II. General Information
Managing Broker Responsibilities
RESA requires that the rights and duties of every brokerage be performed by one or more managing brokers. The role of the managing broker is critical in the operation of the brokerage to ensure that the brokerage carries out the duties imposed by RESA. The managing broker acts for the brokerage for all purposes under RESA.
The real estate services that are permitted to be provided under the licence of the managing broker are the only real estate services that may be conducted by a brokerage.
RESA and the Rules set out specific responsibilities for a managing broker.
The managing broker is responsible for the supervision of the associate brokers and representatives who are licensed in relation to the brokerage. Section 3-1 of the Rules requires that the managing broker be actively engaged in the management of the related brokerage and ensure that there is an adequate level of supervision for the associate brokers and representatives and for the employees and others in the brokerage.
In a well-managed office, where the activities of licensees and other staff/employees are adequately supervised, the Council would expect that:
- The managing broker ensures that all associate brokers, representatives, the brokerage, and the managing broker, are currently and properly licensed. A managing broker who allows unlicensed individuals to perform activities that require licensing is subject to disciplinary action by the Council (section 3 of RESA).
- Training/professional development assistance/guidance is provided for associate brokers and representatives.
- The managing broker is able and available to assist and advise associate brokers and representatives and other employees as they encounter problems in their day-to-day activities. When the managing broker is not at the office, the managing broker should be available to the office by other electronic means.
- The managing broker follows up on the activities of associate brokers and representatives who are absent for prolonged periods from the office.
- Although the managing broker is not expected to review all advertisements, the managing broker should ensure that associate brokers and representatives are made aware of sections 4-6, 4-7, and 4-8 of the Rules which relate to advertising, as well as advertising guidelines and policies established by the Council.
- The managing broker should periodically discuss examples of appropriate and inappropriate advertising with associate brokers and representatives.
- A brokerage procedures manual has been read and acknowledged by its associate brokers and representatives clearly disclosing to them the rules and office policies of the brokerage.
- There is a means of communicating with associate brokers and representatives in writing respecting policy matters or changes in the law. It is recommended that the brokerage keep copies of these communications on file.
- The managing broker holds office meetings with associate brokers and representatives engaged by the brokerage.
- The managing broker ensures that associate brokers and representatives are aware of and comply with the Rules, including the application of RESA to the provision of all real estate services by a licensee, and the requirements for disclosure, including the need to provide certain disclosures in writing.
- The managing broker ensures that associate brokers and representatives obtain a written service agreement that includes a general description of services and that the services are in accordance with the policies of the brokerage.
- Where a brokerage engages associate brokers or representatives who conduct business outside of the brokerage’s usual market area, the managing broker must ensure the following procedures are in place:
- Listing, buyer agency, rental property, and strata management contracts, amendments thereto, and Contracts of Purchase and Sale are, as soon as possible after their execution, faxed, couriered, delivered, or e-mailed to the brokerage’s office in order that the managing broker can review the documentation, and that a legible true copy is maintained on file in the office (section 3-2 of the Rules).
- In order for funds received on behalf of clients (e.g., trust deposits, rental funds, security deposits, etc.) to be deposited in trust upon receipt, arrangements must be made for associate brokers and representatives to either courier, deliver, or electronically transfer these funds immediately to the brokerage (section 27 of RESA).
(b) Accounts and Records
Section 3-1 of the Rules also provides that the managing broker is responsible to ensure that the trust accounts and records of the brokerage are maintained in accordance with RESA, the Real Estate Services Regulation, Rules, and Bylaws, and that there is appropriate management and control of documents related to the licensing requirements.
A managing broker must be a signing authority on each trust account maintained by the brokerage. Additionally, a managing broker or someone designated by the managing broker, must review, date, and initial the monthly trust asset and liability reconciliation (section 7-4 of the Rules).
(c) Action in the Event of Improper Conduct
If the managing broker has knowledge of conduct that the managing broker considers to be professional misconduct, conduct unbecoming a licensee, or may be improper or negligent conduct, section 3-1 of the Rules requires that the managing broker must take reasonable steps to deal with the matter.
(d) Notices Regarding Deposits
A managing broker is required by section 3-1(4) of the Rules to ensure that all parties to an agreement giving effect to a trade in real estate are immediately notified if a deposit that was to be held by the related brokerage is not received or if the deposit cheque or other negotiable instrument is not honoured.
A managing broker must give the notice in writing or confirm in writing that the notice has been given.