NOTICE IS HEREBY GIVEN that pursuant to authority vested in the Department of Regulation and Licensing in ss.
227.11 (2),
452.07,
452.10 (4),
452.12 (3),
452.133 and
452.135, Stats., and interpreting ss.
452.12 (3) and
452.135, Stats., the Department of Regulation and Licensing will hold a public hearing at the time and place indicated below to consider an order to repeal ss.
RL 17.02 (1),
(2), and
(4),
17.09,
17.10 and
17.11; to amend ss.
RL 17.04,
17.08 (1) and
17.12 (1); and to create ss.
RL 17.02 (4g) and
(4r),
17.08 (1m) and
(3) to
(5), relating to supervision by real estate brokers.
Hearing Date, Time and Location
Date: December 2, 2004
Time: 10:30 a.m.
Location: 1400 East Washington Avenue
Room 179A
Madison, Wisconsin
Appearances at the Hearing
Interested persons are invited to present information at the hearing. Persons appearing may make an oral presentation but are urged to submit facts, opinions and argument in writing as well. Facts, opinions and argument may also be submitted in writing without a personal appearance by mail addressed to the Department of Regulation and Licensing, Office of Administrative Rules, P.O. Box 8935, Madison, Wisconsin 53708. Written comments must be received by December 13, 2004, to be included in the record of rule-making proceedings. Analysis prepared by the Department of Regulation and Licensing.
Analysis
Statutory authority
Explanation of agency authority:
Section 3608 dp, contained in
2001 Wisconsin Act 16, repealed former Wis. Stats. § 452.12 (3) (b), Stats., which provided that if a broker maintained any branch office in this state, each branch office must be under the direct-full time supervision of a broker. The broker maintaining the branch office was responsible for the acts and conduct of all brokers, salesperson and time-share salesperson employed at the branch office. Section 3608 dm, contained in
2001 Wisconsin Act 16, amended former Wis. Stats. §
452.12 (3) to provide that each broker shall supervise and is responsible for the acts of any broker, salesperson or time-share salesperson employed by the broker. The proposed amendments to Chapter
RL 17 remove rules relating to the supervision of principal offices (s.
RL 17.09), supervision of branch offices (s.
RL 17.10), and supervision outside of principal or branch office (s.
RL 17.11), and replace these sections with a defined “supervising broker" who is responsible for the supervision of licensed employees under s.
RL 17.08. The scope of supervision contained in s.
RL 17.08 is amended to provide for the reasonable review of documents. Additional sections are added to s.
RL 17.08 describing the manner and effect of a delegation of supervision duties to a supervising broker.
Plain language analysis:
SECTIONS 1 and 2 repeal definitions which are no longer applicable.
SECTION 3 creates definitions of “reasonable review" and “supervising broker."
SECTION 4 changes the spelling of “employe" to “employee."
SECTION 5 amends the scope of a broker-employer's duty to supervise employees.
SECTION 6 creates s.
RL 17.08 (1m) to require that documents or records related to a transaction shall be reviewed by the supervising broker prior to the closing of a transaction.
SECTION 7 creates s.
RL 17.08 (3) to require that a broker-employer that is a business entity shall delegate the duty to supervise licensed employees to a supervising broker. Section
RL 17.08 (4) is created to provide that a broker-employer who is not a business entity will be deemed to be the supervising broker in the absence of a delegation of the duty to supervise licensed employees to another supervising broker. And s.
RL 17.08 (5) is created to set forth the requirements of a broker-employer's delegation of the duty to supervise licensed employees to a supervising broker.
SECTION 8 repeals sections related to the supervision of principal and branch offices and the supervision of licensed employees outside of principal or branch offices.
SECTION 9 changes the spelling of “employe" to “employee."
