ADRE Model Broker Policy Manual-Areas of Expertise

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Areas of Expertise

This section should include:

  • What is the company position on working outside of an area of expertise?
  • What does company require as far as education for areas of expertise, i.e., CCIM for commercial?
  • Does the company allow its Sales Associates to act as 3rd party negotiators (After Loan Originator License Requirements fulfilled)?
  • The unauthorized activity by a Sales Associate who conducts real estate on behalf of anyone other than their employing broker is strictly prohibited. For example, establishing or working for a separate legal entity for negotiation of short sales or conducting property management

Pursuant to A.A.C R4-28-1101(H), in part: A Sales Associate shall not undertake to provide professional services concerning a type of property or service that is outside the salesperson’s or broker’s field of competence without engaging the assistance of a person who is competent to provide those services, unless the salesperson’s or broker’s lack of expertise is first disclosed to the client in writing and the client subsequently employs the salesperson or broker.

Quick Quiz

Fill in the Blank:
A Sales shall not undertake to provide professional services concerning a type of property or service that is the salesperson’s or broker’s field of competence without engaging the assistance of a person who is competent to provide those .

R4-28-1101 (H). Duties to Client

H. The services that a salesperson or broker provides to a client or a customer shall conform to the standards of practice and competence recognized in the professional community for the specific real estate discipline in which the salesperson or broker engages. A salesperson or broker shall not undertake to provide professional services concerning a type of property or service that is outside the salesperson’s or broker’s field of competence without engaging the assistance of a person who is competent to provide those services, unless the salesperson’s or broker’s lack of expertise is first disclosed to the client in writing and the client subsequently employs the salesperson or broker.

Pursuant A.R.S. § 32-2155(C): A real estate broker or real estate salesperson shall not collect compensation for rendering services in negotiating loans secured by real property unless all of the following apply:

32-2155. Restriction on employment or compensation

C. A real estate broker or real estate salesperson shall not collect compensation for rendering services in negotiating loans secured by real property unless all of the following apply:

1. The broker or salesperson is licensed under title 6, chapter 9 or is an employee, officer or partner of a corporation or partnership licensed under title 6, chapter 9.

2. The broker or salesperson has disclosed to the person from whom the compensation is collected that the broker or salesperson is receiving compensation both for real estate brokerage, when applicable and for mortgage broker services.

3. The compensation does not violate any other state or federal law.

Quick Quiz

Fill in the Blank:
The or salesperson has disclosed to the person from whom the compensation is collected that the broker or is receiving compensation both for real estate brokerage, when applicable, and for mortgage broker .

 

Authorized and Unauthorized Real Estate Activities

This section should cover areas of practice that Sales Associates are authorized or not authorized to participate in, or are required to have prior approval of Broker, such as:

  • Sales, leases, or exchanges
  • Residential, new, resale, commercial, industrial, multi-family, agricultural, or vacant properties
  • Property management
  • Short Sale
  • Real Estate Owned properties (REO)
  • Business opportunities
  • FHA-VA-owned properties
  • Attorney-in-fact/acting on a buyer’s or seller’s behalf
  • Unsubdivided land
  • Loan Originator (reference Title 6, Chapter 9)
    Does the Company allow its Sales, Associates, to establish or work for separate legal entities, acting as a vendor on properties (ex. property maintenance, home staging, etc.)? Such legal entities may not conduct activities requiring a real estate license.

Company Meetings

This section should cover:

  • The Broker’s policy concerning Sales Associates’ attendance at Company meetings.

Credit Reports

This section may include:

  • Federal guidelines dealing with credit reports and confidentiality concerns.
  • How to respond to a customer/client request that a Sales Associate (other than those managing property) generate, review, fax, and handle a credit report for a client or customer or prospective client or customer.
Quick Quiz

Fill in the Blank:

The Broker’s policy Sales Associates’ attendance at Company .

Disputes between Sales Associates

A licensee shall not allow a controversy with another licensee to jeopardize, delay, or interfere with the initiation, processing, or finalizing of a transaction on behalf of a client (A.A.C. R4-28-1101(D)). Any action for collecting compensation may be filed with a court of law; the Department of Real Estate has no jurisdiction over compensation disputes between licensees (A.R.S. § 32-2152).

This section should address disputes between or among Sales Associates and may include:

  • Any written agreement or policy concerning how the dispute is to be resolved.
  • Whether the matter will be mediated and if so, by whom.
  • If unable to mediate an acceptable resolution, who will determine the outcome.
  • What happens if a Sales Associate refuses to cooperate or fails to comply with any ordered or agreed conduct.
  • Whether notice of the dispute must be given to the broker, including when and how the notice is to be provided.
  • If a lawsuit is filed, who is responsible for judgments, damages, losses, costs, expenses, etc., incurred by Broker/Company in defense of the lawsuit.
  • Consequences for non-compliance with policies/agreement.
R4-28-1101. Duties to Client

D. A licensee shall not allow a controversy with another licensee to jeopardize, delay, or interfere with the initiation, processing, or finalizing of a transaction on behalf of a client. This prohibition does not obligate a licensee to agree to alter the terms of any employment or compensation agreement or to relinquish the right to maintain an action to resolve a controversy. 

 

32-2151. Action by broker or salesperson to collect compensation

A. An action for the collection of compensation earned may be maintained in the courts of the state by any broker or salesperson. To commence the action, the complaint shall allege that the plaintiff was a qualified licensed broker or salesperson at the time the claim arose. Before hearing the action, the court shall require the plaintiff to prove the alleged qualifications.

B. The commissioner shall not entertain complaints regarding purely civil disputes between licensees concerning the earning, splitting or nonpayment of compensation.

C. Nothing in this section shall be construed to permit the payment or receipt of compensation in violation of sections 32-2155 or 32-2163.

Quick Quiz

Fill in the Blank:
The shall not entertain complaints regarding purely civil disputes between licensees concerning the earning, splitting or of compensation.

 

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