In what situation is a broker liable for the actions of their salespersons?

A broker is always liable for the actions of their salespersons because the broker has a fiduciary duty to oversee the activities conducted under their brokerage license. This responsibility includes managing the actions of salespersons, who act in the capacity of the broker when interacting with clients and performing real estate transactions.

This liability stems from the broker’s role as the supervising entity within the brokerage. Whenever a salesperson is engaged in activities related to their professional duties, the broker is considered responsible for any breaches of duty, negligence, or misconduct that may occur. This means that even outside of formal work hours or during training sessions, any actions taken by a salesperson can have consequences for the broker and the brokerage as a whole.

In practical terms, this means that a broker must provide proper training, clear guidelines, and consistent oversight to ensure that salespersons understand their responsibilities and act in compliance with real estate laws and ethical standards. The liability is not limited to specific times like when on duty or when a complaint is filed; rather, it is an ongoing responsibility that persists as long as the salesperson is operating under the broker's license. This ensures accountability and protection for the interests of clients and the integrity of the brokerage.