Broker lost license -- Advice needed

14 Replies

I have a good friend who is a fairly new real estate agent. Her broker recently had his license revoked. This just recently happened, and I can't provide details at this time. My friend's listings are still under the control of that broker, and the broker recently moved her listings to another agent! Without getting a lawyer involved at this point, what action should my friend take? She has signed with a new broker, but the new broker isn't sure how to proceed, and the old broker is still trying to retain control or the group. What does my friend need to do to ensure she retains her listings?

I have not had to deal with this situation personally i'm just going off of what I was told when I went to school.

I believe in a situation such as this each office has a designated person who will take over the broker role in the event something happens to the broker. Revocation, death etc.

The listings remain with the brokerage so if your friend remained with said brokerage she shouldn't have them moved to another agent. It appears as the new broker in charge moved them when your friend left that brokerage.

Again full disclosure I have not had to deal with this. This is just how I was told it works.

Another issue that complicates the situation is that this is a young team, and none of the current agents have the credentials to employ other agents.

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She'll need to get clarification from the state RE commission. I don't think someone can just step into his shoes after a revocation. Part may depend on the timing of events, and the agreement she signed with the brokerage.

Contact the your department of real estate and ask them. I'm sure the property owners also have the option of cancelling their listings should they not want to have their property associated with an office that has lost their license. In that case, your friend would be able to relist at her new office. If it were me, I would contact all my clients, explain the situation and tell them I was checking on the legalities and would be in contact within a day or two with answers.

Technically in most agreements and states the brokerage has the client and the agent as an IC at the brokerage is just a representative helping out. So while the sellers may feel that agent is who they are loyal too they are not clients in a legal sense.

The state re commissions have protocols in place as mentioned for situations like this.

The agent might have been better off staying until that business was finished and then moving elsewhere. As mentioned at this point it's really up to the buyers and sellers what they want to do to change companies or not and follow the agent. The IC agreement agents sign with a brokerage usually stipulate the listings and buyers etc. belong to the brokerage if the agent leaves.

No legal advice.

"Encourage" clients to cancel listings with broker or new broker, and move with your friend. Make sure one understands who can do the encouraging by calling the local realtor board. Im sure this isnt the first time something like this has occured

Thank you for all of the comments. In this case, this real estate agency/company was very small, owned by a single broker, and that broker's license was taken away. Therefore, there are no other agents in this company that can step in as the employing broker.

It turns out that all of the listings under this agency were canceled by the state's RE commission, so she is getting those listings put back in the system. It still isn't clear what happens with transactions that are still in process.

@Chris Gilbert , in Texas if your sponsoring broker has his license revoked all agents licenses are temporarily suspended and contracts are automatically voided. Once your friend has a new sponsoring broker her license would be reactivated and she would simply have her clients resign the contracts and she will be all set. I can't say it is the same in Colorado, but it is likely very similar.

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I agree with Adrian, again....as mentioned states have set provisions for contracts pending in the event of the loss of an agent or broker's license. Different states may have different methods, the RE Commission may appoint a licensee, an attorney can usually act in the matter and agents can get signed up with another broker.

Some bad advice above was to talk the "clients" into terminating contracts, license or no license, the law establishes how a business is "wound up" or how it is to be closed, those contracts are assets, doing trash talk and interfering in contracts held as well as diverting clients is unethical and illegal and can have consequences, like getting sued. If you have a closing set in 2 days, call the commission and get direction as funds may be escrowed until a broker is appointed or disposition is arranged so that the closing can take place.

Provisions are made so that the public is not burdened by disciplinary actions against a broker or agent, business in the pipeline can be continued by someone. No RE Commission expects the public to lose deals!!!

Which leads right back to Adrian's best answer, see an attorney. The RE Commission can fine the broker and they could collect from contracts pending in due process. Killing contracts or settlements without proper guidance might cost you your license too! :)