Sales Associate David* was registered with Old Brokerage.  He decided to leave that brokerage and move to New Brokerage.

Before David left, but once he had made the decision to leave Old Brokerage, a former client contacted him about listing his house.  Naturally, David wanted to secure the listing.

David signed a listing agreement with New Brokerage two days before they were registered as his employer.  The property was not listed in the MLS until after he was registered with New Brokerage.

To reiterate, here is the timeline…

  1. David is with Old Brokerage.
  2. David plans to move to New Brokerage, but hasn’t move yet.
  3. Client contacts David and signs a listing agreement.
  4. David uses New Brokerage as the name on the listing agreement.
  5. Two days later, David transfers his license from Old Brokerage to New Brokerage.
  6. David lists property in the MLS under New Brokerage.

David was charged with operating as a sales associate other than with his registered broker.  He was fined $250, the $594 cost of the investigation, and must take a three-hour ethics class.  The three-hour ethics class does not count towards any continuing education.  It is in addition to his required C.E.

In prelicensing class, when I talk about cases like this, people often say, “Who would file a complaint like that?”  It’s simple – just follow the money.  The broker at Old Brokerage is the one who filed the complaint.  This broker was losing out on a commission, so he filed a complaint.  Was there more to it than the money?  I don’t know.

At the FREC meeting, David’s attorney mentioned that the Old Broker and David had settled regarding the commission.  They split it 50-50.  FREC cannot order one party to pay the other party.  The Florida Real Estate Commission can issue a fine, but that money goes to the state of Florida.

So David’s real punishment was paying $844 to the state, hiring an attorney, taking some classes, and the time and emotion involved in this.  Plus he lost half of the commission to Old Broker.  It is unknown whether the broker of Old Brokerage also filed a Realtor complaint.

Ideally, David could have waited to sign the listing agreement until he was actually registered with New Brokerage.  Maybe that wasn’t feasible, for some reason.  If David had attended my class on How To Make The Best Deal With Your New Broker, his employment contract with Old Brokerage would discuss abandoned listings, and the terms would be favorable to David.

I attend the FREC meetings almost every month.  There is at least one interesting case per month.  I’m going to start to write more about them.

*The names of licensees and brokerages have been changed.  My goal is education, not embarrassment.  The actual case number is DBPR 2021-056033.  For those interested in learning more, you can look it up and get the full information.

 

Please note that Karen Climer has no affiliation with Climer School of Real Estate.  Her father, Ron Climer, sold Climer School of Real Estate in 2014.  It has since been involved in several mergers and acquisitions and is owned by a large investment company.  Karen owns Demetree School of Real Estate in Orlando, Florida.