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Brokers… Do you know what your agents are doing?

lady justice

By Peg Ritenour, OAR Vice President of Legal Services/Administration

One of the components of the new license law provisions that became effective on April 6 is a requirement for each brokerage to identify at least one principal broker who is responsible for the activities of the brokerage. HB 532 also clarifies the duties required of the principal broker. Among these duties is the obligation to oversee the activity of affiliated licensees. This duty has been expanded to impose a duty on the principal broker to assure that their affiliated licensees are only providing real estate services within their area of competency, unless they are working with another affiliated licensee who possesses such competency.

For example, if an agent has never handled a commercial transaction or managed property before, the principal broker will be required to make sure the agent is working with another licensee who has such expertise. The same thing would be true of a commercial agent who wants handle residential property without the necessary competency.

To assure that this requirement is met, it is important for the principal broker to communicate this new license law requirement to affiliated licensees. It is recommended that an office policy be adopted that mandates that agents consult with the broker or manager before providing real estate services outside their normal area of practice. If the licensee wants to provide services in an area in which the agent doesn’t have such competency, as the principal broker you must make sure that the agent is working with another affiliated licensee who is competent in that area. If neither the broker or agent has such competency, then the agent should not be permitted to list, sell, lease or manage such property. By having a written policy that is communicated and acknowledged by your agents, the brokerage can demonstrate their effort to comply with this new responsibility.


Legal articles provided in the OAR Daily Buzz are intended to provide broad, general information about the law and is not intended to be legal advice. Before applying this information to a specific legal problem, readers are urged to seek advice from an attorney. 

Tags: legal