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 and buyer brokerage agreements. What is the broker's primary responsibility regarding these active agreements upon dissolution?
- ATerminate all active agreements immediately, notifying clients to seek new representation.
- BObtain written consent from each client to transfer their agreement to another licensed brokerage.
- CContinue servicing the agreements personally until their expiration, even after dissolution.
- DAutomatically transfer all active agreements to another broker without client consent.
Show answer & explanationAnswer & explanation
Correct answer: B. Obtain written consent from each client to transfer their agreement to another licensed brokerage.
Upon dissolution, a broker cannot unilaterally transfer active agreements. They must obtain written consent from each client to transfer their agreements to another licensed brokerage. This protects the client's agency relationship.
Why the other options are wrong
- A. Terminating agreements immediately without proper resolution can harm clients and lead to complaints.
- C. A dissolved brokerage cannot continue to operate or service agreements in a licensed capacity.
- D. Transferring agreements without client consent is a breach of fiduciary duty and contract.
Brokerage Dissolution (Active Agreements)
When a real estate brokerage dissolves, especially a sole proprietorship, the broker has specific responsibilities regarding active listing and buyer brokerage agreements to protect client interests.
- 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.