Who’s Your Broker?

By Jean Wolinski-Hobbs, Consumer Protection Officer

When brokers have multiple firm affiliations, consumers can often be left wondering “Who’s our broker?”

Say, for instance, that Broker A is affiliated with ABC Realty, Inc., a sales-only firm. Broker A wants to engage in property management. ABC Realty, Inc. gives Broker A permission to establish his/her own firm for property management and yet remain affiliated with ABC Realty, Inc., for residential sales. Broker A establishes XYZ Realty, LLC, becomes qualifying broker, broker-in-charge, and starts engaging in property management.
Months later, a tenant is unhappy with Broker A’s disposition of the tenant security deposit and files a complaint with the Commission against Broker A and ABC Realty, Inc. The tenant named ABC Realty, Inc. in the complaint because Broker A used ABC Realty’s software program that auto-populates the firm name and address on the lease form.

The tenant has a reasonable belief that the rental property is being managed through ABC Realty, Inc. This could be a misrepresentation on the part of Broker A, not to mention a misuse of ABC Realty’s software, and presents a problem for Broker A with both ABC Realty and the Commission.
When brokers have multiple affiliations, they need to use business cards and forms that identify the correct real estate firm with which the consumer is dealing.

Brokers-in-charge also need to be mindful of this issue. If you are a broker-in-charge and allow brokers with your firm to establish a separate firm, or affiliate with another existing firm, then make sure that they are not engaging in any other business under your firm name or using your trust account to handle monies that are related to a transaction with the other firm. Office policy should address whether brokers may have other affiliations.

There can be many reasons a broker might be affiliated with more than one real estate firm. Brokers just need to be sure that the documentation they are using indicates the correct firm affiliation for the transaction at hand, and that everyone knows which role the broker is performing for each transaction.

This article came from the May 2015-Vol46-1 edition of the bulletin.