Have you ever wondered why someone would pursue a broker license with no intention of opening their own firm? The person might just love taking real estate education and taking exams, but a more likely explanation is the person may want to act as a supervising broker within their firm. A person with a broker license can supervise other agents.
A firm generally is responsible for supervising the brokerage service activities provided by agents associated with a firm. The firm’s responsibilities are outlined in Wis. Stat. § 452.132. The firm must make sure agents associated with the firm have reasonable access to a supervising broker and make sure the supervising broker complies with their supervision responsibilities.
What are the specific supervision duties for a firm?
Provide each agent with a written statement of the procedures under which the firm and its agents must operate with respect to handling leases, agency agreements, offers to purchase and other documents related to the transaction. This “written statement” can be conveniently incorporated into a firm’s office policy manual. The WRA just revised its Office Policy Manual that firms can customize to create and implement policies for their agents.
Notify each agent associated with the firm where a copy of the rules promulgated by the Real Estate Examining Board (REEB) related to conduct and ethical practices can be found. Anyone can find the statutes and administrative code sections pertinent to real estate on the WRA's Wisconsin Real Estate Statutes webpage.
Before letting an agent become associated with the firm and at the beginning each biennial licensure period, the firm must ensure each agent holds a valid license. A firm can look up an agent’s license status using the Wisconsin Department of Safety and Professional Services (DSPS) LicensE online portal, available at license.wi.gov.
Be responsible for the custody and safety of all documents and records relating to transactions submitted to the firm.
What about the specific duties for a supervising broker?
Prior to closing, the supervising broker must review agency agreements, offers to purchase, leases and other documents executed by the parties as well as records relating to the transaction used by the agent associated with the firm and submitted to the firm. The supervising broker must also review all the trust account records relating to the transaction prior to closing.
An agent associated with a firm must promptly submit all signed agreements, offers, leases and other documents related to real estate transactions and services to the firm. This includes any paperwork used or received while providing services on the firm’s behalf.
The supervising broker’s supervision responsibilities are limited to confirming that agency disclosure has been provided to a client or customer, confirming any applicable form approved by the REEB has been used and the forms have been completed by filling in the blanks in a manner consistent with the structure of the form and letting the agent know if there are errors in how the form was completed. If a supervising broker tells an agent there is an error in how a form was completed, the agent is responsible for communicating that error to the party, and the party will determine whether to request any changes to address the error.
Who gets to be a supervising broker?
A firm that is a licensed business entity shall delegate the duty to supervise agents associated with the firm to a supervising broker who is a licensed individual broker. If a firm is set up as a limited liability company, a corporation or another business entity, and the firm obtains a real estate license for that entity, the firm must delegate supervision duty to a licensed broker. A firm that is not a licensed broker business entity can delegate the supervision duty to a licensed individual broker. If a firm that is not a licensed broker business entity does not delegate supervision, the firm itself is deemed to be the supervising broker. If a firm is not set up as a business entity but rather is operating as a sole proprietor, the firm can delegate supervision to a licensed broker; but absent that delegation, the sole proprietor is deemed to be the individual responsible for supervision. Any delegation of supervision must be made in writing and must be signed by or on behalf of the delegating firm and be signed by the broker to whom the delegation is made. A firm can have more than one supervising broker.
The statute sets the requirements for broker supervision. Each firm gets to decide how to achieve the statutory requirements to comply with the law.
