Termination Policy ADRE Model Broker Policy Manual-System
This section should include:
Procedures for when a Sales Associate terminates association with the Company, or the Company terminates the Sales Associate, such as:
- Reviewing all of the Sales Associate’s pending business and determining who will handle the transactions; Reviewing any agreements concerning compensation.
- Policies regarding the disposition of Company property upon the severance/termination of a Sales Associate from the Company, such as: keys, key card, documents, etc.
- Company policy/practice concerning listing agreements.
- Information that the severance is not effective under the licensing laws until the ADRE receives the notice of severance.
Use of Transaction Management System
This section should include:
- Information regarding any transaction management platform/system (if applicable), and how Sales Associates and employees will be expected to use the transaction management platform/system.
- See SPS 2010.01 regarding transaction management guidelines:
Guidance for using Electronic Real Estate Transaction Management
Description of Practice/Procedure: Designated brokers may implement a Transaction Management (TM) program for internal standardization of document storage, so long as the document storage program adheres to the guidelines mandated by the Arizona Revised Statutes (“A.R.S.” or “statutes”) and the Arizona Administrative Code Rules (“A.A.C. R” or “rules”) applicable to the Arizona Department of Real Estate (“Department” or ADRE). Understanding there are several computer based TM and/or document storage programs (“TM system” or “electronic storage system”), this advisory provides guidance and outlines the responsibilities of brokers who are using or intend to use any electronic record program. This advisory also provides guidance to brokers using electronic record programs who have signed or intend to sign the Department’s User Agreement, which provides the Department access to their electronic storage systems.
Electronic Record Keeping
1. Backing up records: Transaction and employment records required to be maintained pursuant to statute or rule, must be backed-up (duplicated and stored in a secure, offsite location) in a manner allowing restoration in the event electronic data maintained at the principal place of business is destroyed.
2. Production of records: Records must be reproducible for the Department, at the broker’s expense, in a legible, paper form (“hard copy”) upon the request of the Commissioner, or the Commissioner’s representative, for auditing, inspection, or investigation purposes. Brokers who maintain electronic records in a computer based TM and/or document storage program may provide the Department with electronic access to records, unless a hard copy is specifically requested by the Department.
3. Electronic records maintained in an electronic storage system should be legible, exact duplicates of the original documents.
4. Maintenance of a log: Brokers using web based TM and/or document storage programs shall maintain a log in a chronological or other systematic manner that lists each real estate purchase contract or lease agreement, and identifies the file in which these documents are maintained. If the web based TM and/or document storage program maintains this log or list electronically, it should be made easily accessible upon request by the Commissioner or the Commissioner’s representatives. If the web based TM and/or document storage program is not capable of maintaining this log or list electronically, the broker shall maintain a separate list or log in either written or electronic form and shall make it available to the Commissioner or the Commissioner’s representative upon request.
5. Notification requirements: If the file servers containing a broker’s web based TM and/or document storage program are directly or indirectly owned by the broker, the broker shall inform the Commissioner in writing of the location of these file servers. If the file servers containing a broker’s web based TM and/or document storage program are not directly or indirectly owned by the broker, the broker shall inform the Commissioner in writing of the legal address and name of the entity responsible for storing such records. The broker may be required to show evidence that the broker’s electronic records are backed-up in accordance with this SPS, and SPS 2005.06 addressing “Electronic Record Keeping.” a.
A: ADRE Online Review/Audit Option: A broker using a web based TM and/or document storage program may opt to sign the Department’s User Agreement and provide the Department with direct access to his/her electronic storage system. Providing the Department access to brokers’ electronic storage systems is intended to enable efficient, streamlined exchanges of information with the Department, increase efficiency within the brokerage, and assist in ensuring compliance among real estate salespersons and associate brokers licensed to brokers. This capability is available using a web based TM and/or document storage program if a broker complies with the following requirements: (1) the broker must sign a User Agreement with ADRE allowing ADRE internet access to all required documents; (2) the broker must be able to produce the required documents and files in hard copy format if hard copies of documents are specifically requested by the Commissioner or the Commissioner’s representative; and (3) the broker must sign a guarantee that the documents and files will be maintained for the mandatory time frames set forth in the relevant statutes and rules including, but not limited to, A.R.S. §§ 32-2151.01, 32-2153(A)(17) and 32-2175.
32-2153(A)(17) Grounds for denial, suspension or revocation of licenses; letters of concern; provisional
license; retention of jurisdiction by commissioner; definitions
A. The commissioner may suspend or revoke a license, deny the issuance of a license, issue a letter of concern to a licensee, issue a provisional license or deny the renewal or the right of renewal of a license issued under the provisions of this chapter if it appears that the holder or applicant, within five years immediately preceding, in the performance of or attempt to perform any acts authorized by the license or by this chapter, has:
17. Failed or refused upon demand to produce any document, contract, book, record, information, compilation or report that is in the licensee’s possession or that the licensee is required by law to maintain concerning any real estate, cemetery or membership camping business, services, activities or transactions involving or conducted by the licensee for inspection by the commissioner or the commissioner’s representative.
B. The Commissioner’s access to broker’s files shall be used for:
I. Preliminary review/research of consumer complaints against brokers and salespersons;
II. Routine audits or audit reviews of broker files to ensure compliance with any requirements in the relevant statutes and rules, including but not limited to ensuring that brokers properly maintain documents in a timely manner.
III. Any other purposes the Commissioner deems necessary to protect Arizona consumers.
This section should include:
SPS 2005-04 – Substantive Policy Statement regarding the use of unlicensed assistants.
- If an unlicensed assistant is paid on any basis that relies on the ultimate sale of a property, then that person must be licensed.
An unlicensed assistant in the employ of a licensed real estate broker may:
- Perform telephone duties, to include calls to:
- Collect demographic information
- Solicit interest in engaging the services of a licensee or brokerage.
- set or confirm appointments (with no other discussion) for:
A licensee to list or show property
A buyer with a loan officer
A property inspector to inspect a home
A repair/maintenance person to perform repairs/maintenance.
An appraiser to appraise property.
- Mortgage and/or title companies to track the status of a file, check daily interest rates and points, whether buyer has been qualified, confirm closing appointment for licensee, and so forth o Assist a licensee at an open house.
- Unlock a home for a licensee so that licensee can show a buyer the property or preview the property (no discussion about the property).
- Deliver documents (as a mail or delivery service only).
- An unlicensed assistant shall not perform the following activities:
- Hold/host an open house without an agent being present.
- Perform a walk-through inspection o Answer questions relating to a transactional document.
- Give instructions to inspectors, appraisers or maintenance/repair people. Because these instructions are part of the licensee’s regular duties and there is a direct relationship to the (potential) transaction, a license is required in order to give instructions to inspectors, appraisers or repair/maintenance people.
An unlicensed person may not act as a residential leasing agent by performing any of the following activities, unless the exemption pursuant to A.R.S. § 32-2121(A)(6) applies:
- Preparing and presenting to any person a residential lease, application or renewal or any amendment of the lease.
- Collecting or receiving a security deposit, a rental payment or any related payment for delivery to and made payable to a property, a property manager, an owner or the location.
- Showing a residential rental unit to any prospective tenant.
- Executing residential leases or rental agreements.
- Acting on behalf of the owner or the Company to deliver legal notice related to the property or to the tenants.