If you are a real estate broker in California, mistakes by your staff can jeopardize the standing of the broker’s license. Even if a mistake is unintentional, you are accountable for all actions by everyone at your brokerage. If a third party reports a violation by anyone in your office, the California Department of Real Estate (DRE) will likely issue a broker office survey in addition to any disciplinary actions against your staff.
The DRE Broker Compliance Evaluation Manual outlines the most important requirements and responsibilities for real estate brokers in California. Key regulations concerning real estate broker staff include:
- All salespeople and associates must be properly licensed.
- Brokers must report all hiring and termination of real estate salespeople to the DRE.
- Every broker associate and salesperson must have a written agreement outlining responsibilities and compensation.
- A broker must have a reasonable system of supervising salespeople and broker associates.
A broker office survey typically involves investigators analyzing office policies and reviewing a random selection of transaction files and accounting records. If the survey reveals violations, a costly, in-depth BRE audit usually follows. Depending on the violation, brokers are at risk of losing their license and possibly facing criminal charges.
There are a lot of common-sense things you can do in preparation for an office survey such as making sure you have client information properly secured, all real estate licenses are prominently displayed and all business cards have the correct license numbers on them. For more in depth inspections of your system for reviewing transactions, we recommend bringing in an experienced attorney who can identify and correct problems before they result in disciplinary actions.