Delegation of Authority: ARS 32-2153

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ARS 32-2153 (A)(21)

32-2153. Grounds for denial, suspension or revocation of licenses; letters of concern; provisional license; retention of jurisdiction by commissioner; definitions

suspended-licenseA. 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 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,

21. As a licensed broker, failed to exercise reasonable supervision over the activities of salespersons, associate brokers or others under the broker’s employ or failed to exercise reasonable supervision and control over the activities for which a license is required of a corporation, limited liability company or partnership on behalf of which the broker acts as designated broker under section 32-2125.

Quick Quiz

Fill in the Blank:
The may suspend or revoke a license, deny the issuance of a license, issue a letter of concern to a  .

32-2125. Corporations

A. A corporation, limited liability company or partnership applying for a broker’s license for the entity shall designate a natural person who is licensed as a broker and who is an officer of the corporation, manager of the limited liability company if management of the limited liability company is vested in one or more managers, member of the limited liability company if management is vested in the members or partner of the partnership who shall act as designated broker. The license shall extend no authority to act as designated broker to any other person. This subsection does not apply to a corporation or limited liability company applying for a license under subsection B of this section. An entity’s broker’s license issued pursuant to this subsection shall run concurrently with the corporation’s, limited liability company’s or partnership’s designated broker’s license.

B. An employing broker may engage the services of salespersons and associate brokers images (2)who act through and on behalf of professional corporations or professional limited liability companies that are licensed by the department.

A designated broker who acts on behalf of an employing real estate entity is permitted to become a professional corporation or a professional limited liability corporation.

Any person so engaged shall be separately licensed.

The department shall issue to or renew a license under this subsection only for a professional corporation or a professional limited liability corporation whose shareholders, members or managers hold active real estate licenses.

A corporation licensed under this subsection shall meet the requirements of title 10, chapter 20.

A limited liability company licensed under this subsection shall meet the requirements of title 29, chapter 4, article 11.

A professional corporation or professional limited liability company shall not be licensed as an employing broker.

C. The license of a corporation or limited liability company licensed under subsection B of this section terminates only upon the death of a shareholder, member or manager or any other change of shareholders, members or managers, except that any remaining shareholder, member or manager who was an authorized officer and shareholder prior to the change remains authorized to continue business under the corporation’s or limited liability company’s license for up to an additional ninety days pending the issuance of a new license.

D. The commissioner may suspend, revoke or deny renewal or the right of renewal of the license of a corporation, limited liability company or partnership licensed under this section if the corporation, limited liability company or partnership or any shareholder, officer, agent, partner or member of a corporation, limited liability company or partnership violates any of the provisions of this chapter.

E. Nothing in this section shall be construed to enlarge the functions of salespersons, to permit salespersons to assume any of the responsibilities or functions of brokers or to relieve the commissioner of any regulatory power or authority over salespersons or brokers.

F. A corporation, limited liability company or partnership licensed under subsection A of this section or a professional corporation or professional limited liability company licensed under subsection B of this section is exempt from the education requirements imposed pursuant to this chapter. The commissioner shall not charge a license fee or a renewal fee pursuant to section 32-2132 to a corporation, professional corporation, limited liability company, professional limited liability company or partnership licensed or approved under this section.

G. A corporation, limited liability company or partnership licensed under this section shall report to the department within ten days:

1. Any change in officers, directors, members, managers or partners or any change of control of the entity.

2. Any amendment to its articles of incorporation or organization or to its partnership agreement.

3. If a corporation, when a person becomes an owner of ten percent or more of the stock in the corporation.

4. The dissolution of the corporation, limited liability company or partnership.

Quick Quiz

Fill in the Blank:
An broker may engage the services of salespersons and associate brokers who act through and on behalf of corporations or professional limited liability companies that are licensed by the .

The delegation of Authority:

A designated broker or a managing broker, delegated by the designated broker, shall approve all listings, leases, property management agreements, buyer/broker employment agreements and purchase contracts within 10 days of execution.  (32-2151.01(G)) .  In order for a licensee to be eligible to be delegated this authority, the licensee must be licensed as an associate broker.  If the licensee is an associate broker, the licensee is also eligible to have the authority delegated to them to do the following per ARS 32-2127 (A)(B) (C) (D) and Commissioner’s Rule R4-28-304.

32-2151.01. Requirements

G. The designated broker shall review each listing agreement, purchase or nonresidential lease agreement or similar instrument within ten business days of the date of execution by placing the broker’s initials and the date of review on the instrument on the same page as the signatures of the parties. A designated broker may authorize in writing an associate broker who the designated broker employs to review and initial these instruments on the designated broker’s behalf.

32-2127 Business

A. When a broker maintains more than one place of business within the state he shall be required to procure an additional license for each branch office maintained.

B. Branch office licenses shall be issued in the same name as the principal office license is issued, and the license must be posted in the branch office. Branch office signs shall conform to the provisions for the principal office and shall include the designation “branch office”.

C. Each branch office shall be under the management of a broker or a licensed salesman.

D. If a designated broker is unable to act within twenty-four hours, he may designate a licensee whom he employs or another designated broker to act on his behalf. The designated broker shall make this designation in writing and shall keep the original designation at his office for one year from its effective date. A copy of this designation must be attached to any hire, server or renewal form submitted to the department which is signed by the designated broker’s designee. This designation shall not exceed thirty days’ duration and may authorize the designee to perform any and all duties the designated broker may legally perform, except that a salesperson shall not be authorized to hire or server licensees. A written designation is required for each temporary absence.

Quick Quiz

Fill in the Blank:
Branch  licenses shall be issued in the same name as the principal office license is issued, and the license must be posted in the office.

R4-28-304 Branch

A. To obtain a branch office license, the designated broker shall submit to the Department before operating the branch office the following information for each branch office of the employing broker on the Application for Branch Office form:

B. Branch office manager. A designated broker may authorize in writing an associate broker or salesperson to act as a branch office manager to perform any of the following duties of the designated broker at the branch office. This designation does not relieve the designated broker from any responsibilities. Upon the change of the branch manager, the designated broker shall submit a new authorization to the Department within 10 days of the change and shall retain a copy in the broker’s main office for five years.

  1. If the branch manager is an associate broker, the associate broker may, when dealing with branch office transactions:
  •  Review and initial contracts,
  •  Supervise the activity of salespersons and associate brokers,
  •  Hire or sever a salesperson or associate broker,
  •  Sign compensation checks,
  •  Be a signer on the branch office trust account and property management trust account,
  •  Write checks from the broker’s trust accounts, and
  •  Be responsible for the handling of all trust account funds administered by the branch manager.
  1. If the branch manager is a salesperson, the salesperson may, when dealing with branch office transactions:
  • Perform office management tasks that are not statutory duties of the employing broker, and
  • Be a signer on the broker’s trust account and property management trust account.
Quick Quiz

Fill in the Blank:
Branch office . A designated broker may authorize in writing an associate broker or salesperson to act as a branch manager to perform any of the following duties of the designated broker at the branch office. This designation does not relieve the designated broker from any .

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