Buck Stops With Real Estate Broker

I thought this was interesting from the California Association of REALTORS® Blog:

The Department of Real Estate Broker Supervision Task Force looked at the current law and issues surrounding the supervision of salespersons and determined that the DRE has no authority to regulate office managers for failure to supervise. Should there be misconduct in an office, only the broker of record is responsible, whether they have a daily hands-on role in that office or not. Many brokers of large firms do designate branch office managers to watch over the day-to-day activities of each office and assume that any problems will either be handled or reported, so, you may ask, is it fair to hold them responsible?

Say a broker has a large firm with 20 offices. It is impossible for him or her to be present at every office every day, hence the designation of an office manager to oversee the sales people. Since the office manager would be the one most involved in the everyday operations of the office it would seem that if one of the sales people was involved in misconduct they would be much more likely to know about it than the broker and so would be the one responsible to do something about it. However, if nothing is done and the transgression comes to light, the DRE currently only has the authority to discipline the broker of record, even if the broker were not made aware of the misconduct. An office manager can choose to do nothing and have absolutely no license repercussions.

So right now large brokerages have designated brokers covering hundreds or thousands of licensees. CAR is sponsoring a bill that would allow some responsibility to go to a “Designated Office Manger.”

SB 510, authored by Senator Correa, is being sponsored by C.A.R. to create an answer to that question!

This measure will set minimum standard for managers and will allow the DRE to develop a designated office manager program. The DRE will be allowed to create an office manager registration form for principal brokers to use to notify the DRE when they appoint an eligible real estate broker or salesperson to supervise the operations and employees of a branch office. The broker of record would also be required to provide the DRE with a copy of a written contract between the employing broker and the agent detailing the duties and responsibilities to be performed by the designated office manager.

Once the broker has designated an office manager, the DRE would have the authority to discipline an office manager for failing to supervise the activities of the other licensees in their office. Principal brokers will not get off scott-free, however, they will still be responsible for the overall supervision, including the supervision of their office managers.

I know several  designated brokers of large firms that sleep like babies at night, in other words waking up every 2 hours crying!

I have to agree with the DRE Task force that responsibility tends to follow accountability.  Even with that said, many legacy brokers have one office manager for 200 or more agents – still too many to properly supervise.

Photo courtesy of Marshall Astor via Flickr

 

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