For many years the commission enforced a rule that a salesperson or broker could not affiliate with more than one brokerage unless the two companies were located at the same address. A couple of years ago, legal counsel for the Commission determined that KREC did not have statutory authority to enforce the long-standing rule that prohibited what KREC commonly refers to as “multiple company affiliation.” Consequently, KREC had no means to prevent a salesperson or associate broker from affiliating with several different brokerages — sometimes without the knowledge of their supervising brokers.

Questions soon arose concerning whether the public could be harmed by allowing unlimited multiple company affiliations. The potential existed for agency law violations, conflicts of interest and “creaming,” that is, shifting a lucrative client/customer’s business to the brokerage where the licensee would receive the best financial benefit.

KREC researched whether other states prohibit or restrict multiple company affiliation. By far, the largest majority of states prohibit multiple company affiliation for salespersons. Many states allow the supervising broker to affiliate with more than one company. One state permits multiple company affiliation if each of the licensee’s supervising brokers consents.

KREC asked the 2002 legislature to consider passage of a blended approach, taking selected provisions from other states’ laws. The result was passed into law effective July 1, 2002. Pertinent provisions include:

• A salesperson cannot be employed by or associated with more than one supervising broker at any one time. [See K.S.A. 58-3062(b)(3)(A).]

• An associate broker or branch broker can be employed by or associated with more than one supervising broker at any one time if each supervising broker consents, in writing, to the multiple company affiliation. [See K.S.A. 58-3062(b)(3)(B) and (e)]

• There is no prohibition or limitation on a supervising broker from being affiliated with more than one company at any one time.

KREC will soon be sending letters with instructions to those licensees who are affected by the July 1, 2002 change in the law concerning multiple company affiliation. Salespersons who are affiliated with more than one supervising broker will be given 90 days to comply by terminating all but one of their brokerage affiliations. Associate brokers and branch brokers who entered into multiple brokerage affiliations prior to July 1, 2002, will be given 90 days to comply by providing KREC evidence of written consent from each supervising broker. If anyone has questions regarding this change in the law, please contact KREC.