary actions on licensees who violate real estate laws and rules.

A group boycott is an illegal antitrust practice in which two or more competing real estate businesses agree to refuse to work with a specific person, company, or entity in order to harm that party's ability to compete.

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.

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