District of Columbia Real Estate Broker Exam — All Questions

A corporation applies for a DC real estate broker's license and plans to run three offices. The license may not be issued unless:

• a.Each branch office keeps a separate escrow account for its own deals
• b.Each branch office employs at least one licensed property manager
• c.Each branch office is managed by a licensed real estate broker✓
• d.Each branch office is separately incorporated under District law

D.C. Official Code § 47-2853.183 bars issuing a broker's license to a firm, franchise, partnership, association, or corporation unless the Mayor finds four things: that the applicant is organized and exists under applicable District and federal law, that every member, partner, trustee, or officer engaged in licensed activity is licensed, that every employee rendering professional services holds a valid license or certificate, and that "[e]very branch office is managed by a licensed real estate broker." The supervision rules build on that: 17 DCMR § 2614.3 assigns supervision of a subordinate licensee to the broker who manages the particular branch where that person works. The statute does not require a separate escrow account per office, a property manager in each office, or separate incorporation of the branches.

A DC broker opens a second place of business inside the District. What does the licensure statute require for that office?

• a.A separate basic business license in the office manager's own name
• b.A duplicate license, a copy of which is posted within the office✓
• c.A written waiver from the Commission before the office may open
• d.A bond filed with the Mayor covering that office's escrow account

D.C. Official Code § 47-2853.184(a) provides that if a broker "maintains more than one place of business within the District, a duplicate license shall be issued to the broker for each office upon payment of the required fee," and that "[a] copy of the license must be posted within each office." The duplicate is issued to the broker, not to a manager in the manager's own name. Bonding is not automatic for a branch office: § 42-1707(i) lets the Mayor establish bonding requirements by rule if the Mayor determines they are necessary to protect the public. And no provision conditions opening an office on advance Commission approval — the branch requirement that does apply is § 47-2853.183(4), that a licensed broker manage it.

A DC broker relocates the firm's principal place of business. Within how many days must the broker notify the Mayor in writing and return the licences?

• a.15 days✓
• b.5 days
• c.10 days
• d.30 days

D.C. Official Code § 47-2853.184(b) requires that whenever a broker "changes the location of his or her principal place of business, or discontinues his or her business, he or she shall notify the Mayor within 15 days of the event, in writing, and return to the Mayor his or her license together with the licenses of all real estate salespersons employed by him or her." New licences are then issued on payment of the required fee, and each salesperson is relicensed on reemployment. The deadline has teeth: § 47-2853.184(c) provides that failure to notify or to return the licences "will result in immediate suspension of the license" until the broker complies. The 5-, 10-, and 30-day figures are not in the section.

A DC broker's supervisory responsibility over affiliated licensees means the broker must:

• a.Set commission rates jointly with competing brokerages in the District
• b.Guarantee that each sale the firm handles reaches settlement
• c.Personally negotiate every contract the firm's licensees write
• d.Oversee the advertising, records, and escrow of affiliated licensees✓

17 DCMR § 2614.1 makes the broker "responsible for the day-to-day supervision of real estate salespersons, associate real estate brokers, and property managers affiliated with the real estate broker," and § 2614.7(c) spells out what that supervision covers: written procedures for the handling of deposit monies under the escrow rules, fair housing compliance, advertising compliance, review of contracts and brokerage agreements, use of unlicensed assistants, and agency disclosure. D.C. Official Code § 47-2853.161(2) says the same at statute level, holding the broker "accountable for the day-to-day job-related activities of his or her employees." It does not mean doing every licensee's job: what the rules ask for is a system of oversight, not personal performance. No broker can promise a result, since closing depends on parties, lenders, and inspections outside the firm's control. And coordinating commission rates with competing brokerages is not supervision at all; it is price fixing, which antitrust law forbids.

It is shown at a Commission hearing that a DC broker did not provide reasonable and adequate supervision of the firm's licensees. At that point:

• a.The Commission must also prove a client suffered an actual loss
• b.The broker must prove the supervision provided was adequate✓
• c.The complaint is dismissed unless a salesperson is charged too
• d.The matter is referred to the Mayor for a summary suspension

17 DCMR § 2614.8 provides that "[u]pon a showing that the broker has not provided reasonable and adequate supervision in the areas under this section of this chapter, the burden of proof shall be on the broker to show that the supervision that the broker did provide was reasonable and adequate." The rule shifts the burden onto the person who holds the records — attendance at staff meetings, contract and advertising reviews, and the written policies § 2614.7(d) lists as evidence. Client loss is not an element: D.C. Official Code § 47-2853.17(a)(22) reaches a careless disregard for the health, welfare, or safety of a client "regardless of whether such person sustains actual injury." Nothing conditions the broker's supervisory liability on charging a salesperson as well. And summary suspension under § 47-2853.18(a) is reserved for conduct presenting an imminent danger, not for a supervision failure found after a hearing.