Form-of-the-week: Office Manager Employment Agreement – Form 510
The supervisory role of an office manager
In July 2015, nearly 12,000 individual and corporate broker licensees employed two or more real estate agents to represent them and render real estate services on their behalf. As employers of licensees, these brokers are required under the California Bureau of Real Estate’s (CalBRE’s) supervisory scheme to reasonably supervise the activities of their employees to protect members of the public with whom they deal.
Reasonable supervision includes establishing policies, rules, procedures and reports to review and manage:
- transactions and conduct requiring a real estate license;
- documents materially affecting the rights or obligations of clients in transactions;
- the filing, storage and maintenance of documents related to the real estate services rendered;
- the handling and documentation of trust funds;
- advertisement of real estate services requiring a license;
- employee’s knowledge of anti-discrimination, fair housing and agency laws; and
- reports on the activities of employees. [California Bureau of Real Estate Regulations §2725]
For the employing broker who is too busy to provide continuous oversight over all the licensees they employ, the broker may also employ a licensee as an office manager to carry out their supervisory responsibility to review documents and maintain files.
The broker or office manager reviewing documents is to observe and take steps to correct any unacceptable documentation at the earliest possible moment.
Without corrective activity, the broker becomes exposed to liability for money losses incurred by others through an error or other malfeasance committed by their agents.
In addition to reviewing documents, the responsibilities of the appointed office manager include:
- the oversight and supervision of day-to-day operations of all licensed activities in the real estate branch of division [Calif. Business and Professions Code § §10164(a)];
- supervising the on-the-job activities of employed licensees; and
- managing clerical staff employed in the branch office or division.
The real estate licensee who is appointed by a broker as their office manager also assumes obligations for any sanctions and disciplinary actions by the CalBRE for the office manager’s failure to properly supervise the activities of licensees and administrative employees. [Bus & P C §10164(b)]