Monthly Archives: September 2014
Can a Licensee Manage Property for Others Independent of the Firm?
Assuming that a legal business practice in one situation applies in a similar situation may lead to unintentional license law violations. For example, a broker who operates a firm engaged exclusively in sales activities may have an associate who wishes to manage property for others. Some brokers have mistakenly believed that they could authorize the associate to open a trust account and manage property for others if the associate gave the broker periodic accounting reports.
That practice is available only for an associate to manage his or her own real property. It is not available for an associate to manage the property of others. If an associate wants to manage the property of others, all trust funds collected by the associate must be placed in the trust account owned by the broker; and the broker must maintain the accounting records on those funds.
Before undertaking a new business practice or marketing technique, an associate should discuss the proposed activity carefully and fully with his or her broker. The broker in turn may want to explore the legal implications of that activity with legal counsel in order to avoid unintentional violations of the law.