The popularity of teams conducting real estate business has grown substantially in the last several years. In fact, the concept has grown so rapidly that some teams are large enough to operate like a company within a company. The team leader is a powerful position. Leaders are often responsible for recruiting, hiring and firing members. With the written permission of the supervising or branch broker, the team leader is allowed to pay commissions and other valuable considerations to team members. See K.S.A. 58-3062(b)(1)(A).

In this setting, who is responsible for supervising the team members and is it possible the team leader is practicing dual agency?

Q. Who is responsible for supervision of the team members?
A. The supervising or branch broker is ultimately responsible for supervising the team leader and team members. The team concept is not referenced in license law. The supervising broker or branch broker is clearly responsible for maintenance of the primary office and supervision of all the affiliated licensees. See K.S.A. 58-3060. If the brokerage does not use third party escrow services, the broker is responsible for maintenance of the trust account and all earnest monies shall be turned over to the broker. See K.S.A. 58-3061 and 58-3062(b). The supervising or branch broker is accountable for failing to supervise the activities of an affiliated salesperson or broker. K.S.A. 58-3062(c)

Nowhere does the license law say that a supervising broker may avoid liability by delegating responsibility for supervision of team members to a team leader. This may be a difficult concept for team members to understand when the supervising broker did not hire them and does not pay them. However, it is imperative that the supervising broker or branch broker understands that they may be held accountable for any violations committed by the team leader or team members.

Q. Is the team leader practicing dual agency?
A. The answer is, possibly. Teams are growing in both size and number. As teams get larger, it is plausible that some members may function as designated buyer’s agents and some may function as designated seller’s agents. For example, George is the supervising broker of Cardinal Real Estate. Brenda is the team leader for the Ace Real Estate Team. Ally and Blair are members of the Ace Real Estate Team. Ally functions as a designated seller’s agent and lists the property located at 123 Topeka St. Blair functions as a designated buyer’s agent. If Blair’s client is interested in the property listed by Ally, can Brenda provide any advice to Blair and Ally? No. If Brenda does so, she will be acting as a dual agent in violation of K.S.A. 58-30,103(a). Because designated agency exists, George functions as a transaction broker. If George feels uncomfortable advising both Blair and Ally on this transaction, George may advise Ally and appoint another licensee in the brokerage to assist Blair. See K.S.A. 58-30,109(b)(4).