Principal Broker, Managing Broker, and Trust Accounts
The New Hampshire broker exam tests the supervisory tier that distinguishes a broker from a salesperson: responsibility for a firm, its affiliated licensees, and its client money. This chapter explains the principal broker and managing broker roles and the trust-account duties unique to that responsibility.
Principal Broker Responsibility
Each New Hampshire brokerage firm must have a principal broker who is responsible for the firm's licensed activity, its trust accounts, and the supervision of affiliated salespersons and brokers. The principal broker is accountable to the Commission for the conduct of the office and for ensuring that client funds and records are handled according to law. This concentrated accountability is the core reason the broker credential requires additional experience and education.
Managing Broker and Branch Supervision
A firm with more than one office typically designates a managing broker to supervise a branch on behalf of the principal broker. The managing broker oversees day-to-day activity at that location, but ultimate responsibility for the firm still rests with the principal broker. Understanding who bears responsibility for supervision, advertising, and escrow at each level is a recurring theme on the state portion.
Trust and Escrow Handling
A broker who holds earnest money or other client funds must keep them in a separate trust or escrow account, apart from personal and business operating funds. Commingling client money with the broker's own funds, or converting it, is a serious violation. The broker must maintain records that allow the account to be reconciled and must disburse funds only as authorized by the transaction or by law, including proper handling of disputed deposits.