A Florida real estate broker is dissolving their sole proprietorship brokerage. They currently have several active listings and active buyer brokerage agreements. What is the broker's primary responsibility regarding these active agreements?
- AThe broker must provide written notice to all parties and assist in transferring the agreements to another licensed broker.
- BAll active agreements are automatically canceled upon dissolution.
- CThe broker must immediately transfer all agreements to an affiliated sales associate.
- DThe broker can continue to service the agreements until they naturally expire.
Show answer & explanationAnswer & explanation
Correct answer: A. The broker must provide written notice to all parties and assist in transferring the agreements to another licensed broker.
Upon dissolution of a sole proprietorship, the broker must notify all parties to active agreements in writing and assist in transferring these agreements to another licensed broker, with the consent of the clients. These agreements are personal service contracts and cannot be unilaterally assigned or continued without a licensed broker.
Why the other options are wrong
- B. Automatic cancellation could harm clients; the broker has a duty to facilitate continuity.
- C. Sales associates cannot hold or manage listing/buyer agreements directly; they must be under a broker.
- D. A broker cannot continue to service agreements once their brokerage is dissolved, as they would no longer be operating as a licensed entity.
Brokerage Dissolution (Active Agreements)
When a Florida sole proprietorship brokerage dissolves, the broker must provide written notice to all parties with active agreements and assist in transferring these agreements to another licensed broker, with client consent.
- Applies to listings and buyer agreements.
- Requires written notice to clients.
- Broker must assist in transferring agreements.
- Client consent is necessary for transfer.
Memory trick: Closing the shop? Inform and assist, don't let clients drift.