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ADRE Model Broker’s Policy and Procedure Manual
The ADRE Model Broker’s Policy and Procedure Manual (“Manual”) has been created to provide an example of the written policies, procedures, and systems that a Real Estate Broker is required to establish and enforce according to A.A.C. R4-28-1103.
Brokers should carefully consider the needs of their individual brokerages and their employees, both licensed and unlicensed when creating their written policies, procedures and systems. Written policies, procedures, and systems should provide employees/sales associates with an understanding of the expectations of the Broker and practical information on how the brokerage operates.
The Manual is intended to serve as a model only; Brokers are not required to use the form or substance contained in the Manual. Brokers may adopt any portion of the Manual that is relevant to their brokerages and should adapt the Manual to address the specific needs of their brokerage.
R4-28-1103. Broker Supervision and Control
A. An employing broker and a designated broker shall exercise reasonable supervision and control over the activities of brokers, salespersons, and others in the employ of the broker.
Consistent oversight and control include the establishment and enforcement of written policies, procedures, and systems to:
- 1. Review and manage:
- A. Transactions requiring a salesperson’s or broker’s license;
- B. Use of disclosure forms and contracts and, if a real estate broker, real estate employment agreements under A.R.S. § 32-2151.02;
- 2. Manage:
- A. Filing, storing, and maintaining documents pertaining to transactions under subsection (A)(5)(a);
- B. Handling of trust funds;
- C. Use of unlicensed assistants by a salesperson or broker;
- 3. Oversee delegation of authority to others to act on behalf of the broker;
- 4. Familiarize salespersons and associate brokers with the requirements of federal, state, and local laws relating to the practice of real estate, or the sale of cemetery property or membership camping contracts;
- 5. Review and inspect:
- A. Documents that may have a material effect upon the rights or obligations of a party to a transaction;
- B. Advertising and marketing by the broker and by salespersons, brokers, and others in the broker’s employ.
B. A designated broker shall establish a system for monitoring compliance with statutes, rules, and the employing broker’s policies, procedures, and systems.
C. A designated broker shall supervise associate brokers, salespersons, and employees of the employing broker and shall exercise reasonable supervision and control over activities by the employing broker for which a license is required.
D. An employing broker is responsible for the acts of all associate brokers, salespersons, and other employees acting within the scope of their employment.
E. A designated broker may use the services of employees to assist in administering the provisions of this Section but shall not relinquish overall responsibility for supervision and control of the acts of the employing broker’s employees.
F. A designated broker who, upon learning of a violation of real estate statutes or rules by a salesperson or associate broker under the broker’s supervision, immediately reports the violation to the Department is not subject to disciplinary action by the Department for failure to supervise the salesperson or broker.
G. If an employing broker maintains one office and employs a designated broker, no more than one other licensed person, and no more than one unlicensed person, the employing broker and designated broker are not required to develop and maintain written policies, procedures, and systems as described in subsection (A).
Notice of Disclaimer
The requirements outlined in this model are based on a practical application of Arizona laws, rules, and custom and are not intended to provide legal advice. From time to time, laws, rules, forms, and requirements referenced in this manual may change. Neither the Real Estate Commissioner nor any division, officer or employee of the Department of Real Estate warrants the accuracy, reliability or timeliness of any information in this model manual, and will not be responsible or liable for any loss, consequence, or damage resulting directly or indirectly from reliance on the accuracy, reliability, or timeliness of the information. Information in this model may have been derived from or repeated from other sources and may be applicable or not. The documents and materials found or referenced here may have been revised or replaced since the last printing of this model manual. Any person or entity that relies on information obtained from this manual does so at the person’s or entity’s own risk. The user assumes the responsibility of verifying any materials used or relied on.
Definitions of many terms are found in the real estate law book. In addition to terms defined in A.R.S. § 32-2101, 32-2171, and A.A.C. R4-28-101, the following terms appear in this manual which is defined below:
A.A.C. – Arizona Administrative Code (unofficially, the Commissioner’s Rules).
ADRE – Arizona Department of Real Estate.
AAR – Arizona Association of REALTORS®
A.R.S. – Arizona Revised Statutes
Broker – A company’s designated broker.
D.B.A./dba – Doing Business As name
Employing Broker – The self-employed broker or real estate entity to which the Sales Associates are licensed.
Listing – An employment contract to represent a seller in the marketing of the seller’s property.
Buyer-Broker Agreement – An employment contract to represent a buyer in the intended purchase of property.
MLS – local multiple listing services.
NAR – NATIONAL ASSOCIATION OF REALTORS®
RESPA – Real Estate Settlement Procedures Act
Sales Associate – A licensed salesperson or associate broker working with the company as either an employee or an independent contractor.
SPDS – Seller’s Property Disclosure Statement.
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