Florida Real Estate Sales Associate Examination Content OutlineReal Estate Brokerage Activities and ProceduresMedium
A Florida real estate broker is dissolving their sole proprietorship brokerage. They currently have several active listing agreements. What is the broker's primary responsibility regarding these active agreements upon dissolution?
- AObtain written consent from each client to transfer their agreement to another licensed brokerage.
- BContinue servicing the agreements personally until their expiration, even after dissolution.
- CAutomatically transfer all active agreements to another broker without client consent.
- DTerminate all active agreements immediately, notifying clients to seek new representation.
Show answer & explanationAnswer & explanation
Correct answer: A. Obtain written consent from each client to transfer their agreement to another licensed brokerage.
Upon dissolution of a sole proprietorship, the broker cannot unilaterally transfer active agreements. They must obtain written consent from each client to transfer their agreement to another licensed brokerage. This protects the client's agency relationship and ensures proper continuity of service.
Why the other options are wrong
- B. A dissolved brokerage cannot continue to operate or service agreements in a licensed capacity.
- C. Transferring agreements without client consent is a breach of fiduciary duty and contract.
- D. Terminating agreements immediately without proper resolution can harm clients and lead to complaints.
Brokerage Closure Procedures (Listings)
When a real estate brokerage ceases operations, especially a sole proprietorship, the broker has specific responsibilities regarding active listing agreements to protect client interests and ensure legal compliance.
- Client consent is required for transfer of agreements.
- Agreements cannot be unilaterally assigned to another broker.
- Failure to properly handle agreements can lead to disciplinary action.
Memory trick: When the BROKERAGE CLOSES, CLIENTS' CONSENT is the GOLDEN RULE for smooth transitions.