Chapter 8 - Brokerage Office Issues Flashcards
Employee - Common Law
is a person whose employer mandates the results. The employer controls how the results are accomplished.
Independent Contractors
Control the means and methods of accomplishing an assigned task; the paying entity has the right only to demand the end results.
Managing Broker
is a broker who has supervisory responsibilities for licensees in one or, in the case of multi-office company, more than one office and who has been appointed as such by the sponsoring broker.
Statutory Non-Employee
Licensed real estate agents
Regular Employee
a person who works an average of 20 hours a week for a person or entity who would be considered as an ‘employee’ under the IRS main tests in these categories
Employee Agreement
Must be signed by the parties. The agreement must address - supervision, duties, compensation and termination.
Errors & Omissions Insurance
Professional liability insurance that protects licensee from mistakes or negligence. A typical policy pays legal fees and judgements resulting from real estate transactions. It does not generally cover - Fraud, Transactions involving buying or selling of one’s own real estate, civil rights violations.
Unlicensed assistants
Those who are licensed may employ, or otherwise utilize the services of, unlicensed assistants to assist them with administrative, clerical, or personal activities for which a license is not required. A licensee is not permitted to act as an unlicensed agent
Commission
Primary source of compensation for the real estate licensee. The commission rate that will be paid on the sale of property is negotiated between the client and the broker at the time a written agreement is made. Commission is typically a percentage of the transaction amount, although compensation could be a flat fee, hourly rate or some other consideration.
Sponsoring Broker
is the licensed person or entity who has issued a sponsor card to another licensed broker or leasing agent. However, the sponsoring broker may delegate that responsibility to one or more managing brokers.
Branch Office
Means that the sponsoring broker has multiple offices and they must apply for a branch office license for each office other than their principal place of business.
Offer of Cooperation
Usually published in the form of an MLS listing, the listing includes the amount (%) offered as compensation for either a subagent, broker’s agent or buyer’s agent
Procuring Cause
The real estate agent who is primarily responsible for bringing about a sale, such as by introducing the buyer to the property or by negotiating the agreement between the buyer and seller. Sometimes more than one agent contributes to the sale.
