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“Associate Broker”: A Term Still in Search of a Definition

Bob Hunt
By Bob Hunt
C.A.R. Director

AB 2330, which becomes effective on January 1, 2018, does not give a new legal meaning to the term “associate broker,” but it does provide some clarity to the fact that a broker may be an “associate licensee.”

I suspect most California consumers know that, as in many other states, there is a difference between real estate agents who are licensed as brokers and those who are licensed as salespersons. Brokers may generally be thought to have more knowledge and/or experience (though it doesn’t take much effort to think of some salespersons who have tons of experience and knowledge—often more than some brokers).

Also, to some, the term broker connotes a position of authority. Thus, if my card said “Bob Hunt, Broker” and then spelled out the name and address of a real estate company, some might infer that I was, as it were, the broker of the company—that is, the person who is ultimately responsible for the actions of the agents. But that would not necessarily be correct.

It is true that every real estate company does need to have a particular broker who is the responsible broker for the company. But also, many companies employ brokers who have no such responsibility. They are simply persons with a broker’s license who have contracted with the company to act as a sales associate. The responsible broker is responsible for supervising them. But they have no supervisory responsibility with regard to anyone else. Such persons are often referred to as “associate brokers”; however, this term has no specific legal meaning.

Where confusion has arisen, or could arise, is that when a broker is acting as an associate licensee— essentially as a salesperson—there is nothing in the Bureau of Real Estate (BRE) records to indicate or record that fact.

I, for example, have a broker’s license, but I am not currently the responsible broker for any company. I am, by contract, a sales associate with a real estate company. I have no supervisory responsibility. However, if consumers were to visit the BRE website, they would not find my name on the list of the company’s sales personnel. Nor, if they were to look up my name directly, would they find that I am a sales associate for the company with which I am affiliated.

No matter how this practice came about historically, it is out of synch in the age of transparency, when everyone should be able to find out everything about everyone else immediately. More relevant, it is not in keeping with the BRE’s high-priority desire that consumers should easily be able to find out who is working for whom, and who is responsible for a salesperson’s behavior.

Thus it is that California Assembly Bill 2330 was signed into law by Governor Jerry Brown on September 25, 2016. This bill becomes effective January 1, 2018. (Some time will be needed to effect its implementation.)

The bill requires that, if a broker is acting as a sales associate for another broker, then that information will be provided on the BRE website. It also requires that, whenever a broker acting as a salesperson enters or leaves the employ of a responsible broker, then the responsible broker shall immediately notify the commissioner of that fact in writing.

AB 2330 is not going to change the real estate industry. Actually, it does not even give a new legal meaning to the term “associate broker.” But it does provide a little more clarity to the fact that a broker may, in fact, be an “associate licensee”—that is, a licensee who “has entered into a written contract with a broker to act as the broker’s agent . . . and to function under the broker’s supervision . . . ”(Civil Code Section 2079.13).

That, and it will enable a consumer to determine, by using the BRE website, whether a broker is acting as an agent for another broker. More information available; always a good thing. Right?

Bob Hunt is a director of the California Association of REALTORS® and is the author of Real Estate the Ethical Way. His email address is scbhunt@aol.com.