Dolgetta Law

Broker Compliance and Supervision (Starting Over)

Just over three years ago, the article “Let the Broker Beware” (Supervision of Independent Contractors) appeared in Real Estate Indepth. In this relatively short period of time, the regulatory scheme has changed dramatically. Agency relationship disclosure under Real Property Law Section 443 has been amended twice. On January 1, 2014 new advertising regulations encompassing real estate teams, the use of the internet, signs, business cards and similar matters will become effective. Recent opinions from the Department of State have eliminated the common practice by broker associates of using corporate titles. Other opinions stringently affirm Regulation Section 175.21 and the duty of the broker to comply with Section 441 of the Real Property Law by providing to salespersons “regular, frequent and consistent personal guidance, instruction, oversight and superintendence”. Changes in the Realtor Code of Ethics have further defined what brokers can and cannot say about each other with restrictions on comments about other real estate professionals.

Compliance Manuals and Broker Policy Manuals

Most brokerage firms now have an office manual that sets forth the policies followed by the particular firm. All firms have been cautioned repeatedly to ensure compliance with New York State law and particularly the 1986 amendments to the Workers Compensation Law (Sections 2 and 201) and Labor Law (Section 511) which delineate limitations about direction and control of salespersons by their broker. It is hard to imagine that any office policy statement or compliance manual will be complete or up to date as 2013 ends.

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