Qualifying Broker Responsibilities

Broker Supervising Sales Agent

Just exactly what are the responsibilities

of a qualifying broker? This is a difficult question to answer since we are limited to space. “Broker Responsibilities” is a more fitting title for a book, but I’ll attempt to share some of the major responsibilities. In most cases, the owner of a real estate agency also assumes the role of a qualifying broker. Common sense tells us the owner’s main concern is making decisions that will effectively grow their business and make it profitable. A smart business owner will hire someone to be the qualifying broker for agency because the daily activities for both the owner and the qualifying broker are enormous. Each position is a full time job within itself.

Have you ever known of

an agency owner that didn’t also list and sell real estate? There are some that are only owners and actually practice real estate, but they’re few and far between. When you realistically think about it, how many people are really good at multitasking while fulfilling major management positions. There is an old saying, “When the cat’s away, the mice will play.” If an owner is out showing homes, who is left in the office to make major business decisions; who is left to assist the sale force? A smart business owner should realize the importance of hiring qualified people for management positions so they can focus of the overall growth on the company.

There are also legal reasons to hire a qualifying broker

rather than assuming the duties yourself. According to Alabama Statutory law, §34-27-1 states, “This chapter requires that a real estate salesperson be licensed under a qualifying broker. A qualifying broker is held responsible to the commission and to the public for acts of each salesman licensed under him.” By this law we see that every real estate agent must under the tutelage of a qualifying broker, and the broker is responsible for all acts of the agents under them.

Alabama License Law, Section §34-27-2 (12) defines a qualifying broker as, “A broker under whom a sole proprietorship, corporation, partnership, branch office, or lawfully constituted business organization as the Legislature may from time to time provide is licensed, or a broker licensed as a company to do business as a sole proprietorship who is responsible for supervising the acts of the company or proprietorship and all real estate licensees licensed therewith.” Here we see the qualifying broker is responsible for supervising all agents licensed with their company.

Having been a qualifying broker for close to 40 years,

I fully understand the magnitude of responsibilities placed on the broker. I know from experience that if a sales force consist of as few as 15-20 agents, the duties of the qualifying broker is all he or she has time for. And from my experience as a qualifying broker, the work day consist of 18-20 hours most days. The position takes some getting used to. I found it very difficult to ever totally relax. The qualifying broker never knows what actions their agents are taking that could lead to possible legal issues and the broker is held responsible for everything agent may say or do.

Statutory law, Section § 34-27-34 (a) (1) tells us

who may serve as a qualifying broker; “A broker may serve as qualifying broker for a salesperson or associate broker only if licensed in Alabama, his or her principal business is that of a real estate broker, and he or she shall be in a position to actually supervise the real estate activities of the associate broker or salesperson on a full-time basis.” Take note this law said “supervise real estate activities on a full-time basis!” Some National Franchises mandate that the qualifying broker cannot list or sell real estate. That is they are non-competing agents. While some other franchises almost mandate that a qualifying broker competes with the agents they supervise. I know of so many cases where agents had to make decisions on their own because they couldn’t reach their qualifying broker. With the commonality of cell phones, there should never be a time when an agent shouldn’t be able to reach their broker. Yet it happens every day.

Let’s look at one last law; § 34-27-34 (a) (2), “A salesperson or associate broker shall not perform acts for which a license is required unless licensed under a qualifying broker. A qualifying broker shall be held responsible to the commission and to the public for all acts governed by this chapter of each salesperson and associate broker licensed under him or her and of each company for which he or she is the qualifying broker. It shall be the duty of the qualifying broker to see that all transactions of every licensee engaged by him or her or any company for which he or she is the qualifying broker comply with this chapter. Additionally, the qualifying broker shall be responsible to an injured party for the damage caused by any violation of this chapter by any licensee engaged by the qualifying broker. This subsection does not relieve a licensee from liability that her or she would otherwise have.

This is by no means a complete explanation of the qualifying broker responsibilities but it is the root meaning of the position. It should be enough to cause someone to think twice before deciding to become a qualifying broker; especially if you are thinking of working with a company that doesn’t place you in total control over the agents you would be responsible for. In the past I have been the qualifying broker for various corporations, and when I reflect on the way I supervised people; I was very strict and somewhat difficult to work for. On the other hand, we were very professional, very productive, and we had very few legal issues arise. If I had it to do all over, I do it the same way because some of the agents that worked under my guidance year ago, now own and manage their own brokerage firms that are very productive.

With all this in mind, the main responsibility of a qualifying broker is to protect the consumers best financial interests when buying or selling real estate in Alabama, while protecting and guiding the agents licensed under them against illegal and unethical practices.

Should you have specific questions concerning various issues, please let me know and I’ll research the answer for you. I also want to encourage you to subscribe to our “News & Updates” weekly report so you can stay abreast of issues that might affect you when buying or selling real estate. If you haven’t visited my website, please go to www.AlabamaRealEstateInstitute.com  and view previous articles.