Internal Brokerage Issues

Guidelines for Hiring Licensed or Unlicensed Assistants

It is important for a real estate agent to follow proper procedures when hiring licensed or unlicensed assistants.  First, there are two CAR forms that should be used when an agent decides to get an assistant.   There is the Personal Assistant Contract as well as the Broker/Associate-Licensee/Assistant Third Party Agreement.   It is suggested that both these forms be used.

In addition, CAR has an excellent Q & A entitled “Unlicensed Assistants” that lays out in chart form the activities that unlicensed assistants are legally permitted to do and those that are not permitted.   It is suggested that the agent hiring an unlicensed assistant provide the assistant with this form and have the assistant sign it on the last page indicating that they have received this and that they agree to abide by the guidelines set forth in it.

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Is That Your Commission?

We have all been struggling through one of the most difficult markets of our lifetime.  This is a market which finds people particularly competitive for clients and commissions.  For this reason, there has been a bit of a spike in Procuring Cause Hearings.  In this climate, it is of particular importance that real estate agents understand the factors which are likely to be considered in the event of a dispute regarding Procuring Cause.

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File Retention

Over the years, one issue that is often discussed is how to handle the retention and storage of files. Some of the questions involve:  How long must I retain my file?  Who should maintain the file?  In what format should I store my file?  Where should I store my file?  Here we examine some of these issues:

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Audits by the Department of Real Estate

An internal directive has been issued by the California Department of Real Estate (“DRE”) to begin conducting broker office surveys.  These surveys, which are effectively an audit of the brokerages activities and files, are schedule to commence in early 2013.   The broker office surveys will involve unannounced and unscheduled visit to brokers’ offices at which time the DRE will ask to see records from random transactions.  Amongst other things, the DRE is expected to investigate transaction files, trust fund handling, record keeping methods, and a host of the procedures and documents.

While it has always been a good idea for a real estate brokerage to have an outside source conduct an Advisory Audit of its policies and files, given the aforementioned internal directive by the DRE,  it is particularly advantageous to have such an audit this year.

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