Comparison with adjacent states:
Minnesota Rules Chapter 2805
2805.1000 RESPONSIBILITIES OF BROKERS.
Subpart 1. Supervision of personnel. Brokers shall adequately supervise the activities of their salespersons and employees. Supervision includes the ongoing monitoring of listing agreements, purchase agreements, other real estate-related documents which are prepared or drafted by the broker's salespersons or employees or which are otherwise received by the broker's office, and the review of all trust account books and records. If an individual broker maintains more than one place of business, each place of business shall be under the broker's direction and supervision. If a partnership or corporate broker maintains more than one place of business, each place of business shall be under the direction and supervision of an individual broker licensed to act on behalf of the partnership or corporation. The primary broker shall maintain records specifying the name of each broker responsible for the direction and supervision of each place of business. If an individual broker, who may be the primary broker, is responsible for supervising more than one place of business, the primary broker shall, upon written request of the commissioner, file a written statement specifying the procedures which have been established to assure that all salespersons and employees are adequately supervised. Designation of another broker to supervise a place of business does not relieve the primary broker of the ultimate responsibility for the actions of licensees.
Illinois Administrative Code
Title 68, Section 1450.125 Managing Broker Responsibilities
a) The sponsoring broker shall inform OBRE in writing of the name and certificate number of all managing brokers employed by the sponsoring broker and the office or branch offices each managing broker is responsible for managing. Each managing broker shall have an active license as a broker.
b) The sponsoring broker shall be responsible for issuing sponsor cards. However, the sponsoring broker may delegate that responsibility to one or more managing brokers.
c) Upon written request within 15 days after the loss of a managing broker, OBRE shall issue a written authorization to allow the continuing operation of a licensed office or branch office, provided that the sponsoring broker or representative under a duly executed power of attorney assumes responsibility, in writing, for the operation of the office and agrees to personally supervise the operations. No authorization shall be valid for more than 60 days unless extended by OBRE for good cause and upon written request by the sponsoring broker. Good cause includes circumstances as sales under contract pending closing, loss of livelihood for sales associates, and undue hardship caused to sellers.
d) When a managing broker receives a renewal application from OBRE for a licensee supervised by the managing broker or employed by the sponsoring broker of the manager, he shall notify the licensee of the receipt, personally within 7 days or by certified or registered mail or other signature restricted delivery service within 10 days. The notice shall also inform the licensee that any unprocessed renewal form will be returned to OBRE by the manager broker. When a managing broker receives a renewal application from OBRE for a licensee not supervised by the managing broker or employed by the sponsoring broker of the managing broker, the renewal form shall immediately be returned to OBRE.
e) All managing brokers shall notify OBRE on business letterhead of any change of business address of the offices they manage within 24 hours of any change. Change of address is required for all offices and branch offices. A license returned to OBRE for the reason described in this subsection shall remain in good standing until the new licenses are issued and in the possession of the licensee.
f) OBRE will honor the Order of a court of competent jurisdiction appointing a legal representative for the sole purpose of closing out the affairs of a deceased broker or a broker who has been adjudicated disabled, who was a sole proprietor, until the real estate brokerage is closed but not to actively engage in the brokerage business as defined in Section 1-10 of the Act.
Section 1450.130 Supervision
a) A managing broker shall exercise reasonable supervision over the activities of licensees and unlicensed assistants working in those offices managed by the managing broker. This would include:
1) the implementation of office policies and procedures established by the sponsoring broker;
2) training of licensees or unlicensed assistants;
3) assisting licensees as necessary in real estate transactions;
4) supervising those special (escrow) accounts over which the sponsoring broker has delegated responsibility to the managing broker in order to ensure compliance with the special (escrow) account provisions of the Act and this Part;
5) supervising all advertising of any service for which a license is required;
6) familiarizing sponsored licensees with the requirements of federal and state laws relating to the practice of real estate; and
7) compliance with this Part for licensees and offices under his/her supervision.
b) The sponsoring broker shall remain ultimately responsible for compliance with this Part. The sponsoring broker shall name a managing broker for every office.
Iowa Administrative Code-IAC Real Estate Commission [193E]
193E—7.10(543B) Agency-designated broker responsibilities. The following conditions and circumstances, together with the education and experience of licensed and unlicensed employees and independent contractors, shall be considered when determining whether or not the designated broker has met the supervisory responsibilities as set forth by Iowa Code section 543B.62, subsection (3), paragraph “b."
