Team advertising, a lapsed license, and a chatty receptionist
You are the principal broker of a 22-agent brokerage with two teams. On a Monday you learn five things. First, team leader Marcus ran an ad reading 'Quiet street - perfect for young professionals, no children' under the name Marcus & Associates Homes, with no brokerage name anywhere in the ad. Second, Marcus's unlicensed transaction coordinator has been emailing the other side's agent to negotiate a $4,500 repair credit. Third, one of Marcus's agents, Beth, whose license lapsed 60 days ago, closed two transactions and was paid $9,400 directly by the title company at closing. Fourth, the brokerage opened a second office in a co-working space three months ago and has not notified the Division or placed a licensed broker in charge. Fifth, the unlicensed receptionist routinely quotes commission splits to callers and tells them what the seller will 'probably take.' Marcus says all of this is normal for a high-volume team.
1. Identify each compliance failure and the rule implicated.
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The ad copy. 'No children' is a familial-status violation under the federal Fair Housing Act and Ohio's fair housing statute, which also reaches discriminatory advertising. 'Perfect for young professionals' is a softer but related steering signal. The ad also fails advertising rules: licensees must advertise under the brokerage's licensed name or a registered trade name, and the brokerage name must appear. 'Marcus & Associates Homes' standing alone misleads the public about who is responsible.
The transaction coordinator. An unlicensed person may perform clerical and ministerial work - scheduling, delivering documents, gathering information. Negotiating a repair credit is not ministerial; it is transaction negotiation reserved to licensees.
Beth. A lapsed license means no license. She performed licensed activity without one, and $9,400 was paid to an unlicensed person. Compensation for brokerage services must flow to the broker and from the broker to a licensed salesperson.
The second office. Branch offices must be supervised by a licensed broker and accounted for with the Division; an unreported, unsupervised location is an office-management failure.
The receptionist. Quoting splits and relaying a seller's bottom line are licensed activities and, for the bottom line, a confidentiality breach.
2. What must you do about Beth's lapsed license and the $9,400, and what is your own exposure?
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Immediately. Instruct Beth in writing to cease all licensed activity - no showings, no negotiations, no open houses, no listing or buyer representation - until the license is reinstated. Tell Marcus the same, in writing, with a deadline.
The $9,400. You may not accept, retain, or distribute compensation earned through unlicensed activity. Contact the title company and the parties to unwind the payment, and consult counsel on the correct disposition. Do not simply move the money into the brokerage's commission account and pay Beth later. Reinstatement is prospective; it does not retroactively license the two closings.
Your exposure. You are the supervisor of record. Missing a 60-day lapse means your license-tracking process failed, and the unreported branch office is a second supervisory miss. Expect scrutiny of your supervision, your written policies, and your records. Notify your E&O carrier and consider self-reporting to the Division with a written corrective plan, which is generally better received than being discovered.
Process fix. A license-expiration calendar with 90/60/30-day alerts, a rule that only the broker's office may accept commission checks, and a written checklist for every closing.
3. Draft the corrective plan for the advertising and unlicensed-assistant problems, including training points.
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Advertising. Pull the ad and any like it today. Require every ad - print, digital, social, signage, team pages - to display the brokerage's licensed name or registered trade name at least as prominently as any team name. Institute a pre-approval step: no ad goes live without broker review, and the review covers fair housing language, not just the name. Rewrite 'no children' and 'perfect for young professionals' to describe the property, not the preferred occupant: 'three-bedroom ranch on a cul-de-sac.'
Unlicensed staff. Issue written job descriptions listing permitted tasks (scheduling, filing, delivering executed documents, answering factual questions about a listed property) and prohibited tasks (negotiating price, terms, or repairs; advising on value; quoting commissions; disclosing a seller's bottom line). Have every unlicensed employee and every team leader sign an acknowledgment.
Training. A mandatory session for all 22 agents covering fair housing advertising, who may negotiate, how commissions flow, and the branch-office rule. Document attendance.
Monitoring. Monthly file audits by you or a designated broker, with written findings, plus a standing agenda item at team meetings. Supervision that exists only on paper is exactly what fails an audit.