Broker Responsibility: Supervising Sales Agents, Delegation, Records and Written Policies

Broker-sales agent relationships, the broker's responsibility for the acts of sales agents, and the use of unlicensed assistants are all topics in the Agency & Brokerage section. They also drive many case-study fact patterns, so learn the exact duties and deadlines.

Scope of authority and the broker's liability

• The broker must notify each sponsored sales agent in writing of the scope of the agent's authorized activities.
• Unless that scope is limited or revoked in writing, the broker is responsible for the agent's authorized acts, though the broker need not supervise the agents directly.
• If the broker permits an agent to go beyond the scope explicitly authorized, the broker is responsible for those acts too.
• The broker is responsible for any property management activity by a sponsored sales agent that requires a license.
• By statute, a licensed broker is liable to the commission, the public and the broker's clients for any conduct under the Act by the broker or by a sales agent associated with or acting for the broker.
• When the broker is a business entity, the designated broker is the person responsible for these duties. The rule does not create or require an employer-employee relationship.

A sales agent may work from a location other than the broker's main office, but the sponsoring broker remains responsible for the agent's actions there.

Delegating supervision and teams

• A broker may delegate to another license holder the responsibility to assist in administering compliance, but may not relinquish overall responsibility for supervising the license holders the broker sponsors.
• Any license holder who leads, supervises, directs or manages a team must be delegated as a supervisor. Every delegation must be in writing.
• If a delegation has lasted or is expected to last more than three consecutive months, the broker gives TREC the supervisor's name within 30 days of the delegation, and notifies TREC within 30 days after the delegation ends. A delegated supervisor who is or becomes a broker may send the end notice instead.
• The Broker Responsibility Course must be attended during the current license term by every broker and by any sales agent who supervises another license holder. The course may not exceed six classroom hours.

Written policies and procedures

A broker who sponsors sales agents, or who is a designated broker, keeps current written policies and procedures to ensure that:

• each agent is advised of the scope of authorized activities and is competent, including in the geographic market where the agent represents clients;
• each agent keeps the license active while doing licensed work;
• all compensation to an agent is paid by, through, or with the written consent of the sponsoring broker;
• agents receive notice of changes to the Act, TREC rules or promulgated contract forms before the change takes effect;
• the first three times an agent performs a type of brokerage activity, the agent receives coaching and assistance from an experienced license holder competent for that activity;
• agents comply with the advertising rules, trust accounts and consumer funds are kept with appropriate controls, and records are maintained.

Records, response times and TREC mail

• Keep records for at least four years from closing, termination of the contract, or the end of the transaction, in a format readily available to TREC: disclosures; commission agreements; substantive communications with parties; offers, contracts and addenda; receipts and disbursements of compensation; property management contracts; appraisals, broker price opinions and comparative market analyses; and sponsorship agreements. Only an "Act of God" not intentionally caused by the broker excuses destroyed records.
• A broker or delegated supervisor must respond to sponsored sales agents within two calendar days.
• Mail and other correspondence from TREC goes to sponsored agents within three calendar days after receipt. TREC sends an active sales agent's notices to the sponsoring broker's address.
• Listings and other brokerage agreements are solicited and accepted in the broker's name.

Compensation, sponsorship changes and unlicensed assistants

• A sales agent may accept compensation only from the broker sponsoring the agent or the broker who sponsored the agent when the compensation was earned, and may pay a commission only through the current sponsoring broker.
• When a sponsorship ends, the terminating party immediately notifies the other party and TREC in writing. TREC places the sales agent license on inactive status; it may return to active status if, before the license expires, a broker files a request to assume sponsorship with the fee.
• A business entity that receives compensation on behalf of a license holder must be licensed as a broker, unless it is a registered LLC or S corporation, at least 51 percent owned by that license holder, that performs no other acts of a broker.
• Unlicensed staff may not do anything that requires a license. Showing a property, including unlocking it or hosting an open house, requires a license. A broker may not associate with an unlicensed person who is expected to act as a license holder, and employees who direct or supervise licensed activity must be licensed.

Complaints and the broker after SB 1968

TREC investigates a license holder on a signed, written complaint that gives reasonable cause. It will not act on an anonymous complaint, or on a complaint submitted later than the fourth anniversary of the incident. Since January 1, 2026, TREC may also send its notice of investigation to a license holder associated with the subject of the complaint. TREC staff guidance treats a complaint against a sponsored sales agent as also a complaint against the broker, to decide whether the broker properly supervised.

Delegated supervisor

A license holder the broker appoints in writing to help supervise; required for anyone who leads a team.

Designated broker

The individual broker who acts for a licensed business entity and carries its broker responsibilities.

Scope of authority

The written notice telling a sponsored sales agent which activities the broker authorizes.

Where this shows up on the exam

Agency & Brokerage is 10 of the 50 scored State items, and Commission Duties & Powers adds 3 more. Expect the 30-day and three-month delegation rules, the two- and three-calendar-day deadlines, the four-year records list, and who may pay a sales agent.

Sources

North Carolina law as published by the General Assembly and the Office of Administrative Hearings, checked 2026-11-05:

• 22 TAC §§535.2, 535.4, 535.21
• Tex. Occ. Code §§1101.204, 1101.355, 1101.367, 1101.458, 1101.651, 1101.652(b)(26), 1101.803
• SB 1968 (89th Leg., 2025), effective January 1, 2026
• TREC License Holder FAQ (staff guidance)
• Pearson VUE Texas Broker State Law outline #094401