7.10(1) When making a determination, the commission may consider, but is not limited to consideration of, the following:
a. Availability of the designated broker/designee to assist and advise regarding brokerage related activities;
b. General knowledge of brokerage-related staff activities;
c. Availability of quality training programs and materials to licensed and unlicensed employees and independent contractors;
d. Supervisory policies and practices in the review of competitive market analysis, listing contracts, sales contracts and other contracts or information prepared for clients and customers;
e. Frequency and content of staff meetings;
f. Written company policy manuals for licensed and unlicensed employees and independent contractors;
g. Ratio of supervisors to licensed employees and independent contractors; and
h. Assignment of an experienced licensee to work with new licensees.
7.10(2) The designated broker shall disseminate, in a timely manner, to licensed employees and independent contractors all regulatory information received by the brokerage pertaining to the practice of real estate brokerage.
193E—7.11(543B) Supervision required. An employing or affiliated broker is responsible for providing supervision of any salesperson or broker associate employed by or otherwise associated with the broker as a representative of the broker. The existence of an independent contractor relationship or any other special compensation arrangement between the broker and the salesperson or broker associate shall not relieve either the broker or the salesperson or broker associate of duties, obligations or responsibilities required by law.
7.11(1) Each salesperson and broker associate shall keep the broker fully informed of all activities being conducted on behalf of the broker and any other activities that might impact the broker's responsibilities. However, the failure of the salesperson or broker associate to keep the broker fully informed shall not relieve the broker of duties, obligations or responsibilities required by law.
Michigan – Administrative Rules
R 339.22310 Supervision.
Rule 310. A broker or associate broker shall supervise the work of a licensee. Supervision shall include, at a minimum, all of the following:
(a) Direct communication in person or by radio, telephone, or electronic communication on a regular basis.
(b) Review of the practice of the supervised licensee.
(c) Review of the supervised licensee's reports.
(d) Analyses and guidance of the licensee's performance in regulated activities.
(e) Provision of written operating policies and procedures.
Indiana Administrative Code
876 IAC 1-1-3 Definitions.
Authority: IC 25-34.1-2-5/ IC 25-34.1-2-5.1
Affected: IC 25-34.1-3-2; IC 25-34.1-5
Sec. 3. (a) The definitions in this section apply throughout this title.
(i) “Principal broker" means the individual broker, including the broker designated as representative of a corporation or partnership whom the commission shall hold responsible for the actions of licensees who are assigned to the principal broker.
876 IAC 1-1-18 Supervision of office by licensed broker; branch offices; notice by principal broker.
Authority: IC 25-34.1-2-5
Affected: IC 25-34.1-3-3.1; IC 25-34.1-3-4.1
Sec. 18. Every real estate office or real estate branch office whether operated as a corporation, partnership, or sole proprietorship, shall be directed, supervised, and managed by a licensed real estate broker. The office or branch office shall constitute the managing broker's principal and sole place of real estate business. Said managing broker may be the principal broker in cases where there is only one office. The principal broker must submit to the commission a Branch Office Registration Form prior to the opening of any branch office. Said principal broker shall notify the commission when any licensee associated with said principal broker transfers from one branch office to another branch office within the same association. (Indiana Real Estate Commission; Rule 19; filed Sep 28, 1977, 4:30 pm: Rules and Regs. 1978, p. 799; filed Mar 13, 1980, 2:30 pm: 3 IR 647; filed Dec 11, 1986, 10:40 am: 10 IR 877; readopted filed Jun 29, 29, 2001, 9:56 a.m.: 24 IR 3824)
Anticipated costs incurred by private sector
None.
Effect on small business
These proposed rules will be reviewed by the department through its small business review advisory committee to determine whether there will be a significant economic impact on a substantial number of small businesses, as defined in s.
227.114 (1) (a), Stats.
Agency contact person
Pamela Haack, Paralegal, Department of Regulation and Licensing, 1400 East Washington Avenue, P.O. Box 8935, Madison, WI 53708-8935. Phone: 608-266-0495. E-mail address:
pamela.haack@drl.state.wi.us.
Fiscal estimate
The Department of Regulation and Licensing will incur $500 in costs for staff to print and distribute the rule change.
Copies of this rule are available without cost by making a request to the Department of Regulation and Licensing, Office of Administrative Rules, P.O. Box 8935, Madison, Wisconsin 53708-8935, telephone number 608-266-0495, e-mail address:
pamela.haack@drl.state.wi.us.
Notice of Hearing
Transportation
