Regulations Clarify Brokers’ Advertising Supervision Responsibilities
Promulgated in 2016, K.A.R. 86-3-31 clarified supervising brokers’ responsibilities for specific actions by associated licensees. Among those specifically itemized activities, K.A.R. 86-3-31 (a)(8) includes the responsibility to ensure that all advertising by affiliated licensees “…complies with applicable statutes, regulations, and office policies…”
On July 1, 2020, K.A.R. 86-3-7 became effective which, for the first time, defined advertising and made specific rules concerning a licensee’s name or team name on websites and social media, among other forms of media. In addition to the statutory requirement that a licensee’s broker’s trade name or business name must appear in all advertising, the regulation also specifies the broker’s trade or business name must appear in a font size at least half the size of the name of the licensee or team. Further, in digital media, the broker’s trade name must be “adjacent to” the name of the licensee or team name.
The Internet has greatly expanded supervision responsibilities for brokers regarding advertising by their affiliated licensees. All advertising must be conducted with supervising broker approval.
Regarding an alleged violation of failure by the supervising broker to properly supervise activities of affiliated licensees, per K.A.R. 86-3-31(b) the following may be considered as mitigating factors. The Supervising broker or branch broker has:
- Ensured written policies and procedures are in place and demonstrated that affiliated licensees received training on them
- Provided access to ongoing training and education or access to experienced personnel to review the accuracy of documents and discuss real estate practice law
- Confirmed systems are in place to ensure proper management and control of documents and records relating to licensing requirements and transactions
It seems like it is a new world every week, but technology demands that supervising brokers keep up with new marketing venues to effectively supervise their affiliated licensees.
Are You an Expert?
Cindy Boswell | Real Estate Specialist/Investigator
If a client or customer asks questions outside of your field of expertise, do you recommend expert advice? Are you an expert when it comes to appraisals, inspections, property repairs, or loans? BRRETA requires buyer’s agents, seller’s agents, and transaction brokers to advise their clients and customers to obtain expert advice as to material matters which are beyond the expertise of the licensee. See K.S.A. 58-30,106(a)(2)(C), K.S.A. 58-30,107(a)(2)(C), and K.S.A. 58-30,113(b)(2)(B).
Example 1: Mr. Buyer couldn’t decide if he wanted a whole house inspection because of the extra cost involved. The licensee informed Mr. Buyer there would be an FHA appraisal, so the house would be inspected. Based on what the licensee said, Mr. Buyer decided not to do a whole house inspection. Later, many issues arose with the house. Was the licensee an expert on the difference between an FHA appraisal and a whole house inspection? If not, Mr. Buyer should have been advised to talk with the FHA appraiser and a whole house inspector before making the decision to decline a whole house inspection.
Example 2: Ms. Buyer is ready to make an offer on a property and notices a crack in the basement wall. Ms. Buyer asks the licensee if it appears to be a major problem with the foundation. The licensee says, “No, I don’t see any evidence of water. I think it’s fine.” Ms. Buyer decided not to have the foundation inspected based on the licensee’s response. After closing on the property, the basement floods. Was the licensee an expert in foundations? If not, the licensee should have recommended Ms. Buyer obtain expert advice.
Protect yourself. If the licensee advised the client or customer to obtain expert advice as to material matters, no cause of action for any person shall arise against the licensee pertaining to such material matters. See K.S.A. 58-30,106(b), K.S.A. 58-30,107(b), and K.S.A. 58-30,113(e).
Why Can't I Complete My Renewal?
Licensees often try to renew their license and are surprised to find they haven't completed all required CE. Commonly, licensees forget to complete the Kansas Required Core. Salespersons and Brokers must complete 12 hours every two years to renew, including at least 3 mandatory hours in an approved course titled "Kansas Required Core." Find approved courses in the Directory.
Please note, if you submit your license renewal online before you have met the CE requirement, your renewal will be placed on hold and the system will attempt to process it for seven days. If you complete all CE more than seven days after submitting the online renewal, you must notify KREC at krec@ks.gov to ensure your record has been updated and/or provide course certificates. You will receive a printable pocket card via email from KREC within 48 hours of your renewal being completed.
Employee Spotlight
Alycia Smith is the Director of Licensing at KREC. Her department is responsible for the processing and issuance of licenses, all maintenance and changes relating to existing licenses and companies and providing customer service to the public and licensees. She is the point person for E-Gov and online licensing services. Alycia has been with KREC since January 2016. She grew up in Junction City, Kansas and has a degree in Criminal Justice. Alycia is the mother of two sons, ages 15 and 10, and one dog. She enjoys traveling and adventuring, reading, and spending time with her family.
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