Broker Supervision and Improper Use of License and Office

PURPOSE: This rule explicitly prohibits a broker from using his/ her license to permit a salesperson to function as a real estate brokerage firm. (1) Individual brokers, designated brokers, and office managers/ supervising brokers shall be responsible for supervising the real estate related activities including the protection of any confidential information as defined under 339.710.8, RSMo of all licensed and unlicensed persons associated with them, whether in an individual capacity or through a corporate entity, association or partnership. A broker shall not be held responsible for inadequate supervision if— (A) A licensed or unlicensed person violates a provision of Chapter 339, RSMo or the rules for it in conflict with the supervising broker’s specific written policies or instructions; (B) Reasonable procedures have been established to verify that adequate supervision was being performed; (C) The broker, upon learning of the violation, attempted to prevent or mitigate the damage; (D) The broker did not participate in the violation; (E) The broker did not ratify the violation; and (F) The broker did not attempt to avoid learning of the violation. (2) A broker shall not permit licensed and unlicensed persons affiliated with the broker to— (A) Establish and carry on real estate brokerage business for their own benefit, directly or indirectly, where the broker’s primary interest is the receipt of a fee or other valuable consideration for the use of the broker’s license by others; or (B) Where the broker has no control or only nominal control of the business affairs conducted under the broker’s license or is only nominally associated with the business. (3) Appointments of designated agents and designated transaction brokers under section 339.820, RSMo shall be entered into by the designated broker or office manager/ supervising broker on behalf of that broker and affiliated licensees. (4) Appointments of designated agents and designated transaction brokers under section 339.820, RSMo shall be made in a written agreement for brokerage services or other written notice to the client or party, unless such appointment is presumed pursuant to section 339.820.1, RSMo. (5) Individual brokers, designated brokers, and office managers/ supervising brokers shall not be considered to be a dual agent or a transaction broker solely because such broker makes an appointment under section 339.820, RSMo. However, when such broker supervises the licensees for both sides of a transaction, that broker will be a dual agent or a transaction broker upon learning confidential information about either party to a transaction or upon being consulted by any licensee involved in the transaction. Also, when the broker supervises the licensee representing or assisting one (1) side of the transaction and personally represents or assists the other side, that broker will be a dual agent or a transaction broker. AUTHORITY: section 339.120, 339.710, 339.780 and 339.820, RSMo Supp. 1999.* This rule originally filed as 4 CSR 250-8.020. Original rule filed Nov. 14, 1978, effective Feb. 11, 1979. Amended: Filed May 11, 1983, effective Aug. 11, 1983. Amended: Filed June 15, 1990, effective Dec. 31, 1990. Amended: Filed Feb. 2, 1994, effective Aug. 28, 1994. Amended: Filed Dec. 1, 1997, effective Sept. 1, 1998. Amended: Filed Jan. 14, 2000, effective July 30, 2000. Moved to 20 CSR 2250-8.020, effective Aug. 28, 2006. *Original authority: 339.120, RSMo, 1941, amended 1963, 1967, 1981, 1988, 1993, 1995, 1999; 339.710, RSMo 1996, amended 1998, 1999; 339.780, RSMo 1996, amended 1998, 1999; 339.820, RSMo 1996, amended 1998, 1999.